-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kr7siaxDN0HDmfxMqGe2mWpvr/Gti4CUv9jcgiEw5irM04/B5fZj2+p71deqgE5X xJPmlrOeZFoVvT2TFhbvTw== 0001034603-03-000032.txt : 20030416 0001034603-03-000032.hdr.sgml : 20030416 20030416110120 ACCESSION NUMBER: 0001034603-03-000032 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20030416 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030416 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY ALUMINUM CO CENTRAL INDEX KEY: 0000949157 STANDARD INDUSTRIAL CLASSIFICATION: ROLLING DRAWING & EXTRUDING OF NONFERROUS METALS [3350] IRS NUMBER: 133070826 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27918 FILM NUMBER: 03651850 BUSINESS ADDRESS: STREET 1: 2511 GARDEN ROAD STREET 2: BUILDING A SUITE 200 CITY: MONTEREY STATE: CA ZIP: 93940 BUSINESS PHONE: 3042736000 MAIL ADDRESS: STREET 1: 2511 GARDEN ROAD STREET 2: BUILDING A SUITE 200 CITY: MONTEREY STATE: CA ZIP: 93940 8-K 1 cover.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 1, 2003 Century Aluminum Company (Exact name of registrant as specified in its charter) Delaware 0-27918 13-3070826 (State or other jurisdiction of (Commission File Number) (IRS Employer Incorporation) Identification No.) 2511 Garden Road Building A, Suite 200 Monterey, California 93940 (Address of principal executive offices) (Zip Code) (831) 642-9300 (Registrant's telephone number, including area code) Item 2. Acquisition or Disposition of Assets On April 1, 2003, Century Aluminum Company ("Century," or the "Company") completed the acquisition of the 20% interest in its Hawesville, Kentucky primary aluminum reduction facility which was indirectly owned by Glencore International AG (together with its subsidiaries, "Glencore") together with Glencore's pro rata interest in certain related assets (collectively, the "Acquired Assets"). Century paid a purchase price of approximately $105 million for the Acquired Assets, which it financed with approximately $65 million of available cash and a six-year $40 million promissory note payable to Glencore (the "Hawesville Note"). Amounts outstanding under the Hawesville Note earn interest at a rate of 10% per annum and are secured by a first priority security interest in the Acquired Assets. Until the Hawesville Note matures on April 1, 2009, the Company will make principal and interest payments semi-annually, with principal payments based on the average closing prices for aluminum quoted on the London Metals Exchange for the six month period ending two weeks prior to each payment date. The Company's obligations under the Hawesville Note are guaranteed by each of its consolidated subsidiaries, including Hancock Aluminum LLC ("Hancock"), a wholly-owned subsidiary of the Company which holds the Acquired Assets. Century's purchase of the Acquired Assets was effected pursuant to the terms of an Asset Purchase Agreement, dated as of April 1, 2003, among Glencore Ltd., Glencore Acquisition I LLC, Hancock and the Company (the "Asset Purchase Agreement"). The terms of the Asset Purchase Agreement, including the purchase price paid for the Acquired Assets, were determined through arms'-length negotiations between the parties and approved by an independent committee of the Company's board of directors. Glencore originally purchased the Acquired Assets from Century in April 2001 when Century acquired the Hawesville facility and related assets from Southwire Company ("Southwire"), a privately-held wire and cable manufacturing company (the "Hawesville Acquisition"). The cash purchase price paid by Glencore to Century in 2001 was $97.8 million. Glencore also assumed direct responsibility for a pro rata portion of certain liabilities and obligations related to the Hawesville facility, including: (i) delivery obligations under the Molten Aluminum Supply Agreement, dated April 1, 2001, between Century and Southwire, (ii) debt service obligations related to $7.8 million in industrial revenue bonds ("IRBs") assumed by Century in connection with the Hawesville Acquisition, (iii) any post-closing payments due Southwire pursuant to the terms of the Company's agreement with Southwire, and (iv) certain other post-closing liabilities and obligations (including environmental) related to the Hawesville facility (collectively, the "Assumed Liabilities"). In connection with the Company's subsequent purchase of the Acquired Assets from Glencore, the Company assumed all of Glencore's obligations related to the Assumed Liabilities. In addition, the Company issued a promissory note to Glencore to secure any payments Glencore makes as guarantor of a letter of credit the Company posted in April 2001 in support of the IRBs (the "Reimbursement Note"). The Hawesville facility began operations in 1970 with four potlines. A fifth potline was added in 1999, increasing the annual production capacity at the facility to 538 million pounds of primary aluminum. Together with the 80% interest it previously owned, the acquisition of the Acquired Assets gives the Company ownership of 100% of the Hawesville facility and its related aluminum production operations and increases the Company's overall annual production capacity by 108 million pounds. Glencore is the Company's largest shareholder, and based on its common and preferred stock ownership, beneficially owns approximately 41.5% of Century's common stock. In addition, Willy R. Strothotte, the chairman of the board of directors of Glencore International AG, serves as a director on Century's board of directors and Craig A. Davis, the chairman of Century's board of directors, is a director and former executive officer of Glencore International AG. -2- Item 7. Financial Statements and Exhibits (c) Exhibits. The following have been attached as exhibits to this filing on Form 8-K: Exhibit Number Description -------------- ----------- 2.1 Asset Purchase Agreement, dated as of April 1, 2003, by and between Glencore Ltd., Glencore Acquisition I LLC, Hancock Aluminum LLC and Century Aluminum Company 2.2 Secured Promissory Note, dated April 1, 2003, issued by Century Aluminum Company (Hawesville Note) 2.3 Secured Promissory Note, dated April 1, 2003, issued by Century Aluminum Company (Reimbursement Note) 2.4 Security Agreement, dated as of April 1, 2003, by and between Hancock Aluminum LLC, Glencore Ltd. and Glencore Acquisition I LLC 2.5 Guaranty, dated as of April 1, 2003, by Hancock Aluminum LLC, Century Kentucky, Inc., NSA Ltd., Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Metalsco, Ltd. and Skyliner, Inc. for the benefit of Glencore Acquisition I LLC and Glencore Ltd -3- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CENTURY ALUMINUM COMPANY Date: April 16, 2003 By: /s/ Gerald J. Kitchen ------------------------------------ Name: Gerald J. Kitchen Title: Executive Vice President, General Counsel Chief Administrative Officer and Secretary -4- EXHIBIT INDEX Exhibit Number Description -------------- ----------- 2.1 Asset Purchase Agreement, dated as of April 1, 2003, by and between Glencore Ltd., Glencore Acquisition I LLC, Hancock Aluminum LLC and Century Aluminum Company 2.2 Secured Promissory Note, dated April 1, 2003, issued by Century Aluminum Company (Hawesville Note) 2.3 Secured Promissory Note, dated April 1, 2003, issued by Century Aluminum Company (Reimbursement Note) 2.4 Security Agreement, dated as of April 1, 2003, by and between Hancock Aluminum LLC, Glencore Ltd. and Glencore Acquisition I LLC 2.5 Guaranty, dated as of April 1, 2003, by Hancock Aluminum LLC, Century Kentucky, Inc., NSA Ltd., Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Metalsco, Ltd. and Skyliner, Inc. for the benefit of Glencore Acquisition I LLC and Glencore Ltd -5- EX-2.1 3 ex2-1.txt ASSET PURCHASE AGREEMENT EXHIBIT 2.1 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (together with the Schedules and Exhibits hereto, the "Agreement") dated as of April 1, 2003 is entered into by and among GLENCORE LTD., a Swiss corporation acting through its Stamford, Connecticut branch ("Glencore"), GLENCORE ACQUISITION I LLC, a Delaware limited liability company ("GAC" and, together with Glencore, collectively referred to at times as "Seller"), HANCOCK ALUMINUM LLC, a Delaware limited liability company ("Buyer") and CENTURY ALUMINUM COMPANY, a Delaware corporation ("Century"). RECITALS: 1. Pursuant to an Asset Purchase Agreement dated as of April 2, 2001 (the "2001 Asset Purchase Agreement"), by and among Century, Century Kentucky, Inc., a Delaware corporation ("CKI"), NSA, Ltd., a Kentucky limited partnership ("NSA") and Glencore AG, a Swiss corporation, GAC purchased an interest in an aluminum reduction plant located in Hawesville, Kentucky (the "Plant") and the aluminum reduction business conducted at the Plant (the "Business") from Century. The Plant is composed of five potlines, four of which were installed at the original construction of the Plant and one of which (the "Fifth Potline") was installed in 1999, as well as a cast house, carbon plant and other assets and facilities necessary to the Business. 2. Under the 2001 Asset Purchase Agreement, GAC acquired (a) the Fifth Potline, together with the real property thereunder (the "Fifth Potline Interest"), (b) a twenty percent (20%) undivided interest in and to certain assets and properties comprising part of the Plant or otherwise used in the conduct of the Business, including NSA's right, title and interest in and to the Reciprocal Easement (as defined in Exhibit C) (the "20% Undivided Interest"), and (c) a membership interest equal to twenty percent (20%) of the total membership interests in Century Aluminum of Kentucky LLC ("CAK"), a Delaware limited liability company (the "Membership Interest"). In addition, Century assigned to Glencore a twenty percent (20%) interest in the benefits of the representations and warranties and indemnities of Southwire Company ("Southwire") pursuant to Century's Stock Purchase Agreement (the "Stock Purchase Agreement") with Southwire (collectively, the "Additional Interest") and NSA granted to GAC certain easements pursuant to the Glencore Reciprocal Easement (as defined in Exhibit C) (the "GAC Easement," and, together with the Fifth Potline Interest, the 20% Undivided Interest, the Membership Interest and the Additional Interest, the "Interest"). 3. Simultaneously with the closing under the 2001 Asset Purchase Agreement, CAK assigned to each of NSA and Glencore, pursuant to an Alumina Purchase Agreement, dated as of April 2, 2001, between CAK, NSA and Glencore (the "Alumina Purchase Agreement"), a pro rata interest in an agreement for the supply of sandy calcinated grade alumina which was assigned to CAK by Southwire in connection with the Stock Purchase Agreement. For purposes hereof, "pro rata" when used in relation to Glencore shall mean a twenty percent (20%) share and when used in relation to NSA shall mean an eighty percent (80%) share. Glencore's rights in, to and under the Alumina Purchase Agreement are hereinafter referred to as the "Alumina Supply Interest." 4. Seller desires to sell to Century or Buyer, and Century desires to purchase, through Buyer, from Seller, the Interest, the Alumina Supply Interest and the GAC Purchased Working Capital, upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of premises and the respective covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS The definitions of the following terms are set forth in the Sections specified below and will apply throughout this Agreement: The definitions of the following terms are set forth in the Sections specified below and will apply throughout this Agreement: DEFINITION SECTION ---------- ------- Affiliate Section 11.1 Additional Interest Recital 2 Allocation Schedule Exhibit F Alumina Purchase Agreement Recital 3 Alumina Supply Interest Recital 3 Arbitrator Section 3.3(b) Assets Section 4.6 Assumed Liabilities Section 2.5 Business Recital 1 Business Day Section 3.3(c) Buyer Preamble CAK Recital 2 Cash Payment Section 3.3(a) Century Preamble CKI Recital 1 Claims Section 4.5 Closing Section 10.1 2 DEFINITION SECTION ---------- ------- Closing Date Section 10.1 Closing Working Capital Amount Section 3.3(b)(ii) Closing Working Capital Calculation Section 3.3(b)(i) Code Section 4.9(a) Deed Section 10.2(d) Fifth Potline Recital 1 Fifth Potline Interest Recital 2 GAC Preamble GAC Easement Recital 2 GAC Purchased Working Capital Section 3.3(a) Glencore Preamble Glencore Reciprocal Easement Exhibit C Guaranty Section 6.2(b) Hawesville Purchase Note Section 3.2 Indemnified Party Section 11.5 Indemnifying Party Section 11.5 Interest Recital 2 IRB Section 2.5 Letter of Credit Section 6.1(a) Letter of Credit and Reimbursement Agreement Section 6.1(a) Letter of Credit Guaranty Section 6.1(a) 3 DEFINITION SECTION ---------- ------- Letter of Credit Reimbursement Note Section 3.2 Lien Section 6.2(d)(iii) Loss Section 11.1 Membership Interest Recital 2 Mortgage Section 6.2(a) Notes Section 3.2 NSA Recital 1 Owners Agreement Section 7.2 Permitted Liens Section 6.2(d)(iii) Power Contract Section 6.2(d)(iv) pro rata Recital 3 Purchase Price Section 3.1 Reciprocal Easement Exhibit C Reference Date Section 3.3(a) Reference Working Capital Amount Section 3.3(a) Reimbursement Agreement Section 6.2(e) Security Agreement Section 6.2(a) Seller Preamble Southwire Recital 2 Stock Purchase Agreement Recital 2 Subsidiary Guarantors Section 5.1 Taxes Section 4.9(a) Tax Returns Section 4.9(b) 4 DEFINITION SECTION ---------- ------- Third Party Claim Section 11.5 Threshold Section 11.3 20% Undivided Interest Recital 2 2001 Asset Purchase Agreement Recital 1 Working Capital Section 3.3(a) ARTICLE II SALE AND PURCHASE OF ASSETS 2.1 Transfer of the Interest, Alumina Supply Interest and GAC Purchased Working Capital. On the terms and subject to the conditions of this Agreement, Seller agrees to sell, convey, assign, transfer and deliver, to Buyer, and Century agrees to cause Buyer to purchase and accept from Seller, at the Closing, all of Seller's right, title and interest in and to (a) the Fifth Potline Interest, (b) the 20% Undivided Interest, (c) the Membership Interest, (d) the Additional Interest, (e) the GAC Easement, (f) the Alumina Supply Interest and (g) the GAC Purchased Working Capital. 2.2 The Fifth Potline Interest. The Fifth Potline Interest specifically includes the fixed and movable assets comprising pot line five (5) at the Plant, together with the real property thereunder, all as more fully described in Exhibit B hereto. 2.3 The 20% Undivided Interest. The 20% Undivided Interest specifically includes (a) the undivided twenty percent (20%) interest of GAC as tenant in common in certain real property (as more fully described in Exhibit C hereto) and certain fixed and movable assets, comprising the Plant or otherwise used in the conduct of the Business, but not including any of the working capital of the Business, and (b) all of GAC's right, title and interest in and to the Reciprocal Easement. 2.4 The Additional Interest. The Additional Interest specifically includes GAC's undivided twenty percent (20%) interest in all of the rights of Century under the Stock Purchase Agreement, including without limitation with respect to the representations and warranties of Southwire to the extent that they relate to the Fifth Potline Interest, the 20% Undivided Interest, the Membership Interest, the Additional Interest or the Business, and in GAC's rights to indemnification arising thereunder. 2.5 Assumed Liabilities. On the terms and subject to the conditions of this Agreement, at Closing Century will assume and agree to pay, perform and discharge when due Glencore's and GAC's respective obligations under and with respect to (i) any remaining obligations under the industrial revenue bond relating to the Plant (the "IRB") and contingent post-closing payments 5 arising pursuant to the Stock Purchase Agreement; (ii) all liabilities of the Business, including any liabilities for matters as to which no indemnification or a partial indemnification payment is received from Southwire, and (iii) all other obligations not covered by (i) and (ii) above assumed by GAC under the 2001 Asset Purchase Agreement or the Alumina Purchase Agreement (collectively, the "Assumed Liabilities"); provided, however, that the Assumed Liabilities shall not include (i) any liability of GAC for its unpaid Taxes for periods prior to the Closing, (ii) except as provided in Section 10.4 below, any liability of GAC for income, transfer, sales, use, and other Taxes arising in connection with the consummation of the transactions contemplated hereby, (iii) any liability of GAC for the unpaid Taxes of any other person, or (iv) any liabilities of GAC under the Owners Agreement as provided for in Section 6.1(c). ARTICLE III PURCHASE PRICE AND ADJUSTMENT 3.1 Purchase Price. Subject to the adjustment provided for in Section 3.3, the aggregate purchase price (the "Purchase Price") for the Interest, the Alumina Supply Interest and the GAC Purchased Working Capital will be Ninety-Nine Million Eight Hundred Eighty-Seven Thousand Seven Hundred Forty-Four United States Dollars (US$99,887,744), plus Century's assumption of the Assumed Liabilities. 3.2 Payment of Purchase Price. At the Closing, the Purchase Price (other than the Assumed Liabilities) will be paid to GAC as follows: (A) Fifty-Nine Million Eight Hundred Eighty-Seven Thousand Seven Hundred Forty-Four United States Dollars (US$59,887,744) will be paid by Century to GAC by wire transfer of immediately available funds to the account theretofore designated by GAC in a written notice to Century; and (B) Century shall deliver to GAC two (2) non-negotiable promissory notes, each executed by Century in favor of GAC or Glencore, as the case may be, in the forms attached hereto as Exhibit D (the "Hawesville Purchase Note") and Exhibit E (the "Letter of Credit Reimbursement Note"). The Hawesville Purchase Note and the Letter of Credit Reimbursement Note are sometimes referred to herein collectively as the "Notes." 3.3 Net Working Capital Adjustment. The Purchase Price shall be subject to adjustment for the amount of Working Capital as specified in this Section 3.3: (a) Reference Working Capital Amount. The parties agree that, for purposes hereof, "Working Capital" shall mean an amount equal to (i) twenty percent (20%) of the sum of the total current assets and total current liabilities of CAK, in each case including those items identified on Exhibit A hereto, plus (ii) the amount of the GAC Purchased Working Capital. "GAC Purchased Working Capital" shall mean all alumina inventory held by or on behalf of GAC as of the relevant date. For purposes of determining the Purchase Price to be paid on the Closing Date, the parties have agreed that Working Capital shall be deemed to be the amount of US$1,587,744 (the "Reference Working Capital Amount"), as calculated as of February 28, 2003 in accordance with the calculation shown on Exhibit A hereto; provided however, that in connection with the calculation of the Closing Working Capital Calculation, GAC may dispute any of the amounts included in the calculation of the Reference Working Capital Amount reflected in Exhibit A. 6 (b) Post-Closing Adjustment. (i) As promptly as practicable, but in any event within sixty (60) calendar days following the Closing Date, Century shall deliver to GAC a certificate setting forth the calculation of Working Capital as of the Closing Date (the "Closing Working Capital Calculation"), which shall be prepared in a manner and on a basis consistent with the calculation of the Reference Working Capital Amount shown on Exhibit A hereto. (ii) In the event GAC disputes any amounts reflected in, or the calculation of, the Closing Working Capital Calculation which affects the amount of Working Capital shown thereon as of the Closing Date (the "Closing Working Capital Amount"), it shall notify Century in writing within thirty (30) calendar days after Century's delivery of the Closing Working Capital Calculation of each disputed item, specifying the amount thereof in dispute and setting forth, in reasonable detail, the basis for such dispute. Century shall provide GAC access to the work papers of Century relating to the preparation of the Closing Working Capital Calculation. In the event of such a dispute, GAC and Century shall attempt to reconcile the differences with respect to such disputed item(s), and any resolution by them as to any disputed item(s) shall be final, binding and conclusive on the parties hereto. If GAC and Century are unable to reach a resolution with such effect within thirty (30) calendar days after receipt by Century of GAC's written notice of dispute, GAC and Century shall submit the items remaining in dispute for resolution to Deloitte & Touche LLP, or such other internationally recognized firm of independent accountant as shall be mutually acceptable to Glencore and Century ("Arbitrator"), who shall, within thirty (30) calendar days after such submission, determine and deliver to Century and GAC a report upon such remaining disputed items, and such report shall be final, binding and conclusive on GAC and Century. The Closing Working Capital Amount shall be adjusted to reflect any resolution of a dispute reached by GAC and Century or any report delivered by the Arbitrator, including any adjustments for unresolved disputed items required pursuant to Section 3.3(a). (iii) The Closing Working Capital Amount shall be deemed final for the purposes of this Section 3.3 upon the earlier of (1) the failure of Glencore timely to notify Century of a dispute, (2) the resolution of all disputes, pursuant to Section 3.3(b)(ii), by Century and GAC, and (3) the resolution of all disputes, pursuant to Section 3.3(b)(ii), by the Arbitrator. Within three (3) Business Days after the Closing Working Capital Amount is deemed final, a Purchase Price adjustment shall be made as follows: (iv) In the event the Closing Working Capital Amount exceeds the Reference Working Capital Amount, Century shall pay to GAC the amount of such excess as an adjustment to the Purchase Price by wire transfer of immediately available funds to such account as GAC shall notify Century in writing. 