<PAGE>
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): July 21,1998
Stillwater Mining Company
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(Exact name of registrant as specified in its charter)
Incorporated under the laws of Delaware 0-25090 81-0480654
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(State or other jurisdiction (Commission (IRS Employee
of incorporation) File Number) Identification No.)
717 Seventeenth Street, Suite 1480, Denver, CO 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 978-2525
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<PAGE>
ITEM 5. OTHER EVENTS
Stillwater Mining Company (the "Company") has entered into marketing contracts
covering the sale of palladium and platinum over the five-year period from
January 1999 through December 2003. Pursuant to these contracts, the Company has
committed approximately 90 to 100% of its annual palladium production. Palladium
sales are priced at a slight discount to market, with a floor price averaging
approximately $225 per ounce. The Company has agreed to an average maximum
palladium price of approximately $400 per ounce on approximately 30% of its
production. The remaining 70% of the Company's palladium production is not
subject to any price cap. In addition, the Company has committed approximately
20% of its annual platinum production over the next five years. Platinum sales
are priced at a slight discount to market, subject to an average minimum price
of $350 per ounce with an average maximum price of $425 per ounce. The remaining
80% of the Company's annual platinum production is not committed under these
agreements. Such platinum production remains available for sale at prevailing
market prices or under future contracts. The marketing contracts contain typical
termination provisions that allow the purchasers to terminate in the event the
Company breaches and the breach is not cured within periods ranging from ten to
thirty days of notice by the purchaser. In addition, the contracts contain force
majeure provisions that allow for the suspension and, in one instance, the
termination of the contract upon the occurrence of an event of force majeure.
The marketing contracts are included as Exhibits 10.1, 10.2, 10.3 and 10.4
hereto and are incorporated in their entirety by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
10.1 Palladium Sales Agreement, made as of August 13, 1998, among
Stillwater Mining Company and Ford Motor Company (portions of the
agreement have been omitted pursuant to a confidential treatment
request).
10.2 Palladium Sales Agreement, made as of July 21, 1998, among Stillwater
Mining Company and KEMET Corp. (portions of the agreement have been
omitted pursuant to a confidential treatment request).
10.3 Palladium and Platinum Sales Agreement, made as of August 17, 1998,
among Stillwater Mining Company and General Motors Corporation
(portions of the agreement have been omitted pursuant to a
confidential treatment request).
10.4 Palladium and Platinum Sales Agreement, made as of August 27, 1998,
among Stillwater Mining Company and Mitsubishi Corporation (portions
of the agreement have been omitted pursuant to a confidential
treatment request).
<PAGE>
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 hereunto duly authorized.
STILLWATER MINING COMPANY
(Registrant)
Date: September 28, 1998 By: /S/ JAMES SABALA
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Name: James Sabala
Title: Vice President and Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
No. Description
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10.1 Palladium Sales Agreement, made as of August 13, 1998, among
Stillwater Mining Company and Ford Motor Company (portions of the
agreement have been omitted pursuant to a confidential treatment
request).
10.2 Palladium Sales Agreement, made as of July 21, 1998, among Stillwater
Mining Company and KEMET Corp. (portions of the agreement have been
omitted pursuant to a confidential treatment request).
10.3 Palladium and Platinum Sales Agreement, made as of August 17, 1998,
among Stillwater Mining Company and General Motors Corporation
(portions of the agreement have been omitted pursuant to a
confidential treatment request).
10.4 Palladium and Platinum Sales Agreement, made as of August 27, 1998,
among Stillwater Mining Company and Mitsubishi Corporation (portions
of the agreement have been omitted pursuant to a confidential
treatment request).
<PAGE>
EXHIBIT 10.1
MATERIAL IN THIS DOCUMENT HAS BEEN
OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
PALLADIUM SALES AGREEMENT
THIS PALLADIUM SALES AGREEMENT (this "Agreement") is made and entered into
this 13 day of August, 1998, by and between STILLWATER MINING COMPANY, a
Delaware corporation, whose address is 717 17th Street, Suite 1480, Denver,
Colorado ("SMC"), and FORD MOTOR COMPANY, a Delaware corporation, whose address
is 17101 Rotunda Drive, Dearborn, Michigan ("Ford").
RECITAL
Ford and SMC are interested in entering into an arrangement by this
Agreement whereby SMC will supply Ford certain agreed upon amounts of palladium
sponge, .9995 minimum purity.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, SMC hereby agrees to sell and
deliver and Ford hereby agrees to purchase palladium of the quantity and quality
hereinafter set forth, upon the following terms and conditions:
Section 1. Definitions and Terminology. Unless the context indicates
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otherwise, capitalized terms used in this Agreement have the meaning set forth
in this Section 1.
Actual Monthly Production means the actual amount of mined metal out-
turned by SMC or on behalf of SMC by a third party refinery during any one
calendar month.
[***]
Business Day means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the United States are
authorized or obligated by law or executive order to close.
Confidentiality Agreement means that certain Confidentiality
Agreement, dated as of August 13, 1998, by and between SMC and Ford.
Contract Year means the twelve consecutive calendar months commencing
with January of each calendar year.
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Delivery Point means Johnson Matthey or Engelhard (New Jersey), as
designated by Ford by the 20th Business Day of the Pricing Month.
Estimated Annual Production means the amount of annual production of
SMC estimated by SMC for a Contract Year and included in a written notification
to Ford by the December 15th prior to such Contract Year.
[***]
Metal means the Palladium to be sold under this Agreement.
Ounce is a troy ounce equivalent to 31.1035 grams.
Palladium means refined palladium in sponge form with .9995 minimum
purity.
Pricing Day means any day for which there is [***] published.
Pricing Month means the month prior to delivery during which pricing
is determined pursuant to Section 4 of this Agreement.
[***]
Section 2. Term. This Agreement shall have a term from January 1,
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1999, through and including December 31, 2003. This Agreement is subject to
earlier termination pursuant to Section 8 of this Agreement.
Section 3. Quantity and Delivery. Beginning on January 4, 1999, SMC
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will sell and deliver Metal FOB Delivery Point, to be credited to Ford's pool
account, and Ford will purchase the quantities of Metal set forth in this
Section 3, which shall be delivered no later than the third Business Day of the
month following the Pricing Month.
(a) Palladium. During the Contract Year 1999, SMC will sell and
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deliver and Ford will purchase on a monthly basis [***] of Actual Monthly
Production. During the Contract Years 2000, 2001, 2002 and 2003, SMC will sell
and deliver and Ford will purchase on a monthly basis [***] of Actual Monthly
Production. The parties acknowledge that the Actual Monthly Production will vary
from time to time.
[***]
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[***]
(c) Notification of Estimated Annual Production and of Actual
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Monthly Production. Not later than December 15th prior to each Contract Year,
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SMC shall, for informational purposes only, notify Ford in writing of the
Estimated Annual Production for such Contract Year. Not later than the last
Business Day of the month preceding the Pricing Month, SMC will notify Ford in
writing of its Actual Monthly Production, which amount will be priced during the
next month, i.e. the Pricing Month, and delivered by the third Business Day of
the month following the Pricing Month. Ford and SMC will verify actual
production amounts by reference to production data set forth in SMC's Quarterly
Report on Form 10-Q, filed with the Securities and Exchange Commission (the
"SEC"). Ford shall have the right to request from SMC statements from SMC's
third party refiners to verify Actual Monthly Production amounts.
By way of example, for delivery of Metal in January 1999, SMC will notify
Ford of the Actual Monthly Production by the last Business Day in November 1998
and the Metal will be priced in December 1998 and delivered by January 4, 1999.
(d) Estimates. Estimated Annual Production will be provided by SMC
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to Ford for informational purposes only. SMC makes no warranty, commitment or
guaranty regarding the amount of Actual Monthly Production. Actual Monthly
Production may differ from estimated amounts due to a number of factors,
including but not limited to (i) fluctuations in ore grade, tons mined, crushed
or milled, (ii) variations in concentrator, smelter or refinery operations,
(iii) geological, technical, permitting, mining and processing problems; (iv)
delay in developing or failure to develop the East Boulder site; and (v)
availability of experienced employees.
Section 4. Pricing. Subject to Section 3(b) above, the price per Ounce
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to be paid to SMC by Ford for the actual quantities of Palladium delivered
pursuant to Section 3 above shall be based on the Average Monthly Price for the
Pricing Month less a discount of [***] per Ounce. [***]
Section 5. Payment Terms. On the last Business Day of each Pricing
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Month, SMC will notify Ford in writing via facsimile as to the formula-based
pricing computations set forth in Section 4 above for the actual quantities of
Metal to be delivered by SMC pursuant to this Agreement during the following
month. Unless Ford has provided SMC with Notice of disagreement with the
pricing computations within two Business Days of receipt of the pricing
computations, Ford will forward payment for 100% of the actual quantities by
wire transfer to SMC (pursuant to written wire transfer instructions which will
be provided by SMC) within two Business Days after release of the Metal to
Ford's pool account at the Delivery Point (unless the parties mutually agree in
writing to adjust the delivery date). All payments will be made in U.S.
Dollars.
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If Ford does not agree with SMC's pricing computations, Ford shall Notify
SMC of such disagreement within two Business Days of receipt of the pricing
computations and the parties shall seek resolution of such dispute as to the
calculation of the payment amount pursuant to the dispute resolution procedures
set forth in Section 15 below. If SMC receives Notice from Ford of its
disagreement with the pricing computations, SMC may suspend delivery of Metal to
Ford until such time as payment has been received by SMC. This right shall not
be deemed to be an exclusive right or remedy. Without derogating SMC's rights
under this Agreement, any delay in payment by Ford to SMC shall bear interest
calculated at the Prime Rate (as quoted by Chase Manhattan Bank in the Wall
Street Journal on the date such payment was due) from the date upon which
payment was due until the date full payment is received.
Section 6. Suspension of Delivery for Failure to Pay. Ten days after
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receipt by Ford of written notice from SMC to Ford of Ford's failure to pay
pursuant to the terms of Section 5 above, SMC may suspend delivery of Metal to
Ford until such time as payment has been received by SMC. This right shall not
be deemed to be an exclusive right or remedy.
Section 7. Risk of Loss; Title. Title and risk of loss and liability
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for all Metal delivered hereunder shall pass to Ford upon release of the Metal
at Ford's pool account at JM.
