LONG-TERM SUPPLY AGREEMENT
EXHIBIT 10.1
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CONFIDENTIAL
TREATMENT REQUESTED
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CONFIDENTIAL
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
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HEMLOCK
SEMICONDUCTOR, LLC, a Delaware limited liability company with its principal
place of business at 00000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000, and SUNPOWER
CORPORATION, a United States corporation with its principal place of business at
0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000 hereby enter into this
Long-Term Supply Agreement.
WHEREAS,
Buyer desires to purchase and Seller desires to sell Products pursuant to the
terms and conditions of this Agreement for use by Buyer in the solar industry;
and
WHEREAS,
subject to the terms and conditions herein, Buyer will purchase from Seller
specified amounts of Products at specific prices per kilogram over the Term of
this Agreement.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Definitions. The
terms defined in this Section shall have the meanings specified in this
Section. Other terms in this Agreement that are not defined in this
Section 1 shall have the meanings ascribed to them elsewhere in this
Agreement.
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(a)
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“Affiliate”
of either party means an entity that controls said party, is controlled by
said party, or is under common control or common ownership with said
party. For purposes of this definition, “control” and
“controlled” mean the possession of the power to direct or cause the
direction of the management and policies of such an entity, whether
through the ownership of voting securities, by contract, by management
agreement or otherwise.
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(b)
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“Agreement”
means this Long-Term Supply
Agreement.
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(c)
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“Buyer”
means SunPower Corporation.
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(d)
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“Effective
Date” means the date on which execution of this Agreement has been
completed by both parties.
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(e)
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“Gross
Price” for each Product means the Gross Price per kilogram for each year
of this Agreement as set forth in Section 4 hereof and Tables II A and B,
and Tables III A - I, of Exhibit B, subject to the adjustments set
forth in this Agreement.
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(f)
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“Net
Price” for each Product means the Gross Price per kilogram minus the
Advance Payment per kilogram for each year of this Agreement set forth in
Table I of Exhibit B, subject to the adjustments set forth in this
Agreement.
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(g)
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“Net
Remaining Advance Payment Balance” for each calendar year is set forth in
Table 1 of Exhibit B.
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(h)
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“Seller”
means Hemlock Semiconductor, LLC.
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2. Product. As
used in this Agreement, “Product” or “Products” means solar grade
polycrystalline silicon as described in the specifications for the respective
Products, as set forth in Exhibit A (the “Product
Specifications”). Buyer shall utilize the Products for its
manufacturing purposes in solar applications only and shall not, without the
prior written consent of Seller, resell or transfer the Products to anyone or
use the Products other than in Buyer’s solar manufacturing applications, subject
to the following exceptions:
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(a)
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Buyer
may transfer the Products without prior written consent of Seller to
wholly-owned or majority-owned subsidiaries of the Buyer (hereinafter
together with Buyer referred to as the “Buyer Group”) for Buyer’s
manufacturing purposes in solar applications only, and for no other
purpose; and
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(b)
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Buyer
may transfer the Products without prior written consent of the Seller to
persons who have entered into supply agreements with a Buyer Group member
to produce ingots and/or wafers from such transferred Products for such
Buyer Group member, for Buyer’s manufacturing purposes in solar
applications. Buyer shall notify Seller of each such transfer,
provide copies of the Buyer Group transfer agreements upon entering into
such agreements and notify Seller upon termination of such
agreements.
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If so
requested by Buyer, Seller may, in its sole discretion, agree to deliver
Products to carriers that are shipping to Buyer Group members or persons who
have entered into supply agreements with a Buyer Group member (as described in
Sections 2(a) and 2(b) hereof) for the limited purposes cited above, and any
such deliveries will constitute delivery to Buyer under this
Agreement.
Buyer
acknowledges that the Products bearing Product Codes HSC DMS-L, HS DMS-L, HSC
900, HS 900, HSC 840, HS 840, HSC 850, HS 850, HSC SCE, HS SCE, HSC PTBS, HS
PTBS, HSC PCE, HS PCE, HSC P75, HS P75, HSC P80, HS P80 (for which prices are
set forth in Tables III A – I, in Exhibit B) may not be available to Buyer for
purchase under this Agreement unless and until Seller, in its sole discretion,
elects to offer one or more of such Products for sale to Buyer; and, if Seller
so elects, any such sales shall occur upon agreement of Buyer and
Seller. Notwithstanding the preceding sentence, Buyer further
acknowledges and agrees that Seller, upon agreement with Buyer, may fill Buyer
orders for Products bearing Codes HSC DMS, HS DMS, HSC SGB and HS SGB (for which
prices are set forth in Tables II A – B) with any combination of Products,
including any of the products listed in the first sentence of this paragraph
(and priced in Tables III A – I).
3. Term. The
term of this Agreement shall commence on the Effective Date and (subject to
Section 19 hereof) shall continue through December 31, 2020 (the
“Term”). Subject to Section 19, the Term may be extended, at Seller’s
sole discretion, for a period not to exceed 180 days (i.e., not beyond
June 29, 2021) so as to enable Seller to cure any default of its obligation
under this Agreement.
4. Price. The
Gross Price per kilogram for each Product for each calendar year shall be fixed
at the respective prices set forth in Tables II A and B, and Tables III A – I,
of Exhibit B, and is subject only to adjustments for Cost Structure Adjustments
(as provided in Section 8
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5. Contract
Quantity. “Contract Quantity” means the quantities of Products
that Buyer is obligated to purchase from Seller in each calendar year and in the
aggregate during the Term of this Agreement. The Contract Quantity is
set forth in the aggregate and allocated by calendar year of purchase in Table I
of Exhibit B. The Contract Quantity for each calendar year shall be
fulfilled based upon Buyer’s purchases among any of the respective Products in
that year.
Buyer and
Seller acknowledge that in connection with their course of dealings in respect
of other purchase and sale agreements that are separate from and unaffected by
this Agreement, Buyer periodically issues purchase orders to Seller for
product(s) in which Buyer requests specified quantities, delivery dates and
delivery locations; and from time to time Buyer issues change orders to such
purchase orders. Buyer and Seller hereby agree that (i)
notwithstanding such purchase order practices, nothing in this Section 5 shall
create any obligation under this Agreement to deliver purchase orders in
accordance with their prior purchase order practices, and (ii) in order to
constitute a purchase of Product toward fulfillment of Buyer's take or pay
purchase obligations under this Agreement, any purchase orders delivered by
Buyer to Seller shall expressly reference this Agreement and identify
specifically the portions of Product ordered in such purchase order as being
purchased under this Agreement, and absent such express reference and
identification, such purchases shall not count toward Buyer purchase obligations
under this Agreement.
6. Non-Refundable
Advance Payment. Buyer shall make a non-refundable,
unconditional, irrevocable advance payment to Seller in the amount of
$290,777,760 (the “Advance Payment”), payable as follows:
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(a)
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5%
($14,538,888.00) shall be due on or before October 9,
2009;
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(b)
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35%
($101,772,216.00) shall be due on or before October 11,
2010;
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(c)
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35%
($101,772,216.00) shall be due on or before October 10, 2011;
and
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(d)
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25%
($72,694,440.00) shall be due on or before August 10,
2012.