7 (v) In the event the Closing Working Capital Amount is less than the Reference Working Capital Amount, GAC shall pay to Century the amount of such deficiency as an adjustment to the Purchase Price by wire transfer of immediately available funds to such account as Century shall notify GAC in writing. (c) As used herein, "Business Day" means any day of the year on which banks are not required or authorized to close in New York, New York. (d) The parties agree that, in the event of the submission of any dispute regarding Working Capital to the Arbitrator, the parties shall share equally the fees and expenses of the Arbitrator required to be paid therefor. 3.4 Allocation of Purchase Price. The Purchase Price shall be allocated in accordance with Exhibit F attached hereto. 3.5 Effectiveness. In the event that the Closing shall occur, Century and GAC agree that the results of operations of the Business acquired by Buyer hereunder from 12:01 am on the Closing Date shall be for the account of Buyer. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER Seller represents and warrants to Century as follows: 4.1 Organization and Good Standing. Glencore is a corporation duly organized, validly existing and in good standing under the laws of Switzerland with a branch office in Stamford, Connecticut. Glencore has all requisite power and authority to own its properties, including the Alumina Supply Interest, and to conduct its business as presently conducted. GAC is a limited liability company duly formed and validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to own its properties, including without limitation, the Fifth Potline Interest, the 20% Undivided Interest, the GAC Purchased Working Capital, the Membership Interest and the Additional Interest, and to conduct its business as presently conducted. 4.2 Authority; Enforceability. Glencore has all requisite power and authority to execute, deliver and perform its obligations arising under this Agreement and to consummate the transactions contemplated hereby and GAC has all requisite power and authority to execute, deliver and perform this Agreement and the Deed and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and, in the case of GAC, the Deed, and the consummation of the transactions contemplated hereby and thereby, have been, or will be on or prior to the Closing Date, duly and validly authorized by all necessary action on the part of Glencore and GAC, as the case may be. This Agreement has been duly executed and delivered by each of Glencore and GAC and constitutes a valid and binding obligation of Glencore and GAC, enforceable against Glencore and GAC in accordance with its terms. When executed and delivered by GAC, on and as of the Closing Date, the Deed will have been duly executed and delivered by GAC, and will constitute a valid and binding obligation of GAC, enforceable against GAC in accordance with its terms. 8 4.3 No Conflict or Breach. The execution, delivery and performance of this Agreement and, in the case of GAC, the Deed, do not and will not: (a) conflict with or constitute a violation of the Certificate of Formation or other constitutive documents of either Glencore or GAC, as the case may be; (b) conflict with or constitute a violation of any law, statute, judgment, order, decree or regulation of any legislative body, court, administrative agency, governmental authority or arbitrator applicable to or relating to Glencore, GAC, the Interest, the Alumina Supply Interest, the GAC Purchased Working Capital or any portion of any thereof; (c) conflict with, constitute a default under, result in a breach or acceleration of or require notice to or the consent of any third party under any contract, agreement, commitment, mortgage, note, license or other instrument or obligation to which Glencore or GAC is party or by which it is bound or by which the Interest, the Alumina Supply Interest, the GAC Purchased Working Capital or any portion of any thereof is affected; or (d) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever on the Interest, the Alumina Supply Interest, the GAC Purchased Working Capital or any portion of any thereof (except as provided in Section 6.2(a) hereof). 4.4 Governmental Consents and Approvals. The execution, delivery and performance of this Agreement by each of Glencore and GAC and of the Deed by GAC do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to any governmental authority, except as described in Schedule 4.4 attached hereto. 4.5 Litigation. There are no pending or, to the knowledge of Glencore or GAC, threatened claims, actions, suits, arbitration proceedings, inquiries, hearings, injunctions or investigations ("Claims") against Glencore or GAC which if adversely determined would result in a lien on the Interest, the Alumina Supply Interest or the GAC Purchased Working Capital or that may affect this Agreement, the Deed or the transactions contemplated hereby or thereby. 4.6 Valid Title; No Liens. (i) Seller is the sole and exclusive owner of, and has good, valid and marketable title, and in the case of real property (including without limitation all land and buildings and other improvements thereon, together with all tenements, hereditaments and appurtenances thereto), good, marketable and insurable title in fee simple, to, all of the assets, properties and rights which constitute a part of the Interest, the Alumina Supply Interest or the GAC Purchased Working Capital (such assets, properties and rights are hereinafter referred to as the "Assets") wherever located, free and clear of all Liens other than Permitted Liens, and (ii) no other person or legal entity has or will have at Closing any interest whatsoever in any of the Assets. At Closing, Seller will transfer and convey to Buyer, and Buyer will acquire, good, valid and marketable title to the Assets, free and clear of all Liens of any kind or nature whatsoever, other than Permitted Liens. 4.7 GAC Purchased Working Capital. The information delivered by GAC to Century regarding the GAC Purchased Working Capital in connection with the calculation of the Reference Working Capital Amount was true, accurate and complete. 9 4.8 Brokers. No finder, broker, agent or other intermediary has acted for or on behalf of Seller in connection with the negotiation or consummation of this Agreement, and there are no claims for any brokerage commission, finder's fee or similar payment due from Seller. 4.9 GAC Tax Matters. (a) For the purposes of this Agreement, "Taxes" are any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Internal Revenue Code of 1986 (the "Code") section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. (b) GAC has filed all returns, declarations, reports, claims for refund, or information returns or statements relating to Taxes, including any schedules or attachments thereto, and including any amendments thereof ("Tax Returns") that it was required to file. All such Tax Returns were correct and complete in all material respects. All Taxes owed by GAC (whether or not shown on any Tax Return) have been paid. GAC is not currently the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where GAC does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no security interests on any of the assets of GAC that arose in connection with any failure (or alleged failure) to pay any Tax. (c) No member or director or officer of GAC has any knowledge that any authority will assess any additional Taxes for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Tax liability of GAC either (A) claimed or raised by any authority in writing or (B) as to which any of the members or the directors or officers of GAC has knowledge. Except as provided by Schedule 4.9, no Tax Return filed with respect to GAC has been or currently is the subject of audit. (d) GAC has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. GAC has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Code section 6662. GAC is not a party to any Tax allocation or sharing agreement. GAC has no liability for the Taxes of any other person. 4.10 Disclosure. No representation, warranty or statement made by Glencore or GAC in this Agreement, or in any document furnished or to be furnished to Century or Buyer by or on behalf of Glencore or GAC pursuant to this Agreement, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements contained herein or therein not misleading. 10 ARTICLE V REPRESENTATIONS AND WARRANTIES OF CENTURY Century represents and warrants to Seller as follows: 5.1 Organization and Good Standing; Governing Documents. Century is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Century has all requisite power and authority to own its properties and to conduct its business as presently conducted. Buyer is a limited liability company duly formed and validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own its properties and to conduct its business as presently conducted. Each of CKI, Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Metalsco, Ltd. and Skyliner, Inc. (collectively, together with NSA, the "Subsidiary Guarantors") is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of incorporation, and NSA is a limited partnership duly organized, validly existing and in good standing under the laws of Kentucky. Each of the Subsidiary Guarantors has all requisite power and authority to own its properties and to conduct its business as presently conducted. 5.2 Authority; Enforceability. Century has all requisite power and authority to execute and deliver this Agreement, the Notes and the Reimbursement Agreement and to consummate the transactions contemplated hereby and thereby. Buyer has all requisite power and authority to execute and deliver this Agreement, the Security Agreement, the Mortgage and the Guaranty and to consummate the transactions contemplated hereby and thereby. Each of the Subsidiary Guarantors has all requisite power and authority to execute and deliver the Guaranty and to consummate the transactions contemplated thereby. The execution, delivery and performance of this Agreement, the Notes, the Reimbursement Agreement, the Security Agreement, the Mortgage and the Guaranty and the consummation of the transactions contemplated hereby and thereby have been, or will be on or prior to the Closing Date, duly and validly authorized by all necessary action on the part of Century, Buyer and/or each of the Subsidiary Guarantors, as the case may be. This Agreement has been duly executed and delivered by each of Century and Buyer and constitutes a valid and binding obligation of each of Century and Buyer, enforceable against each of Century and Buyer in accordance with its terms. When executed and delivered by Century, Buyer and/or each of the Subsidiary Guarantors, as the case may be, on and as of the Closing Date, the Notes, the Reimbursement Agreement, the Security Agreement, the Mortgage and the Guaranty will have been duly executed and delivered by Century, Buyer and/or each of the Subsidiary Guarantors, as the case may be, and will constitute valid and binding obligations of Century, Buyer and/or each of the Subsidiary Guarantors, as the case may be, enforceable against Century, Buyer and/or each of the Subsidiary Guarantors, as the case may be, in accordance with their terms. 5.3 No Conflict or Breach. The execution, delivery and performance of this Agreement, the Notes, the Reimbursement Agreement, the Security Agreement, the Mortgage and the Guaranty will not: (a) conflict with or constitute a violation of the Articles of Incorporation, By-Laws or other constitutive documents of Century, Buyer or any of the Subsidiary Guarantors; 11 (b) conflict with or constitute a violation of any law, statute, judgment, order, decree or regulation of any legislative body, court, administrative agency, governmental authority or arbitrator applicable to or relating to Century, Buyer or any of the Subsidiary Guarantors; or (c) conflict with, constitute a default under, result in a breach or acceleration of or require notice to or the consent of any third party under any contract, agreement, commitment, mortgage, note, license or other instrument or obligation to which Century, Buyer or any of the Subsidiary Guarantors is party or by which it is bound, other than notices which have been given and consents which have been obtained. 5.4 Governmental Consents and Approvals. The execution, delivery and performance of this Agreement, the Notes, the Security Agreement, the Mortgage and the Guaranty do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to any governmental authority, except as described in Schedule 5.4 attached hereto. 5.5 Litigation. There are no Claims pending or, to the knowledge of Century, threatened, against Century, Buyer or any of the Subsidiary Guarantors or their respective operations relating to or arising out of, or that may affect, this Agreement, the Notes, the Security Agreement, the Mortgage or the Guaranty or the transactions contemplated hereby or thereby. 5.6 Working Capital. The information included in the calculation of (a) the Reference Working Capital Amount was, and (b) the Closing Working Capital Amount shall be (other than such information as is provided by GAC) true, accurate and complete. 5.7 Brokers. No finder, broker, agent or other intermediary has acted for or on behalf of Century in connection with the negotiation or consummation of this Agreement, and there are no claims for any brokerage commission, finder's fee or similar payment due from Century. 5.8 Disclosure. No representation, warranty or statement made by Century, Buyer or any Subsidiary Guarantor in this Agreement, or in any document furnished or to be furnished to Glencore or GAC by or on behalf of Century pursuant to this Agreement, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements contained herein or therein not misleading. ARTICLE VI INDIVIDUAL COVENANTS 6.1 Covenants of Glencore. (a) Letter of Credit. In connection with the consummation of the transactions contemplated by the 2001 Asset Purchase Agreement, Citibank, N.A. issued a letter of credit (the "Letter of Credit") as credit enhancement for the IRB, which Letter of Credit was issued pursuant to the Letter of Credit and Reimbursement Agreement dated as of October 10, 2001 among NSA, Glencore and Citibank, N.A (the "Letter of Credit and Reimbursement Agreement"). Glencore guaranteed payments by NSA to Citibank, N.A. under the Letter of Credit and Reimbursement Agreement (the "Letter of Credit Guaranty"). Glencore shall keep the Letter of Credit Guaranty in place following the 12 Closing until payment in full of the Hawesville Purchase Note (whether on the maturity date, by acceleration or otherwise), at which time the Letter of Credit shall be replaced by a letter of credit posted by Century. Until the Letter of Credit Guaranty is terminated, Glencore shall continue to perform all of its obligations under the Letter of Credit and Reimbursement Agreement. (b) Substitution of Collateral. GAC agrees that Century shall be entitled to substitute such other security in lieu of the Membership Interest as may be reasonably acceptable to GAC and, in such event, the security interest in the Membership Interest granted to GAC pursuant to Section 6.2(a) and the Security Agreement shall be released and GAC and Century or Buyer, as the case may be, shall execute and deliver such amendment to the Security Agreement, Uniform Commercial Code financing statements or amendments thereto and such other documents and instruments as may be reasonably requested by either of them in order to effect such release and pledge in substitution therefor. (c) CAK Operating Costs. Notwithstanding the assignment of the Owners Agreement and the termination of the guarantees thereunder as provided for in Section 7.2 hereof, Seller agrees to pay to CAK any and all Operating Costs, Extras (each such term having the meaning given thereto in the Owners Agreement) and other amounts as may be determined to have been due from GAC to CAK pursuant to the Owners Agreement for the period prior to or on the Closing Date within ten (10) days after receipt of a request therefor, and Seller and Century agree that any dispute with respect to any such Operating Costs, Extras or other amounts shall be resolved in accordance with the dispute resolution mechanism provided for in the Owners Agreement. 6.2 Covenants of Century. (a) Security. As security for the performance of Century's obligations under the Notes, Buyer, GAC and Glencore shall enter into a security agreement in the form attached hereto as Exhibit G (the "Security Agreement"), pursuant to which Buyer shall grant to GAC and Glencore a first priority security interest in and to (i) the Fifth Potline Interest, (ii) the 20% Undivided Interest, (iii) the Membership Interest, (iv) the Additional Interest, (v) the GAC Easement and (vi) the Alumina Supply Interest, which security interest shall be granted and perfected on or prior to the Closing Date. Buyer shall grant a mortgage in favor of GAC and Glencore (the "Mortgage") to more fully reflect and record the security interest granted in (x) the real property and improvements constituting a part of the Fifth Potline Interest, (y) the GAC Easement and (z) the real property and improvements constituting a part of the 20% Undivided Interest. (b) Guaranty. As further security for the performance of its obligations under the Notes, Century shall cause Buyer, CKI, NSA, Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Metalsco, Ltd. and Skyliner, Inc. to execute and deliver a guaranty to GAC and Glencore of Century's obligations arising under the Notes (the "Guaranty"). 13 (c) Real Estate Easements. Century agrees that the GAC Easement and the easements granted pursuant to the Reciprocal Easement shall remain in place for so long as GAC holds the security interest granted pursuant to the Security Agreement. (d) Negative Covenant. Century agrees that, so long as GAC holds a security interest in the Membership Interest, Century shall not: (i) permit CAK to issue additional membership interests therein such that the Membership Interest shall be diluted, (ii) permit CAK to incur indebtedness, other than (A) trade payables arising in the ordinary course of business and obligations in respect of trade letters of credit or bankers' acceptances issued in respect of trade payables, and (B) advances by members in respect of operating costs of CAK, (iii) permit CAK to incur or permit to exist any Lien of any nature whatsoever on any of its properties or assets, other than (A) Liens existing on the Closing Date and any extensions, renewals or replacements thereof, (B) pledges or deposits under worker's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts or leases, or to secure public or statutory obligations (including without limitation obligations pursuant to environmental laws), surety bonds, customs duties and the like, or for the payment of rent, in each case incurred in the ordinary course of business, (C) Liens imposed by law, such as carriers', vendors', warehousemen's and mechanics' liens, in each case for sums not yet due or which are being contested in good faith and by appropriate proceedings, (D) Liens in respect of taxes and other governmental assessments and charges which are not yet due or which are being contested in good faith by appropriate proceedings, (E) Liens securing reimbursement obligations with respect to letters of credit that solely encumber documents and other property relating to such letters of credit and the proceeds thereof, (F) licenses or leases or subleases as licensor, lessor or sublessor of any of its property, including intellectual property, in the ordinary course of business, (G) judgment liens and Liens securing appeal bonds or letters of credit issued in support of or in lieu of appeal bonds, so long as no judgment default has occurred and is continuing, and (H) extensions, renewals or replacements of any Liens referred to in clauses (B) through (G) (the Liens referred to in clauses (B) through (H), together with the Liens described on Schedule 6.2, collectively, "Permitted Liens"). As used herein, "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind. (iv) permit CAK to sell, transfer or otherwise dispose of the Agreement for Electric Service between Kenergy (formerly GREC) and Southwire, and Amendment No. 1 thereto, each dated July 15, 1998 and all agreements related to the provision of electrical power thereunder to the Plant by or among Kenergy, LG&E Energy Corp. or LG&E Energy Marketing, Inc. and Southwire and its affiliates, assigned to Century on April 1, 2001 and further assigned by Century to CAK on April 1, 2001 (all such agreements, collectively, the "Power Contract"), 14 without the prior consent of GAC, which shall not be unreasonably withheld; provided, that the provisions of this Section 6.2(d)(iv) shall be without prejudice to CAK's rights to sell any power obtained under the Power Contract in the ordinary course of business. (e) The Letter of Credit; Notes. Century shall pay and be responsible for all of the costs and expenses incurred by GAC or Glencore, as the case may be, in connection with the Letter of Credit (including, but not limited to, those arising out of the Letter of Credit and Reimbursement Agreement). At Closing, Century shall execute and deliver a Reimbursement Agreement by and between Century and Glencore (the "Reimbursement Agreement") in the form attached hereto as Exhibit H, pursuant to which Century agrees to reimburse all amounts that may be paid by Glencore under the Letter of Credit Guaranty. On or prior to payment in full of the Notes (whether at stated maturity, by acceleration or otherwise), the Letter of Credit shall be replaced by a letter of credit posted by Century. Century shall also pay and be responsible for all costs and expenses incurred by GAC or Glencore, as the case may be, in connection with the Notes, including those arising in connection with the Security Agreement, the Mortgage, the Guaranty and the Reimbursement Agreement. ARTICLE VII MUTUAL COVENANTS Each of Seller and Century covenants and agrees with the other as follows: 7.1 Best Efforts. Each party shall use its best efforts to make or obtain as promptly as possible all consents, approvals, authorizations, registrations and filings with all federal, state or local judicial or governmental authorities or administrative agencies as are required in connection with the consummation of the transactions contemplated by this Agreement. 