Section 8. Warranty. SMC warrants that the Metal supplied hereunder
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shall have a minimum purity of .9995, that SMC will convey good title thereto,
that the Metal will be delivered free and clear of all liens and encumbrances
and that the Metal will have been produced, handled and transported to the
Delivery Point in accordance with all applicable federal, state and local laws,
rules and regulations. OTHER THAN THOSE EXPRESSLY STATED IN THIS AGREEMENT,
THERE ARE NO REPRESENTATIONS, GUARANTEES OR WARRANTIES, EXPRESSED OR IMPLIED, OF
MERCHANTABILITY, FITNESS, OR SUITABILITY FOR A PARTICULAR PURPOSE OR USE
NOTWITHSTANDING ANY COURSE OF PERFORMANCE, USAGE OF TRADE OR LACK THEREOF
INCONSISTENT WITH THIS SECTION. SMC's sole liability for breach of warranty
shall be limited to replacement of the nonconforming Metal with conforming Metal
within 10 Business Days of notice from Ford of the nonconformity.
Section 9. Default and Termination. Either party shall be entitled to
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terminate this Agreement in the event of (i) the other party generally not
paying its debts as such debts become due, or admitting in writing its inability
to pay its debts generally or making a general assignment for the benefit of
creditors, the appointment of a receiver for the other party or any of its
assets, the filing by the other party of a voluntary petition in bankruptcy or
any form of reorganization, or the filing of an involuntary petition in
bankruptcy against the other party which is not dismissed with prejudice within
60 days of such filing, or the making of an assignment for the benefit of
creditors of the other party; or (ii) a breach by the other party of any of the
material terms or conditions of this Agreement, which breach is not cured within
30 days of notice of such breach by the non-breaching party. SMC shall be
entitled to terminate this Agreement in the event Ford does any of the
following: (i) acquire, or agree, offer or propose to acquire, directly or
indirectly, from SMC or any other person, any business or assets of, or
securities issued by, SMC or any right, warrant or option
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to acquire any of the foregoing; (ii) propose to enter into, directly or
indirectly, any merger or business combination involving SMC or any of its
subsidiaries or to purchase, directly or indirectly, a material portion of the
assets of SMC or any of its subsidiaries; (iii) make any proposal or request to
SMC or any of its officers or directors relating, directly or indirectly, to any
action referred to in clause (i) or (ii) of this paragraph or to any
modification or waiver of any provision of this paragraph; (iv) make or
participate in, directly or indirectly, any "solicitation" of "proxies" (as
those terms are used in the proxy rules of the SEC) to vote or seek to advise or
influence any person with respect to the voting of any voting securities of SMC
or any of its subsidiaries; (v) form, join or in any way participate in a
"group" (within the meaning of Section 13(d)(3) under the Securities Exchange
Act of 1934, as amended) with respect to any voting securities of SMC or any of
its subsidiaries; (vi) act alone or in concert with others to seek to control or
influence the management, Board of Directors or policies of SMC; (vii) advise,
assist or enter into any discussions, negotiations, arrangements or
understandings with any other person with respect to any of the foregoing; or
(viii) make any public statement or disclosure of any kind with respect to any
matter addressed by this paragraph (unless required by law) or take any other
action which might reasonably be expected to result in any such public
disclosure. Otherwise, this Agreement will terminate on December 31, 2003
(except that the provisions of Sections 5, 8, 11, 12, 15, 18 and 19 of this
Agreement will survive such termination).
Section 10. Taxes and Assessments. Ford shall be responsible for and
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shall reimburse SMC for the payment of all sales and use taxes, excise taxes
(which include, but are not limited to, federal manufacturers taxes,
environmental taxes, and state and local product taxes), and all other federal,
state, and local taxes or fees, however designated, other than taxes or fees on
income, paid or incurred by SMC directly or indirectly with respect to the
purchase, storage, exchange, use, transportation and handling of any Metal
delivered to Ford hereunder. If any personal property taxes are assessed
against the Metal by any governmental authority, such assessment shall be the
responsibility of and shall be paid by the party having title to the Metal at
the time of assessment.
Section 11. Claims. Claims as to shortage in quantity and deficiency in
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quality shall be made by written notice from Ford to SMC within five Business
Days after the delivery in question, or else any such claims shall be deemed to
have been waived. All other claims shall be made by written notice from one
party to the other party within 60 days after the delivery in question, or else
any such claims shall be deemed to have been waived. EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED IN THIS AGREEMENT, NO CLAIMS WHATSOEVER SHALL BE MADE
HEREUNDER FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
Section 12. Limitation of Liability. SMC shall not be liable for any
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prospective or speculative profits or special, indirect, consequential, punitive
or exemplary damages, and SMC's liability with respect to this Agreement or any
action in connection herewith whether in contract, tort, or otherwise shall not
exceed the price of that portion of the Metal on which liability is asserted.
Section 13. Compliance with Laws. To the extent applicable, the parties
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agree to comply with all laws, ordinances rules, codes, regulations and lawful
orders of any federal, state or local governmental authority applicable to
performance of the Agreement.
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<PAGE>
Section 14. Force Majeure.
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(a) Effect of Occurrence. In the event that either party is
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rendered unable, wholly or in part, by force majeure applying to it, to carry
out its obligations under this Agreement, it is agreed that such obligations of
such party, so far as they are affected by such force majeure, shall be
suspended during the continuance of any inability so caused, but for no longer
period; provided that Ford shall not be excused by any event of force majeure
from making timely payments for Metal delivered prior to the effective date of
their notice of force majeure. The parties agree that the various periods and
terms provided for herein shall be extended for a period equivalent to such
period of force majeure. The party claiming that an event of force majeure has
occurred will promptly notify the other party of the commencement and
termination of any event of force majeure. Prompt notice of force majeure shall
be given by the party invoking it to the other party, setting out the nature and
full details thereof, the extent of the interruption and the anticipated
duration of the interruption.
(b) Definition. The term "force majeure" as employed herein,
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shall mean causes beyond the reasonable control of the parties, including, but
not limited to, acts of God, explosions, fires, floods, breakdowns or damage to
SMC's mine(s) or related equipment or facilities, failure of plant or equipment
to operate according to plans or specifications, war or warlike hostilities,
riots, strikes, labor disputes, lockouts, unavoidable accidents, uncontrollable
delays in transportation, non-availability of any adequate means of
transportation, the effect of any state or federal laws, regulations or
requirements (expressly including inability to obtain or amend necessary
governmental approvals, licenses or permits on reasonably acceptable terms),
geological, technical, metallurgical, mining, construction, or processing
problems, non-availability of supplies, power shortages, court orders, acts of
military authority, acts or failures to act of federal, state or local agencies
or regulatory bodies and inability to obtain timely refining despite
commercially reasonable efforts of appropriate quantity of materials necessary
to produce the required amounts of Metal; provided, however, that performance
shall be resumed within a reasonable period of time after such cause has been
removed; and provided further that neither party shall be required against its
will to adjust any labor dispute or to question the validity of or to refrain
from judicially testing the validity of any federal, state or local order,
regulation or statute or to refrain from pursuing its legal or equitable
remedies against any third party. Notwithstanding the foregoing, the parties
agree that this Section 14 is not intended to provide relief from economic
conditions such as, but not limited to, market situations that provide lower or
higher prices than in effect under this Agreement.
Section 15. Dispute Resolution. Except as otherwise provided in this
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Agreement, the parties hereby agree that any dispute, controversy or claim
arising under this Agreement, or the breach thereof (a "Dispute"), shall first
be subject to the informal dispute resolution procedures set forth in this
Section 15. The party asserting the existence of a Dispute as to the
interpretation of any provision of this Agreement or the performance by the
other party of any of its obligations hereunder shall notify the other party in
writing of the nature of the asserted Dispute. Within 10 Business Days of
receipt of such notice, representatives from each party shall arrange and have a
personal or telephone conference in which they attempt to resolve such Dispute.
If those individuals are unable to resolve the Dispute within such time frame,
the Dispute shall be settled by arbitration
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<PAGE>
administered in the State of New York under the rules of the American
Arbitration Association then in effect for the resolution of commercial disputes
by an arbitrator(s) selected by mutual agreement of the parties, or by the
American Arbitration Association absent such mutual agreement, and judgment on
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Any findings of such arbitration shall be final and
binding on the parties, and all reasonable costs (including attorneys' fees)
incurred as a result of a Dispute being referred to arbitration will be borne by
the party against whom any award is made. This Section 15 provides the exclusive
means of resolving disputes under this Agreement. Punitive or exemplary damages
shall not be awarded.
Section 16. Representations and Warranties. Each of the parties
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represents and warrants as follows:
(a) Good Standing. That it is a corporation duly incorporated
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and in good standing in its state of incorporation and that it is qualified to
do business and is in good standing in those states where necessary in order to
carry out the purposes of this Agreement;
(b) Performance. That it has the corporate capacity to enter
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into and perform this Agreement and all transactions contemplated herein and
that all corporate and other actions required to authorize it to enter into and
perform this Agreement have been properly taken;
(c) No Breach. That it will not breach any other agreement or
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arrangement by entering into or performing this Agreement; and
(d) Due Execution and Delivery. That this Agreement has been
--------------------------
duly executed and delivered by it and is valid and binding upon it and
enforceable against it in accordance with its terms; provided, however, that no
representation or warranty is made as to the remedy of specific performance or
other equitable remedies for the enforcement of this Agreement or any other
agreement contemplated hereby, and provided further that this representation is
limited by applicable bankruptcy, insolvency, moratorium, and other similar laws
affecting generally the rights and remedies of creditors and secured parties.
Section 17. Notices. Any notice, election, report or other
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correspondence (collectively, "Notices") required or permitted hereunder shall
be in writing and (i) delivered personally to an officer of the party to whom
directed; (ii) sent by registered or certified United States mail, postage
prepaid, return receipt requested; (iii) sent by reputable overnight courier; or
(iv) sent by facsimile transmission with confirmation of receipt. All such
Notices shall be addressed to the party to whom directed as follows:
SMC: Stillwater Mining Company
717 17th Street, Suite 1480
Denver, Colorado 80202
Attn: Vice President of Metals Marketing
with a copy to: Chief Financial Officer
Facsimile: (303) 978-2590
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Ford: Ford Motor Company
17101 Rotunda Drive
Dearborn, Michigan 48121
Attn: Buyer/Precious Metals
Facsimile: (313) 594-0510
with a copy to: Director of Raw Materials Purchasing
Facsimile: (313) 322-5595
Either party may, from time to time, change its address for future Notices
hereunder by Notice in accordance with this Section 17. All Notices shall be
complete and deemed to have been given or made when mailed or sent by overnight
courier, or upon personal delivery when delivered personally or when receipt is
confirmed when sent by facsimile transmission.