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Seller
understands and acknowledges that Buyer is making the Advance Payment to secure
the availability of the Contract Quantity of Products. Buyer
acknowledges and agrees that, except as provided in Section 11 and Section 14,
there are no circumstances or occurrences that will require Seller to refund to
Buyer all or any portion of the Advance Payment. The Advance Payment
shall be applied as a credit against the Gross Price of the Products that Buyer
is required to purchase during the Term of this Agreement, at the times and in
the amounts per kilogram shown on Table I of Exhibit B.
7. Take or
Pay Agreement. This Agreement is a take or pay agreement such
that, in addition to making the Advance Payment required under Section 6 hereof,
Buyer is absolutely
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and
irrevocably required to pay the Net Price per kilogram for the Contract Quantity
per calendar year over the Term of this Agreement. In the event that
Buyer fails to order or take delivery of the Contract Quantity for a calendar
year then Seller shall invoice Buyer for the difference between the quantity of
Products ordered in that calendar year and the Contract Quantity of Product for
that calendar year at the Net Price in effect for HSC DMS and/or HS DMS for that
calendar year (subject to any price adjustment provided for in this Agreement,
including without limitation, under Section 8 or Section 18), and Buyer
shall pay the same in accordance with Section 9 hereof.
8. Cost
Structure Adjustments. The prices described in Section 4 and
set forth in Tables II A and B, and Tables III A – I, of Exhibit B are subject
to upward price adjustments based upon the prior years’ cumulative cost
increases in accordance with the formulae set forth in Exhibit C (“Cost
Structure Adjustments”). The parties acknowledge and understand that
the indices used in calculating the Cost Structure Adjustments for electricity,
labor and silicon metal (as referenced in Exhibit C) for each of the respective
calendar years during the Term of this Agreement, beginning with 2009, will not
be available until the following year. Based on past experience, the
parties anticipate that the indices for labor and silicon metal will be
published in the first quarter of the following year, and for electricity not
until the fourth quarter of the following year. Irrespective of the
dates that any of the indices are published, commencing in 2009, as soon as is
reasonably practicable after Seller learns of the first index to be published,
Seller shall determine the Cost Structure Adjustment, if any, attributable to
that particular index, and shall notify Buyer of any such adjustment to the
Gross Price of the Products, and such adjustment shall be effective
retroactively to January 1 of that year. Additional adjustments may
be made during that year as the remaining indices are published and the data
applied to the formulae in Exhibit C. All price adjustments made in a
given year shall be cumulative, and all upward price adjustments shall remain in
effect until the respective Cost Structure Adjustment calculations are performed
in the following year. In the event that in the following year the
calculation of a particular Cost Structure Adjustment determines that no upward
price adjustment is triggered for that cost index, or a price adjustment of a
different amount is triggered, then Seller shall, within 30 days of performing
such Cost Structure Adjustment, so notify Buyer and issue a credit to Buyer,
which shall be applied against future purchases required under this Agreement,
in the amount that Buyer paid an upward Cost Structure Adjustment for that
particular cost index, during a period in which no adjustment or a lower
adjustment applied.
For
example, if cost increases for labor and silicon metal give rise to upward price
adjustments for calendar year 2015 and Seller learns of and so notifies Buyer of
those in April 2015, then Seller shall be entitled, in April 2015, to payment
for the full price increases for labor and silicon metal retroactive to January
1, 2015. If, thereafter in October 2015, the cost of electricity
gives rise to an upward price adjustment and Seller learns of and so notifies
Buyer of that in October 2015, then Seller shall be entitled, in October 2015,
to payment for the full price of the electricity increase, retroactive to
January 1, 2015. The upward price adjustments for each of these three
cost components will remain in effect until Seller performs the next annual Cost
Structure Adjustment calculations respectively, in 2016. If, upon
performing the calculation for labor and silicon metal in, for example, April
2016, no upward price adjustment is triggered (which would have been effective
retroactive to January 1, 2016), then, within 30 days, Seller shall issue a
credit to Buyer to be applied against future purchases, in the amount of the
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Under no
circumstances will there be any downward Cost Structure Adjustments to the Gross
Prices set forth in Tables II A and B, and Tables III A – I, of Exhibit
B. Any Cost Structure Adjustment applicable under this Section 8
shall be in addition to and cumulative with any price adjustments for any other
price adjustments under this Agreement, including without limitation taxes or
other charges provided for in Section 18 hereof.
Buyer
acknowledges that, should any of the cost indices referenced in Exhibit C that
are components of the Cost Structure Adjustment formulae no longer be published
as anticipated, or the data presentation, data provided, or data preparation be
changed such that Seller, in its sole and reasonable discretion, determines that
the purpose of this Cost Structure Adjustment provision has or will fail to
achieve its purpose, then Seller shall select a replacement index or benchmark,
which shall be binding upon Buyer’s written agreement, which consent shall not
be unreasonably withheld.
9. Payment. Payment
terms are net 30 days from the date of the invoice. Finance charges
of ***% per month (***% per annum) shall be assessed on payments past due from
the payment due date to the date payment is received. Failure to pay
invoices when due or finance charges when assessed may result in delayed or
cancelled shipments. No deductions, setoffs, defenses or
counterclaims from invoices are permitted. Delay or cancellation by
Seller of shipments resulting from Buyer’s non-payment will not relieve Buyer
from any obligation set forth in this Agreement.
10. Freight
Terms, Title and Risk of Loss. Freight terms for the shipment
of Products hereunder are FCA (Incoterms 2000) from any of Seller’s designated
shipping points. Buyer shall bear all expenses of shipment, and Buyer
shall be solely responsible for the selection and engagement of
carriers. Title and risk of loss for all Products shall pass to Buyer
upon delivery to carrier.
11. Termination
and Damages. The parties acknowledge that it is their express
intent that Buyer is obligated to purchase and Seller is obligated to deliver
the Contract Quantity over the Term of this Agreement, and that the basis and
circumstances under which the parties may terminate this Agreement prior to the
expiration of the Term of this Agreement are expressly limited to the terms of
this Section 11.
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(a)
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Default
by Seller-Failure to Supply Product. Upon default by
Seller of its obligation to deliver a material amount of the Contract
Quantity of Product listed on Table I of Exhibit B, and such failure is
not the result of a Force Majeure Event as defined in Section 19 or any
default by Buyer, Buyer may serve a written notice of default upon
Seller. Seller shall have 180 days (commencing on the date
written notice is received by Seller) to cure such default. If
such default is not cured within 180 days, and provided there is no
uncured Buyer default, Buyer at its option may elect to terminate this
Agreement by a second written notice
to
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***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
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Seller. If
Buyer elects to terminate, Buyer shall be entitled to receive from Seller,
within thirty (30) days of Seller’s receipt of Buyer’s written election to
terminate this Agreement, an amount equal to the amount of the Advance Payment
that has not yet been applied to the price of Products purchased by Buyer,
without interest.