7.2 Owners Agreement and Guarantees. The parties agree to assign all of GAC's right, title and interest in and to the Owners Agreement dated as of April 2, 2001 by and among NSA, GAC and CAK, as amended to date (the "Owners Agreement"), to Buyer effective as of the Closing. Century and Glencore agree that the guarantees agreed to be delivered by each of them pursuant to the Owners Agreement shall be terminated and of no further force and effect at and as of the Closing. 7.3 LLC Agreement. The parties agree to assign all of GAC's right, title and interest in and to the Amended and Restated Limited Liability Company Agreement of Century Aluminum of Kentucky LLC dated as of April 2, 2001 by and among CKI, GAC and CAK to Buyer, effective as of the Closing. 15 ARTICLE VIII CONDITIONS PRECEDENT TO CENTURY'S OBLIGATIONS The obligations of Century to consummate or cause the consummation of the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions on or before the Closing Date, unless specifically waived in writing by Century prior to the Closing Date: 8.1 Representations and Warranties. The representations and warranties of Seller contained in this Agreement shall have been true and correct on the date of this Agreement and shall be true and correct on the Closing Date as though made on and as of the Closing Date. 8.2 Compliance with Covenants. Seller shall have duly performed and complied or caused the performance or compliance with all covenants, agreements and obligations required by this Agreement to be performed or complied with by it on or prior to the Closing. 8.3 Absence of Litigation. No action or proceeding shall be pending by or before any court or other governmental body or agency seeking to restrain, prohibit or invalidate the transactions contemplated by this Agreement or which would adversely affect the right of Buyer to own, operate or control the Interest or any portion thereof after the Closing Date. 8.4 Board Approval. Century's board of directors shall have authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. 8.5 Consent of Bank Lenders. Century shall have received a consent, in form and substance reasonably satisfactory to Century, from the requisite lenders under the revolving credit agreement, dated as of April 2, 2001, among Century and certain of its Affiliates, as borrowers, Fleet Capital Corporation, as agent for the lenders, Fleet Securities Inc., as arranger, Credit Suisse First Boston, as syndication agent, and the lending institutions parties thereto, to the consummation of the transactions contemplated hereby. 8.6 Ancillary Agreements. The parties thereto (other than persons under the control of Century) shall have executed and delivered all of the documents and instruments contemplated to be delivered pursuant to Section 10.2. ARTICLE IX CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS The obligations of Seller to consummate or cause the consummation of the transactions contemplated by this Agreement are subject to the satisfaction of each of the following conditions on or before the Closing Date, unless specifically waived in writing by Seller prior to the Closing: 9.1 Representations and Warranties. The representations and warranties of Century contained in this Agreement shall have been true and correct on the date of this Agreement, and shall be true and correct on the Closing Date as though made on and as of the Closing Date. 16 9.2 Compliance with Covenants. Century shall have duly performed and complied or caused the performance and compliance with all covenants, agreements and obligations required by this Agreement to be performed or complied with by it on or prior to the Closing. 9.3 Absence of Litigation. No action or proceeding shall be pending by or before any court or other governmental body or agency seeking to restrain, prohibit or invalidate the transactions contemplated by this Agreement. 9.4 Senior Management Approval. Glencore's senior management shall have authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. 9.5 Ancillary Agreements. The parties thereto (other than persons under the control of Seller) shall have executed and delivered the Security Agreement, the Mortgage, the Guaranty, the Notes and the Reimbursement Agreement and all of the documents and instruments contemplated to be delivered pursuant to Section 10.3. ARTICLE X CLOSING 10.1 Closing. The closing of the sale of the Interest, the Alumina Supply Interest and the GAC Purchased Working Capital (the "Closing") shall take place at the offices of Curtis, Mallet-Prevost, Colt & Mosle LLP, 101 Park Avenue, New York, New York, or such other place as may be mutually agreed upon by the parties hereto. The date of the Closing is referred to as the "Closing Date." 10.2 Deliveries by Seller. At the Closing, Seller shall deliver or cause to be delivered to Buyer the following: (a) A certificate of an authorized officer of GAC confirming the satisfaction of the conditions set forth in Sections 8.1 and 8.2 hereof. (b) A copy of all corporate resolutions authorizing the execution, delivery and performance by GAC of this Agreement, the Deed, the Security Agreement and such other agreements as may be executed and delivered by GAC pursuant to this Agreement, and the consummation of the transactions contemplated herein and therein, accompanied by the certification of an authorized representative of GAC to the effect that such resolutions are in full force and effect and have not been amended, modified or rescinded. (c) Good standing certificates from the Secretary of State of Delaware and the Secretary of State of Kentucky for GAC. (d) A special warranty Deed for the real property and improvements constituting a part of the Interest (the "Deed"), and such other Deeds, Bills of Sale and Assignment and such other instruments of transfer as Century may request to convey and vest in Buyer all of GAC's right, title and interest in and to all of the remaining Interest, free and clear of liens arising by, through or under GAC (except as provided in Section 6.2(a) hereof); provided that in no event shall GAC be required to deliver a Deed with respect to any 17 portion of the Interest that purports to convey greater title to such portion of the Interest than was conveyed or warranted by Century to GAC under the 2001 Asset Purchase Agreement. (e) An assignment of the Alumina Supply Interest executed by Glencore in favor of Buyer. (f) Assignments and such other documents and instruments as may reasonably be requested by Century for the assignment by GAC to Buyer of the GAC Purchased Working Capital. (g) An opinion of legal counsel regarding title to the real property constituting a part of the Interest. (h) An owner's affidavit executed by GAC regarding title to the real property constituting a part of the Interest. 10.3 Deliveries by Century. At the Closing, Century will deliver or cause to be delivered to Seller the following: (a) A certificate of an authorized officer of Century confirming the satisfaction of the conditions set forth in Sections 9.1 and 9.2 as to representations, warranties and covenants of Century. (b) A copy of all corporate resolutions authorizing the execution, delivery and performance by Century of this Agreement and the Notes, and the consummation of the transactions contemplated herein and therein, accompanied by the certification of an authorized officer of Century to the effect that such resolutions are in full force and effect and have not been amended, modified or rescinded. (c) A copy of all corporate resolutions authorizing the execution, delivery and performance by Buyer of this Agreement, the Deed, the Security Agreement, the Mortgage and the Guaranty, and the consummation of the transactions contemplated herein and therein, accompanied by the certification of an authorized officer of Buyer to the effect that such resolutions are in full force and effect and have not been amended, modified or rescinded. (d) The Purchase Price (other than the Assumed Liabilities), in the form provided for in Section 3.2. (e) Original copies of the agreements referred to in Section 9.5, executed by all parties thereto other than persons under the control of Glencore. 10.4 Transfer Costs. GAC and Buyer shall share equally (a) any fees and disbursements in connection with the transfer of the Interest, the Alumina Supply Interest and the GAC Purchased Working Capital as provided in Section 2.1, and (b) all property transfer taxes, including, without limitation, conveyance, sales, use and stamp taxes and any recording, registration, and other fees, which become payable in connection with the Closing of the 18 transactions contemplated by this Agreement (other than any recording costs, registration and other fees incurred in connection with the Mortgage and the Security Agreement). GAC, after review and consent by Century, shall file such applications and documents as shall permit any such tax to be assessed and paid on or prior to the Closing Date in accordance with any available pre-sale filing procedure. Buyer shall execute and deliver all instruments and certificates necessary to enable GAC to comply with the foregoing. 10.5 Further Assurances. Seller will, at any time on or after the Closing Date, take any and all steps reasonably requested by Century or Buyer to confirm title to Buyer of the Interest (or any portion thereof), the Alumina Supply Interest and the GAC Purchased Working Capital, and will do, execute, acknowledge and deliver all such further acts, deeds, conveyances, powers of attorney and assurances as may be required for the more effective transfer to Buyer, or its successors or assigns, of any of the Interest, the Alumina Supply Interest and the GAC Purchased Working Capital. ARTICLE XI INDEMNIFICATION 11.1 Indemnification by GAC. GAC will indemnify, defend and hold harmless Century and its officers, directors and Affiliates from, against, and with respect to any and all action or cause of action, loss, damage, claim, obligation, liability, penalty, fine, cost and expense (including, without limitation, reasonable attorneys' and consultants' fees and costs and expenses incurred in investigating, preparing, defending against or prosecuting any litigation, claim, proceeding, demand or request for action by any governmental or administrative entity), of any kind or character (a "Loss") arising out of or in connection with any of the following: (a) any breach of any of the representations or warranties of GAC or Glencore contained in or made pursuant to this Agreement; (b) any failure by GAC or Glencore to perform or observe, or to have performed or observed, in full, any covenant, agreement or condition to be performed or observed by it pursuant to this Agreement; and As used in this Article XI, the term "Affiliate" means, with respect to any specified person, any other person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person; provided that for purposes hereof, with respect to Glencore and GAC, "Affiliate" shall not include Century, Buyer, CAK, NSA or any other person that is controlled, directly or indirectly by Century, and with respect to Century and Buyer, "Affiliate" shall not include Glencore or GAC or any other entity that is not controlled, directly or indirectly, by Century. 11.2 Indemnification by Century. Century will indemnify, defend and hold harmless Seller and each of their officers, directors and Affiliates from, against and with respect to any Loss arising out of or in connection with any of the following: (a) any breach of any of the representations and warranties of Century contained in or made pursuant to this Agreement; 19 (b) any failure by Century or Buyer to perform or observe, or to have performed or observed, in full, any covenant, agreement or condition to be performed or observed by it pursuant to this Agreement; and (c) the Assumed Liabilities. 11.3 Indemnification Threshold. Neither party will be entitled to indemnification under Section 11.1(a) and (b) or Section 11.2(a) and (b) hereof until such party has sustained aggregate Losses under such Sections in excess of One Hundred Thousand Dollars (US$100,000.00) (the "Threshold"). If either party suffers indemnifiable Losses in excess of the Threshold, such party will be entitled to indemnification hereunder with respect to the aggregate amount of all such indemnifiable Losses and not merely the amount in excess of the Threshold. 11.4 Time Limits on Indemnification. Neither party will have liability to the other party for indemnification under Section 11.1(a) or Section 11.2(a) hereof unless notice of the Loss is given by the Indemnified Party to the Indemnifying Party within two (2) years of the Closing Date. 11.5 Notice of Third Party Claim. A party that may be entitled to be indemnified pursuant to Section 11.1 or 11.2 (the "Indemnified Party") shall promptly notify the other party (the "Indemnifying Party") in writing within fifteen (15) days of notice of any pending or threatened claim or demand asserted by a third party which the Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement ("Third Party Claims") against the Indemnified Party, describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Article XI except to the extent the Indemnifying Party is materially prejudiced by such failure. Subject to the Indemnifying Party's right to defend in good faith Third Party Claims as hereinafter provided, the Indemnifying Party shall satisfy or contest its obligations under this Article XI within fifteen (15) days after the receipt of written notice thereof from the Indemnified Party. If the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that may result from a Third Party Claim, then the Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice if it gives notice of its intention to do so to the Indemnified Party within fifteen (15) days of the receipt of such notice from the Indemnified Party; provided, however, that the Indemnified Party may participate in such defense and retain separate counsel at its own cost and expense, without prejudice to the rights of the parties to control the defense of their respective interests. In the event the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party's expense, all witnesses, pertinent records, materials and information in the Indemnified Party's possession or under the Indemnified Party's control relating thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, at the Indemnifying Party's expense, all such witnesses, 20 records, materials and information in the Indemnifying Party's possession or under the Indemnifying Party's control relating thereto as is reasonably required by the Indemnified Party. No such Third Party Claim may be settled by the Indemnifying Party without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld); provided, however that any such settlement shall in all cases release the Indemnified Party from all liability with respect thereto. 11.6 Claims between Buyer and GAC. Century and GAC shall attempt to resolve between themselves any claims for indemnification hereunder not a result of a Third Party Claim. The notification provisions of Section 11.5 shall also apply to claims between Century and GAC. Any disputes not resolved within ninety (90) days of notice shall be settled by arbitration as provided in Section 13.7. 11.7 Dollar Limit on Indemnification by Century and GAC. Notwithstanding anything to the contrary contained in this Agreement, the maximum aggregate amount of indemnifiable Losses which may be recovered (a) from GAC or its Affiliates by Century and its Affiliates arising out of or resulting from the causes enumerated in Section 11.1(a) (with the exception of any Losses relating to or arising from the breach of any representation or warranty contained in Section 4.1, 4.2, 4.3, 4.6 or 4.9) or (b) from Century or its Affiliates by GAC and its Affiliates arising out of or resulting from the causes enumerated in Section 11.2(a) (with the exception of any Losses relating to or arising from the breach of any representation or warranty contained in Section 5.1, 5.2 or 5.3), shall in either case be an amount equal to Ten Million Dollars (US$10,000,000). 11.8 Exclusive Remedies. Except in respect of injunctive relief to the extent available, the parties hereto acknowledge and agree that following the Closing the indemnification provisions of this Article XI shall be the sole and exclusive remedies of, on the one hand, GAC and its Affiliates against Century and its Affiliates, and on the other hand, Century and its Affiliates against GAC and its Affiliates, for any breach of the representations, warranties, covenants or agreements of GAC or Century, as the case may be, hereunder. ARTICLE XII TERMINATION 12.1 Termination. This Agreement may be terminated at any time prior to the Closing: (a) By the mutual written consent of GAC and Century; (b) By GAC (if Seller is not then in breach of any term of this Agreement), if Century (i) fails to perform in any material respect its agreements contained herein required to be performed on or prior to the Closing Date, or (ii) materially breaches any of its representations or warranties contained herein, which failure or breach is not cured within ten (10) days after GAC has notified Century of its intent to terminate this Agreement pursuant to this subparagraph; (c) By Century (if Century is not then in breach of any term of this Agreement), if Seller (i) fails to perform in any material respect its agreements contained herein required to be performed on or prior to the Closing Date, or (ii) materially breaches any of its 21 representations or warranties contained herein , which failure or breach is not cured within ten (10) days after Century has notified GAC of its intent to terminate this Agreement pursuant to this subparagraph; (d) By either GAC or Century, if there is any order, writ, injunction or decree of any court or governmental or regulatory agency binding on Seller or Century which prohibits or restrains Seller or Century from consummating the transactions contemplated hereby; or (e) By either party if the Closing has not occurred by the later of (i) sixty (60) days after the date hereof, or (ii) June 2, 2003. 12.2 Effect on Obligations. Termination of this Agreement pursuant to this Article shall terminate all obligations of the parties hereunder, except for the obligations under Sections 13.2 (with respect to expenses) and 13.3 (with respect to publicity); provided, however, that termination pursuant to Sections 12.1(b) or (c) will not relieve the defaulting or breaching party from any liability to any other party hereto. ARTICLE XIII MISCELLANEOUS 13.1 Bulk Sales. The parties agree to waive the requirements, if any, of all applicable bulk sales laws. 13.2 Expenses. Except as set forth in Section 3.3(b) (Post-Closing Adjustment), Section 6.2(e) (the Letter of Credit; Notes) or in Section 10.4 (Transfer Costs), each party shall bear its own fees, costs and expenses incurred in connection with the transactions contemplated hereby. 13.3 Publicity. Except as may be required by law or stock exchange rules, no party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party, and the parties shall cooperate as to the timing and contents of any such press release or public announcement; provided that nothing in this Section 13.3 shall prohibit Century from disclosing information regarding the transactions contemplated by this Agreement, upon request, to stock analysts in the ordinary course of business and consistent with past practice. Notwithstanding the foregoing, where an announcement is required by law or stock exchange rules, the party required to make such an announcement shall notify the other party of such requirement (and provide a copy of such announcement to the other party) as soon as practicable in advance of such announcement and, to the extent practical, take the views of the other party in respect of such announcement into account prior to making such announcement. 13.4 Best Efforts. Each party hereto agrees to use its best efforts to satisfy the conditions to the Closing set forth in this Agreement and otherwise to consummate the transactions contemplated by this Agreement. 22 13.5 Notices. All notices, demands and other communications made hereunder will be in writing and shall be given either by personal delivery, by nationally recognized overnight courier (with charges prepaid) or by telecopy (with telephone confirmation), and will be deemed to have been given or made when personally delivered, the day following the date deposited with such overnight courier service or when transmitted to telecopy machine and confirmed by telephone, addressed to the respective parties at the following addresses (or such other address for a party as shall be specified by like notice): If to Seller: Glencore Acquisition I LLC c/o Glencore Ltd. 301 Tresser Boulevard Stamford, Connecticut 06901-3244 Attention: Aluminum/Alumina Department Facsimile No.: (203) 978-2610 If to Century or Buyer: Century Aluminum Company 2511 Garden Road Building A, Suite 200 Monterey, CA 93940 Attention: Gerald J. Kitchen Facsimile No.: (831) 642-9328 13.6 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, applicable to contracts executed in and to be performed entirely within that state. 