Section 18. Publicity. Neither SMC nor Ford will issue or approve an
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advertisement, promotional material, news release or other form of publicity
concerning this Agreement or the transactions contemplated herein without the
prior approval of the other party as to the contents of such advertisement,
promotional material, news release or publicity and the timing of its release,
which approval cannot be unreasonably withheld.
Section 19. Confidentiality. The terms of the Confidentiality Agreement
---------------
shall continue in full force and effect.
Section 20. Entire Agreement. This Agreement and the Confidentiality
----------------
Agreement represent the complete agreement between the parties hereto and
supersede all prior or contemporaneous oral or written agreements of the parties
to the extent they relate in any way to the subject matter hereof or thereof.
Section 21. Relationship of the Parties. Nothing contained in this
---------------------------
Agreement shall be deemed to constitute either party the partner of the other,
nor, except as otherwise herein expressly provided, to constitute either party
the agent or legal representative of the other, nor to create any fiduciary
relationship between them. It is not the intention of the parties to create,
nor shall this Agreement be construed to create, any mining, commercial or other
partnership. Neither party shall have any authority to act for or to assume any
obligation or responsibility on behalf of the other party, except as otherwise
expressly provided herein. The rights, duties, obligations and liabilities of
the parties shall be several and not joint or collective. Each party shall be
responsible only for its obligations as herein set out and shall be liable only
for its share of the costs and expenses as provided herein. Each party shall
indemnify, defend and hold harmless the other party, its directors, officers,
employees, agents and attorneys from and against any and all losses, claims,
damages and liabilities arising out of any act or any assumption of liability by
the indemnifying party, or any of its directors, officers, employees, agents and
attorneys done or undertaken, or apparently done or undertaken, on behalf of the
other party, except pursuant to the authority expressly granted herein or as
otherwise agreed in writing between the parties.
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Section 22. No Implied Covenants. There are no implied covenants
--------------------
contained in this Agreement other than those of good faith and fair dealing.
Section 23. Binding Effect; No Assignment. This Agreement shall bind
-----------------------------
and inure to the benefit of and be enforceable by the parties hereto and may not
be assigned by either party to a third party without the consent of the other
party, which consent shall not be unreasonably withheld, except with respect to
(i) any assignment to provide security in connection with any financing,
expressly including, by way of example and not limitation, assignments of
royalty, overriding royalties or net profits interests or production payments,
or (b) any merger, consolidation or other reorganization or transfer by
operation of law, or by purchase of the business of or substantially all of the
assets of one of the parties, with respect to which such consent by the
nonassigning party will not be required.
Section 24. Amendment and Waiver. Except as otherwise provided herein,
--------------------
no modification, amendment or waiver of any provision of this Agreement shall be
effective against either party unless such modification, amendment or waiver is
approved in writing by the parties hereto. The failure by either party to
demand strict performance and compliance with any part of this Agreement during
the term of this Agreement shall not be deemed to be a waiver of the rights of
such party under this Agreement or by operation of law. Any waiver by either
party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach thereof.
Section 25. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
Section 26. Governing Law. The parties to this Agreement are domiciled
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in two different states. In order to create greater certainty with respect to
their legal rights and obligations under this Agreement, the parties desire to
adopt as the substantive law of this Agreement the law of a state which has
highly developed commercial law and precedent and which is not the domicile of
either party. The parties hereby agree that this Agreement shall be construed
in accordance with the laws of the State of New York as though this Agreement
were performed in full in the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
Section 27. Counterparts. This Agreement may be executed in
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counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
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<PAGE>
Section 28. Attorneys' Fees. In the event of any controversy, claim, or
---------------
dispute between the parties hereto, arising out of or relating to this Agreement
or the breach thereof, the prevailing party shall be entitled to recover from
the losing party reasonable expenses, attorneys' fees, and costs.
Section 29. Further Documents. At the request of either party, the
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parties shall execute and deliver any further instruments, agreements, documents
or other papers reasonably requested by that party to effect the purposes of
this Agreement and the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
STILLWATER MINING COMPANY FORD MOTOR COMPANY
By: /s/ William E. Nettles By: /s/ Jean N. Mayer
_______________________ _________________________
Name: William E. Nettles Name: Jean N. Mayer
Title: Chief Executive Officer Title: Executive Director
Manufacturing Procurement
Operations
By: /s/ Robert C. Lapple By: /s/ Jeff W. Wellman
________________________ _________________________
Name: Robert C. Lapple Name: Jeff W. Wellman
Title: Vice President Metals Marketing Title: Director of Raw
Materials Purchasing
By: /s/ Eric E. Conrad
_________________________
Name: Eric E. Conrad
Title: Purchasing Specialist
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<PAGE>
EXHIBIT 10.2
MATERIAL IN THIS DOCUMENT HAS BEEN
OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
PALLADIUM SALES AGREEMENT
THIS PALLADIUM SALES AGREEMENT is made and entered into this 21st day of
July, 1998, by and between Stillwater Mining Company, a Delaware corporation,
whose address is 717 17th Street, Suite 1480, Denver, Colorado ("SMC") and KEMET
Corp., a Delaware corporation, whose address is 2835 KEMET Way, Simpsonville,
South Carolina 29681 ("KEMET").
RECITALS
A. KEMET currently operates a plant in Simpsonville, South Carolina. SMC
owns and operates the Stillwater Mine Complex in Sweetgrass, Stillwater and Park
Counties, Montana, which includes a mine, concentrator, smelters and a base
metals refinery in Columbus, Montana (collectively, the "Facility").
B. KEMET and SMC are interested in entering into an arrangement by this
Agreement, solely for purposes related to each of their respective businesses,
whereby SMC will supply KEMET certain agreed upon amounts of Palladium sponge,
.9995% minimum purity ("Product").
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, SMC hereby agrees to sell and
KEMET hereby agrees to purchase Product on terms as follows:
1. Term. This Palladium Sales Agreement (the "Agreement") shall have a
----
term of 18 months from July 1, 1998 through and including December 31, 1999.
2. Quantity and Delivery. Beginning on July 31, 1998, SMC will sell and
---------------------
deliver Product FOB Johnson Matthey in Valley Forge, Pennsylvania ("JM"), to be
credited to KEMET's pool account (which KEMET agrees to have established with JM
prior to July 31, 1998), and KEMET will take and pay for, the following
quantities of Product, which shall be delivered on the last business day of each
calendar month:
Period Quantity
------ --------
July 31, 1998 through
December 31, 1998 [***] troy ounces per month
January 29, 1999 through
December 31, 1999 [***] troy ounces per month
Not later than July 15, 1998 (for the remainder of 1998) and January 4,
1999 (for calender year 1999), SMC shall notify KEMET in writing of SMC's
anticipated monthly levels of production of palladium from the Facility for the
remainder of 1998 (on July 15, 1998) and all of 1999 (on January 4, 1999). SMC
agrees that so long as the Facility is running at not less than [***] of the
anticipated production level (calculated on a monthly basis), it will deliver to
KEMET the required number of troy ounces of Product at the end of each calendar
month, as set forth in Section 2. If, however, the level of production falls
below [***] of the anticipated production during any calendar month, the parties
agree that SMC shall be required to deliver to KEMET at the end of that month
<PAGE>
only a prorated share of troy ounces of Product based on the actual output from
the Facility versus the [***] benchmark. By way of example, if during September
of 1998 the actual level of production through the Facility was only [***] of
the anticipated production level (as reported to KEMET by SMC not later than
July 15, 1998), then SMC would be obligated to deliver only [***] troy ounces of
Product ([***] below the otherwise required minimum) to KEMET by the last
business day of September. In any month when actual production levels at the
Facility are less than [***] of anticipated production levels, SMC shall include
a written statement of actual production levels at the Facility for that month
with the monthly delivery of Product.
3. Pricing. The price to be paid to SMC by KEMET for the quantities of
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Product delivered pursuant to Section 2 above shall be as follows:
1. From July 31, 1998 Through December 31, 1998: For deliveries
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during the period between July 31, 1998 and December 31, 1998, [***]
2. From January 29, 1999 Through December 31, 1999: For deliveries
-----------------------------------------------
during the period from January 29, 1999 through December 31, 1999, [***]
4. Payment Terms. On the last business day of each calendar month, SMC
-------------
will inform KEMET in writing as to the formula-based pricing computations set
forth on Exhibit A for all amounts of Product delivered by SMC pursuant to this
Agreement during that month. KEMET will forward such payment amount for 100% of
the Product sold by wire transfer to SMC (pursuant to written wire transfer
instructions which will be provided by SMC), no later than the second business
day of the following month. All payments will be made in U.S. Dollars. If
KEMET does not agree with SMC's formula-based pricing computations, KEMET will
nonetheless forward such payment amount for 100% of the Product delivered and
seek resolution of such dispute as to the calculation of the payment amount
pursuant to the dispute resolution procedures set forth in Section 14 below.
Without derogating SMC's rights under this Agreement, any delay in payment by
KEMET to SMC shall bear interest calculated at the Prime Rate (as quoted by
Chase Manhattan Bank in the Wall Street Journal on the date such payment was
due) plus 3% from the third day of the month following delivery until the date
full payment is received.
5. Risk of Loss; Title. Risk of loss and liability for all Product
-------------------
delivered hereunder shall pass to KEMET upon delivery to JM. Title to the
Product shall pass from SMC to KEMET upon full payment by KEMET for such
Product.
6. Warranty. SMC warrants that the Product supplied hereunder shall have
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a minimum purity of .9995%, that SMC will convey good title thereto, that the
Product will be delivered free and clear of all liens and encumbrances payable
by SMC and that the Product will have been produced, handled and transported to
the delivery point hereunder in accordance with all applicable
2
<PAGE>
federal, state and local laws, rules and regulations. OTHER THAN THOSE EXPRESSLY
STATED IN THIS AGREEMENT, THERE ARE NO REPRESENTATIONS, GUARANTEES OR
WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY, FITNESS, OR SUITABILITY OF
THE PRODUCT FOR A PARTICULAR PURPOSE OR USE NOTWITHSTANDING ANY COURSE OF
PERFORMANCE, USAGE OF TRADE OR LACK THEREOF INCONSISTENT WITH THIS SECTION.