If Buyer,
in its sole discretion, elects not to terminate this Agreement under the default
circumstances set forth above, then Buyer and Seller shall negotiate in good
faith toward modifying the terms of this Agreement, including, among other
terms, a new delivery schedule, the quantities to be supplied pursuant to that
schedule, and the applicable purchase price.
Delay or
cancellation by Seller of shipments resulting from Buyer’s non-payment shall not
provide Buyer any termination rights or rights to damages set forth in this
Section 11.
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(b)
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Limitation
of Buyer’s Remedies. EXCEPT AS PROVIDED IN SECTION
11(a), SECTION 14, SECTION 15 AND SECTION 17 HEREOF, NO OTHER REMEDY
(INCLUDING, BUT NOT LIMITED TO, INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR
LOST PROFITS, LOST SALES, INJURY TO PERSON OR PROPERTY, OR ANY OTHER
INCIDENTAL OR CONSEQUENTIAL LOSS) SHALL BE AVAILABLE TO
BUYER.
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(c)
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Default
by Buyer. Upon receipt of written notice from Seller of
default by Buyer of its obligation
to:
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(i)
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make
any installment of the Advance Payment;
or
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(ii)
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comply
with its purchase or take-or-pay obligations;
or
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(iii)
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make
payment for the Products;
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Buyer
shall have 180 days to cure such default. If such default continues
for more than 180 days after Buyer received notice thereof, or if any of Buyer’s
representations and warranties in this Agreement (including without limitation
in Section 21) were not true and accurate as of the Effective Date or become
untrue or inaccurate during the Term of this Agreement, Seller may, at its
option, terminate this Agreement by written notice to Buyer, and Seller will
have no further obligation to supply Product to Buyer, and Seller will thereupon
be entitled to the following damages:
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A.
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payment
by Buyer to Seller of all Advance Payment amounts due under Section 6 and
not yet paid by Buyer to Seller;
and
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B.
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retention
of any Net Remaining Advance Payment Balance;
and
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C.
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payment
by Buyer to Seller for all Product delivered;
and
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D.
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acceleration
of payment by Buyer to Seller for all remaining Contract Quantity of
Product at the Net Price in effect for HSC DMS and/or HS DMS at the time
of Buyer’s default, subject to any price adjustment provided for in this
Agreement, including without limitation, under Section 8 or Section
18.
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Buyer
acknowledges and agrees that payments made by Buyer under this Section 11(c) do
not constitute a penalty.
Buyer
acknowledges and agrees that the 90-day cure period provided in this Section
11(c) is not intended to and shall not extend the payment terms beyond those set
forth in Section 9 hereof.
12. Confidentiality
and Trade Secrets.
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(a)
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Seller
and Buyer acknowledge and agree that certain information each party has
received or may receive from the other party or from a Seller or Buyer
Affiliate in connection with this Agreement, including information
regarding research, technology, technical specifications, product
developments, marketing plans or conditions, products, business
strategies, and the like, constitutes “Confidential Information” of the
other party and shall be deemed disclosed by the other party to the
receiving party. The purpose for exchanging Confidential
Information is to allow the parties to use Confidential Information solely
for the purpose of meeting their obligations and responsibilities under
this Agreement. The party receiving any Confidential
Information, and its employees, attorneys, financial advisors, officers,
directors, shareholders and members who receive Confidential Information,
shall not, except with the prior written consent of the disclosing party,
(i) use Confidential Information for any purpose other than those purposes
permitted under this Agreement, whether for itself or for the benefit of
another, or (ii) divulge, disclose, publish or communicate, to any person,
firm, corporation or entity, in any manner whatsoever, the terms of this
Agreement or any Confidential Information of the disclosing party;
provided, however, that (i) each party hereto may use, divulge, disclose
or communicate the terms of this Agreement or Confidential Information of
the disclosing party to its Affiliates, members, and/or shareholders, and
Affiliates of those entities, on a “need-to-know” basis, subject to the
provisions of this Section 12, without first obtaining the other party’s
written consent, and (ii) Buyer may use, divulge, disclose or communicate
the terms of this Agreement or Confidential Information of the disclosing
party to persons who have entered into a supply agreement with a Buyer
Group member (as provided in Section 2(b) hereof) on a “need to know”
basis, subject to the provisions of this Section 12, provided that Seller
has consented in writing in advance to such disclosure, which consent
shall not be unreasonably withheld. Each party further agrees,
for itself and for any person to whom a disclosure is permitted and made,
to use the same degree of care to maintain as confidential and to avoid
non-permitted use or disclosure of the Confidential Information disclosed
to it under this Agreement as it employs with respect to its own
confidential information, but at all times shall use at least reasonable
care to
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(i)
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was
already known to the receiving party at the time such Confidential
Information is disclosed by the other
party;
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(ii)
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was
or became publicly known through no wrongful act of the receiving
party;
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(iii)
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was
rightfully received from a third party without
restriction;
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(iv)
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was
independently developed by the receiving party;
or
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(v)
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was
required for legal or financial reporting purposes to be disclosed;
provided, however, that the party being required to disclose shall, if
circumstances permit, provide advance notice to the other party and shall
allow the other party a reasonable opportunity to oppose such disclosure,
if appropriate, and assist the other party, at such party’s sole expense,
in obtaining a protective order or other method of maintaining
confidentiality of such Confidential
Information.
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The
obligations not to use and not to disclose Confidential Information received by
a party under this Agreement shall continue during the Term of this Agreement
and for a period of three (3) years thereafter, and thus survive the termination
or expiration of this Agreement.
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(b)
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The
parties further acknowledge and agree that certain of the Confidential
Information that has been or will be provided to Buyer in connection with
this Agreement concerns technical information related to the Products, the
design, composition, performance, characteristics, manufacture, and use of
the Products, and applications for the Products, including research, test
results, and test methodologies, and also constitutes or reflects trade
secrets of Seller or an Affiliate of Seller (herein collectively “Seller’s
Trade Secrets”). Buyer acknowledges and agrees that Seller’s
Trade Secrets are owned by Seller or an Affiliate of Seller, are secret,
are being provided to Buyer in confidence, are the subject of reasonable
efforts by Seller to keep them secret, and that Seller has derived value
because of their secrecy, as evidenced in part by the parties entering
into this Agreement. Buyer agrees for itself and any person to
whom a disclosure is permitted and made, to use the same degree of care to
maintain as confidential and to avoid any non-permitted use or disclosure
of Seller’s Trade Secrets as it employs with respect to its own trade
secret information, but at all times shall use at least reasonable care to
protect Seller’s Trade Secrets against non-permitted use or
disclosure. The obligations not to use and not to disclose
Seller’s Trade Secrets shall continue during the Term of this Agreement
and, with respect to each Seller Trade Secret, for so long thereafter as
Seller and/or Seller’s Affiliate maintains such Trade Secret as a trade
secret, and thus survive the termination or expiration of this
Agreement.
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(c)
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Buyer
will be liable for any breach of this Section 12 by any Buyer Group
members or any person to whom Buyer is permitted to disclose Seller’s
Confidential Information and/or Seller’s Trade Secrets. In the
event of a breach or a threatened breach of this Section 12, Buyer
acknowledges and agrees that Seller will face irreparable injury which
cannot be completely or adequately remedied by monetary damages and that
Seller shall be entitled, in addition to remedies otherwise available at
law or in equity, to a temporary restraining order, a preliminary
injunction, and a final injunction enjoining such breach or threatened
breach.