13.7 Dispute Resolution. Any controversy or claim arising out of or relating to this Agreement, or any breach thereof, shall be settled by arbitration administered by the American Arbitration Association in New York City under its Commercial Arbitration Rules. The panel of arbitrators shall consist of three arbitrators. Each party shall select one arbitrator and the two selected arbitrators shall select a third to complete the panel. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The determination of the arbitrators shall be final and binding on the parties. 13.8 Counterparts. This Agreement may be executed in one or more original or facsimile counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 13.9 Assignment. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither this Agreement nor any of the rights, interest or obligations hereunder may be assigned by any of the parties hereto without the prior written consent of all other parties hereto, and any purported assignment without such consent shall be void. 23 13.10 Third Party Beneficiaries. None of the provisions of this Agreement or any document contemplated hereby is intended to grant any right or benefit to any person or entity which is not a party to this Agreement. 13.11 Headings. The Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of this Agreement and shall not in any way affect the meaning or interpretation of this Agreement. 13.12 Amendments. Any waiver, amendment, modification or supplement of or to any term or condition of this Agreement will be effective only if in writing and signed by all parties hereto and the parties hereto waive the right to amend the provisions of this Section orally. 13.13 Specific Performance. Seller acknowledges that each of the Fifth Potline Interest, the 20% Undivided Interest, the Membership Interest, the Additional Interest, the GAC Easement, the Alumina Supply Interest and the GAC Purchased Working Capital are unique and that if Seller fails to consummate the transactions contemplated by this Agreement such failure will cause irreparable harm to Century for which there will be no adequate remedy at law. Century shall be entitled, in addition to its other remedies pursuant to Article XI hereof, to specific performance of this Agreement if Seller will, without cause, refuse to consummate the transactions contemplated by this Agreement. 13.14 Access to Records. After the Closing, each of Century and GAC will permit the other and its counsel, accountants and other representatives reasonable access at such times as Century and GAC may agree to records relating to the Plant, its operation or the Business as operated during the period from April 2, 2001 until the Closing Date for accounting, financial, and tax purposes. 13.15 Severability. In the event that any provision in this Agreement shall be determined to be invalid, illegal or unenforceable in any respect, the remaining provisions of this Agreement will not be in any way impaired, and the illegal, invalid or unenforceable provision shall be fully severed from this Agreement and there will be automatically added in lieu thereof a provision as similar in terms and intent to such severed provision as may be legal, valid and enforceable. 13.16 Entire Agreement. This Agreement and the Schedules and Exhibits hereto constitute the entire contract between the parties hereto pertaining to the subject matter hereof, and supersede all prior and contemporaneous agreements and understandings between the parties with respect to such subject matter. [SIGNATURE PAGE FOLLOWS] 24 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be signed by its duly authorized officer or representative as of the date first above written. CENTURY ALUMINUM COMPANY By: -------------------------- Name: Title: GLENCORE LTD. By: -------------------------- Name: Title: GLENCORE ACQUISITION I LLC By: -------------------------- Name: Title: HANCOCK ALUMINUM LLC By: -------------------------- Name: Title: EXHIBIT A Reference Working Capital Amount REFERENCE WORKING CAPITAL AMOUNT CALCULATION As of February 28, 2003 ------------------ CENTURY ALUMINUM OF KENTUCKY LLC: $ CASH (740,577) ACCOUNTS RECEIVABLE, TRADE 173,035 INVENTORIES 21,451,201 PREPAID & OTHER ASSETS 1,622,771 - ---------------------------------------------------------------------------- TOTAL CURRENT ASSETS $ 22,506,430 - ---------------------------------------------------------------------------- ACCOUNTS PAYABLE, TRADE $(18,794,511) ACCRUED & OTHER CURRENT LIABILITIES (4,473,198) - ---------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES $(23,267,709) - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- TOTAL WORKING CAPITAL $ (761,279) - ---------------------------------------------------------------------------- 20% OF TOTAL WORKING CAPITAL $ (152,256) GAC PURCHASED WORKING CAPITAL $ 1,740,000 ============================================================================ WORKING CAPITAL $ 1,587,744 ============================================================================ EXHIBIT B Fifth Potline Description Fee simple ownership of all of Parcel No. 1 as described herein, all as described herein, together with the buildings and improvements thereon and the rights, easements and appurtenances thereunto belonging, said tract or parcel of land is situate in Hancock County, Kentucky, and are more particularly bounded and described as follows: PARCEL NO. 1 5TH POT LINE TRACT Commencing at the northwest corner of the Southwire Company Kentucky Plant (SCKP) facility (aka Rod and Cable Mill) 52.172 acre tract; thence North 61 degrees 54 minutes 49 seconds West 984.85 feet to the true POINT OF BEGINNING A 1/2 inch iron pipe set this survey; all iron pipe set this survey are 18" long schedule 40 steel pipe with a yellow plastic identifier marked "RINEY-PLS 2492" and being a common corner between the outlot for Potline No. 5 and the outlot for Potlines No. 1 through No. 4 (inclusive); thence South 54 degrees 55 minutes 18 seconds West 121.02 feet to an iron pipe set this survey near the edge of an asphalt drive; thence South 35 degrees 07 minutes 00 seconds East 88.87 feet to an iron pipe set this survey at the corner of a concrete parapet; thence South 54 degrees 59 minutes 13 seconds West 62.00 feet to an iron pipe set this survey at the corner of a concrete parapet wall; thence North 34 degrees 51 minutes 53 seconds West 88.80 feet to an iron pipe set this survey near the edge of an asphalt drive; thence South 54 degrees 55 minutes 18 seconds West 141.16 feet to an iron pipe set this survey in the asphalt pavement; thence North 34 degrees 54 minutes 40 seconds West 1,258.51 feet to an iron pipe set this survey in the asphalt pavement; thence North 55 degrees 14 minutes 55 seconds East 83.70 feet to an iron pipe set this survey near the south edge of an asphalt drive; thence North 34 degrees 32 minutes 25 seconds West just outside the edge of a concrete utility trough, passing an iron pipe set this survey at 112.75 feet, in all a total distance of 116.73 feet to a point situated just north of a concrete utility trough; thence generally parallel with the concrete utility trough North 54 degrees 59 minutes 03 seconds East 278.52 feet to an iron pipe set this survey in the graveled area of the electrical switch yard/transformer yard; thence South 34 degrees 49 minutes 47 seconds East 118.16 feet to an iron pipe set this survey near the south edge of an asphalt drive; thence South 55 degrees 16 minutes 19 seconds West 40.48 feet to an iron pipe set this survey; thence generally following the building wall between Potline No. 5 and Potline No. 4 South 34 degrees 58 minutes 38 seconds East 1,256.54 feet to the point of beginning, containing 10.204 acres, more or less, per survey by HRG, PLLC dated March 8, 2001 and signed March 23, 2001. EXHIBIT C 20% Undivided Interest Real Property Description An undivided 20% interest as a tenant in common in (a) Parcel No. 2, (less Exception No. 1, Exception No. 2 and Exception No. 3) and (b) Parcel No. 3, all as described herein, together with the buildings and improvements thereon and the rights, easements and appurtenances thereunto belonging, said tracts or parcels of land are situate in Hancock County, Kentucky, and are more particularly bounded and described as follows: PARCEL NO. 2 NSA, LTD. EAST TRACT Beginning at an iron pipe set this survey (all iron pipes set this survey are 1/2 inch I.D. steel pipe bearing a yellow plastic identifier marked "RINEY-PLS 2492") in the northern line of KY 271 being the southwestern corner to the remaining Southwire Company property (rod and cable mill/SCKP facility plant site, a 52.172 acre site); thence with the northern right of way of said public highway the following five courses: South 55 degrees 06 minutes 31 seconds West 22.77 feet to a P.K. nail set this survey near the centerline of an asphalt access drive; South 54 degrees 50 minutes 08 seconds West 189.00 feet to a concrete right of way marker found broken flush with the ground level; South 55 degrees 46 minutes 37 seconds West 304.39 feet to a iron pipe set this survey; South 54 degrees 50 minutes 08 seconds West 300.00 feet to a concrete right of way marker found; South 53 degrees 57 minutes 07 seconds West 648.34 feet to a 1/2 inch iron pipe set this survey; thence along a curve to the right having a radius of 522.96 feet and a chord bearing North 80 degrees 22 minutes 47 seconds West 737.56 feet to a concrete right of way marker found in the eastern right of way of KY 334; thence with the eastern right of way of said public highway the following eighteen courses: North 35 degrees 29 minutes 26 seconds West 449.41 feet to a concrete right of way marker found; North 35 degrees 32 minutes 28 seconds West 330.66 feet to a concrete right of way marker found; thence along a curve to the right having a radius of 904.93 feet and a chord bearing North 29 degrees 46 minutes 42 seconds West 174.82 feet to a concrete right of way marker found; North 21 degrees 05 minutes 56 seconds West 170.26 feet to a concrete right of way marker found; North 24 degrees 21 minutes 50 seconds West 500.69 feet to a concrete right of way marker found; North 24 degrees 17 minutes 49 seconds West 353.12 feet to a concrete right of way marker found; thence along a curve to the left having a radius of 11,519.16 and a chord bearing North 25 degrees 30 minutes 15 seconds West 452.97 feet to a concrete right of way marker found; North 26 degrees 35 minutes 58 seconds West 495.91 feet to a concrete right of way marker found; North 25 degrees 47 minutes 22 seconds West 734.10 feet to a concrete right of way marker found broken flush with the ground level; North 25 degrees 12 minutes 26 seconds West 262.59 feet to a 1/2 inch iron pipe set this survey; North 24 degrees 30 minutes 25 seconds West 432.63 feet to a 1/2 inch iron pipe set this survey westward of disturbed concrete right of way marker; North 19 degrees 16 minutes 29 seconds West 147.50 feet to a concrete right of way marker found; thence along a curve to the right the three monumented chords being North 17 degrees 56 minutes 48 seconds West 320.66 feet to an iron pipe set this survey; North 15 degrees 50 minutes 14 seconds West 90.73 feet to a concrete right of way marker found; North 13 degrees 36 minutes 44 seconds West 376.42 feet to a concrete right of way marker found; thence North 03 degrees 51 minutes 00 seconds East 73.98 feet to a concrete right of way marker found; thence North 11 degrees 25 minutes 30 seconds West 200.60 feet to a concrete right of way marker found; thence North 13 degrees 45 minutes 21 seconds West 259.39 feet to a concrete right of way marker found; thence along a curve to the right having a radius of 5,453.84 feet and a chord bearing North 10 degrees 06 minutes 18 seconds West 346.63 feet to a steel 'T' pin (with a metal identifier marked "JDQ 2365 property line") found marked "JDQ property corner" at the southwestern corner of the Big Rivers R.E.C.C. property (D.B. 71, Pg. 380); thence with the southern line of Big Rivers North 51 degrees 44 minutes 04 seconds East 3,430.99 feet to a 1/2 inch iron pipe set this survey in the bottom of a ravine flowing into the Ohio River, the property line extending along a bearing North 51 degrees 44 minutes 04 seconds East to the low water mark of the Ohio River; thence meandering along the random line near the top of the river bank (the actual property line traversing along the low water mark of the southern shore of the Ohio River) the following seven courses: South 24 degrees 42 minutes 59 seconds East (passing a 1/2 inch iron pipe; reference point; set this survey at 110.00 feet) in all a total distance of 822.23 feet; South 24 degrees 07 minutes 05 seconds East 674.72 feet to a 1/2 inch iron pipe set this survey; South 22 degrees 16 minutes 11 seconds East 599.87 feet to a 1/2 inch iron pipe set this survey; South 18 degrees 35 minutes 43 seconds East 911.86 feet to a 1/2 inch iron pipe set this survey; South 26 degrees 21 minutes 30 seconds East 800.72 feet to a 1/2 inch iron pipe set this survey; South 23 degrees 24 minutes 42 seconds East 814.92 feet to a 1/2 inch iron pipe set this survey; South 14 degrees 31 minutes 21 seconds East 469.18 feet to a 1/2 inch iron pipe set this survey, the actual property line extending from the low water mark of the Ohio River on a bearing of South 69 degrees 45 minutes 26 seconds West through said point; thence continuing along a new division line the following four courses along a remnant portion of the Southwire Company property (around the "rod and cable mill"/SCKP facility plant, a 52.172 acre site) and being generally parallel with and approximately one foot outside the existing chain line fence: South 69 degrees 45 minutes 26 seconds West 218.46 feet to a 1/2 inch iron pipe set this survey; South 10 degrees 02 minutes 39 seconds West 468.03 feet to a 1/2 inch iron pipe set this survey; South 54 degrees 57 minutes 15 seconds West 1,044.36 feet to a 1/2 inch iron pipe set this survey; South 34 degrees 58 minutes 11 seconds East 1,454.63 feet to the point of beginning, containing 487.777 acres, more or less, per survey by HRG, PLLC dated March 8, 2001 and signed March 23, 2001. The survey reference line is located along the top of the Ohio River bank and/or along the eastern perimeter fence. There is expressly EXCEPTED and RESERVED from the above described Parcel No. 2, and not conveyed herein, the following parcels: EXCEPTION NO. 1 SOUTHWIRE COMPANY OUTLOT Beginning at a steel 'T' pin found (with a metal identifier marked "JDQ 2365 property line") marked JDQ property corner in the eastern right of way of KY 334, said point being the southwestern corner of the Big Rivers R.E.C.C. property (D.B. 71, Pg. 380); thence with the southern line of Big Rivers North 51 degrees 44 minutes 04 seconds East 1,392.82 feet to an iron pipe set this survey (all iron pipes set this survey are 1/2 inch I.D. steel pipe bearing a yellow plastic identifier marked "RINEY-PLS 2492") approximately 20 feet northward of the perimeter chain link fence; thence with a new division line the following six courses: South 9 degrees 42 minutes 36 seconds East 996.75 feet to an iron pipe set this survey; South 57 degrees 23 minutes 42 seconds West 319.12 feet to an iron pipe set this survey westward of the existing rail spur line; South 35 degrees 49 minutes 39 seconds East 397.49 feet to an iron pipe set this survey westward of the existing spur line; South 11 degrees 07 minutes 20 seconds West 31.29 feet to an iron pipe set this survey northward of an existing gravel access drive; South 57 degrees 10 minutes 12 seconds West 227.51 feet to an iron pipe set this survey northward of an existing gravel access drive and approximately 20 feet eastward of a pump house; South 54 degrees 05 minutes 36 seconds West passing an iron pipe set this survey at 450.71 feet westward of an abandoned asphalt runway; in all a total distance of 935.46 feet to an iron pipe set this survey in the eastern right of way of KY 334; thence with the eastern right of way of said public highway the following six courses: along a curve to the right having a radius of 5,567.18 feet and a long chord bearing North 15 degrees 50 minutes 14 seconds West 90.73 feet to a concrete right of way marker found; thence along a curve to the right having a radius of 5,499.44 feet and a long chord bearing North 13 degrees 36 minutes 44 seconds West 376.42 feet to a concrete right of way marker found; North 3 degrees 51 minutes 00 seconds East 73.98 feet to a concrete right of way marker found; North 11 degrees 25 minutes 30 seconds West 200.60 feet to a concrete right of way marker found; North 13 degrees 45 minutes 21 seconds West 259.39 feet to a concrete right of way marker found; thence along a curve to the right having a radius of 5,453.84 feet and a chord bearing North 10 degrees 06 minutes 18 seconds West 346.63 feet to the point of beginning, containing 36.755 acres, more or less, per survey by HRG, PLLC dated March 8, 2001 and signed March 23, 2001. Exception No. 1 is the same property reserved in that certain deed from Southwire Company to NSA, Ltd. dated March 26, 2001, of record in the Office of the Recorder of Hancock County, Kentucky in Deed Book 124, at page 102. EXCEPTION NO. 2 NSA, LTD. POTLINES NO. 1 THROUGH 4 OUTLOT Commencing at the northwest corner of the Southwire Company Kentucky Plant (SCKP) facility (aka Rod and Cable Mill) 52.172 acre tract; thence North 61 degrees 54 minutes 49 seconds West 984.85 feet to an iron pipe set this survey; all iron pipe set this survey are 18" long, schedule 40 steel pipe with a yellow plastic identifier marked "RINEY-PLS 2492"; and being a common corner between the outlot for Potline No. 5 and the outlot for Potlines No. 1 through No. 4 (inclusive); thence generally following the building wall between Potline No. 5 and Potline No. 4 North 34 degrees 58 minutes 38 seconds West 1,256.54 feet to an iron pipe set this survey near the south edge of an asphalt drive; thence North 55 degrees 16 minutes 19 seconds East 40.48 feet to an iron pipe set this survey; thence North 34 degrees 49 minutes 47 seconds West 118.16 feet to an iron pipe set this survey in the gravel area of the electric switch yard/transformer yard; thence North 54 degrees 59 minutes 03 seconds East 483.22 feet to an iron pipe set this survey; thence North 54 degrees 59 minutes 04 seconds East 454.83 feet to an iron pipe set this survey; thence South 34 degrees 58 minutes 08 seconds East, generally along the east edge of Potline Building No. 1, 1,373.43 feet to an iron pipe set this survey near the edge of an asphalt drive; thence South 54 degrees 55 minutes 18 seconds West 978.64 feet to the point of beginning containing 30.761 acres, more or less, per survey by HRG, PLLC dated March 8, 2001 and signed March 23, 2001. EXCEPTION NO. 3 5TH POT LINE TRACT Commencing at the northwest corner of the Southwire Company Kentucky Plant (SCKP) facility (aka Rod and Cable Mill) 52.172 acre tract; thence North 61 degrees 54 minutes 49 seconds West 984.85 feet to the true POINT OF BEGINNING A 1/2 inch iron pipe set this survey; all iron pipe set this survey are 18" long schedule 40 steel pipe with a yellow plastic identifier marked "RINEY-PLS 2492" and being a common corner between the outlot for Potline No. 5 and the outlot for Potlines No. 1 through No. 4 (inclusive); thence South 54 degrees 55 minutes 18 seconds West 121.02 feet to an iron pipe set this survey near the edge of an asphalt drive; thence South 35 degrees 07 minutes 00 seconds East 88.87 feet to an iron pipe set this survey at the corner of a concrete parapet; thence South 54 degrees 59 minutes 13 seconds West 62.00 feet to an iron pipe set this survey at the corner of a concrete parapet wall; thence North 34 degrees 51 minutes 53 seconds West 88.80 feet to an iron pipe set this survey near the edge of an asphalt drive; thence South 54 degrees 55 minutes 18 seconds West 141.16 feet to an iron pipe set this survey in the asphalt pavement; thence North 34 degrees 54 minutes 40 seconds West 1,258.51 feet to an iron pipe set this survey in the asphalt pavement; thence North 55 degrees 14 minutes 55 seconds East 83.70 feet to an iron pipe set this survey near the south edge of an asphalt drive; thence North 34 degrees 32 minutes 25 seconds West just outside the edge of a concrete utility trough, passing an iron pipe set this survey at 112.75 feet, in all a total distance of 116.73 feet to a point situated just north of a concrete utility trough; thence generally parallel with the concrete utility trough North 54 degrees 59 minutes 03 seconds East 278.52 feet to an iron pipe set this survey in the graveled area of the electrical switch yard/transformer yard; thence South 34 degrees 49 minutes 47 seconds East 118.16 feet to an iron pipe set this survey near the south edge of an asphalt drive; thence South 55 degrees 16 minutes 19 seconds West 40.48 feet to an iron pipe set this survey; thence generally following the building wall between Potline No. 5 and Potline No. 4 South 34 degrees 58 minutes 38 seconds East 1,256.54 feet to the point of beginning, containing 10.204 acres, more or less, per survey by HRG, PLLC dated March 8, 2001 and signed March 23, 2001. PARCEL NO. 3 NSA, LTD. WEST TRACT Beginning at a 1/2 inch iron pin bearing yellow plastic identifier marked 1927 in the western right of way of KY 334; thence with the line of Stephen J. Emmick (D.B. 85, Pg. 196) South 53 degrees 35 minutes 18 seconds West 879.97 feet to a 1/2 inch iron pin with a yellow plastic identifier marked