SMC's sole liability for breach of warranty shall be limited to replacement of
the nonconforming Product.
7. Default and Termination. A party will be entitled to terminate this
-----------------------
Agreement in the event of (i) the other party generally not paying their debts
as such debts become due, or admitting in writing their inability to pay their
debts generally or making a general assignment for the benefit of creditors, the
appointment of a receiver for the other party or any of its assets, the filing
by the other party of a voluntary petition in bankruptcy or any form of
reorganization, or the filing of an involuntary petition in bankruptcy against
the other party which is not dismissed with prejudice within 60 days of such
filing, or the making of an assignment for the benefit of creditors of the other
party; or (ii) a material breach by the other party of any of the material terms
or conditions of this Agreement, which breach is not cured within 10 days of
notice of such breach by the non-breaching party. Otherwise, this Agreement
will terminate on December 31, 1999 (except that the provisions of Sections 4,
14, 16 and 17 of this Agreement will survive such termination). In addition, in
the event that KEMET fails to perform any put obligation or forward sales
obligation as described in Exhibit A, SMC, upon written notice to KEMET, may
liquidate an amount of Product as necessary to fulfill any such obligation on
KEMET's behalf, and KEMET shall be responsible for the difference between the
market price obtained for such Product by SMC and the price SMC would have
received had KEMET fulfilled that obligation.
8. Taxes and Assessments. KEMET shall be responsible for and shall
---------------------
reimburse SMC for the payment of all sales and use taxes, excise taxes, (which
include, but are not limited to, federal manufacturers taxes, environmental
taxes, and state and local product taxes), and all other federal, state, and
local taxes or fees, however designated, other than taxes or fees on income,
paid or incurred by SMC directly or indirectly with respect to the purchase,
storage, exchange, use, transportation and handling of any Product delivered to
KEMET hereunder. If any personal property taxes are assessed against the
Product by any governmental authority, such assessment shall be the
responsibility of and shall be paid by the party having title to the Product at
the time of assessment. As of the date of this Agreement, neither KEMET nor SMC
has any actual knowledge of any taxes or assessments that would be payable by
KEMET hereunder.
9. Claims. Claims as to shortage in quantity shall be made by written
------
notice from KEMET to SMC within 5 business days after the delivery in question,
or else any such claims shall be deemed to have been waived. All other claims,
including defects in quality and demurrage, shall be made by written notice from
KEMET to SMC within 60 days after the delivery in question, or else any such
claims shall be deemed to have been waived. EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS AGREEMENT, NO CLAIMS WHATSOEVER SHALL BE MADE HEREUNDER FOR
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
3
<PAGE>
10. Limitation of Liability. Except as otherwise provided in this
-----------------------
Agreement, neither party shall be liable for any prospective or speculative
profits or special, indirect, consequential, punitive or exemplary damages and
the liability of either party with respect to this Agreement or any action in
connection herewith whether in contract, tort, or otherwise shall not exceed the
price of the Product sold hereunder or the price of that portion of the Product
on which liability is asserted.
11. Compliance with Laws. To the extent applicable, the parties agree to
--------------------
comply with all laws, ordinances rules, codes, regulations and lawful orders of
any federal, state or local governmental authority applicable to performance of
the Agreement.
12. Notices. Any notice, election, report or other correspondence
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(collectively, "Notices") required or permitted hereunder shall be in writing
and (i) delivered personally to an officer of the party to whom directed; (ii)
sent by registered or certified United States mail, postage prepaid, return
receipt requested; (iii) sent by reputable overnight courier; or (iv) sent by
facsimile transmission with confirmation of receipt. All such Notices shall be
addressed to the party to whom directed as follows:
SMC: Stillwater Mining Company
717 17th Street, Suite 1480
Denver, Colorado 80202
Attn: Robert Lapple
with a copy to: Jim Sabala
Facsimile: (303) 978-2590
KEMET: KEMET Corp.
2835 KEMET Way
Simpsonville, South Carolina 29681
Attn: David Woods
Facsimile: (864) 967-6853
with a copy to: Ray Cash
Facsimile: (864) 228-4161
Either party may, from time to time, change its address for future notices
hereunder by notice in accordance with this Section 12. All Notices shall be
complete and deemed to have been given or made when mailed or sent by overnight
courier, or upon personal delivery when delivered personally, or in the case of
notices, when receipt is confirmed when sent by facsimile transmission.
13. Force Majeure.
-------------
(a) Effect of Occurrence. In the event that either party is
--------------------
rendered unable, wholly or in part, by force majeure applying to it, to carry
out its obligations under this Agreement, it is agreed that such obligations of
such party, so far as they are affected by such force majeure, shall be
suspended during the continuance of any inability so caused, but for no longer
period; provided that KEMET shall not be excused by any event of force majeure
from making timely payments for Product delivered prior to the effective date of
their notice of force majeure. The parties agree that
4
<PAGE>
the various periods and terms provided for herein shall be extended for a period
equivalent to such period of force majeure. The party claiming that an event of
force majeure has occurred will promptly notify the other party of the
commencement and termination of any event of force majeure. Prompt notice of
force majeure shall be given by the party invoking it to the other party,
setting out the nature and full details thereof, the extent of the interruption
and the anticipated duration of the interruption.
(b) Definition. The term "force majeure" as employed herein, shall
----------
mean causes beyond the reasonable control of the parties, including, but not
limited to, acts of God, war or warlike hostilities, riots, strikes, labor
disputes, lockouts or other industrial disturbances, unavoidable accidents,
uncontrollable delays in transportation, non-availability of any means of
transportation, any state or federal laws, regulations or requirements
(expressly including inability to obtain necessary governmental approvals,
licenses or permits on reasonably acceptable terms), court orders, acts of
military authority, acts or failures to act of federal, state or local agencies
or regulatory bodies and inability beyond the reasonable control of SMC to
obtain timely refining of appropriate quantity of materials necessary to produce
the required amounts of Product; provided, however, that performance shall be
resumed within a reasonable period of time after such cause has been removed;
and provided further that neither party shall be required against its will to
adjust any labor dispute or to question the validity of or to refrain from
judicially testing the validity of any federal, state or local order, regulation
or statute. Notwithstanding the foregoing, the parties agree that this Section
13 is not intended to provide relief from economic conditions such as, but not
limited to, market situations that provide lower or higher prices than in effect
under this Agreement.
14. Dispute Resolution. The parties hereby agree that any dispute,
------------------
controversy or claim arising under this Agreement, or the breach thereof (a
"Dispute"), shall first be subject to the informal dispute resolution procedures
set forth in this Section 14. The party asserting the existence of a Dispute as
to the interpretation of any provision of this Agreement or the performance by
the other party of any of its obligations hereunder shall notify the other party
in writing of the nature of the asserted Dispute. Within seven business days of
receipt of such notice, the Vice President of Metals Marketing of SMC and the
Corporate Purchasing Manager of KEMET shall arrange for a personal or telephone
conference in which they use good faith efforts to resolve such Dispute. If
those individuals are unable to resolve the Dispute, they shall jointly prepare
and, within seven business days after their conference, circulate to the CEO of
SMC and the Senior Vice President/Treasurer of KEMET a memorandum outlining in
reasonable detail the nature of the Dispute. Within five business days after
receipt of that memorandum, the individuals to whom that memorandum was
addressed shall arrange for and have a personal or telephone conference in which
they attempt to resolve such Dispute. If those individuals are unable to
resolve the Dispute, the Dispute shall be settled by arbitration administered in
the State of Colorado under the American Arbitration Association's Commercial
Arbitration Rules by an arbitrator(s) selected by mutual agreement of the
parties, or the American Arbitration Association absent such mutual agreement,
and judgment on the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Any findings of such arbitration shall be
final and binding on the parties, and all reasonable costs (including attorneys
fees) incurred as a result of a Dispute being referred to arbitration will be
borne by the party against whom any award is made.
5
<PAGE>
15. Representations and Warranties. Each of the parties represents and
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warrants as follows:
(a) Good Standing. That it is a corporation duly incorporated and
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in good standing in its state of incorporation and that it is qualified to do
business and is in good standing in those states where necessary in order to
carry out the purposes of this Agreement;
(b) Performance. That it has the capacity to enter into and
-----------
perform this Agreement and all transactions contemplated herein and that all
corporate and other actions required to authorize it to enter into and perform
this Agreement have been properly taken;
(c) No Breach. That it will not breach any other agreement or
---------
arrangement by entering into or performing this Agreement; and
(d) Due Execution and Delivery. That this Agreement has been duly
--------------------------
executed and delivered by it and is valid and binding upon it and enforceable
against it in accordance with its terms; provided, however, that no
representation or warranty is made as to the remedy of specific performance or
other equitable remedies for the enforcement of this Agreement or any other
agreement contemplated hereby, and provided further that this representation is
limited by applicable bankruptcy, insolvency, moratorium, and other similar laws
affecting generally the rights and remedies of creditors and secured parties;
(e) Eligible Swap Participant: It is an "eligible swap
-------------------------
participant" that qualifies for the safe harbor exemption for swap agreements
under the rules of the Commodity Futures Trading Commission;
(f) Standardization and Creditworthiness: The material economic
------------------------------------
terms of Section 4 (including Exhibit A) have been individually tailored and
negotiated by it, and the creditworthiness of the other Party was a material
consideration in its entering into or determining the terms of Section 4
(including Exhibit A);
(g) Transacting as Principal: It is entering into this Agreement
------------------------
(including Section 4 and Exhibit A) as principal and not as agent for any third
party;
(h) Transactions are Arm's Length: It is entering into this
-----------------------------
Agreement in reliance upon its own judgment and upon any tax, accounting,
regulatory and financial advice as it has deemed necessary, and not upon any
view expressed by the other party, and all trading decisions are or will be the
result of arm's length negotiations between the parties; and
(i) Risks are Fully Understood: It is entering into this Agreement
--------------------------
with full understanding of all material risks thereof, and it is capable of
assuming and willing to assume those risks.
6
<PAGE>
16. Publicity. Neither SMC nor KEMET will issue or approve an
---------
advertisement, promotional material, news release or other form of publicity
concerning this Agreement or the transactions contemplated herein without the
prior approval of the other party as to the contents of such advertisement,
promotional material, news release or publicity and the timing of its release.