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(d)
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Seller
will be liable for any breach of this Section 12 by any person to whom
Seller is permitted to disclose Buyer’s Confidential
Information. In the event of a breach or a threatened breach of
this Section 12, Seller acknowledges and agrees that Buyer will face
irreparable injury which cannot be completely or adequately remedied by
monetary damages and that Buyer shall be entitled, in addition to remedies
otherwise available at law or in equity, to a temporary restraining order,
a preliminary injunction, and a final injunction enjoining such breach or
threatened breach.
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13. Limited
Warranty. Buyer acknowledges and agrees that Seller warrants
only that: (i) upon delivery to the carrier, the Products will meet the
applicable Product Specifications, as set forth in Exhibit A and (ii) the
Products will be delivered free from any security interest, lien or
encumbrance. THIS LIMITED WARRANTY IS IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, SUCH WARRANTIES BEING
EXPRESSLY DISCLAIMED.
14. Limited
Remedy for Non-Conforming Products. Seller shall be given
reasonable and prompt written notice and opportunity to examine any claim by
Buyer that the Products are not compliant with the Limited Warranty set forth in
Section 13. Buyer agrees that its sole and exclusive remedy against
Seller, in the event of a breach of the Limited Warranty set forth in Section
13, shall be limited, at Seller’s sole discretion, to either: (i) the revision,
repair or replacement of Products that are not compliant with Section 13 or (ii)
refund payment not to exceed the purchase price (including any Advance Payment
applied to such purchases) of the specific non-compliant Products. In
the event that Seller elects to remedy any breach of the Limited Warranty under
section (ii) of the preceding sentence, any quantity of Product for which the
purchase price has been refunded will reduce Seller’s obligation to supply
Product and Buyer’s obligation to purchase Product hereunder by an equivalent
amount. Buyer further acknowledges and agrees that in the event that
Seller elects to make refund payments as provided in the alternate remedy (ii)
above, this exclusive remedy provision shall not have failed of its essential
purpose. Any replacement or refund is conditional on Buyer giving
Seller written notice within 90 days from the date of shipment by Seller that
the Products are other than as warranted. Failure by Buyer to give
this written notice within the 90-day period shall constitute a waiver by Buyer
of all claims under this Agreement with respect to any claim of defect of the
Products. If requested by Seller, all unconsumed Products alleged by
Buyer to be other than as warranted in Section 13 shall be returned to Seller
freight collect.
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15. Limitation
on Damages. THE DAMAGE LIMITATION FOR BREACH OF THE LIMITED
WARRANTY OF SECTION 13 IS AS SET FORTH IN SECTION 14
ABOVE. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY,
SELLER’S MAXIMUM AGGREGATE LIABILITY FOR ANY OTHER CLAIMS ARISING OVER THE TERM
OF THIS AGREEMENT, IF ANY, FOR ALL DAMAGES, INCLUDING WITHOUT LIMITATION
CONTRACT DAMAGES AND DAMAGES FOR INJURIES TO PERSONS OR PROPERTY, WHETHER
ARISING FROM SELLER’S BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE,
PRODUCT LIABILITY, STRICT LIABILITY, OR OTHER TORT, IS LIMITED TO BUYER’S NET
REMAINING ADVANCE PAYMENT BALANCE, WITHOUT INTEREST, (AS SET FORTH IN TABLE I OF
EXHIBIT B) AT THE TIME SUCH LIABILITY IS DETERMINED. IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL, OR
SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST REVENUES AND
PROFITS. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF
ESSENTIAL PURPOSE OF THE LIMITED REMEDY OR ANY OTHER REMEDY SET FORTH IN THIS
AGREEMENT.
16. Exclusion
and Waiver of Remedies, Liability and Damages As Against Seller’s
Affiliates. Buyer acknowledges and agrees that any and all
potential claims, remedies, liabilities or damages sought by Buyer against
Seller arising directly or indirectly from Seller’s performance under this
Agreement may be asserted by Buyer against Hemlock Semiconductor, LLC only, and
not against any Affiliates of Hemlock Semiconductor, LLC. Buyer
further acknowledges and agrees that only Hemlock Semiconductor, LLC will be
answerable at law or in equity for the obligations of Seller to perform under
this Agreement, and Buyer hereby forever waives any and all claims that it might
seek to assert against any Affiliate of Hemlock Semiconductor, LLC relating
directly or indirectly to this Agreement.
17. Patents. If
any suit is brought against Buyer for infringement of any United States Letters
Patent, alleging that the Products manufactured by Seller, or an Affiliate of
Seller, infringe any United States Letters Patent, Seller shall, at its own
expense, defend and control the suit against these allegations only, and shall
pay any award of damages assessed against Buyer in the suit only to the extent
that the damages are awarded in connection specifically with a final
adjudication, with all appeals as of right exhausted or waived, that the Product
infringes a not invalid patent claim that is not unenforceable, provided that
Buyer has not materially changed the Product by subsequent processes and gives
Seller prompt notice in writing of the institution of the suit and, to the full
extent of Buyer’s power to do so, Buyer permits Seller to defend and control the
suit against these allegations. The above fully expresses Buyer’s
exclusive remedy and Seller’s sole responsibility with respect to infringement
of any patent by the Products, and Seller EXPRESSLY DISCLAIMS ANY OTHER WRITTEN
OR UNWRITTEN, EXPRESS OR IMPLIED, WARRANTY AGAINST INFRINGEMENT with respect to
the Products. In no circumstance shall Seller be liable to defend or
pay any award of damages assessed against Buyer in any suit or cause of action
alleging that the use of the Products infringes any patent.
18. Taxes and
Other Charges. In the event that any governmental authority
(federal, state, local or otherwise) imposes, levies or assesses a tax,
surcharge, assessment or any other additional charge on the production, sale,
use, transportation, shipment, conveyance or delivery of the Products, Seller
may (at its sole option), in accordance with applicable law, add
10
19. Force
Majeure. Neither Buyer nor Seller shall be liable for delays
or failures in performance of its obligations under this Agreement that arise
out of or result from causes beyond such party's control, including without
limitation: acts of God; acts of the Government or the public enemy; natural
disasters; fire; flood; epidemics; quarantine restrictions; strikes; freight
embargoes; war; acts of terrorism; and, in the case of Seller only, a default of
a Seller supplier (in each case, a “Force Majeure Event”). In the
event of any such delay or failure of performance by Buyer or Seller, the other
party shall remain responsible for any obligations that have
accrued to it but have not been performed by it as of the date of the
Force Majeure Event. When the party suffering from the Force Majeure
Event is able to resume performance, the other party shall resume its
obligations hereunder. The Term of this Agreement may be extended for
a period not to exceed two (2) years, so as to complete the purchase and
delivery of Product affected by a Force Majeure Event. The party
suffering a Force Majeure Event shall provide the other party with prompt
written notice of (i) the occurrence of the Force Majeure Event, (ii) the
date such party reasonably anticipates resuming performance under this Agreement
and, if applicable, (iii) such party's request to extend the Term of this
Agreement.