McDaniel-LS 1927 found near the crest of a ridge; thence South 53 degrees 35 minutes 53 seconds West (passing a 1/2 inch iron pin found with identifier marker 1927 at 2,344.17 feet near the top of the bank at Muddy Gut Slough) in all a total distance of 2,394.17 feet to a point in said slough; thence continuing with another line of Emmick along a meander line generally following the flow channel of said slough the following nine courses: North 31 degrees 17 minutes 53 seconds West 200.54 feet to a calculated point; North 44 degrees 57 minutes 57 seconds West 147.71 feet to a calculated point; North 12 degrees 50 minutes 18 seconds West 109.64 feet to a calculated point; North 22 degrees 17 minutes 58 seconds West 258.13 feet to a calculated point; North 26 degrees 24 minutes 00 seconds West 116.03 feet to an iron pipe set this survey (all iron pipes set this survey are 1/2 inch I.D. steel pipe bearing a yellow plastic identifier marked "RINEY-PLS 2492"); North 29 degrees 00 minutes 27 seconds West 313.10 feet to an iron pipe set this survey; North 28 degrees 01 minutes 56 seconds West 184.74 feet to a calculated point; North 29 degrees 37 minutes 13 seconds West 90.00 feet to a calculated point; North 23 degrees 52 minutes 22 seconds West 108.98 feet to an iron pin found with identifier number 1927; thence continuing with another line of Emmick South 53 degrees 06 minutes 05 seconds West 1,071.72 feet to a concrete monument with an unmarked brass cap found in the eastern right of way of the CSX Railroad right of way, said point being 39.32 feet from the centerline of said mainline railroad; thence 40 feet from and parallel with the centerline of said trackage along the east right of way of said railroad right of way the following thirteen courses: North 09 degrees 49 minutes 24 seconds West 17.77 feet to an iron pipe set this survey; North 12 degrees 00 minutes 52 seconds West 661.07 feet to an iron pipe set this survey; North 10 degrees 50 minutes 13 seconds West 93.51 feet to an iron pipe set this survey; North 08 degrees 51 minutes 27 seconds West 96.44 feet to an iron pipe set this survey; North 05 degrees 56 minutes 39 seconds West 101.09 feet to an iron pipe set this survey; North 02 degrees 24 minutes 19 seconds West 120.04 feet to an iron pipe set this survey; North 01 degree 01 minutes 08 seconds East 95.49 feet to an iron pipe set this survey; North 04 degrees 09 minutes 34 seconds East 98.61 feet to an iron pipe set this survey; North 07 degrees 06 minutes 18 seconds East 99.56 feet to an iron pipe set this survey; North 09 degrees 33 minutes 13 seconds East 101.53 feet to an iron pipe set this survey; North 10 degrees 47 minutes 43 seconds East 101.07 feet to an iron pipe set this survey; North 11 degrees 18 minutes 19 seconds East 125.94 feet to an iron pipe set this survey; North 11 degrees 08 minutes 34 seconds East 607.79 feet (said point being 38.47 feet from the centerline of said mainline railroad), crossing a Big Rivers R.E.C.C. easement (D.B. 72, Pg. 399) containing public highway KY 3092 and a railroad spur to a concrete monument with unmarked brass cap found, corner to line of J.R. Brantley (D.B. 84, Pg. 814); thence with the southern line of Brantley the following two courses: North 50 degrees 39 minutes 04 seconds East 191.76 feet to an iron pipe set this survey; North 50 degrees 28 minutes 50 seconds East 2,020.69 feet to an iron pipe set this survey; thence with the southern lines of Brantley and of Charles and David Winchell (D.B. 106, Pg. 240) North 49 degrees 49 minutes 53 seconds East 1,613.04 feet to an iron pipe set this survey, said point being in the western right of way of KY 334 at the intersection of KY 3092; thence with the western right of way of KY 334 and crossing Big Rivers R.E.C.C. easement (D.B. 72, Pg. 399) containing KY 3092 and a rail spur South 07 degrees 53 minutes 54 seconds East 89.45 feet to a mag nail set this survey (approximately 7-feet south of the centerline of KY 3092); thence South 08 degrees 02 minutes 41 seconds East 123.08 feet to an iron pipe set this survey; thence continuing with the western right of way said public highway the following thirteen courses: South 09 degrees 37 minutes 11 seconds East 68.02 feet to an iron pipe set this survey; South 10 degrees 06 minutes 38 seconds East 370.53 feet to a concrete right of way marker found; South 11 degrees 45 minutes 05 seconds East 171.47 feet to a concrete right of way marker found; South 14 degrees 15 minutes 53 seconds East 383.76 feet to a concrete right of way marker found; South 17 degrees 02 minutes 59 seconds East 419.39 feet to a concrete right of way marker found; South 18 degrees 56 minutes 25 seconds East 146.85 feet to an iron pipe set this survey; South 21 degrees 57 minutes 32 seconds East 405.42 feet to a 1/2 inch iron pin found with identifier number 1927; South 25 degrees 40 minutes 53 seconds East 303.90 feet to an iron pipe set this survey; South 26 degrees 04 minutes 54 seconds East 234.06 feet to an iron pipe set this survey; South 25 degrees 02 minutes 38 seconds East 300.19 feet to an iron pipe set this survey; South 26 degrees 34 minutes 17 seconds East 200.05 feet to an iron pipe set this survey; South 27 degrees 31 minutes 35 seconds East 300.11 feet to an iron pipe set this survey; South 29 degrees 15 minutes 35 seconds East 213.29 feet to the point of beginning, containing 295.46 acres, more or less, per survey by HRG, PLLC, dated March 8, 2001 and signed March 23, 2001. Parcel No. 1 (5th Pot Line Tract), Parcel No. 2 (less Exception No. 1, Exception No. 2 and Exception No. 3) , and Parcel No. 3 all described above are collectively referred to herein as the "Property" and are more particularly shown and described on a plat of survey entitled "Southwire Company, Located at 1987 State Route 271 N West Of Hawesville, Hancock County, Kentucky," dated March 8, 2001 and signed March 23, 2001, prepared by HRG, PLLC, scale 1' = 400' and recorded in Office of the Recorder of Hancock County, Kentucky in Plat Cabinet B, Slides 145 and 155, (the "Survey"), which Survey is incorporated by reference herein and made a part hereof. The Property is part of the same property conveyed by Southwire Company to NSA, Ltd. by deed dated March 26, 2001, of record in the Office of the Recorder of Hancock County, Kentucky in Deed Book 124, at page 102, and is all of the same property conveyed by NSA, Ltd. to Glencore Acquisition I LLC by deed dated April 2, 2001, of record in said Recorder's Office in Deed Book 124, at page 209; reference to which deeds is here made for all pertinent purposes. EASEMENTS The Property is expressly subject to and includes the benefit of the following easements and agreements: (i) Owners Agreement dated April 2, 2001 between NSA, Ltd., Glencore Acquisition I LLC, and Century Aluminum of Kentucky, LLC, of record in Deed Book 124, at page 222, (the "Owners Agreement");(ii) Reciprocal Easement Agreement dated April 2, 2001 between NSA, Ltd. and Southwire Company, of record in Deed Book 124, at page 164, (the "Reciprocal Easement"); (iii) Groundwater Treatment Building Lease dated April 2, 2001 between NSA, Ltd. and Glencore Acquisition I LLC, as Landlord, and Southwire Company, as Tenant, of record in Deed Book 124, at page 182, (the "Lease"); (iv) Environmental Access and Cooperation Agreement dated April 2, 2001 between NSA, Ltd., Glencore Acquisition I LLC, Century Aluminum of Kentucky, LLC and Southwire Company, of record in Deed Book 124, at page 194, (the "Environmental Access Agreement"); and (v) Reciprocal Easement Agreement dated April 2, 2001 between NSA, Ltd. and Glencore Acquisition I LLC, of record in Deed Book 124, at page 287, (the "Glencore Reciprocal Easement"). EXHIBIT D Form of Hawesville Purchase Note EXHIBIT E Form of Letter of Credit Reimbursement Note EXHIBIT F Allocation of Purchase Price With respect to Buyer's acquisition of the Interest, the Alumina Supply Interest and the GAC Purchased Working Capital, within sixty (60) calendar days following the Closing Date, Buyer shall deliver to GAC a schedule (the "Allocation Schedule") allocating the purchase price among the assets comprising the Interest, the Alumina Supply Interest and the GAC Purchased Working Capital. If GAC in good faith determines that there is a reasonable basis that any of the allocations or computations reflected on the Allocation Schedule are materially incorrect, GAC and Buyer will attempt in good faith to promptly agree on a revised Allocation Schedule. If the parties cannot resolve any such dispute within thirty (30) Business Days of the delivery by Buyer of the Allocation Schedule to GAC, the items remaining in dispute shall be submitted to the Arbitrator. If the Arbitrator determines that the items remaining in dispute are not materially incorrect, then GAC and Buyer shall be bound by the allocation prepared by Buyer. If the Arbitrator determines that one or more items remaining in dispute are materially incorrect, then GAC and Buyer shall be bound by the allocation of such items as determined by the Arbitrator. The Arbitrator shall make any such determination within thirty (30) Business Days after submission of the remaining disputed items. EXHIBIT G Form of Security Agreement EXHIBIT H Form of Reimbursement Agreement SCHEDULE 4.4 Required consents, approvals, authorizations or filings with any governmental authority in relation to the execution of the Asset Purchase Agreement and the Deed. 1. Such consents, approvals, authorizations or filings as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and regulations and rules promulgated pursuant to that act. SCHEDULE 4.9 Tax Matters None. SCHEDULE 5.4 Required consents, approvals, authorizations or filings with any governmental authority in relation to the execution of the Asset Purchase Agreement, the Notes, the Reimbursement Agreement, the Security Agreement, the Mortgage and the Guaranty 1. Such consents, approvals, authorizations or filings as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and regulations and rules promulgated pursuant to that act. 2. Such consents, approvals, authorizations or filings as may be required under applicable federal or state securities laws and regulations and rules promulgated pursuant to such laws. 3. Such consents, approvals, authorizations or filings as may be required in connection with the perfection of the Security Interests (as defined in the Security Agreement). SCHEDULE 6.2 Liens All exceptions to title set forth on Schedule B to title policy number 100105528 dated April 5, 2001 issued by Chicago Title Insurance Company. ASSET PURCHASE AGREEMENT BY AND AMONG GLENCORE LTD., GLENCORE ACQUISITION I LLC, HANCOCK ALUMINUM LLC AND CENTURY ALUMINUM COMPANY DATED AS OF April 1, 2003 Table of Contents Page # Article I DEFINITIONS..........................................................2 Article II SALE AND PURCHASE OF ASSETS.........................................5 2.1 Transfer of the Interest, Alumina Supply Interest and GAC Purchased Working Capital..........................................5 2.2 The Fifth Potline Interest.........................................5 2.3 The 20% Undivided Interest.........................................5 2.4 The Additional Interest............................................5 2.5 Assumed Liabilities................................................5 Article III PURCHASE PRICE AND ADJUSTMENT......................................6 3.1 Purchase Price.....................................................6 3.2 Payment of Purchase Price..........................................6 3.3 Net Working Capital Adjustment.....................................6 3.4 Allocation of Purchase Price.......................................8 3.5 Effectiveness......................................................8 Article IV REPRESENTATIONS AND WARRANTIES OF SELLER............................8 4.1 Organization and Good Standing.....................................8 4.2 Authority; Enforceability..........................................8 4.3 No Conflict or Breach..............................................9 4.4 Governmental Consents and Approvals................................9 4.5 Litigation.........................................................9 4.6 Valid Title; No Liens..............................................9 4.7 GAC Purchased Working Capital......................................9 4.8 Brokers...........................................................10 4.9 GAC Tax Matters...................................................10 4.10 Disclosure........................................................10 Article V REPRESENTATIONS AND WARRANTIES OF CENTURY...........................11 5.1 Organization and Good Standing; Governing Documents...............11 5.2 Authority; Enforceability.........................................11 5.3 No Conflict or Breach.............................................11 5.4 Governmental Consents and Approvals...............................12 5.5 Litigation........................................................12 5.6 Working Capital...................................................12 5.7 Brokers...........................................................12 5.8 Disclosure........................................................12 Article VI INDIVIDUAL COVENANTS...............................................12 6.1 Covenants of Glencore.............................................12 6.2 Covenants of Century..............................................13 Page # Article VII MUTUAL COVENANTS..................................................15 7.1 Best Efforts......................................................15 7.2 Owners Agreement and Guarantees...................................15 7.3 LLC Agreement.....................................................15 Article VIII CONDITIONS PRECEDENT TO CENTURY'S OBLIGATIONS....................16 8.1 Representations and Warranties....................................16 8.2 Compliance with Covenants.........................................16 8.3 Absence of Litigation.............................................16 8.4 Board Approval....................................................16 8.5 Consent of Bank Lenders...........................................16 8.6 Ancillary Agreements..............................................16 Article IX CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS.......................16 9.1 Representations and Warranties....................................16 9.2 Compliance with Covenants.........................................17 9.3 Absence of Litigation.............................................17 9.4 Senior Management Approval........................................17 9.5 Ancillary Agreements..............................................17 Article X CLOSING.............................................................17 10.1 Closing...........................................................17 10.2 Deliveries by Seller..............................................17 10.3 Deliveries by Century.............................................18 10.4 Transfer Costs....................................................18 10.5 Further Assurances................................................19 Article XI INDEMNIFICATION....................................................19 11.1 Indemnification by GAC............................................19 11.2 Indemnification by Century........................................19 11.3 Indemnification Threshold.........................................20 11.4 Time Limits on Indemnification....................................20 11.5 Notice of Third Party Claim.......................................20 11.6 Claims between Buyer and GAC......................................21 11.7 Dollar Limit on Indemnification by Century and GAC................21 11.8 Exclusive Remedies................................................21 Article XII TERMINATION.......................................................21 12.1 Termination.......................................................21 12.2 Effect on Obligations.............................................22 Article XIII MISCELLANEOUS....................................................22 13.1 Bulk Sales........................................................22 13.2 Expenses..........................................................22 13.3 Publicity.........................................................22 Page # 13.4 Best Efforts......................................................22 13.5 Notices...........................................................23 13.6 Governing Law.....................................................23 13.7 Dispute Resolution................................................23 13.8 Counterparts......................................................23 13.9 Assignment........................................................23 13.10 Third Party Beneficiaries......................................24 13.11 Headings.......................................................24 13.12 Amendments.....................................................24 13.13 Specific Performance...........................................24 13.14 Access to Records..............................................24 13.15 Severability...................................................24 13.16 Entire Agreement...............................................24 EX-2.2 4 ex2-2.txt HAWESVILLE NOTE EXHIBIT 2.2 SECURED PROMISSORY NOTE ("Hawesville Purchase Note") Principal Amount U.S. $40,000,000.00 April 1, 2003 1. For value received, the undersigned, Century Aluminum Company, a Delaware corporation ("Maker"), with an address at 2511 Garden Road, Building A, Suite 200, Monterey, CA 93940, by this secured promissory note (the "Note") unconditionally promises to pay to Glencore Acquisition I LLC, a Delaware limited liability company, with an address c/o Glencore Ltd., Three Stamford Plaza, 301 Tresser Boulevard, Stamford, Connecticut 06901-3244 ("Payee"), on the earlier of (i) April 1, 2009, and (ii) the date on which Maker's obligations hereunder are declared to be immediately due and payable pursuant to paragraph 8(a) hereof (the "Maturity Date"), the principal amount of (a) Forty Million United States Dollars (US$40,000,000.00) or (b) such lesser amount as may be then outstanding hereunder (the "Principal Amount"), together with accrued and unpaid interest thereon. Maker shall pay interest on the Principal Amount at a rate equal to ten percent (10%) per annum. Any amounts owing and not paid when due hereunder shall accrue interest at a default rate of interest equal to the aforementioned rate, plus two percent (2%) (the "Default Rate"). All payments due hereunder shall be made in lawful money of the United States of America, in same-day funds. 2. Interest shall be paid semi-annually on each six month anniversary of the date hereof (each such date, an "Interest Payment Date"). Interest shall be calculated on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or the Maturity Date falls on a day other than a Business Day, the payment required to be made thereon shall be made on the next succeeding Business Day. "Business Day" shall mean any day of the year on which banks are not required or authorized by law to close in New York, New York. 3. Without prejudice to the obligation to pay the outstanding Principal Amount on the Maturity Date, principal payments shall be made under this Note as provided in this paragraph 3. Payee shall determine the average of the daily cash settlement aluminum closing prices quoted on the London Metals Exchange ("LME") for the six month period ending two (2) weeks prior to an Interest Payment Date. If such average is US$1400 per metric tonne or more, Maker shall make a principal payment on such Interest Payment Date equal to the amount set forth opposite such average price in the table below; provided, however, that such principal payments shall be applied to, and shall not exceed, the Principal Amount of this Note. - -------------------------------------------------------------------------------- LME Average Aluminum Principal Price (US$) Payment per metric tonne US$ ---------------- --- - -------------------------------------------------------------------------------- less than 1400 0 - -------------------------------------------------------------------------------- greater than or equal to 1400, but less than 1500 1,000,000 - -------------------------------------------------------------------------------- greater than or equal to 1500 but less than 1600 2,000,000 - -------------------------------------------------------------------------------- 1600 or more 3,000,000 - -------------------------------------------------------------------------------- 4. All payments made hereunder shall be recorded by Payee on the grid annexed hereto as Annex A. All notations thereon by Payee shall be conclusive and binding on the parties hereto, absent manifest error. 5. This Note may be repaid at any time, in whole or in part, without penalty or premium. 6. This Note is the Hawesville Purchase Note which, together with the Letter of Credit Reimbursement Note, is being issued as partial payment of the Purchase Price being paid by Maker to Payee under the Asset Purchase Agreement entered into by and among Maker, Hancock Aluminum LLC ("Buyer"), Payee and Glencore Ltd. ("Glencore"), dated as of April 1, 2003 (the "Asset Purchase Agreement"), and this Note, together with the Letter of Credit Reimbursement Note, shall be secured by (a) a first priority security interest in and to (i) the Fifth Potline Interest, (ii) the 20% Undivided Interest, (iii) the Membership Interest, (iv) the Additional Interest, (v) the Alumina Supply Interest and (vi) the GAC Easement, in each case as evidenced by (x) the Security Agreement by and between Buyer, Payee and Glencore of even date herewith and (y) in the case of the real property and improvements constituting a part of the Fifth Potline Interest, the 20% Undivided Interest and the GAC Easement, the Mortgage granted by Buyer in favor of Payee and Glencore of even date herewith, and (b) the Guaranty. The capitalized terms Hawesville Purchase Note, Letter of Credit Reimbursement Note, Purchase Price, Fifth Potline Interest, 20% Undivided Interest, Membership Interest, Additional Interest, Alumina Supply Interest, GAC Easement, Security Agreement, Guaranty and Mortgage as used in this Note have the meanings ascribed to them in the Asset Purchase Agreement. 