[*] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED FROM PUBLIC FILING PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE U.S. SECURITIES AND
EXCHANGE COMMISSION. THE OMITTED INFORMATION, WHICH HAS BEEN
IDENTIFIED WITH THE SYMBOL “[*],” HAS BEEN FILED
SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
FIRST AMENDED AND RESTATED
SUPPLY AGREEMENT
This FIRST
AMENDED AND RESTATED SUPPLY AGREEMENT (this
“AGREEMENT”) is made as of the date last set forth on
the signature page hereto, by and between POLYMET ALLOYS, INC
(hereinafter called “POLYMET”), with offices at 1701
Providence Park, Suite 100, Birmingham, Alabama 35242; and HOKU
MATERIALS, INC (hereinafter called “HOKU”), with
offices at 1288 Ala Moana Blvd., Ste. 220 Honolulu, HI 96814
USA.
WHEREAS,
POLYMET and HOKU are parties to that certain supply agreement dated
as of November 13, 2008, for the sale by POLYMENT and the purchase
by HOKU of silicon metal (the “Original Supply
Agreement”); and
WHEREAS,
POLYMET and HOKU wish to amend and restate the Original Supply
Agreement in its entirety by this AGREEMENT, which shall supersede
the Original Supply Agreement.
NOW, THEREFORE,
in furtherance of the foregoing Recitals and in consideration of
the mutual covenants and obligations set forth in this AGREEMENT,
POLYMET and HOKU hereby agree as follows:
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POLYMET is a
supplier of Silicon Metal (hereinafter called the
“Product”) which HOKU uses for its Polysilicon
manufacture. Polymet shall obtain Product only from RIMA Industrial
S/A, unless HOKU approves another source.
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HOKU hereby
appoints POLYMET to supply certain quantity of HOKU’s
requirement of the Product subject to the terms and conditions set
out in this AGREEMENT.
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POLYMET
warrants to HOKU that:
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The Product
supplied hereunder conforms with the technical specification
provided by HOKU to POLYMET (Annex 1).
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POLYMET will
inform HOKU of any material change in the raw material used in the
production process of the Product.
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The quantity of
the Product to be supplied by POLYMET to HOKU for twelve (12)
consecutive calendar months commencing January
1st, 2010 shall be according to the following schedule:
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Calendar
Year 2010: Approx. [*] but no less than 65 percent
HOKU’s calendar yearly consumption except as per clause
4.
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Calendar Year
2011: Approx. [*] but no less than 65 percent HOKU’s calendar
yearly consumption except as per clause 4.
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Calendar Year
2012: Approx. [*] but no less than 65 percent of HOKU’s
calendar yearly consumption except as per clause 4.
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The Product
shall be shipped in approximate equal amounts each calendar month,
or as otherwise agreed in writing by the parties, using scheduling
process and parameters to be determined and decided between the
parties.
With regard to
the quantities specified in paragraph 3, the prices of the Product
in calendar years 2010, 2011 and 2012 will be freely negotiated for
each such calendar year. If the Parties are unable to
agree on the price at least 60 days prior to the beginning of the
applicable calendar year, then the following shall
apply: in the respective calendar year for each purchase
of the Product by HOKU, if the total purchases by HOKU for that
calendar year from POLYMET, in the aggregate total less than the
greater of (a) the amount specified for that year in paragraph 3 of
this AGREEMENT above, or (b) 65 percent of HOKU’s estimated
calendar year consumption for that calendar year, then before HOKU
purchases any quantity of Product from another supplier, HOKU
must offer that certain quantity to POLYMET and POLYMET will have
the right to accept or reject such offer in equivalent conditions
(price, payment conditions and place of delivery)
(“Conditions”) of the lowest price offer presented to
HOKU by other suppliers (“Lowest Third Party Price
Offer”). POLYMET shall have the right to review and verify
the bona fides of such Lowest Third Party Price Offer either (a) by
HOKU providing such information about the Conditions of such Lowest
Third Party Offer directly to POLYMET, without disclosing the
identity of such third party supplier, or (b) by an independent
third party that is mutually acceptable to HOKU and POLYMET in each
such party’s reasonable judgment (“Independent
Party”) that shall review and verify for POLYMET the bona
fide nature of such Lowest Third Party Price Offer, provided that
such Independent Party shall be subject to a confidentiality
agreement with HOKU. POLYMET must accept or reject any such offer
within seven calendar days from receipt from HOKU or from the
Independent Party as the case may be, by fax or e-mail of the
relevant information about such Conditions, followed up by a
telephone call to [*].
The price of
the Product in any calendar year shall be a Fixed Price on a per
pound of material basis plus any Inland Freight and pallet charges
associated with transporting the product from the port of entry in
the United States to Hoku’s Pocatello, Idaho production
plant. These charges will be separate line items on each
invoice.
Payments Terms
for this AGREEMENT are Net [*] days from the delivery date of the
material to HOKU’s Pocatello, Idaho plant, via wire
transfer.
The Product
shall be delivered FOB Pocatello, ID or as directed by HOKU, in
amounts and at the times specified in the delivery schedule agreed
upon in writing between the parties. In case of any delay that is
not POLYMET’s fault, HOKU shall unconditionally accept such
delay up to a maximum of [*] days. Also, POLYMET shall
unconditionally accept a postponing of any shipment for a maximum
of [*] days if such postponing is not HOKU’s fault and is
informed to Polymet prior to the production date of that material
in Brasil.
The Product to
be supplied by POLYMET to HOKU hereunder shall be packed in [*] lb
maximum supersa