In
addition, if due to a Force Majeure Event, Seller is unable to supply sufficient
goods to meet all demands from customers and internal uses, Seller shall have
the right to allocate supply among its customers in any manner in which Seller,
in its sole discretion, may determine.
Notwithstanding
anything in this Agreement to the contrary, in the event that due to a Force
Majeure Event the party suffering such event is unable to perform its
obligations under this Agreement for longer than two (2) years after the event
occurs, the other party shall have the right to terminate this
Agreement.
20. No Third
Party Beneficiary Rights; No Rights or Remedies To Buyer
Group.
This
Agreement establishes no third party beneficiary rights in any persons or
entities not parties hereto, including without limitation any Buyer Group
members or persons who have entered into supply agreements with a Buyer Group
member (as described in Sections 2(a) and 2(b) hereof); and, no provision
in this Agreement shall be construed or deemed in any way to inure to the
benefit of any persons or entities not parties hereto, including, but not
limited to, any person or entity described in Sections 2(a) and 2(b), so as to
constitute any such person or entity as a third party beneficiary of any or all
of this Agreement or otherwise give rise to any cause of action to such third
party.
No Buyer
Group members or other persons who have entered into supply agreements with a
Buyer Group member (as described in Sections 2(a) and 2(b) hereof) shall have
any rights or remedies against Seller under any provision of this Agreement,
including without limitation
11
21. Representations
and Warranties. Each of Buyer and Seller hereby represents and
warrants to the other as follows:
|
(a)
|
Organization
and Good Standing. Such party is a corporation or
limited liability company, as applicable, duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization
and has the requisite corporate or limited liability company, as
applicable, power authority to own, lease and operate its properties and
to carry on its business as now conducted. Such party is not in
default under or in violation of any provisions of its organizational
documents.
|
|
(b)
|
Authority
and Enforceability. Such party has all corporate or
limited liability company, as applicable, power and authority to execute
and deliver this Agreement and perform its obligations
hereunder. The execution and delivery by such party of this
Agreement and the performance by such party of the transactions
contemplated hereby have each been duly and validly authorized by all
necessary corporate or limited liability company, as applicable,
action. This Agreement has been duly executed and delivered by
such party and, assuming due execution and delivery by the other party,
constitutes a valid and binding obligation of such party, enforceable
against it in accordance with its
terms.
|
|
(c)
|
No
Conflicts; Consents. The execution and delivery of this
Agreement by such party, the performance by it of its obligations
hereunder, and the compliance by it with the terms and conditions hereof,
will not: (i) violate any provision of its organizational documents, or
(ii) violate any law, rule, regulation, accounting principle, financial
disclosure obligation, or order of any court or governmental authority or
agency that is applicable to or binding on such party. The
execution and delivery by such party of this Agreement and the performance
by such party of its obligations hereunder do not require: (a) any
authorization, consent or approval of, or notice to, any person or entity
under any contract or agreement to which such party is party; or (b) any
authorization, consent, approval, certification, license or order of, or
any filing with or notice to, any governmental
entity.
|
|
(d)
|
Legal
Proceedings. There are no legal proceedings pending or,
to the knowledge of such party, threatened before any governmental
department, commission, board, agency, or instrumentality that would
prevent the execution and delivery by such party of this Agreement, the
consummation of the transactions contemplated hereby or the performance by
such party of its obligations hereunder, or that would otherwise adversely
affect the validity or enforceability of this Agreement, nor, to the
knowledge of such party, is there any reasonable basis for any such
proceeding.
|
12
22. Indemnification. Except
as provided in Section 17 hereof, Buyer shall defend, indemnify and hold
harmless Seller, its owners, members, Affiliates, officers, directors, employees
and agents (collectively the “Seller Indemnitees”) from and against any and all
liability, loss, and expense (including reasonable attorneys’ fees) as a result
of third party claims or actions arising out of Seller’s performance under this
Agreement, the sale or use of the Products or the handling or further processing
thereof following delivery by Seller to Buyer hereunder; provided, however, that
Buyer shall have no obligation to indemnify the Seller Indemnitees for any
liability, loss, claims, or expense (including attorneys’ fees) to the extent
established in a final judgment by a court of competent jurisdiction to have
resulted from a Seller Indemnitee’s gross negligence or willful
misconduct.
23. Notice. Any
notice, demand or other communication required or permitted to be given under
this Agreement shall be in writing and shall be deemed delivered to a party (i)
when actually received by the representatives designated below to receive
notices, or (ii) (a) when delivered to the designated recipients’ addresses
listed below (addressed to the designated recipients) by certified or registered
mail (return receipt requested) and (b) when delivered by confirmed facsimile to
the recipients’ numbers designated below. Either party may change its
addresses or representatives for receiving notices upon notice to the
other.
|
|
If
to Seller to:
|
Hemlock
Semiconductor, LLC
|
|
|
00000
Xxxxxx Xxxx
|
|
|
Xxxxxxx,
Xxxxxxxx 00000
|
|
|
Attn.:
Vice President of Marketing
|
|
|
Fax
No.: (000) 000-0000
|
|
|
With
a copy to:
|
Hemlock
Semiconductor, LLC
|
|
|
00000
Xxxxxx Xxxx
|
|
|
Xxxxxxx,
Xxxxxxxx 00000
|
|
|
Attn.:
General Counsel/Legal Department
|
|
|
Fax
No.: (000) 000-0000
|
|
|
If
to Buyer to:
|
SunPower
Corporation
|
|
|
Attn: Xxx
Xxxxxxxx
|
|
|
0000
Xxxxx Xxxxx Xxxxxx
|
|
|
Xxx
Xxxx, Xxxxxxxxxx 00000
|
|
|
Fax
No.: (000) 000-0000
|
|
|
With
a copy to:
|
SunPower
Corporation
|
|
|
Attn: General
Counsel
|
|
|
0000
Xxxxx Xxxxx Xxxxxx
|
|
|
Xxx
Xxxx, Xxxxxxxxxx 00000
|
|
|
Fax
No.: (000) 000-0000
|
13
24. Choice of
Law. This Agreement is made in, and shall be governed and
controlled in all respects by the laws of the State of Michigan, U.S.A.
(specifically disclaiming the United Nations Convention on Contracts for the
International Sale of Goods), without giving any effect to any choice or
conflict of law provision or rule that would cause application of the laws of
any jurisdiction other than that set forth in this Section. All
disputes, including those related to interpretation, enforceability, validity,
and construction, shall be determined under the laws of the State of Michigan,
without regard to any conflict of law provisions.
25. Choice of
Forum; Time Period. The parties submit to the exclusive
jurisdiction of the Circuit Court for the County of Saginaw, State of Michigan,
U.S.A. for all disputes and actions arising, directly or indirectly, out of this
Agreement, the performance of this Agreement, or the breach of this
Agreement. Any action arising, directly or indirectly, out of this
Agreement must be commenced within two (2) years after the cause of action has
accrued.