7. Each of the following events shall be an event of default hereunder (each, an "Event of Default"): (a) Maker fails to pay (i) the Principal Amount or any portion thereof when due and payable hereunder, or (ii) any interest due and payable thereon within three (3) Business Days after an Interest Payment Date, or (iii) any other amount payable hereunder within five (5) Business Days after notice by Payee of non-payment; or (b) Any breach by Maker of, Maker's default in compliance with, or Maker's failure to perform, any of the terms, conditions, representations, agreements or covenants arising under this Note, the Asset Purchase Agreement, or Buyer's breach of, or default in compliance with, or failure to perform, any of the terms, conditions, representations, agreements or covenants arising under the Mortgage or the Security Agreement, and such breach, default or failure shall not have been remedied within thirty (30) calendar days after the occurrence thereof; or (c) An Event of Default (as such term is defined in the Letter of Credit Reimbursement Note) shall have occurred and be continuing under the Letter of Credit Reimbursement Note; or (d) Any lien stated to be created by the Security Agreement or the Mortgage shall at any time not constitute a valid and perfected lien on the Collateral (as such term is defined in the Security Agreement) intended to be covered thereby, free and clear of all other liens and encumbrances (except to the extent that Payee shall have consented to the release of all or a portion of the Collateral under the Security Agreement and/or the Mortgage), or this Note, the Letter of Credit Reimbursement Note (unless cancelled in accordance with the terms of the Reimbursement Agreement (as such term is defined in the Letter of Credit Reimbursement 2 Note), the Security Agreement, the Mortgage or the Guaranty shall cease to be in full force and effect, or the enforceability thereof or hereof shall be contested by Maker or Buyer; or (e) Maker fails to make any payment of principal or interest or premium, if any, on any indebtedness for borrowed money when due and beyond any period of grace, if any, provided with respect thereto, or fails to duly observe or perform or comply with any agreement with any person or entity or any term or condition of any instrument, if such failure, either individually or in the aggregate, shall have caused the acceleration of the payment of indebtedness for borrowed money with an aggregate face amount in excess of $10,000,000; or (f) Maker (i) fails to pay its debts generally as such debts become due, or admits in writing its inability to pay its debts generally, or (ii) makes a general assignment for the benefit of its creditors; or (g) If any proceeding is commenced by or against Maker seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of sixty (60) days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur; or (h) One or more judgments which (in each case, to the extent not covered by insurance) exceed the aggregate amount of $10,000,000, shall be rendered against Maker and, within thirty (30) days after the entry thereof, such judgment shall not have been discharged or execution thereof stayed pending appeal, or, within thirty (30) days after the expiration of any such stay, such judgment shall not have been discharged; or (i) The taking by Maker of any corporate action to authorize any of the actions set forth above in paragraphs 7(f) or (g) above. 8. (a) During the continuance of any Event of Default, Payee may, by notice to Maker declare the Principal Amount, all interest thereon and all other amounts and obligations payable under this Note to be immediately due and payable, whereupon the Principal Amount, all such interest and all such amounts and obligations shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Maker; provided, however, that upon the occurrence of the Event of Default specified in paragraphs 7(f) or (g), the Principal Amount, all such interest and all such amounts and obligations shall automatically become and be immediately due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by Maker. (b) In addition, during the continuation of any Event of Default and whether or not Payee has accelerated the Principal Amount, all interest thereon and all other amounts due hereunder, Payee may proceed to protect and enforce its rights by suit in equity, action at law or other proceeding, whether for specific performance of any covenant or agreement contained herein, in the Letter of Credit Reimbursement Note, the Mortgage, the 3 Security Agreement or in the Guaranty, or any instrument (including the Note or the Letter of Credit Reimbursement Note) pursuant to which the obligations to Maker are evidenced, including as permitted by applicable law, obtaining the ex parte appointment of a receiver, and, if such amount shall have become due, by declaration or otherwise, proceed to enforce payment thereof or any other legal or equitable right of Payee. (c) No remedy conferred upon Payee is intended to be exclusive of any other and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder, under the Letter of Credit Reimbursement Note, the Security Agreement, the Mortgage or the Guaranty, now or hereafter existing at law or in equity or by statute or other provision of law. (d) Following an Event of Default and during the continuance thereof, interest shall accrue at the Default Rate. 9. Maker hereby certifies and declares that all acts, conditions and things required to be done and performed and to have happened precedent to the execution and delivery of this Note and to constitute this Note a valid obligation of Maker in accordance with its terms have been done, performed and have happened in compliance with all applicable laws. 10. Except as provided herein, Maker hereby expressly waives any diligence, presentment, demand, protest or notice of any nature with respect to this Note. 11. Maker agrees to pay, in United States dollars, costs of collection and reasonable attorneys' fees in case default occurs in the payment of any amount due under this Note. 12. Waiver by Payee of any Event of Default or of a breach of any provision of this Note shall not constitute a waiver as to any other Event of Default or breach, or as to any future occurrence of the same Event of Default or breach. 13. This Note shall not be assignable, except to an affiliate of Glencore. 14. This Note shall be governed by, and construed in accordance with, the laws of New York. MAKER: Century Aluminum Company By: --------------------------- Name: Title: 4 EX-2.3 5 ex2-3.txt REIMBURSEMENT NOTE EXHIBIT 2.3 SECURED PROMISSORY NOTE ("Letter of Credit Reimbursement Note") April 1, 2003 1. This secured promissory note (this "Note") is being issued by Century Aluminum Company, a Delaware corporation ("Maker"), with an address at 2511 Garden Road, Building A, Suite 200, Monterey, CA 93940, in connection with, and to evidence Maker's obligations arising under, the Reimbursement Agreement, dated as of the date hereof (the "Reimbursement Agreement"), between Maker and Glencore Ltd., a Swiss corporation with an address at Three Stamford Plaza, 301 Tresser Boulevard, Stamford, Connecticut 06901-3244 ("Payee"), and this Note is the "Letter of Credit Reimbursement Note" referred to in the Reimbursement Agreement. 2. For value received, the undersigned Maker, by this Note hereby unconditionally promises to pay to Payee: (a) all Guaranty Repayment Amounts (as such term is defined in the Reimbursement Agreement) which shall not have been paid by Maker to Payee on or prior to the applicable Guaranty Repayment Date; and (b) on the earlier of (i) April 1, 2009, and (ii) the date on which Maker's obligations hereunder are declared to be immediately due and payable pursuant to paragraph 8(a) hereof (the "Maturity Date"), the principal amount of (x) Eight Million One Hundred Fifty Thousand United States Dollars US$8,150,000 or (y) if less, the sum of all unpaid Loan Repayment Amounts and the Exposure Amount (as such terms are defined in the Reimbursement Agreement), together with accrued and unpaid interest thereon, if any. (c) Interest shall accrue on any Loan Repayment Amount (as such term is defined in the Reimbursement Agreement) from the date on which Payee makes payment to the Bank of the relevant amount giving rise to the obligation of Maker to pay such Loan Repayment Amount to the date the Loan Repayment Amount is repaid by Maker at a rate equal to ten percent (10%) per annum (the "Interest Rate"). Any amount due and payable hereunder which is not paid when due shall accrue interest thereon at a default rate of interest equal to the Interest Rate, plus two percent (2%) (the "Default Rate"). All payments due hereunder shall be made in lawful money of the United States of America, in same-day funds. 3. Accrued and unpaid interest on a Loan Repayment Amount, if any, shall be paid semi-annually on each six-month anniversary of the date hereof (each such date, an "Interest Payment Date"). Interest shall be calculated on the basis of a 360-day year of twelve 30-day months. If any Interest Payment Date or the Maturity Date shall fall on a day other than a Business Day, the payment required to be made thereon shall be made on the next succeeding Business Day. "Business Day" shall mean any day of the year on which banks are not required or authorized by law to close in New York, New York. 4. Any Loan Repayment Amount or other amount outstanding hereunder may be repaid at any time, in whole or in part, without penalty or premium. Notwithstanding the fact that, from time to time, no Loan Repayment Amount or other amount may be outstanding, this Note shall remain in full force and effect until the Maturity Date, unless terminated in accordance with the provisions of the Reimbursement Agreement. 5. All amounts due and owing hereunder, whether Guaranty Repayment Amounts, Loan Repayment Amounts or the Exposure Amount, or interest thereon, and all payments made with respect thereto, shall be noted by Payee on the grid annexed hereto as Exhibit A, which shall identify in each case the type of amount or payment. All such notations shall be conclusive and binding on Maker and Payee, absent manifest error. 6. This Note, together with the Hawesville Purchase Note, is being issued as partial payment of the Purchase Price being paid by Maker under the Asset Purchase Agreement entered into by and among Maker, Hancock Aluminum LLC ("Buyer"), Payee and Glencore Acquisition I LLC ("GAC"), dated April 1, 2003 (the "Asset Purchase Agreement"), and this Note, together with the Hawesville Purchase Note, shall be secured by (a) a first priority security interest in and to (i) the Fifth Potline Interest, (ii) the 20% Undivided Interest, (iii) the Membership Interest, (iv) the Additional Interest, (v) the Alumina Supply Interest, and (vi) the GAC Easement, in each case as evidenced by (x) the Security Agreement by and between Buyer, Payee and GAC of even date herewith and (y) in the case of the real property constituting a part of the Fifth Potline Interest, the 20% Undivided Interest and the GAC Easement, the Mortgage granted by Maker in favor of Payee and GAC of even date herewith, and (b) the Guaranty. The capitalized terms Hawesville Purchase Note, Purchase Price, Fifth Potline Interest, 20% Undivided Interest, Membership Interest, Additional Interest, Alumina Supply Interest, GAC Easement, Security Agreement, Guaranty and Mortgage, as used in this Note, have the meanings assigned to them in the Asset Purchase Agreement. 7. Each of the following events shall be an event of default hereunder (each, an "Event of Default"): (a) Maker fails to pay (i) any Loan Repayment Amount outstanding or any portion thereof when due and payable hereunder, or (ii) any Guaranty Repayment Amount on or prior to the applicable Guaranty Repayment Date, or (iii) any interest due and payable on any Loan Repayment Amount within three (3) Business Days of an Interest Payment Date; or (b) An Event of Default (as such term is defined in the Hawesville Purchase Note) shall have occurred and be continuing under the Hawesville Purchase Note. 8. (a) During the continuance of any Event of Default, Payee may, by notice to Maker declare all amounts payable pursuant to paragraphs 2(a) and (b) hereof, all interest thereon and all other amounts and obligations payable under this Note to be immediately due and payable, whereupon such amounts, interest and other amounts and obligations shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Maker; provided, however, that upon the occurrence of the Event of Default specified in paragraphs 7(f) or (g) of the Hawesville Purchase Note, the principal amount hereof, all such interest and all such amounts and obligations shall automatically become and be immediately due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by Maker. (b) In addition, during the continuation of any Event of Default and whether or not Payee has accelerated the principal amount, all interest thereon and all other amounts due hereunder, Payee may proceed to protect and enforce its rights by suit in equity, action at law or other proceeding, whether for specific performance of any covenant or agreement contained herein, in the Hawesville Purchase Note or in the Mortgage, the Security 2 Agreement or the Guaranty, or any instrument (including this Note and the Hawesville Purchase Note) pursuant to which the obligations to Maker are evidenced, including as permitted by applicable law, obtaining the ex parte appointment of a receiver, and, if such amount shall have become due, by declaration or otherwise, proceed to enforce payment thereof or any other legal or equitable right of Payee. (c) No remedy conferred upon Payee is intended to be exclusive of any other and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder, under the Hawesville Purchase Note, the Security Agreement, the Mortgage or the Guaranty, now or hereafter existing at law or in equity or by statute or other provision of law. (d) Following an Event of Default and during the continuance thereof, interest shall accrue at the Default Rate. 9. Maker hereby certifies and declares that all acts, conditions and things required to be done and performed and to have happened precedent to the execution and delivery of this Note and to constitute this Note a valid obligation of Maker in accordance with its terms have been done, performed and have happened in compliance with all applicable laws. 10. Except as provided herein, Maker hereby expressly waives any diligence, presentment, demand, protest or notice of any nature with respect to this Note. 11. Maker agrees to pay, in United States dollars, costs of collection and reasonable attorneys' fees in case default occurs in the payment of any amount due under this Note. 12. Waiver by Payee of any Event of Default or of a breach of any provision of this Note shall not constitute a waiver as to any other Event of Default or breach, or as to any future occurrence of the same Event of Default or breach. 13. This Note shall not be assignable, except to an affiliate of Glencore. 14. This Note shall be governed by, and construed in accordance with, the laws of New York. MAKER: Century Aluminum Company By: ------------------------------------- Name: Title: 3 EX-2.4 6 ex2-4.txt SECURITY AGREEMENT EXHIBIT 2.4 SECURITY AGREEMENT SECURITY AGREEMENT dated as of April 1, 2003 (this "Security Agreement") by and between Hancock Aluminum LLC, a Delaware limited liability company ("Hancock"), Glencore Ltd., a Swiss corporation acting through its Stamford, Connecticut branch ("Glencore") and Glencore Acquisition I LLC, a Delaware limited liability company ("GAC," and together with Glencore, "Creditor"). WHEREAS, Century Aluminum Company, a Delaware corporation ("Debtor"), Hancock, Glencore and GAC have entered into an asset purchase agreement (the "Asset Purchase Agreement") pursuant to which Debtor is, through its wholly owned subsidiary, Hancock, on this day buying all of the assets and assuming all of the liabilities of Creditor relating to the aluminum reduction plant located in Hawesville, Kentucky (the "Plant") and the aluminum reduction business conducted at the Plant (the "Business"), as more fully set forth in the Asset Purchase Agreement; and WHEREAS, as part of the purchase price under the Asset Purchase Agreement, the parties agreed that Debtor shall execute and deliver (i) a promissory note in the principal amount of Forty Million United States Dollars (US$40,000,000), in favor of GAC (the "Hawesville Purchase Note"), and (ii) a promissory note in favor of Glencore issued pursuant to the Reimbursement Agreement (as defined below) (the "Letter of Credit Reimbursement Note" and together with the Hawesville Purchase Note, the "Notes"), each to be secured by a guaranty by Hancock and certain other subsidiaries of Debtor in favor of Creditor (the "Guaranty"), and the Notes and the Guaranty are also to be secured by certain of the assets purchased by Hancock pursuant to the Asset Purchase Agreement, as more fully set forth herein; and WHEREAS, as a condition precedent to the consummation of the transactions contemplated by the Asset Purchase Agreement, Hancock has agreed to grant and perfect the first priority security interests in and to certain of the assets purchased under the Asset Purchase Agreement. NOW, THEREFORE, to induce Creditor to enter into the Asset Purchase Agreement, to accept the Notes of Debtor and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Asset Purchase Agreement. The following terms shall have the following meanings: "Asset Purchase Agreement" has the meaning set forth in the first WHEREAS clause of this Security Agreement. "Business" has the meaning set forth in the first WHEREAS clause of this Security Agreement. "CAK" has the meaning set forth in Section 2 hereof. "Collateral" has the meaning set forth in Section 2 hereof. "Collateral Security Documents" means this Security Agreement, the Mortgage, the Guaranty, the Notes, and all other agreements or similar instruments delivered pursuant hereto or thereto. "Creditor" has the meaning set forth in the Preamble of this Security Agreement. "Debtor" has the meaning set forth in the first WHEREAS clause of this Security Agreement. "Event of Default" means an "Event of Default" as defined in the Hawesville Purchase Note or the Letter of Credit Reimbursement Note. "GAC" has the meaning set forth in the Preamble to this Security Agreement. "Glencore" has the meaning set forth in the Preamble to this Security Agreement. "Guaranty" has the meaning set forth in the second WHEREAS clause of this Security Agreement. "Hancock" has the meaning set forth in the Preamble of this Security Agreement. "Hawesville Purchase Note" has the meaning set forth in the second WHEREAS clause of this Security Agreement. "Indenture" means the Indenture dated as of April 2, 2001, as the same may be amended from time to time, among Debtor, as issuer, Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Virgin Islands Alumina Corporation LLC, Century Kentucky, Inc., Metalsco Ltd., Skyliner, Inc., and NSA Ltd., as guarantors, and Wilmington Trust Company, as trustee, relating to Debtor's 11 3/4% Senior Secured First Mortgage Notes due 2008 (as described in the Indenture). "Letter of Credit Reimbursement Note" has the meaning set forth in the second WHEREAS clause of this Security Agreement. "Notes" has the meaning set forth in the second WHEREAS clause of this Security Agreement. "Perfection Certificate" means, with respect to Hancock, a certificate substantially in the form of Exhibit A hereto, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by a Responsible Officer of Hancock. "Plant" has the meaning set forth in the first WHEREAS clause of this Security Agreement. "Post-Petition Interest" means, with respect to each of Debtor and Hancock, any interest that accrues under or in respect of the Notes, the Guaranty or under the Mortgage after the commencement of any case, proceeding or other action relating to the bankruptcy, 2 reorganization or insolvency of Debtor or Hancock (or would accrue but for the operation of applicable bankruptcy, reorganization or insolvency laws), whether or not such interest is allowed or allowable as a claim in any such case, proceeding or other action. "Proceeds" means, with respect to Hancock, all proceeds of, and all other profits, products, rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or other realization upon, the Collateral, including, without limitation, all claims of Hancock against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any of its Collateral whether now existing or hereafter arising. "Reimbursement Agreement" means the Reimbursement Agreement dated as of the date hereof by and between Debtor and Glencore, pursuant to which Debtor has agreed to reimburse or pay to Glencore amounts which may be paid by Glencore under the guaranty provided for in the Letter of Credit and Reimbursement Agreement dated as of October 10, 2001 among Citibank, N.A., NSA, Ltd. and Glencore. "Responsible Officer" means, with respect to Hancock, its chief executive officer, chief financial officer, treasurer or any vice president. "Revolving Credit Agreement" means the Revolving Credit Agreement dated as of April 2, 