17. Confidentiality. Each party shall treat all information, documents
---------------
and other materials provided by the other party hereunder ("Confidential
Information") as confidential and proprietary information of the disclosing
party, and the receiving party agrees to maintain in confidence all such
Confidential Information and not to divulge such Confidential Information in
whole or in part to any third party and not to make use of such Confidential
Information other than in relation to meeting its obligations under this
Agreement. The requirement set forth in this Section 17 shall not apply to: (i)
Confidential Information which at the time of disclosure is in the public
domain; (ii) Confidential Information which, after disclosure, becomes part of
the public domain by publication or otherwise, other than by an unauthorized act
or omission of the receiving party under this Agreement; or (iii) Confidential
Information which the receiving party is required by law or at the request of
any governmental organization to make public.
18. Entire Agreement. This Agreement represents the complete Agreement
----------------
between the parties hereto and supersedes all prior or contemporaneous oral or
written agreements of the parties to the extent they relate in any way to the
subject matter hereof.
19. Relationship of the Parties. Nothing contained in this Agreement
---------------------------
shall be deemed to constitute either party the partner of the other, nor, except
as otherwise herein expressly provided, to constitute either Party the agent or
legal representative of the other, nor to create any fiduciary relationship
between them. It is not the intention of the parties to create, nor shall this
Agreement be construed to create, any mining, commercial or other partnership.
Neither party shall have any authority to act for or to assume any obligation or
responsibility on behalf of the other party, except as otherwise expressly
provided herein. The rights, duties, obligations and liabilities of the parties
shall be several and not joint or collective. Each party shall be responsible
only for its obligations as herein set out and shall be liable only for its
share of the costs and expenses as provided herein. Each party shall indemnify,
defend and hold harmless the other party, its directors, officers, employees,
agents and attorneys from and against any and all losses, claims, damages and
liabilities arising out of any act or any assumption of liability by the
indemnifying party, or any of its directors, officers, employees, agents and
attorneys done or undertaken, or apparently done or undertaken, on behalf of the
other party, except pursuant to the authority expressly granted herein or as
otherwise agreed in writing between the parties.
20. No Implied Covenants. There are no implied covenants contained in
--------------------
this Agreement other than those of good faith and fair dealing.
21. Binding Effect; No Assignment. This Agreement shall bind and inure to
-----------------------------
the benefit of and be enforceable by the parties hereto and may not be assigned
by either party without the consent of the other party, which consent will not
be unreasonably withheld, except with respect to (i) any assignment to provide
security in connection with any financing, or (ii) any merger, consolidation or
other reorganization or transfer by operation of law, or by purchase of the
business
7
<PAGE>
of or substantially all of the assets of one of the parties, with respect to
which the consent by the nonassigning party will be required only as to the
assignment of the provisions concerning hedging set forth in Part 2, Section (b)
of Exhibit A.
22. Amendment and Waiver. Except as otherwise provided herein, no
--------------------
modification, amendment or waiver of any provision of this Agreement shall be
effective against either party unless such modification, amendment or waiver is
approved in writing by the parties hereto. The failure by either party to
demand strict performance and compliance with any part of this Agreement during
the term of this Agreement shall not be deemed to be a waiver of the rights of
such party under this Agreement or by operation of law. Any waiver by either
party of a breach of any provision of this Agreement shall not operate as or be
construed as a waiver of any subsequent breach thereof.
23. Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
24. Governing Law. The parties hereby agree that this Agreement and the
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Exhibit A hereto shall be construed in accordance with the laws of the State of
Colorado, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Colorado or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Colorado.
25. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed an original and all of which together shall constitute one
instrument.
26. Attorneys' Fees. In the event of any controversy, claim, or dispute
---------------
between the parties hereto, arising out of or relating to this Agreement or the
breach thereof, the prevailing party shall be entitled to recover from the
losing party reasonable expenses, attorneys' fees, and costs.
27. Further Documents. At the request of either party, the parties shall
-----------------
execute and deliver any further instruments, agreements, documents or other
papers reasonably requested by that party to effect the purposes of this
Agreement and the transactions contemplated hereby.
8
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
STILLWATER MINING COMPANY KEMET CORP.
By: /s/ Robert C. Lapple By: /s/ D.C. Snider
_____________________________ ------------------------
Name: Robert C. Lapple Name: D.C. Snider
Title:Vice President Metals Marketing -----------------------
Title: Purchasing Manager
----------------------
9
<PAGE>
EXHIBIT A
---------
PRICING FORMULAS
[***]
<PAGE>
[***]
<PAGE>
EXHIBIT 10.3
MATERIAL IN THIS DOCUMENT HAS BEEN
OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
PALLADIUM AND PLATINUM SALES AGREEMENT
THIS PALLADIUM AND PLATINUM SALES AGREEMENT (this "Agreement") is made and
entered into this 17 day of August, 1998, by and between STILLWATER MINING
COMPANY, a Delaware corporation, whose address is 717 17th Street, Suite 1480,
Denver, Colorado ("SMC"), and GENERAL MOTORS CORPORATION, a Delaware
corporation, whose address is 100 Renaissance Center, Detroit, Michigan 48265-
1000 ("GM").
RECITAL
GM and SMC are interested in entering into an arrangement by this Agreement
whereby SMC will supply GM certain agreed upon amounts of palladium and platinum
sponge, .9995 minimum purity.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, SMC hereby agrees to sell and
deliver and GM hereby agrees to purchase palladium and platinum of the quantity
and quality hereinafter set forth, upon the following terms and conditions:
Section 1. Definitions and Terminology. Unless the context indicates
---------------------------
otherwise, capitalized terms used in this Agreement have the meaning set forth
in this Section 1.
Actual Monthly Production means the actual amount of mined metal out-
turned by SMC or on behalf of SMC by a third party refinery during any one
calendar month.
Business Day means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the United States are
authorized or obligated by law or executive order to close.
Contract Year shall mean the twelve consecutive calendar months
commencing with January of each calendar year.
Delivery Point means Engelhard (New Jersey), Degussa (New Jersey) or
PGP (California), as designated by GM by the 20th Business Day of the Pricing
Month.
Estimated Annual Production means the amount of annual production of
SMC estimated by SMC and included in a written notification to GM by the 15th
day of the beginning of each Contract Year for that Contract Year.
[***]
Metal means the palladium and/or platinum to be sold under this
Agreement.
<PAGE>
Ounce is a troy ounce equivalent to 31.1035 grams.
Palladium means refined palladium in sponge form with .9995 minimum
purity.
Platinum means refined platinum in sponge form with .9995 minimum
purity.
Pricing Month means the month prior to delivery during which pricing
is determined pursuant to Section 4 of this Agreement.
Section 2. Term. This Agreement shall have an initial term from
----
January 1, 1999, through and including December 31, 2003, subject to automatic
extension pursuant to Section 3(a) hereof. During the third year of the initial
term and each year thereafter, SMC and GM, by mutual agreement, may extend the
term by one year. This Agreement is subject to earlier termination pursuant to
Section 9 of this Agreement.
Section 3. Quantity and Delivery. Beginning on January 12, 1999, SMC
---------------------
will sell and deliver Metal FOB Delivery Point, to be credited to GM's pool
account, and GM will purchase the quantities of Metal set forth in this Section
3, which shall be delivered no later than the 12th day of the month following
the Pricing Month. All Metal to be sold in any one calendar month shall be
delivered to a single Delivery Point unless GM has notified SMC by the 20th
Business Day of the Pricing Month that GM has elected to have the monthly
shipment split and delivered to more than one Delivery Point; provided, that,
SMC shall not be obligated to split a shipment unless at least [***] Ounces of
Palladium and/or Platinum are to be shipped to each Delivery Point.
(a) Palladium. During the Contract Year 1999, SMC will sell and
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deliver and GM will purchase on a monthly basis [***] of Actual Monthly
Production. During the Contract Years 2000, 2001, 2002 and 2003, SMC will sell
and deliver and GM will purchase on a monthly basis [***] of Actual Monthly
Production. The parties acknowledge that the Actual Monthly Production will vary
from time to time. If, during the years 1999 through and including 2003, SMC
fails to deliver to GM at least [***] Ounces of Palladium pursuant to this
Agreement, then the term of this Agreement shall automatically be extended until
such time as SMC has delivered to GM, at a rate of [***] of Actual Monthly
Production, an aggregate of [***] Ounces of Palladium pursuant to the provisions
of this Agreement.
(b) Platinum. SMC will sell and deliver and GM will purchase the
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following quantities of Platinum:
Year Monthly Quantity
---- ----------------
1999 [***] Ounces
2000 [***] Ounces
2001 [***] Ounces
2002 [***] Ounces
2003 [***] Ounces
2
<PAGE>
(c) Notification of Estimated Annual Production and of Actual Monthly
-----------------------------------------------------------------
Production. Not later than January 15th of each Contract Year, SMC shall, for
- ----------
informational purposes only, notify GM in writing of the Estimated Annual
Production for such Contract Year. Not later than the last Business Day of the
month preceding the Pricing Month, SMC shall notify GM in writing of its Actual
Monthly Production, which amount will be priced during the next month, i.e. the
Pricing Month, and delivered by the 12th of the month following the Pricing
Month. SMC will provide GM on a quarterly basis with a certification from its
Chief Financial Officer of Actual Monthly Production amounts and will provide an
annual reconciliation of such amounts to SMC's Annual Report on Form 10-K.
By way of example, for delivery of Metal in January 1999, SMC will
notify GM of the Actual Monthly Production by the last Business Day in November
1998 and the Metal will be priced in December 1998 and delivered by January 12,
1999.
(d) Estimates. Estimated Annual Production will be provided by SMC to
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GM for informational purposes only. SMC makes no warranty, commitment or
guaranty regarding the amount of Actual Monthly Production. Actual Monthly
Production may differ from estimated amounts due to a number of factors,
including but not limited to (i) fluctuations in ore grade, tons mined, crushed
or milled, (ii) variations in concentrator, smelter or refinery operations,
(iii) geological, technical, metallurgical, permitting, mining and processing
problems and (iv) availability of experienced employees.
Section 4. Pricing. The price per Ounce to be paid to SMC by GM for
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the actual quantities of Metal delivered pursuant to Section 3 above shall be
based on the [***] for the Pricing Month less a discount and subject to certain
minimum and maximum prices as set forth below.
