FIRST AMENDMENT TO
AGREEMENT TO TOLL CONVERT ALUMINA INTO ALUMINUM
(TOLLING CONTRACT)
The parties to this Agreement are:
HYDRO ALUMINUM LOUISVILLE, INC.,
a Delaware corporation ("Hydro"), and
GOLDENDALE ALUMINUM COMPANY,
a Delaware corporation, formerly known as Columbia
Aluminum Corporation (the "Company").
Hydro and the Company are parties to and are performing a contract dated
May 22, 1996, entitled "Agreement to Toll Convert Alumina Into Aluminum (Tolling
Contract)" the "Tolling Contract").
The parties now desire to amend the Tolling Contract with respect to the
matters set forth in this Agreement.
THEREFORE, in consideration of their mutual promises, the parties agree as
follows:
1. Incorporation by Reference
The Tolling Contract is incorporated herein by reference. This Agreement
shall be interpreted and construed in accordance with the provisions and defined
terms of the Tolling Contract.
2. Term
Section 1 of the Tolling Contract is hereby deleted in its entirety and the
following provision is inserted in lieu thereof:
"1. Term. The term of this Tolling Contract is fifteen years,
from January 1, 1997 through December 31, 2011."
3. Metal Production
Section 3 of the Tolling Contract is hereby deleted in its entirety and the
following provision is inserted in lieu thereof:
"3. Metal Production. Throughout the contract term, the Company
will operate its potlines and the casting facility at the smelter
exclusively to convert Hydro's alumina into standard aluminum products
as specified by Hydro. Subject to the Company's product meeting the
quality requirements of paragraph 11, Hydro will pay to the Company a
tolling fee for all aluminum metal manufactured using the entire
production capability of the production facilities, which the Company
shall dedicate solely to the tolling of Hydro's alumina in the
quantity of at least 157,000 metric tons of aluminum metal annually.
If the smelter is converted to a point-feed technology, any increase
in production capability of the production facilities resulting from
such conversion shall be dedicated solely to the tolling of Hydro's
alumina and, subject to the Company's product meeting the quality
requirements of paragraph 11, Hydro will pay to the Company a tolling
fee for all aluminum metal manufactured using such increased
production capability. Subject to this annual requirement, the
quantity of aluminum metal produced by the Company in any rolling
three-month period from tolling Hydro's alumina hereunder may be not
less than:
"(i) 37,288 metric tons, plus
"(ii) 95% of any increased production capability resulting from
conversion of the smelter to point-feed technology.
If Hydro fails to deliver alumina sufficient for the Company to
produce 157,000 metric tons of aluminum annually, plus any increased
production capability resulting from conversion of the smelter to
point-feed technology, at a rate of 1.94 tons of alumina per ton of
aluminum, and if such failure results in a production loss for the
Company, Hydro will pay a tolling fee measured by the resulting lost
production."
4. Casthouse Production
The first sentence of the fifth paragraph of Section 5 of the Tolling
Contract is hereby deleted in its entirety and the following provision is
inserted in lieu thereof:
"Hydro agrees to place orders for at least 70,000 metric tons of
casthouse products each year, plus 100% of any increased casthouse
production resulting from the expansion of the casthouse financed by
Hydro."
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5. Other Agreements
The Tolling Contract and this Agreement establish the fundamental
understanding and legal obligations of the parties. In the ordinary course of
business, the parties have made and intend to make agreements with respect to
products and scheduling, forward sales, special orders, product upcharges and
similar matters, which agreements (a) may be oral or in a formal or informal
writing, (b) shall be enforceable according to their terms, and (c) shall be
subject to arbitration under the Tolling Contract, in case of dispute.
6. Governing Law
This Agreement and all other agreements of the parties directly related to
the Tolling Contract shall be subject to Section 25 of the Tolling Contract.
7. Captions and Counterparts
Paragraph captions are for convenience and are not part of the substance of
this document. This Agreement may be executed in counterparts, each of which
shall be an original and all of which taken together shall be one and the same
instrument.
8. Effective Date
This Amendment shall be effective upon the "First Closing" of the
transactions contemplated by the Subordinated Note Purchase Agreement between
Golden Northwest Aluminum, Inc., the parent of GAC, and Norsk Hydro USA, Inc.,
an affiliate of Hydro, and shall have no force or effect prior to such time.
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Dated: December 21, 1998.
HYDRO ALUMINUM LOUISVILLE, INC.
By: JAMES M. WALTERS
-------------------------------
Name: James M. Walters
Title: President
GOLDENDALE ALUMINUM COMPANY
By: BRETT E. WILCOX
-------------------------------
Name: Brett E. Wilcox
Title: President
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