26. Waiver. A
party’s failure to exercise a right or remedy, or a party’s acceptance of a
partial or delinquent payment, shall not operate as a waiver of any of such
party’s rights or the other party’s obligations under the Agreement and shall
not constitute a waiver of such party’s right to declare an immediate or a
subsequent default.
27. Severability. If
one or more of the provisions of this Agreement shall be found by the court with
jurisdiction to be illegal, invalid or unenforceable, it shall not affect the
legality, validity or enforceability of any of the remaining provisions of this
Agreement. The parties agree to attempt to substitute for any
illegal, invalid or unenforceable provision a legal, valid or enforceable
provision that achieves to the greatest extent possible the economic objectives,
allocation of responsibility, or limitation of warranties and damages of the
illegal, invalid or unenforceable provision.
28. Merchants/Sophisticated
Parties. Seller and Buyer acknowledge and agree that: (i) both
are sophisticated business entities with expertise and experience in all matters
relating to this Agreement; (ii) Buyer and Seller are both “merchants,” and this
Agreement is “between merchants,” as those terms are defined and used in the
Michigan law; (iii) there was equal bargaining power between the parties in
their negotiation and execution of this Agreement; (iv) neither party acted
under any duress, economic or otherwise, when considering and entering into this
Agreement; and (v) both parties had a full opportunity, and did, consult with
their respective counsel before entering into this Agreement.
29. Integration. This
Agreement and the Exhibits attached hereto, constitute the entire understanding
between the parties with respect to the subject matter of the Agreement and
supersede any prior discussions, representations, negotiations, agreements,
memoranda of understanding and the like. Additional or different
terms contained in any Buyer document (including, without limitation, any
purchase order, estimate, order acknowledgement, or payment remittance) shall
not be binding, and shall not create, nor be construed to create any
modification of Buyer’s or Seller’s rights or obligations under this
Agreement. Modifications to the Agreement may be made only in a
writing signed by each party.
30. Assignments. No
assignment of the Agreement or of any right or obligation under the Agreement
shall be made by either party without the prior written consent of the other
14
31. Dollars. All
references to monetary amounts shall be in U.S. Dollars.
32. Captions. Captions
and section headings in this Agreement are for reference purposes only and are
not intended to be substantive portions of this Agreement between the
parties.
33. Agreement
Preparation. This Agreement shall be considered for all
purposes as prepared through the joint efforts of the parties and shall not be
construed against one party or the other as a result of the manner in which this
Agreement was negotiated, prepared, drafted or executed.
34. Execution
Deadline. This Agreement must be executed by Buyer and
returned to Seller before December 31, 2008. If the Agreement is not
executed and returned to Seller by that date, Seller’s offer to enter into this
Agreement shall be revoked and shall be considered never to have been
made.
ACCEPTED
AND AGREED:
|
SUNPOWER
CORPORATION
|
HEMLOCK
SEMICONDUCTOR, LLC
|
|
By: /s/ Xxxxx X. Xxxxx
|
By: /s/ Xxxx X. Xxxxx
|
|
Printed
Name: Xxxxx X. Xxxxx
|
Printed
Name: Xxxx X. Xxxxx
|
|
Title:
Chief Operating Officer
|
Title:
Vice President
|
|
Date: January 9, 2009
|
Date: January 6,
2009
|
15
EXHIBIT
A
PRODUCT
SPECIFICATION
POLYCRYSTALLINE
SILICON SPECIFICATION & DESCRIPTION
***
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
A-1
EXHIBIT
B
TABLE
I
|
Total
Contract Quantity
(in
Kilograms)
***
|
Total
Advance Payment
$290,777,760.00
|
||
|
Calendar
Year
|
Contract
Quantity
Per
Year
(in
Kilograms)
|
Advance
Payment
Per
Kilogram
|
Net
Remaining Advance
Payment
at Year-End
(to
be Prorated for Buyer Payments for Contract Quantity)
|
|
2011
|
***
|
$***
|
$***
**
|
|
2012
|
***
|
$***
|
$***
|
|
2013
|
***
|
$***
|
$***
|
|
2014
|
***
|
$***
|
$***
|
|
2015
|
***
|
$***
|
$***
|
|
2016
|
***
|
$***
|
$***
|
|
2017
|
***
|
$***
|
$***
|
|
2018
|
***
|
$***
|
$***
|
|
2019
|
***
|
$***
|
$***
|
|
2020
|
***
|
$***
|
$***
|
**Does
not include $*** of Advance Payment to be paid to Seller in ***
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
A-2
EXHIBIT
B (continued)
Table
II A
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2012
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2013
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2014
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2015
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2016
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2017
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2018
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2019
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2020
|
HS
DMS or HSC DMS
|
Chunk
|
Bulk
|
$***
|
$***
|
Table
II B
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
|
2012
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
|
2013
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
|
2014
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
|
2015
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
|
2016
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
|
2017
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
|
2018
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
|
2019
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
|
2020
|
HS
SGB OR HSC SGB
|
Chunk
|
10
kg Bags
|
$***
|
$***
|
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
B-3
EXHIBIT
B (continued)
Table
III A*
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
|
2012
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
|
2013
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
|
2014
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
|
2015
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
|
2016
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
|
2017
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
|
2018
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
|
2019
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
|
2020
|
HS
DMSL or HSC DMSL
|
Big
Piece
|
10
kg Bags
|
$***
|
$***
|
Table
III B*
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2012
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2013
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2014
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2015
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2016
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2017
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2018
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2019
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
|
2020
|
HS
900 or HSC 900
|
Chunk
|
Bulk
|
$***
|
$***
|
Table
III C*
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2012
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2013
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2014
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2015
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2016
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2017
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2018
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2019
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2020
|
HS
840 or HSC 840
|
Chips
|
10
kg Bags
|
$***
|
$***
|
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
B-4
EXHIBIT
B (continued)
Table
III D*
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2012
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2013
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2014
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2015
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2016
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2017
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2018
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2019
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
|
2020
|
HS
850 or HSC 850
|
Chips
|
10
kg Bags
|
$***
|
$***
|
Table
III E*
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
|
2012
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
|
2013
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
|
2014
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
|
2015
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
|
2016
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
|
2017
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
|
2018
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
|
2019
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
|
2020
|
HS
SCE or HSC SCE
|
Carbon
Ends
|
Bulk
|
$***
|
$***
|
Table
III F*
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
|
2012
|
HC
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
|
2013
|
HS
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
|
2014
|
HS
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
|
2015
|
HS
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
|
2016
|
HS
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
|
2017
|
HS
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
|
2018
|
HS
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
|
2019
|
HS
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
|
2020
|
HS
PTBS or HSC PTBS
|
Fall-Out
|
Bulk
|
$***
|
$***
|
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
B-5
EXHIBIT
B (continued)
Table
III G*
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
|
2012
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
|
2013
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
|
2014
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
|
2015
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
|
2016
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
|
2017
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
|
2018
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
|
2019
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
|
2020
|
HS
PCE or HSC PCE
|
Etched
CE
|
10
kg Bags
|
$***
|
$***
|
Table
III H*
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2012
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2013
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2014
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2015
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2016
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2017
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2018
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2019
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2020
|
HS
P75 or HSC P75
|
Processed
Fines
|
Drum
|
$***
|
$***
|
Table
III I*
|
Calendar
Year
|
Product
|
Type
|
Package
|
Gross
Price Per kg
|
Net
Price Per kg
|
|
2011
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2012
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2013
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2014
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2015
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2016
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2017
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2018
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2019
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
|
2020
|
HS
P80 or HSC P80
|
Processed
Fines
|
Drum
|
$***
|
$***
|
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
B-6
* This
Product may not be available to Buyer for purchase under this Agreement unless
and until Seller, in its sole discretion, elects to offer it for sale to Buyer;
and, if Seller so elects, it shall be in Seller’s sole discretion to determine
the timing and quantity of any such sales. Seller however, upon
agreement with Buyer, may fill Buyer orders for Products bearing Codes HSC DMS,
HS DMS, HSC SGB and HS SGB (for which prices are set forth in Table II A – B)
with this product and/or with any combination of Products.