(a) Palladium. The price per Ounce to be paid to SMC by GM for the
---------
actual quantities of Palladium delivered pursuant to Section 3 above shall be
based on the [***]
(b) Platinum. The price per Ounce to be paid to SMC by GM for the
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actual quantities of Platinum delivered pursuant to Section 3 above shall be
based on the [***] for the Pricing Month less a discount of [***] per Ounce.
[***]
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<PAGE>
Section 5. Payment Terms. On the last Business Day of each Pricing
-------------
Month, SMC will inform GM in writing via facsimile as to the formula-based
pricing computations set forth in Section 4 above for the actual quantities of
Metal to be delivered by SMC pursuant to this Agreement during the following
month. Unless GM has provided SMC with Notice of disagreement with the pricing
computations, GM will forward such payment amount for 100% of the actual
quantities by wire transfer to SMC (pursuant to written wire transfer
instructions which will be provided by SMC) by the 12th calendar day of the
month following the Pricing Month or if the 12th calendar day is not a Business
Day, by the last Business Day preceding the 12th calendar day of the month
following the Pricing Month (unless the parties mutually agree in writing to
adjust the delivery date). All payments will be made in U.S. Dollars. If GM
does not agree with SMC's pricing computations, GM shall Notify SMC of such
disagreement and the parties shall seek resolution of such dispute as to the
calculation of the payment amount prior to the date payment is due.
Section 6. Suspension of Delivery for Failure to Pay. Ten days after
-----------------------------------------
receipt by GM of written notice from SMC to GM of GM's failure to pay pursuant
to the terms of Section 5 above, SMC may suspend delivery of Metal to GM until
such time as payment has been received by SMC. This right shall not be deemed to
be an exclusive right or remedy.
Section 7. Risk of Loss; Title. Title and risk of loss for all Metal
-------------------
delivered hereunder shall pass to GM upon delivery to the Delivery Point.
Section 8. Warranty. SMC warrants that the Metal supplied hereunder
--------
shall have a minimum purity of .9995, that SMC will convey good title thereto,
that the Metal will be delivered free and clear of all liens and encumbrances
payable by SMC and that the Metal will have been produced, handled and
transported to the Delivery Point in accordance with all applicable federal,
state and local laws, rules and regulations. In respect of Metal supplied by
release from SMC's pool account to GM's pool account, the parties agree that
such Metal shall be deemed to have a minimum purity of .9995. In respect of
Metal supplied by physical delivery to a Delivery Point, SMC will furnish GM
with an analysis and weight certificate on such shipment of Metal. If a
laboratory analysis performed by GM or its nominee shows any Metal to be below
the minimum purity standard, GM will inform SMC within 24 hours of receipt by GM
of the results of the laboratory analysis. In such event, SMC shall arrange to
have adequate samples of the Metal in doubt check-assayed by an independent
assayer acceptable to both parties (or if the parties fail to agree upon such
assayer within five days from the date of notice by GM under this Section 8, by
an assayer appointed by Engelhard, Degussa or PGP, depending on where the Metal
is delivered), whose decision shall be final and binding upon the parties and
who in so deciding shall be deemed to be acting as an expert and not as an
arbitrator. The cost of such check-assay will be borne by the party against
whom an award is made. If the results of the check-assay indicate that the
Metal is below the minimum purity standard, GM will promptly return such Metal
in its original state and packing to SMC at SMC's expense, and SMC will replace
the Metal in doubt within three Business Days. Nothing in this Section 8 shall
modify GM's obligation to make payment to SMC pursuant to Section 5. If GM has
put the Metal into solution or the digestion process or has otherwise changed
the form of the Metal, SMC shall have no liability for breach of warranty
hereunder.
4
<PAGE>
OTHER THAN THOSE EXPRESSLY STATED IN THIS AGREEMENT, THERE ARE NO
REPRESENTATIONS, GUARANTEES OR WARRANTIES, EXPRESSED OR IMPLIED, OF
MERCHANTABILITY, FITNESS, OR SUITABILITY FOR A PARTICULAR PURPOSE OR USE
NOTWITHSTANDING ANY COURSE OF PERFORMANCE, USAGE OF TRADE OR LACK THEREOF
INCONSISTENT WITH THIS SECTION.
SMC'S SOLE LIABILITY FOR BREACH OF WARRANTY SHALL BE LIMITED TO
REPLACEMENT OF THE NONCONFORMING METAL.
Section 9. Default and Termination. Either party shall be entitled to
-----------------------
terminate this Agreement in the event of (i) the other party generally not
paying its debts as such debts become due, or admitting in writing its inability
to pay its debts generally or making a general assignment for the benefit of
creditors, the appointment of a receiver for the other party or any of its
assets, the filing by the other party of a voluntary petition in bankruptcy or
any form of reorganization, or the filing of an involuntary petition in
bankruptcy against the other party which is not dismissed with prejudice within
60 days of such filing, or the making of an assignment for the benefit of
creditors of the other party; or (ii) a breach by the other party of any of the
material terms or conditions of this Agreement, which breach is not cured within
10 days of notice of such breach by the non-breaching party. SMC shall be
entitled to terminate this Agreement in the event GM does any of the following:
(i) acquire, or agree, offer or propose to acquire, directly or indirectly, from
SMC or any other person, any business or assets of, or securities issued by, SMC
or any right, warrant or option to acquire any of the foregoing; (ii) propose to
enter into, directly or indirectly, any merger or business combination involving
SMC or any of its subsidiaries or to purchase, directly or indirectly, a
material portion of the assets of SMC or any of its subsidiaries; (iii) make any
proposal or request to SMC or any of its officers or directors relating,
directly or indirectly, to any action referred to in clause (i) or (ii) of this
paragraph or to any modification or waiver of any provision of this paragraph;
(iv) make or participate in, directly or indirectly, any "solicitation" of
"proxies" (as those terms are used in the proxy rules of the Securities and
Exchange Commission) to vote or seek to advise or influence any person with
respect to the voting of any voting securities of SMC or any of its
subsidiaries; (v) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) under the Exchange Act) with respect to any voting
securities of SMC or any of its subsidiaries; (vi) act alone or in concert with
others to seek to control or influence the management, Board of Directors or
policies of SMC; (vii) advise, assist or enter into any discussions,
negotiations, arrangements or understandings with any other person with respect
to any of the foregoing; or (viii) make any public statement or disclosure of
any kind with respect to any matter addressed by this paragraph (unless required
by law) or take any other action which might reasonably be expected to result in
any such public disclosure. Otherwise, unless this Agreement is extended
pursuant to Section 2, this Agreement will terminate on December 31, 2003
(except that the provisions of Sections 5, 8, 11, 12, 15 and 18 of this
Agreement will survive such termination).
Section 10. Taxes and Assessments. GM shall be responsible for the
---------------------
payment of all sales, use, excise, transfer, value added and other similar taxes
imposed by an governmental authority in any jurisdiction in connection with the
transactions contemplated herein. If any personal property
5
<PAGE>
taxes are assessed against the Metal by any governmental authority, such
assessment shall be the responsibility of and shall be paid by the party having
title to the Metal at the time of assessment.
Section 11. Claims. Claims as to shortage in quantity shall be made by
------
written notice from GM to SMC within five Business Days after the delivery in
question, or else any such claims shall be deemed to have been waived. Except
as otherwise provided in Section 8 or this Section 11, all other claims shall be
made by written notice from GM to SMC within one year of delivery of the Metal
in question, or else any such claims shall be deemed to have been waived. EXCEPT
AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, NO CLAIMS WHATSOEVER SHALL
BE MADE HEREUNDER FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
Section 12. Limitation of Liability. GM shall not be liable for any
-----------------------
special, indirect or consequential damages. SMC shall not be liable for any
prospective or speculative profits or special, indirect, consequential, punitive
or exemplary damages and the liability of SMC with respect to this Agreement or
any action in connection herewith whether in contract, tort, or otherwise shall
not exceed the price of that portion of the Metal on which liability is
asserted.
Section 13. Compliance with Laws. To the extent applicable, the parties
--------------------
agree to comply with all laws, ordinances rules, codes, regulations and lawful
orders of any federal, state or local governmental authority applicable to
performance of the Agreement.
Section 14. Force Majeure.
-------------
(a) Effect of Occurrence. In the event that either party is rendered
--------------------
unable, wholly or in part, by force majeure applying to it, to carry out its
obligations under this Agreement, it is agreed that such obligations of such
party, so far as they are affected by such force majeure, shall be suspended
during the continuance of any inability so caused, but for no longer period;
provided that GM shall not be excused by any event of force majeure from making
timely payments for Metal delivered prior to the effective date of their notice
of force majeure. The parties agree that the various periods and terms provided
for herein shall be extended for a period equivalent to such period of force
majeure. The party claiming that an event of force majeure has occurred will
promptly notify the other party of the commencement and termination of any event
of force majeure. Prompt notice of force majeure shall be given by the party
invoking it to the other party, setting out the nature and full details thereof,
the extent of the interruption and the anticipated duration of the interruption.
(b) Definition. The term "force majeure" as employed herein, shall
----------
mean causes beyond the reasonable control of the parties, including, but not
limited to, acts of God, explosions, fires, floods, breakdowns or damage to
SMC's mine(s) or related equipment or facilities, failure of plant or equipment
to operate according to plans or specifications, war or warlike hostilities,
riots, strikes, labor disputes, lockouts, unavoidable accidents, uncontrollable
delays in transportation, non-availability of any means of transportation, any
state or federal laws, regulations or requirements (expressly including
inability to obtain or amend necessary governmental approvals, licenses or
6
<PAGE>
permits on reasonably acceptable terms), geological, technical, metallurgical,
mining, construction or processing problems, non-availability of supplies, court
orders, acts of military authority, acts or failures to act of federal, state or
local agencies or regulatory bodies and inability to obtain timely refining of
appropriate quantity of materials necessary to produce the required amounts of
Metal; provided, however, that performance shall be resumed within a reasonable
period of time after such cause has been removed; and provided further that
neither party shall be required against its will to adjust any labor dispute or
to question the validity of or to refrain from judicially testing the validity
of any federal, state or local order, regulation or statute or to refrain from
pursuing its legal or equitable remedies against any third party.
Notwithstanding the foregoing, the parties agree that this Section 14 is not
intended to provide relief from economic conditions such as, but not limited to,
market situations that provide lower or higher prices than in effect under this
Agreement.