2001, as the same may be amended from time to time, by and among the Debtor, Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Century Kentucky, Inc., Metalsco Ltd. and NSA Ltd., as borrowers, Fleet Capital Corporation, as agent, and the lending institutions party thereto. "Secured Obligations" means (i) all principal of and interest on each of the Notes payable by, and the performance of all obligations of, Debtor arising under each of the Notes and the Reimbursement Agreement; (ii) the performance of all obligations of Hancock arising under the Mortgage issued by Hancock pursuant to the Asset Purchase Agreement; (iii) the payment and performance obligations of Hancock, Century Kentucky, Inc., NSA, Ltd., Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Metalsco, Ltd., and Skyliner, Inc. arising under the Guaranty (in the case of (i), (ii) and (iii), including without limitation, Post-Petition Interest); (iv) all other amounts from time to time payable by, or the performance of all obligations of, each of Debtor and Hancock arising under the Asset Purchase Agreement; and (v) all obligations of each of Debtor and Hancock arising hereunder. "Security Agreement" means this Agreement. "Security Interests" means the security interests in the Collateral granted by Hancock under the Collateral Security Documents. "UCC" means the Uniform Commercial Code as in effect on the date hereof in the State of Delaware; provided, however, that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of any Security Interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Delaware, then for purposes of the provisions hereof relating to such perfection or the effect of 3 perfection or non-perfection of any Security Interest the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction. Section 2. The Security Interests. (a) As collateral security for the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) and performance of the Secured Obligations in accordance with the terms thereof, subject to subsection (b) below, Hancock hereby grants to Creditor a continuing security interest in all right, title and interest of Hancock in and to all of the following property, whether now owned or existing or hereafter acquired or arising (all being collectively referred to as the "Collateral"): (i) the fixed and movable assets comprising pot line five (5) at the Plant, together with the real property thereunder, all as more fully described in Exhibit A to the Asset Purchase Agreement (in the case of such portion of the foregoing constituting real property, as evidenced by the Mortgage); (ii) an undivided twenty percent (20%) interest in and to all other fixed and movable assets and properties comprising part of the Plant or otherwise used in the conduct of the Business, but not including the fixed and movable assets and properties comprising pot lines one (1) through four (4) at the Plant or any assets or liabilities comprising the working capital of the Business (in the case of such portion of the foregoing constituting real property, as evidenced by the Mortgage); (iii) a membership interest equal to twenty percent (20%) of the total membership interests in Century Aluminum of Kentucky LLC, a Delaware limited liability company ("CAK"); (iv) a twenty percent (20%) interest in the Alumina Purchase Agreement dated as of April 2, 2001 between CAK, NSA, Ltd. and Glencore, pursuant to which, among other things, CAK assigned to Glencore a twenty percent (20%) interest in an agreement for the supply of sandy calcinated grade alumina, all as more fully described in the Asset Purchase Agreement; (v) all books, records, ledger cards, files, correspondence, computer programs and related data processing software that at any time evidence or contain information relating to any property described in subparts (i), (ii) and (iii) above or are otherwise necessary or helpful in the collection thereof or realization thereon; and (vi) all Proceeds of the Collateral described in the foregoing clauses (i), (ii), (iii), (iv) and (v). (b) The Security Interests are granted as security only and shall not subject Creditor to, or transfer or in any way affect or modify, any obligation or liability of Debtor or Hancock with respect to any of the Collateral or any transaction in connection therewith. (c) Notwithstanding the foregoing, Fleet Capital Corporation, as agent under the Revolving Credit Agreement, shall retain a security interest in the inventory, receivables and 4 proceeds thereof, with respect to the Debtor, Hancock and the Subsidiary Guarantors. In no event shall the Collateral include the inventory, receivables or proceeds thereof of the Debtor, Hancock or any of the Subsidiary Guarantors. Section 3. Representations and Warranties. Hancock represents and warrants to Creditor that: (a) Hancock is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware. (b) Hancock has good, valid and marketable title (and in the case of real property, good, marketable and insurable title in fee simple) to all of the Collateral, free and clear of any Lien except for Permitted Liens (as defined in the Asset Purchase Agreement) and those Liens created pursuant hereto and the Mortgage. (c) Hancock has not performed any acts that shall prevent Creditor from enforcing any of the provisions of the Collateral Security Documents or that would limit Creditor in any such enforcement. No financing statement, security agreement, mortgage (except as contemplated hereby) or similar or equivalent document or instrument covering all or any part of the Collateral owned by Hancock is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect or record a Lien on such Collateral, except financing statements, security agreements, mortgages or similar or equivalent documents or instruments which will be released simultaneously with the filing and perfection of the security interests granted herein and in the Mortgage. No Collateral owned by Hancock is in the possession of any Person (other than Hancock) asserting any claim thereto or security interest therein. (d) Hancock has delivered a Perfection Certificate to Creditor. The information set forth therein is correct and complete in all respects as of the date hereof and thereof. (e) The Security Interests constitute, under the UCC, valid security interests in all Collateral owned by Hancock securing the Secured Obligations. (f) When UCC financing statements describing the Collateral shall have been filed in the offices specified in Schedule 5(A) to Hancock's Perfection Certificate, the Security Interests will constitute perfected security interests in the Collateral owned by Hancock to the extent that a security interest therein may be perfected by filing pursuant to the UCC, prior to all Liens and rights of others therein. Except for the filing of such UCC financing statements and the Mortgage, no registration, recordation or filing with any governmental body, agency or official is required in connection with the execution or delivery of the Collateral Security Documents or is necessary for the validity or enforceability thereof or for the perfection or enforcement of the Security Interests. Section 4. Further Assurances; Covenants. Hancock covenants as follows: (a) It will not change (i) its name, identity or corporate structure in any manner, (ii) the location of its chief executive office or (iii) its jurisdiction of organization in any 5 manner unless it shall have given Creditor at least thirty (30) days' prior written notice thereof, together with the delivery of a revised Perfection Certificate reflecting such change. (b) It will keep the Collateral at those locations listed on the Perfection Certificate and will not change such location to one not listed on the Perfection Certificate, without providing Creditor at least ten (10) days' prior written notice thereof, together with the delivery of a revised Perfection Certificate reflecting such change. (c) It will, from time to time, at its expense, execute, deliver, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action (including, without limitation, any filings of financing or continuation statements under the UCC) that from time to time may be necessary or desirable, or that Creditor may reasonably request, in order to create, preserve, perfect, confirm or validate the Security Interests in the Collateral or to enable Creditor to obtain the full benefits of the Collateral Security Documents, or to enable Creditor to exercise and enforce any of its rights, powers and remedies hereunder or thereunder with respect to any of the Collateral. Notwithstanding Sections 4(a) and 4(b), to the extent any event or change in circumstances occurs that would make any statement made in, or Exhibit or Schedule to, the Perfection Certificate inaccurate or misleading in any material respect Hancock shall deliver a revised Perfection Certificate to Creditor within thirty (30) days following such event or occurrence. To the extent permitted by applicable law, Hancock authorizes Creditor to execute and file such financing statements or continuation statements without Hancock's signature appearing thereon. Hancock agrees that a carbon, photographic, photostatic or other reproduction of this Security Agreement or of a financing statement is sufficient as a financing statement. Hancock shall pay the costs of, or incidental to, any recording or filing of any such financing or continuation statements in which it is named as the debtor. (d) It shall keep full and accurate books and records relating to the Collateral, and stamp or otherwise mark such books and records in such manner as Creditor may reasonably request in order to reflect the Security Interests. (e) Hancock will not sell, lease, exchange, assign or otherwise dispose of, or grant any option with respect to, any of the Collateral; provided, however, that so long as no Event of Default has occurred and is continuing or would be caused thereby, Hancock may sell, lease or otherwise dispose of (i) obsolete assets comprising part of the Collateral in the ordinary course of business consistent with past practices, (ii) other assets comprising part of the Collateral described in Section 2(a)(i), and (iii) other assets comprising part of the Collateral described in Section 2(a)(ii), subject in the case of clauses (ii) and (iii), to the following sentence. Hancock agrees that in the event of any sale, lease, exchange, assignment or other disposition permitted by this Section 4(e) of (A) assets comprising part of the Collateral described in Section 2(a)(i) which, individually or in the aggregate have a fair market value in excess of One Million United States Dollars (US$1,000,000), or (B) assets comprising part of the Collateral described in Section 2(a)(ii) which, individually or in the aggregate have a fair market value in excess of Five Million United States Dollars (US$5,000,000), any proceeds with respect thereto in excess of the respective amount set forth in clause (A) or (B), as the case may be, shall be either (x) reinvested in Collateral within one (1) year after the date of such sale, lease, exchange, assignment or other disposition or (y) used to repay to GAC or Glencore, as the case may be, amounts outstanding under the Hawesville Purchase Note and/or the Letter of Credit 6 Reimbursement Note, as the case may be, subject to applicable restrictions contained in the Indenture or the Revolving Credit Agreement, if any; and until such reinvestment or repayment shall have occurred, such excess proceeds shall be deemed to be Collateral hereunder, and on or prior to such sale, lease, exchange, assignment or other disposition Hancock shall have taken such steps as Glencore deems necessary or appropriate to perfect a first priority security interest in such excess proceeds. (f) Hancock will, promptly upon request, provide to Creditor all information and evidence it may reasonably request concerning the Collateral to enable Creditor to enforce the provisions of the Collateral Security Documents. (g) Hancock shall maintain insurance on the Collateral against loss or damage of the kinds customarily insured against by corporations similarly situated and owning like properties, in such amounts, with such deductibles and by such methods as are customary for corporations similarly situated in the industry in which Hancock conducts its business. Hancock shall keep such policies current and shall make all payments required thereunder on a timely basis. Hancock shall name Creditor as loss payee with respect to such coverage and shall supply Creditor with a certificate of insurance from its carrier with respect thereto. Section 5. General Authority. Hancock hereby irrevocably appoints Creditor its true and lawful attorney, with full power of substitution, in the name of Hancock or otherwise, for the sole use and benefit of Creditor, but at the expense of Hancock to the extent permitted by law, to exercise, at any time and from time to time while an Event of Default shall have occurred and is continuing, all or any of the following powers with respect to all or any of the Collateral: (a) to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof; (b) to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto; (c) to sell, transfer, assign or otherwise deal in or with the same or the proceeds or avails thereof, as fully and effectually as if Creditor were the absolute owner thereof; and (d) to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto; provided, that (i) before exercising any of such powers, Creditor shall notify Hancock that it intends to exercise one or more of its powers under this section, and (ii) Creditor shall give Hancock not less than twenty (20) days' prior written notice of the time and place of any sale or other intended disposition of any Collateral owned by Hancock. Creditor and Hancock agree that such notice constitutes "reasonable authenticated notification of disposition" within the meaning of Section 9-611 of the UCC. 7 Section 6. Remedies upon Event of Default. (a) If an Event of Default shall have occurred and is continuing, whether or not Creditor has accelerated the Secured Obligations, Creditor may exercise any or all of the remedies available to it under the Collateral Security Documents. (b) If an Event of Default shall have occurred and is continuing, whether or not Creditor has exercised any available right to declare any Secured Obligations due and payable or seeks or pursues any other relief or remedy available to it under applicable law, under this Security Agreement, the Guaranty, the Mortgage, the Hawesville Purchase Note, the Reimbursement Agreement, the Letter of Credit Reimbursement Note or otherwise, Creditor may exercise all of the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) with respect to any Collateral and, in addition, Creditor may sell the Collateral or any part thereof at public or private sale, for cash, upon credit or for future delivery, and at such price or prices as Creditor shall deem satisfactory. Creditor may be the purchaser of any or all of the Collateral so sold at any public sale (or, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, at any private sale; provided that such private sale is on terms available in such recognized market or at a price or prices comparable to the standard price quotations, as the case may be). Creditor is authorized, in connection with any such sale, if it deems it advisable so to do, to impose such limitations or conditions as it deems necessary or advisable in order to comply with any law. Hancock agrees that it will execute and deliver such documents and take such other action as Creditor deems necessary or advisable in order that any such sale may be made in compliance with law. Upon any such sale, Creditor shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold to it absolutely and free from any claim or right of Hancock of whatsoever kind, including any equity or right of redemption of Hancock which may be waived, and Hancock, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted. Notice of any such sale shall be given to Hancock as required by Section 5 and shall (i) in case of a public sale, state the time and place fixed for such sale, and (ii) in case of a private sale, state the day after which such sale may be consummated. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as Creditor may fix in the notice of such sale. At any such sale the Collateral may be sold in one lot as an entirety or in separate parcels, as Creditor may determine, in its sole discretion. Creditor shall not be obligated to make any such sale pursuant to any such notice. Creditor may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. If all or any part of the Collateral is sold on credit or for future delivery, the Collateral so sold may be retained by Creditor until the selling price is paid by the purchaser thereof, but Creditor shall not incur any liability if such purchaser fails to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. Creditor, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction. 8 (c) For the purpose of enforcing any and all rights and remedies under this Agreement, Creditor may (i) require Hancock to, and Hancock agrees that it will, at its expense and upon the request of Creditor, forthwith assemble moveable assets comprising part of its Collateral as directed by Creditor and make such moveable assets available at a place designated by Creditor which is reasonably convenient to Creditor and Hancock at the premises of Hancock, (ii) to the extent permitted by applicable law, enter, with or without process of law and without breach of the peace, any premises of Hancock where any of the Collateral is or may be located, and without charge or liability to it seize and remove any moveable assets comprising part of the Collateral from such premises, (iii) have access to and use Hancock's books and records relating to its Collateral and (iv) prior to the disposition of the Collateral, store any moveable assets comprising part of the Collateral without charge in any storage facility owned by Hancock at the premises, repair or recondition it or otherwise prepare it for disposition in any manner and to the extent Creditor deems appropriate and, in connection with such preparation and disposition, use without charge any trademark, trade name, copyright, patent or technical process owned or used by Hancock. (d) No remedy conferred upon Creditor hereunder or under any Collateral Security Document is intended to be exclusive of any other and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under any other Collateral Security Document or now or hereafter existing at law or in equity or by statute or other provisions of law. (e) If the proceeds of sale, collection or other realization of or upon the Collateral are insufficient to cover the costs and expenses of such realization and the payment in full of the Secured Obligations, Hancock shall remain liable for any deficiency to the extent such party is obligated therefor under the Notes, the Reimbursement Agreement, the Mortgage, the Guaranty and the other documents executed in connection therewith. Section 7. Expenses. Hancock agrees that it will forthwith upon demand pay to Creditor: (a) the amount of any taxes which Creditor may have been required to pay by reason of the Security Interests in respect of the Collateral or to free any of the Collateral from any Lien thereon (other than Permitted Liens); (b) the cost of any and all filings, recording fees, taxes or any other expense in connection with the perfection of the Security Interests granted hereby; (c) the amount of any and all reasonable out-of-pocket expenses, including any excise, property, transfer, sales and use taxes imposed by any state, federal or other local authority on any of the Collateral, and reasonable fees and disbursements of counsel and of any other experts which Creditor may have been required to pay in connection with the enforcement of the Collateral Security Documents, including such expenses as are incurred in connection with: (i) the collection, sale or other disposition of the Collateral; 9 (ii) any action taken by Creditor to effect compliance on behalf of Hancock in respect of a failure by such party to comply with the provisions of any Collateral Security Document which results (or is likely to result) in the diminution of the value of the Collateral or the validity, perfection, rank or value of any Security Interest in the Collateral; (iii) protecting, storing, warehousing, appraising, insuring, handling, maintaining and shipping the Collateral; or (iv) the exercise by Creditor of any of the rights or powers conferred upon it hereunder. Any such amount not paid to Creditor on demand shall bear interest for each day until paid at a rate per annum equal to the Default Rate (as such term is defined in the Hawesville Purchase Note). Section 8. Limitation on Duty of Creditor in Respect of Collateral. Beyond the exercise of reasonable care in the custody and preservation thereof, Creditor shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. Creditor shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if such Collateral is accorded treatment substantially equal to that which it accords its own property, and shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of any act or omission of any agent or bailee selected by Creditor in good faith or by reason of any act or omission by Creditor, except to the extent that such liability arises from Creditor's gross negligence or willful misconduct. Section 9. Application of Proceeds. If an Event of Default has occurred and is continuing, Creditor may apply the proceeds of any sale of, or other realization upon, all or any part of the Collateral to pay the Secured Obligations. Any such payment shall be made in the following order of priorities: first, to pay the reasonable expenses of such sale or other realization, including reasonable compensation to agents of and counsel for Creditor, and all reasonable expenses, liabilities and advances incurred or made by Creditor in connection with the Collateral Security Documents, and any other unreimbursed expenses for which Creditor is to be reimbursed pursuant to the Notes or Section 7 hereof; second, to pay ratably the unpaid principal of the Secured Obligations of each of Debtor and Hancock until all the principal of such Secured Obligations shall have been paid in full; third, to pay ratably all accrued but unpaid interest on the Secured Obligations of Debtor in accordance with the provisions of the Notes, until all the interest on such Secured Obligations shall have been paid in full; fourth, to pay all other Secured Obligations ratably, until all such other Secured Obligations shall have been paid in full; and 10 finally, to pay to Hancock or its successors or assigns, or as a court of competent jurisdiction may direct, any surplus then remaining from the proceeds of the Collateral owned by it. Creditor may make such distributions hereunder in cash or in kind or, on a ratable basis, in any combination thereof. All distributions made by Creditor hereunder shall be final (except in the event of manifest error). Section 10. Termination of Security Interests; Releases of Collateral (including Insurance Proceeds). (a) Upon the indefeasible payment and performance in full of all Secured Obligations, the Security Interests and all obligations of Hancock under this Security Agreement shall terminate and all rights to and interests in the Collateral pledged by Hancock shall revert to Hancock. (b) Upon any such termination of the Security Interests or release of Collateral, Creditor will execute and deliver to Hancock such documents as Hancock shall reasonably request to evidence the termination of the relevant Security Interests or the release of the relevant Collateral, as the case may be. (c) Creditor agrees that, upon substantial payment and performance of the Secured Obligations, Hancock shall be entitled to request from Creditor the release of the Security Interests and Creditor shall consider such request, provided however, that such release shall be in the sole discretion of Creditor. Section 11. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission or similar writing) and shall be given to such party to it at its address or facsimile number set forth in the Asset Purchase Agreement. Each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when transmitted to the facsimile number referred to in the Asset Purchase Agreement and confirmation of receipt is received, and (ii) if given by any other means, when delivered at the address referred to in the Asset Purchase Agreement. Section 12. Waivers. No failure on the part of Creditor to exercise, and no delay in exercising and no course of dealing with respect to, any right or remedy under any Collateral Security Document shall operate as a waiver thereof; nor shall any single or partial exercise by Creditor of any right or remedy under any Collateral Security Document preclude any other or further exercise thereof or the exercise of any other right or remedy. Section 13. Successors and Assigns. This Security Agreement is for the benefit of Creditor and its successors and, in the case of Creditor, permitted assigns pursuant to the Asset Purchase Agreement, and in the event of an assignment of all or any of the Secured Obligations, the rights of the holder thereof under the Collateral Security Documents, to the extent applicable to the indebtedness so assigned, shall be transferred with such indebtedness. This Security Agreement shall be binding on Hancock and its respective successors and permitted assigns. 11 Section 14. Changes in Writing. Any provision of this Security Agreement may be amended, supplemented, modified or waived only if such amendment, supplement, modification or waiver is in writing and is signed by Hancock and Creditor. Section 15. New York Law. This Security Agreement shall be construed in accordance with and governed by the laws of the State of New York applicable to contracts executed in and to be performed entirely within that state, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than the State of New York are governed by the laws of such jurisdiction. Section 16. Severability. If any provision of any Collateral Security Document is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, the other provisions of the Collateral Security Documents shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of Creditor in order to carry out the intentions of the parties thereto as nearly as may be possible; and the invalidity or unenforceability of any provision thereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. Section 17. Counterparts. This Security Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Section 18. Waiver of Jury Trial. Each party hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Security Agreement or the transactions contemplated hereby. Section 19. Marshaling; Payments Set Aside. Creditor shall be under no obligation to marshal any assets in favor of Hancock or any other party or against or in payment of any or all of the Secured Obligations. To the extent that Hancock makes a payment or payments to Creditor or Creditor receives payment from exercise of its right of setoff, and such payment or payments or the proceeds of such setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party, then (i) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred and (ii) Creditor shall pay and return such amount as Creditor may be required to disgorge or otherwise pay to a trustee, receiver or any other party in respect of the portion of the payment from Hancock. [Signature page follows] 12 IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed by their respective authorized officers as of the day and year first above written. Hancock Aluminum LLC, a Delaware limited liability company By: -------------------------------- Name: Title: Glencore Acquisition I LLC, a Delaware limited liability company By: -------------------------------- Name: Title: Glencore Ltd., a Swiss corporation acting through its Stamford, Connecticut branch By: -------------------------------- Name: Title: EXHIBIT A to Security Agreement PERFECTION CERTIFICATE The undersigned, a Responsible Officer of Hancock Aluminum LLC, a Delaware limited liability company ("Hancock"), hereby certifies, pursuant to the Security Agreement dated as of April 1, 2003 by and between Hancock, Glencore Acquisition I LLC, a Delaware limited liability company, and Glencore Ltd., a Swiss corporation acting through its Stamford, Connecticut branch (terms defined therein being used herein as therein defined), as follows: 1. Name: (a) The exact corporate name of Hancock as it appears in its certificate of formation is as follows: Hancock Aluminum LLC (b) Set forth below is each other corporate name Hancock has had since its organization, together with the date of the relevant change. None. (c) Except as set forth in Schedule 1, Hancock has not changed its identity or corporate structure in any way within the past five years. [Changes in identity or corporate structure would include mergers, consolidations and acquisitions, as well as any change in the form, nature or jurisdiction of corporate organization. If any such change has occurred, include in Schedule 1 the information required by paragraphs 1, 2 and 3 of this certificate as to each acquiree or constituent party to a merger or consolidation.] (d) The following is a list of all other names (including trade names or similar appellations) used by Hancock or any of its divisions or other business units at any time during the past five years: None. 2. Current Locations. (a) The chief executive offices of Hancock (which are the only locations where the books and records of Hancock with respect to the Collateral are maintained) are located at the following addresses: Mailing Address County State 1627 State Route 271 North Hawesville, KY 42348 Hancock KY 2511 Garden Road Monterey CA Building A, Suite 200 Monterey, CA 93940 (b) The following are all the locations where Hancock maintains any Collateral not identified above: Mailing Address County State None. (c) The following are the names and addresses of all Persons other than Hancock which have possession of any of the Collateral: Mailing Address County State NSA, Ltd. Hancock KY 1627 State Route 271 North Hawesville, KY 42348 3. Prior Locations. Set forth below is the information required by subparagraph 2(a) above with respect to each location or place of business maintained by Hancock at any time during the past five years: Mailing Address County State None. 4. UCC Filings. A duly signed financing statement on Form UCC-1 in substantially the form of Schedule 4(A) hereto has been duly filed in the Uniform Commercial 2 Code filing office in each jurisdiction identified in paragraph 2 hereof. Attached hereto as Schedule 4(B) is a true copy of each such filing duly acknowledged by the filing officer. 5. Schedule of Filings. Attached hereto as Schedule 5 is a schedule setting forth filing information with respect to the filings described in paragraph 4 above. 6. Filing Fees. All filing fees and taxes payable in connection with the filings described in paragraph 5 above have been paid. IN WITNESS WHEREOF, I have hereunto set my hand this __ day of April , 2003. -------------------------------- Name: Title: 3 Schedule 1 to Perfection Certificate CHANGE IN IDENTITY OR CORPORATE STRUCTURE None. Schedule 4(A) to Perfection Certificate LOCATION OF FILINGS COPIES OF FILINGS Debtor File Number Date of Filing Schedule 4(B) to Perfection Certificate COPIES OF UCC-1 FILINGS DULY ACKNOWLEDGED BY THE FILING OFFICER EX-2.5 7 ex2-5.txt GUARANTY EXHIBIT 2.5 GUARANTY AGREEMENT This Guaranty Agreement ("Guaranty Agreement") is made and entered into as of the 1st day of April, 2003, by Hancock Aluminum LLC, a Delaware limited liability company ("Hancock"), Century Kentucky, Inc., a Delaware corporation ("CKI"), NSA Ltd., a Kentucky limited partnership ("NSA"), Century Aluminum of West Virginia, Inc., a Delaware corporation ("CAWV"), Berkeley Aluminum, Inc., a Delaware corporation ("Berkeley"), Metalsco, Ltd., a Georgia corporation ("Metalsco"), and Skyliner, Inc., a Delaware corporation ("Skyliner") (each of the foregoing a "Guarantor" and collectively, the "Guarantors"), for the benefit of Glencore Acquisition I LLC, a Delaware limited liability company ("GAC") and Glencore Ltd., a Swiss corporation acting through its Stamford, Connecticut branch ("Glencore"). All capitalized terms used in this Guaranty Agreement shall have the meanings set forth in the Asset Purchase Agreement entered into by and among Century Aluminum Company, a Delaware corporation ("Century"), Hancock, Glencore and GAC, dated April 1, 2003 (the "Asset Purchase Agreement"), except as otherwise expressly indicated herein. As of the date hereof Glencore and GAC have sold to Century, through its wholly owned subsidiary, Hancock: (i) the Fifth Potline Interest, (ii) the 20% Undivided Interest, (iii) the Membership Interest, (iv) the Additional Interest, (v) the Alumina Supply Interest, (vi) the GAC Easement and (vii) the GAC Purchased Working Capital, pursuant to the Asset Purchase Agreement. As partial payment of the Purchase Price being paid by Century under the Asset Purchase Agreement, as of the date hereof Century has issued to (x) GAC, the Hawesville Purchase Note and (y) Glencore, the Letter of Credit Reimbursement Note (collectively, the "Notes"). In order to secure the obligations of Century under the Notes, Hancock, Glencore and GAC have entered into the Security Agreement and the Mortgage. As further security for the performance of Century's obligations under the Notes, and in order to induce Glencore and GAC to enter into and to perform their respective obligations under the Asset Purchase Agreement and pursuant to the requirements of the Asset Purchase Agreement and in furtherance of the transactions contemplated thereby, the Guarantors have executed this Guaranty Agreement in favor of GAC and Glencore. Each Guarantor hereby agrees for the benefit of GAC and Glencore, as the case may be, that: 1. Guaranties. Each Guarantor unconditionally guarantees the full and punctual payment when due of any and all sums payable by Century pursuant to, and the performance by Century of all of Century's obligations under the Notes and any other documents executed pursuant thereto or in connection with the consummation of the transactions contemplated thereby. If Century shall fail to perform and discharge any such obligations within applicable cure periods, if any, the Guarantors shall perform and discharge such obligations upon written notice from GAC or Glencore, as the case may be, as provided in Section 2. 2. Nature of Guaranties. GAC and Glencore, as the case may be, shall have the rights and benefits of this Guaranty Agreement and the right to enforce its provisions, provided that written notice of a default by Century and the lapse of the applicable cure period, if any, shall be given to the Guarantors and the Guarantors shall have a period of ten (10) days after the date of such notice within which to cure such default. Except for the notice requirement set forth above, each of the Guarantors hereby waives diligence, presentment, demand for payment, filing of claims with a court, any right to require a suit against Century, and protest with respect to any performance of an obligation required under this Guaranty Agreement, the Notes or related instruments. This Guaranty Agreement shall be effective irrespective of the validity, regularity or -2- enforceability of the Asset Purchase Agreement, the Notes, the Security Agreement or the Mortgage or any related instrument and shall not be subject to any setoff. Each of the Guarantors intends this Guaranty Agreement and each of its respective obligations hereunder to be absolute and unconditional, and hereby waives, to the fullest extent permitted under applicable laws, any and all defenses available to such Guarantor with respect to its obligations under this Guaranty Agreement; and for that purpose (without limiting the generality of the foregoing): 2.1 Each of the Guarantors agrees that, without notice to any of the Guarantors and without the necessity for any additional endorsement, consent or guaranty by the Guarantors: 2.1.1 GAC and Glencore, as the case may be, may agree with Century that the obligations of Century guaranteed hereunder (the "Guaranteed Obligations") may, from time to time and in whole or in part, be renewed, extended or modified (with respect to time for payment or the terms of indebtedness or otherwise), compromised, released or discharged; and 2.1.2 GAC or Glencore, as the case may be, on the one hand, and Century, on the other, may amend in any way the Asset Purchase Agreement, the Notes, the Security Agreement, the Mortgage or any agreement, document or instrument contemplated therein; all without impairing or affecting in any way the liability of the Guarantors under this Agreement. 2.2 GAC or Glencore, as the case may be, may neglect or forebear to enforce payment hereunder, or under the Asset Purchase Agreement, the Notes, the Security Agreement, the Mortgage or any other document, instrument or agreement contemplated therein, without in any way affecting or impairing the liability of the Guarantors under this Guaranty Agreement. -3- No delay on the part of GAC or Glencore, as the case may be, in exercising any rights hereunder or thereunder or any failure by GAC or Glencore, as the case may be, to exercise the same shall operate as a waiver of such rights, and no notice to or demand on the Guarantors, or any of them, shall be deemed to be a waiver of any obligation of the Guarantors or of the right of GAC or Glencore, as the case may be, to take further action as provided herein. 2.3 The obligations of the Guarantors under this Guaranty Agreement shall be continuing and irrevocable, and shall cover and secure any and all Guaranteed Obligations and shall remain in full force and effect until all the Guaranteed Obligations shall have been satisfied and paid in full. The liability of the Guarantors under this Guaranty Agreement shall not be discharged or reduced by reason of any bankruptcy or insolvency proceeding involving Century or any proceeding for the reorganization, liquidation or dissolution of Century. Each of the Guarantors shall remain liable for (and this Guaranty Agreement shall be reinstated, if necessary) if and to the extent that any payment of any Guaranteed Obligations by or on behalf of Century is, at any time after such payment is made, recovered from GAC or Glencore, as the case may be, by a third party by legal proceedings or otherwise, or by a trustee or receiver in bankruptcy, and GAC or Glencore, as the case may be, shall be under no duty to contest any such recovery. 3. Covenants of the Guarantors. So long as this Guaranty Agreement remains in effect, each Guarantor agrees (a) that it will maintain its corporate existence and will not voluntarily dissolve without discharging its obligations under this Guaranty Agreement and (b) that it will not assign its obligations under this Guaranty Agreement; provided, however, such Guarantor may consolidate with or merge into another corporation or may transfer all or substantially all of its assets to another corporation but only on the condition that the assignee -4- corporation or the surviving corporation shall be within the Century consolidated group and shall expressly assume in writing and agree to perform all of such Guarantor's obligations hereunder. 4. Representations of the Guarantors. Each of the Guarantors hereby represents and warrants to GAC and Glencore that (a) it has full power and authority to enter into this Guaranty Agreement and to perform its obligations hereunder, (b) it has taken all appropriate action (corporate or otherwise) to authorize the execution and delivery of this Guaranty Agreement and to perform its obligations hereunder, and (c) it is Solvent on and as of the date hereof, after giving effect to the transactions contemplated hereby and by the Asset Purchase Agreement. For the purposes hereof, "Solvent" means, with respect to any Guarantor, that as of the date of determination, (i) the then present fair saleable value of the assets of such Guarantor will exceed the amount that will be required to be paid on or in respect of the then existing debts and other liabilities (including contingent liabilities) of such Guarantor as they become absolutely due and matured, (ii) such Guarantor believes that its assets will not constitute unreasonably small capital to permit it to carry out its business as conducted or as proposed to be conducted, and (iii) such Guarantor does not intend to, and does not believe that it will, incur debts beyond its ability to pay such debts as they mature. For purposes of this definition, the amount of any contingent liability at any time, with respect to any Guarantor, shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that in the good faith judgment of such Guarantor can reasonably be expected to become an actual or matured liability of such Guarantor. 5. Notice. Any notice hereunder shall be given in the manner set forth in the Asset Purchase Agreement. Each Guarantor's address for such purpose is c/o Century Aluminum -5- Company, 2511 Garden Road, Building A, Suite 200, Monterey, CA 93940, Attention: Gerald J. Kitchen; Fax No.: (831) 642-9328. 6. Successors and Beneficiaries. This Guaranty Agreement shall be binding upon the successors of each of the Guarantors, and shall inure to the benefit of and shall be enforceable by GAC and Glencore and any of their respective successors or assigns. 7. Governing Law. This Guaranty Agreement and the rights and obligations of the parties shall be governed, construed and interpreted according to the laws of the State of New York applicable to contracts made and to be performed in that State. Each of the Guarantors hereby submits to the personal jurisdiction of the U.S. District Court sitting in the Borough of Manhattan, New York, New York, for purposes of any adjudication or enforcement of this Guaranty Agreement, and each of the Guarantors hereby waives any defenses it may have to personal jurisdiction in such court and any defense that such is an inconvenient or burdensome forum. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -6- IN WITNESS WHEREOF, each of the Guarantors has executed this Guaranty Agreement by the Guarantors for the benefit of GAC and Glencore by its duly authorized officers as of the date first above written. HANCOCK ALUMINUM LLC, a Delaware limited liability company By: ____________________________________ Name: Title: ATTESTED: By ______________________________ CENTURY KENTUCKY, INC. a Delaware corporation By: ____________________________________ Name: Title: ATTESTED: By ______________________________ NSA, LTD., a Kentucky limited partnership, By Metalsco, Ltd., its general partner By: ____________________________________ Name: Title: ATTESTED: By ______________________________ CENTURY ALUMINUM OF WEST VIRGINIA, INC., a Delaware corporation By: ____________________________________ Name: Title: ATTESTED: By ______________________________ BERKELEY ALUMINUM, INC. a Delaware corporation By: ____________________________________ Name: Title: ATTESTED: By ________________________________ METALSCO, LTD., a Georgia corporation By: ____________________________________ Name: Title: ATTESTED: By ________________________________ SKYLINER, INC., a Delaware corporation By: ____________________________________ Name: Title: ATTESTED: By ________________________________ -----END PRIVACY-ENHANCED MESSAGE-----