B-7
EXHIBIT
C
Electricity
Cost Increases: The parties agree that, pursuant to the
formula set forth herein, increases in the cost of electricity that exceed the
Cumulative Electricity Base Percentage may increase the Gross Price of the
Products. Specifically, Seller shall increase the Gross Price of each
Product by $*** per kilogram for each whole percentage point that the Cumulative
Average Actual Electricity Percentage exceeds the Cumulative Electricity Base
Percentage for a calendar year.
“Cumulative Electricity Base
Percentage” means a constant rate of increase of ***% for each calendar year
(“Electricity Base Percentage”) commencing with calendar year 2009, compounded
annually through the end of the Term of this Agreement.
“Actual Electricity Percentage” means
the percentage change from one year to the next in the rate known as the Average
Price by State By Type of Provider (industrial price, full service providers)
published by the Energy Information Administration (“EIA”). The
applicable rate used in calculating the percentage change from year to year
shall be an average of the EIA rates for Michigan and Tennessee. The
Actual Electricity Percentages will begin with the rate change from calendar
year 2007 to calendar year 2008, as reflected in the EIA data that is expected
to be published in the fourth quarter of 2009. Such change from 2007
to 2008 will be the Actual Electricity Percentage applicable in
2009. Seller shall make the same calculation annually through the end
of the Term of this Agreement, each time comparing the rates for the immediately
preceding two years. The parties anticipate that 2019 will be the
last year before the end of the Term of this Agreement for which EIA data will
be used for purposes of making a price adjustment, if any, effective January 1,
2020.
“Cumulative Average Actual Electricity
Percentage” means the percentage change of the Actual Electricity Percentage for
each year, beginning in calendar year 2009, compounded annually through the end
of the Term of this Agreement.
|
Example of Electricity Cost
Increases
|
||||||||||||
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
|
|
Electricity
Base Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
Cumulative
Electricity Base Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
Actual
Electricity Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
Cumulative
Average Actual Electricity Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
Percentage
Difference:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
Price
Change / KG:
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
C-1
EXHIBIT
C (continued)
In the above example, the Annual
Electricity Percentage for 2009 is ***%, reflecting the rate change from 2007 to
2008. The Annual Electricity Percentage for 2010 is ***%, reflecting
the rate change from 2008 to 2009. The Cumulative Electricity Base
Percentage in 2010 is ***%, reflecting the annual compounding of the Electricity
Base Percentage beginning in 2009. There is no upward price
adjustment for 2009 or 2010 because the Cumulative Average Actual Electricity
Percentage does not exceed the Cumulative Electricity Base Percentage by at
least one whole percentage point in either year; rather, it is ***% lower in
2009 and ***% lower in 2010. Notwithstanding that the Cumulative
Average Actual Electricity Percentage is lower than the Cumulative Average
Electricity Base Percentage, there are no downward price adjustments, and the
same is true for 2011. The Gross Price increase of $*** per kilogram
effective January 1, 2012, reflects that the Cumulative Average Actual
Electricity Percentage of ***% exceeds the Cumulative Electricity Base
Percentage of ***% by ***%, or, by at least more than one whole percentage
point, thereby triggering an upward price adjustment for
electricity.
The upward price adjustment of $*** per
kilogram effective January 1, 2012 is in addition to any price adjustment for
labor or silicon metal, and remains in effect until Seller performs the Cost
Structure Adjustment calculation for electricity in 2013. In this
example, there is no upward price adjustment imposed retroactive to January 1,
2013 because the Cumulative Actual Electricity Percentage of ***% exceeds the
Cumulative Electricity Base Percentage of ***% by only ***%, or, by less than
one whole percentage point. Buyer, however, will have continued to
pay the $*** per kilogram that was imposed for 2012 until Seller performed the
Cost Structure Adjustment calculation in 2013, and therefore Seller, within 30
days of determining that no upward adjustment applies for 2013, owes Buyer a
credit in the amount of $*** per kilogram purchased between January 1, 2013 and
the date Seller gives notice of no upward adjustment. In 2016, the
upward price adjustment of $*** per kilogram reflects that the Cumulative
Average Actual Electricity Percentage of ***% exceeds the Cumulative Electricity
Base Percentage of ***% by two whole percentage points, thereby resulting in an
upward price adjustment of $*** per kilogram x 2, for a total upward price
adjustment of $*** per kilogram.
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
C-2
EXHIBIT
C (continued)
Labor
Cost Increases: The parties agree that, pursuant to the
formula set forth herein, increases in the cost of labor that exceed the
Cumulative Labor Base Percentage may increase the Gross Price of the
Products. Specifically, Seller shall increase the Gross Price of each
Product by $*** per kilogram for each whole percentage point that the Cumulative
Actual Labor Percentage exceeds the Cumulative Labor Base Percentage for a
calendar year.
“Cumulative Labor Base Percentage”
means a constant rate of increase of ***% for each calendar year (the “Labor
Base Percentage”) commencing with calendar year 2009, compounded annually
through the end of the Term of this Agreement.
“Actual Labor Percentage” means the
compensation cost change, expressed as a twelve-month percentage change in the
Employment Cost Index published by the United States Department of Labor for
compensation costs for civilian workers not seasonally adjusted
(“ECI”). The Actual Labor Percentages will begin with the
compensation cost change for calendar year 2008, as reflected in ECI data that
is expected to be published in the first quarter of 2009, measuring the change
from December 2007 to December 2008. Seller shall, annually through
the end of the Term of this Agreement ascertain the ECI data for the immediately
preceding December to December period. The parties anticipate that
2019 will be the last year before the end of the Term of this Agreement for
which ECI data will be used for purposes of making a price adjustment, if any,
effective January 1, 2020.