Section 15. Dispute Resolution. Except as otherwise provided in this
------------------
Agreement, the parties hereby agree that any dispute, controversy or claim
arising under this Agreement, or the breach thereof (a "Dispute"), shall first
be subject to the informal dispute resolution procedures set forth in this
Section 15. The party asserting the existence of a Dispute as to the
interpretation of any provision of this Agreement or the performance by the
other party of any of its obligations hereunder shall notify the other party in
writing of the nature of the asserted Dispute. Within 10 Business Days of
receipt of such notice, representatives from each party shall arrange and have a
personal or telephone conference in which they attempt to resolve such Dispute.
If those individuals are unable to resolve the Dispute within such time frame,
the Dispute shall be settled by arbitration administered in the State of New
York under the rules of the American Arbitration Association then in effect for
the resolution of commercial disputes by an arbitrator(s) selected by mutual
agreement of the parties, or by the American Arbitration Association absent such
mutual agreement, and judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Any findings of such
arbitration shall be final and binding on the parties, and all reasonable costs
(including attorneys' fees) incurred as a result of a Dispute being referred to
arbitration will be borne by the party against whom any award is made.
Section 16. Representations and Warranties. Each of the parties
------------------------------
represents and warrants as follows:
(a) Good Standing. That it is a corporation duly incorporated and in
-------------
good standing in its state of incorporation and that it is qualified to do
business and is in good standing in those states where necessary in order to
carry out the purposes of this Agreement;
(b) Performance. That it has the corporate capacity to enter into and
-----------
perform this Agreement and all transactions contemplated herein and that all
corporate and other actions required to authorize it to enter into and perform
this Agreement have been properly taken;
(c) No Breach. That it will not breach any other agreement or
---------
arrangement by entering into or performing this Agreement; and
(d) Due Execution and Delivery. That this Agreement has been duly
--------------------------
executed and delivered by it and is valid and binding upon it and enforceable
against it in accordance with its
7
<PAGE>
terms; provided, however, that no representation or warranty is made as to the
remedy of specific performance or other equitable remedies for the enforcement
of this Agreement or any other agreement contemplated hereby, and provided
further that this representation is limited by applicable bankruptcy,
insolvency, moratorium, and other similar laws affecting generally the rights
and remedies of creditors and secured parties.
Section 17. Notices. Any notice, election, report or other
-------
correspondence (collectively, "Notices") required or permitted hereunder shall
be in writing and (i) delivered personally to an officer of the party to whom
directed; (ii) sent by registered or certified United States mail, postage
prepaid, return receipt requested; (iii) sent by reputable overnight courier; or
(iv) sent by facsimile transmission with confirmation of receipt. All such
Notices shall be addressed to the party to whom directed as follows:
SMC: Stillwater Mining Company
717 17th Street, Suite 1480
Denver, Colorado 80202
Attn: Vice President of Metals Marketing
with a copy to: Chief Financial Officer
Facsimile: (303) 978-2590
GM: General Motors Corporation
5725 Delphi Drive
Troy, Michigan 48098
Attn: David Andres
Facsimile: (248) 813-2095
with a copy to: Executive Director, Metallic,
Worldwide Purchasing
Facsimile: (810) 986-6797
Either party may, from time to time, change its address for future Notices
hereunder by Notice in accordance with this Section 17. All Notices shall be
complete and deemed to have been given or made when mailed or sent by overnight
courier, or upon personal delivery when delivered personally or when receipt is
confirmed when sent by facsimile transmission.
Section 18. Publicity. Neither SMC nor GM will issue or approve an
---------
advertisement, promotional material, news release or other form of publicity
concerning this Agreement or the transactions contemplated herein without the
prior approval of the other party as to the contents of such advertisement,
promotional material, news release or publicity and the timing of its release,
which approval cannot be unreasonably withheld.
Section 19. Entire Agreement. This Agreement represents the complete
----------------
agreement between the parties hereto and supersedes all prior or contemporaneous
oral or written agreements of the parties to the extent they relate in any way
to the subject matter hereof.
8
<PAGE>
Section 20. Relationship of the Parties. Nothing contained in this
---------------------------
Agreement shall be deemed to constitute either party the partner of the other,
nor, except as otherwise herein expressly provided, to constitute either party
the agent or legal representative of the other, nor to create any fiduciary
relationship between them. It is not the intention of the parties to create,
nor shall this Agreement be construed to create, any mining, commercial or other
partnership. Neither party shall have any authority to act for or to assume any
obligation or responsibility on behalf of the other party, except as otherwise
expressly provided herein. The rights, duties, obligations and liabilities of
the parties shall be several and not joint or collective. Each party shall be
responsible only for its obligations as herein set out and shall be liable only
for its share of the costs and expenses as provided herein. Each party shall
indemnify, defend and hold harmless the other party, its directors, officers,
employees, agents and attorneys from and against any and all losses, claims,
damages and liabilities arising out of any act or any assumption of liability by
the indemnifying party, or any of its directors, officers, employees, agents and
attorneys done or undertaken, or apparently done or undertaken, on behalf of the
other party, except pursuant to the authority expressly granted herein or as
otherwise agreed in writing between the parties.
Section 21. No Implied Covenants. There are no implied covenants
--------------------
contained in this Agreement other than those of good faith and fair dealing.
Section 22. Binding Effect; No Assignment. This Agreement shall bind
-----------------------------
and inure to the benefit of and be enforceable by the parties hereto and may not
be assigned by either party without the consent of the other party, which
consent shall not be unreasonably withheld, except with respect to (i) any
assignment to provide security in connection with any financing, expressly
including, by way of example and not limitation, assignments of royalty,
overriding royalties or net profits interests or production payments, or (b) any
merger, consolidation or other reorganization or transfer by operation of law,
or by purchase of the business of or substantially all of the assets of one of
the parties, with respect to which such consent by the nonassigning party will
not be required.
Section 23. Amendment and Waiver. Except as otherwise provided herein,
--------------------
no modification, amendment or waiver of any provision of this Agreement shall be
effective against either party unless such modification, amendment or waiver is
approved in writing by the parties hereto. The failure by either party to
demand strict performance and compliance with any part of this Agreement during
the term of this Agreement shall not be deemed to be a waiver of the rights of
such party under this Agreement or by operation of law. Any waiver by either
party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach thereof.
Section 24. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
9
<PAGE>
Section 25. Governing Law. The parties hereby agree that this Agreement
-------------
shall be construed in accordance with the laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.
Section 26. Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
Section 27. Attorneys' Fees. In the event of any controversy, claim, or
---------------
dispute between the parties hereto, arising out of or relating to this Agreement
or the breach thereof, the prevailing party shall be entitled to recover from
the losing party reasonable expenses, attorneys' fees, and costs.
Section 28. Further Documents. At the request of either party, the
-----------------
parties shall execute and deliver any further instruments, agreements, documents
or other papers reasonably requested by that party to effect the purposes of
this Agreement and the transactions contemplated hereby.
10
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
STILLWATER MINING COMPANY GENERAL MOTORS CORPORATION
By: /s/ William E. Nettles By: /s/ Harold R. Kutner
________________________ ________________________
Name: William E. Nettles Name: Harold R. Kutner
Title: Chief Executive Officer Title: Vice President and Group Executive
Worldwide Purchasing
By: /s/ Robert C. Lapple By: /s/ David R. Andres
________________________ ________________________
Name: Robert C. Lapple Name: David R. Andres
Title: Vice President Title: Purchasing Director
Metals Marketing Commodity Traded Metals
11
<PAGE>
EXHIBIT 10.4
MATERIAL IN THIS DOCUMENT HAS BEEN
OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
PALLADIUM AND PLATINUM SALES AGREEMENT
THIS PALLADIUM AND PLATINUM SALES AGREEMENT (this "Agreement") is made and
entered into this 27 day of August, 1998, by and between STILLWATER MINING
COMPANY, a Delaware corporation, whose address is 717 17th Street, Suite 1480,
Denver, Colorado ("SMC"), and MITSUBISHI CORPORATION, a Japanese corporation,
whose address is 6-3, Marunouchi 2-Chome, Chiyoda-Ku Tokyo 100-8088 JAPAN
("MC").
RECITAL
WHEREAS, MC and SMC are interested in entering into an arrangement by this
Agreement whereby SMC will supply MC certain agreed upon amounts of palladium
and platinum sponge, .9995 minimum purity; and
WHEREAS, MC will be purchasing palladium and platinum for purposes of
reselling such palladium and platinum exclusively to Mitsubishi Motor
Corporation, a Japanese corporation ("MMC"), Netherland Car B.V. (Ned Car), a
Dutch corporation ("Ned Car"), and Mitsubishi Motor Manufacturing of America, a
Delaware corporation ("MMMA" and collectively with Ned Car and MMMA, the "MMC
Group Companies"), for use by the MMC Group Companies in the manufacture of
automobiles worldwide;
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, SMC hereby agrees to sell and
deliver and MC hereby agrees to purchase palladium and platinum of the quantity
and quality hereinafter set forth, upon the following terms and conditions:
Section 1. Definitions and Terminology. Unless the context indicates
---------------------------
otherwise, capitalized terms used in this Agreement have the meaning set forth
in this Section 1.
Actual Monthly Production means the actual amount of refined, mined
Palladium out-turned by SMC or on behalf of SMC by a third party refinery during
any one calendar month.
Business Day means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the United States are
authorized or obligated by law or executive order to close.
Confidentiality Agreement means that certain Confidentiality
Agreement, dated as of July __, 1998, by and between SMC and MC.
Contract Year shall mean the twelve consecutive calendar months
commencing with January of each calendar year.
Destination means the Narita Airport by the 15th Business Day of
the Pricing Month.
<PAGE>
Estimated Annual Production means the amount of annual production
of Palladium estimated by SMC for a Contract Year and included in a written
notification to MC by December 15th prior to such Contract Year.
Metal means the Palladium or Platinum to be sold under this
Agreement, the brand of which is Union Miniere, JM USA, Impala, Engelhard, INCO,
Falconbridge or Heraeus, PGP or such other brand as the parties may agree.
[***]
[***]
Ounce is a troy ounce equivalent to 31.1035 grams.
Palladium means refined palladium in sponge form with .9995 minimum
purity.
Platinum means refined platinum in sponge form with .9995 minimum
purity.
Pricing Day means any day on which there is published a [***]
Pricing Month means the month prior to delivery during which
pricing is determined pursuant to Section 4 of this Agreement.
[***]
Section 2. Term. The time period over which delivery shall occur under
----
this Agreement shall be from January 1, 1999, through and including December 7,
2003, unless otherwise extended or terminated pursuant to this Agreement.