“Cumulative Actual Labor Percentage”
means the percentage change of the Actual Labor Percentage for each calendar
year, beginning in calendar year 2009, compounded annually through the end of
the Term of this Agreement.
|
Example of Labor Cost
Increases
|
|||||||||||||||||||||||||
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||
|
Labor
Base Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|||||||||||||
|
Cumulative
Labor Base Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|||||||||||||
|
Actual
Labor Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|||||||||||||
|
Cumulative
Actual Labor Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|||||||||||||
|
Percentage
Difference:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|||||||||||||
|
Price
Change / KG:
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
|||||||||||||
In the above example, the Actual Labor
Percentage for 2009 is ***%, reflecting the compensation cost change from
December 2007 to December 2008, expressed as a percentage. The Actual
Labor Percentage for 2010 is again ***%, reflecting the same rate change from
December 2008 to December 2009. The Cumulative Actual Labor
Percentage for 2010 is ***%, reflecting the annual compounding of the Actual
Labor Percentage beginning in 2009.
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
C-3
There is
no upward price adjustment for 2009 or 2010 because the Cumulative Actual Labor
Percentage does not exceed the Cumulative Labor Base Percentage by at least one
whole percentage point in either year; rather, it is ***% lower in 2009 and ***%
lower in 2010. Notwithstanding that the Cumulative Actual Labor
Percentage is lower the Cumulative Labor Base Percentage in 2009 and 2010, there
are no downward price adjustments, and the same is true for 2011 to
2017. The Gross Price increase of $*** per kilogram effective January
1, 2018, reflects that the Cumulative Actual Labor Percentage of ***% exceeds
the Cumulative Labor Base Percentage of ***% by ***%, or, by at least one whole
percentage point, thereby triggering an upward price adjustment for
labor.
The upward price adjustment of $*** per
kilogram effective January 1, 2018 is in addition to any price adjustment for
electricity or silicon metal, and in effect until Seller performs the Cost
Structure Adjustment calculation for labor in 2019. In this example,
there is no upward price adjustment imposed retroactive to January 1, 2019
because the Cumulative Actual Labor Percentage of ***% exceeds the Cumulative
Labor Base Percentage of ***% by only ***%, or, by less than one whole
percentage point. Buyer, however, will have continued to pay the $***
per kilogram that was imposed for 2018 until Seller performed the Cost Structure
Adjustment calculation in 2019, and therefore Seller, within 30 days of
determining that no upward adjustment applied for 2019, owes Buyer a credit in
the amount of $*** per kilogram purchased between January 1, 2019 and the date
Seller gives notice of no upward adjustment.
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
C-4
EXHIBIT
C (continued)
Silicon
Metal Cost Increases: The parties agree that, pursuant to the
formula set forth herein, increases in the cost of silicon metal that exceed the
Cumulative Silicon Metal Base Percentage may increase the Gross Price of the
Products. Specifically, Seller shall increase the Gross Price of each
Product by $*** per kilogram for each whole percentage point that the Cumulative
Actual Silicon Metal Percentage exceeds the Cumulative Silicon Metal Base
Percentage for a calendar year.
“Cumulative Silicon Metal Base
Percentage” means a constant rate of increase of ***% (the “Silicon Metal Base
Percentage”) for each calendar year commencing with calendar year 2009,
compounded annually through the end of the Term of this Agreement.
“Actual Silicon Metal Percentage,” for
2009 only, is calculated as the percentage change between an assumed price of
$*** per kilogram and the December 2008 USA CRU Spot – Import price, as
published by CRU International LTD (by subscription only) (“CRU Spot”), which is
expected to be published first quarter of 2009. For 2010, the Actual
Silicon Metal Percentage will be the percentage price change from December 2008
to December 2009, based on CRU Spot data expected to be published in the first
quarter of 2010. Seller shall make the same calculation annually
through the end of the Term of this Agreement, each time comparing the CRU Spot
price published for December of the immediately preceding two
years. The parties anticipate that 2019 will be the last year before
the end of the Term of this Agreement for which CRU Spot data will be used for
purposes of making a price adjustment, if any, effective January 1,
2020.
“Cumulative Actual Silicon Metal Base
Percentage” means the percentage change of the Actual Silicon Metal Percentage
for each year beginning in 2009, compounded annually through the end of the Term
of this Agreement.
|
Example of Silicon Metal Cost
Increases
|
|||||||||||||
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
||
|
Silicon
Metal Base Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
|
Cumulative
Silicon Metal Base Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
|
Actual
Silicon Metal Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
|
Cumulative
Actual Silicon Metal Percentage:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
|
Percentage
Difference:
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
***%
|
|
|
Price
Change / KG:
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
$***
|
|
In
the above example, the Actual Silicon Metal Percentage for 2009 of ***% reflects
the percentage change between the price of $*** per kilogram and the CRU Spot
price for
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
C-5
December
2008. The Actual Silicon Metal Percentage for 2010 is ***%,
reflecting the CRU Spot price change from December 2008 to December
2009. The Cumulative Silicon Metal Base Percentage in 2010 is ***%,
reflecting the annual compounding of the Silicon Metal Base Percentage beginning
in 2009. There is no upward price adjustment for 2009 or 2010 because
the Cumulative Actual Silicon Metal Percentage does not exceed the Cumulative
Silicon Metal Base Percentage by at least one whole percentage point in either
year; rather, it is ***% lower in 2009 and ***% lower in
2010. Notwithstanding that the Cumulative Actual Silicon Metal
Percentage is lower than the Cumulative Silicon Metal Base Percentage, there are
no downward price adjustments, and the same is true for 2011 -
2013. The Gross Price increase of $*** per kilogram in 2014 reflects
that the Cumulative Actual Silicon Metal Percentage of ***% exceeds the
Cumulative Silicon Metal Base Percentage of ***% by ***%, or, by at least more
than one whole percentage point, thereby triggering an upward price adjustment
for silicon metal. That upward price adjustment of $*** per kilogram
is effective January 1, 2014, is in addition to any price adjustment for
electricity or labor, and remains in effect until Seller performs the Cost
Structure Adjustment calculation for silicon metal in 2015. In 2015,
the upward price adjustment of $*** per kilogram reflects that the Cumulative
Actual Silicon Metal Percentage of ***% exceeds the Cumulative Silicon Metal
Base Percentage of ***% by ***%, or, by more than two whole percentage points,
thereby resulting in an upward price adjustment of $*** per kilogram x 2, for a
total upward price adjustment of $***. The upward price adjustment of
$*** is effective January 1, 2015 and remains in effect until Seller performs
the Cost Structure Adjustment calculation for silicon metal in
2016.
In this example, the Cost Structure
Adjustment calculation in 2016 also results in an upward price adjustment of
$*** per kilogram. Buyer will have continued to pay the $*** per
kilogram that was imposed for 2015 until Seller performed the Cost Structure
Calculation for 2016; therefore no credit is due, and the $*** per kilogram
upward price adjustment effective January 1, 2016 will remain in effect until
Seller performs the Cost Structure Adjustment calculation for silicon metal in
2017. Here, the calculation in 2017 results in an upward price
adjustment of only $*** per kilogram. Buyer, however, will have
continued to pay the $*** per kilogram adjustment from 2016 until Seller
performed the Cost Structure Adjustment calculation in 2017, and therefore
Seller, within 30 days of determining that a $*** per kilogram upward adjustment
applied for 2017, owes Buyer a credit in the amount of $*** per kilogram
purchased between January 1, 2017 and the date Seller gives notice of the $***
per kilogram upward adjustment.
***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
C-6