Section 3. Quantity and Delivery. Beginning on January 7, 1999, SMC
---------------------
will sell and deliver Metal to the Destination, delivered duty unpaid, and MC
will purchase the quantities of Metal set forth in this Section 3, which shall
be delivered no later than the 7th day of the month following the Pricing Month.
All Metal to be sold in any one calendar month will be delivered to a single
Destination only, and SMC shall be under no obligation to accommodate MC's
request that any monthly shipment be split. In the event SMC agrees to
accommodate MC's request to split a shipment, MC will reimburse SMC for the
additional costs incurred by SMC in accommodating such request.
2
<PAGE>
(a) Palladium. During the Contract Years 1999, 2000 and 2001, SMC
---------
will sell and deliver and MC will purchase on a monthly basis [***] of Actual
Monthly Production. During the Contract Years 2002 and 2003, SMC will sell and
deliver and MC will purchase on a monthly basis [***]. The parties acknowledge
that the Actual Monthly Production may fluctuate from time to time.
(b) Platinum. SMC will sell and deliver and MC will purchase on a
--------
monthly basis [***] ounces of Platinum.
(c) Notification of Estimated Annual Production and of Actual
---------------------------------------------------------
Monthly Production. Not later than the December 15th prior to each Contract
- ------------------
Year, SMC shall notify MC in writing of the Estimated Annual Production for such
Contract Year. Not later than the last Business Day of the month preceding the
Pricing Month, SMC will notify MC in writing of its Actual Monthly Production,
which amount will be priced during the Pricing Month, and delivered by the 7th
of the month following the Pricing Month. SMC will provide MC on a quarterly
basis with statements from its third party refiners, from which MC may verify
the Actual Monthly Production, and with an annual reconciliation of such amounts
to SMC's Annual Report on Form 10-K, filed with the United States Securities and
Exchange Commission (the "SEC").
(d) Estimates. Estimated Annual Production will be provided by SMC
---------
to MC for informational purposes only. SMC makes no warranty, commitment or
guaranty regarding the amount of Estimated Annual Production. Actual Monthly
Production may differ from estimated amounts due to a number of factors,
including but not limited to (i) fluctuations in ore grade, tons mined, crushed
or milled, (ii) variations in concentrator, smelter or refinery operations,
(iii) geological, technical, metallurgical, permitting, mining and processing
problems and (iv) availability of experienced employees.
By way of example, for delivery of Metal in January 1999, SMC will notify
MC of the Actual Monthly Production by the last Business Day in November 1998
and the Metal will be priced in December 1998 and delivered by January 7, 1999.
[***]
3
<PAGE>
[***]
[***]
Section 4. Pricing. The price per Ounce to be paid to SMC by MC for
-------
the actual quantities of Metal delivered pursuant to Section 3 above shall be
based on the [***] for the Pricing Month less a discount and subject to certain
minimum and maximum prices as set forth below.
(a) Palladium. The price per Ounce to be paid to SMC by MC for
---------
the actual quantities of Palladium delivered during each month pursuant to
Section 3 above shall be based on the [***] for the Pricing Month less a
discount of [***] per Ounce. [***]
(b) Platinum. The price per Ounce to be paid to SMC by MC for
--------
the actual quantities of Platinum delivered during each month pursuant to
Section 3 above shall be based on the [***] for the Pricing Month less a
discount of [***] per Ounce. [***]
Section 5. Payment Terms. On the last Business Day of each Pricing
-------------
Month, SMC will inform MC in writing via facsimile as to the formula-based
pricing computations set forth in Section 4 above for the actual quantities of
Metal to be delivered by SMC pursuant to this Agreement during the following
month. Unless MC has provided SMC with Notice of disagreement with the pricing
computations, MC will forward such payment amount for 100% of the actual
4
<PAGE>
quantities by wire transfer to SMC (pursuant to written wire transfer
instructions which will be provided by SMC) within two Business Days following
delivery of the Metal to the Destination (unless the parties mutually agree in
writing to adjust the delivery date). All payments will be made in U.S. Dollars.
If MC does not agree with SMC's pricing computations, MC shall Notify SMC of
such disagreement within two Business Days of MC's receipt of the pricing
computations and the parties shall seek resolution of such dispute pursuant to
the dispute resolution procedures set forth in Section 16 below. Without
derogating SMC's rights under this Agreement, any delay in payment by MC to SMC
shall bear interest calculated at the 3-month LIBOR (as quoted in the Wall
Street Journal on the date such payment was due) plus 3% from the date upon
which payment was due until the date full payment is received.
Section 6. Suspension of Delivery for Failure to Pay. Ten days after
-----------------------------------------
receipt by MC of written notice of MC's failure to pay pursuant to the terms of
Section 5 above, SMC may suspend delivery of Metal to MC until such time as
payment has been received by SMC. This right shall not be deemed to be an
exclusive right or remedy.
Section 7. Risk of Loss; Title. Title and risk of loss and liability
-------------------
for all Metal delivered hereunder shall pass to MC once the Metal is off-loaded
from the carrier at the Destination.
Section 8. Warranty. SMC warrants that the Metal supplied hereunder
--------
shall have a minimum purity of .9995, that SMC will convey good title thereto,
that the Metal will be delivered free and clear of all liens and encumbrances
payable by SMC and that the Metal will have been produced, handled and
transported to the Destination in accordance with all applicable federal, state
and local laws, rules and regulations. In respect of Metal supplied by physical
delivery to a Destination, SMC will furnish MC with an analysis and weight
certificate on such shipment of Metal.
OTHER THAN THOSE EXPRESSLY STATED IN THIS AGREEMENT, THERE ARE NO
REPRESENTATIONS, GUARANTEES OR WARRANTIES, EXPRESSED OR IMPLIED, OF
MERCHANTABILITY, FITNESS, OR SUITABILITY FOR A PARTICULAR PURPOSE OR USE
NOTWITHSTANDING ANY COURSE OF PERFORMANCE, USAGE OF TRADE OR LACK THEREOF
INCONSISTENT WITH THIS SECTION.
SMC'S SOLE LIABILITY FOR BREACH OF WARRANTY SHALL BE LIMITED TO REPLACEMENT
OF THE NONCONFORMING METAL.
Section 9. Default and Termination.
-----------------------
(a) Termination by MC. MC shall be entitled to terminate this Agreement
-----------------
by delivery of written Notice in the event:
(i) a receiver is appointed for SMC or MMC or any of their
respective assets, SMC or MMC files a voluntary petition in bankruptcy or any
form of reorganization, an involuntary petition in bankruptcy is filed against
SMC or MMC which is not dismissed with prejudice within 60 days of such filing,
or an assignment is made for the benefit of creditors of SMC or MMC;
5
<PAGE>
(ii) SMC breaches any of the material terms or conditions of this
Agreement and the breach is not cured within 30 days of notice of such breach by
MC; or
(iii) SMC shall have Notified MC of the commencement of an event
of force majeure pursuant to Section 15 and such event of force majeure shall
have continued and remained in effect for a period of nine consecutive months.
(b) Termination by SMC. SMC shall be entitled to terminate this
------------------
Agreement in the event:
(i) a receiver is appointed for MC or any of its assets, MC files
a voluntary petition in bankruptcy or any form of reorganization, an involuntary
petition in bankruptcy is filed against MC which is not dismissed with prejudice
within 60 days of such filing, or an assignment is made for the benefit of
creditors of MC;
(ii) MC breaches any of the material terms or conditions of this
Agreement and the breach is not cured within 30 days of notice of such breach by
SMC;
(iii) MC shall have Notified SMC of the commencement of an event
of force majeure pursuant to Section 15 and such event of force majeure shall
have continued and remained in effect for a period of nine consecutive months;
or
(iv) MC does any of the following: (A) acquire, or agree, offer or
propose to acquire, directly or indirectly, from SMC or any other person, any
business or assets of, or securities issued by, SMC or any right, warrant or
option to acquire any of the foregoing; (B) propose to enter into, directly or
indirectly, any merger or business combination involving SMC or any of its
subsidiaries or to purchase, directly or indirectly, a material portion of the
assets of SMC or any of its subsidiaries; (C) make any proposal or request to
SMC or any of its officers or directors relating, directly or indirectly, to any
action referred to in clause (A) or (B) of this paragraph or to any modification
or waiver of any provision of this paragraph; (D) make or participate in,
directly or indirectly, any "solicitation" of "proxies" (as those terms are used
in the proxy rules of the SEC) to vote or seek to advise or influence any person
with respect to the voting of any voting securities of SMC or any of its
subsidiaries; (E) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) under the United States Securities Exchange Act of
1934, as amended) with respect to any voting securities of SMC or any of its
subsidiaries; (F) act alone or in concert with others to seek to control or
influence the management, Board of Directors or policies of SMC; (G) advise,
assist or enter into any discussions, negotiations, arrangements or
understandings with any other person with respect to any of the foregoing; or
(H) make any public statement or disclosure of any kind with respect to any
matter addressed by this paragraph (unless required by law) or take any other
action which might reasonably be expected to result in any such public
disclosure.
Notwithstanding the foregoing, SMC agrees that in the event of Section
9(b)(I) above, SMC shall offer MC the option for MC to assign and MMC to assume
MC's obligations under this
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Agreement prior to terminating this Agreement; provided, however, that if MC
does not exercise the option within 45 days of receipt of written Notification
from SMC of the option offer, SMC shall be free to terminate this Agreement.
(c) Survival. Unless this Agreement is extended pursuant to Section 2
--------
or terminated pursuant to this Section 9, this Agreement will terminate on
December 31, 2003 (except that the provisions of Sections 5, 8, 11, 12, 13, 16,
19, 20 and 21 of this Agreement will survive such termination).
Section 10. Taxes and Assessments. All tariffs, taxes and duties levied
---------------------
on Metal delivered hereunder, or under any commercial documents relating to such
delivery, shall be borne by: (a) SMC when levied in the U.S. or any other
country through which the Metal subsequently passes prior to reaching the
Destination; provided, however, that any such tariffs, taxes and duties shall be
borne by MC if delivery is made in the U.S.; and (b) MC when levied in the
country in which the Destination is situated or any country through which the
Metal passes after delivery.
Section 11. Claims. Claims as to deficiency in quality or shortage in
------
quantity shall be made by written notice from MC to SMC within 30 days after the
delivery in question, or else any such claims shall be waived. MC or its nominee
may perform a laboratory analysis of the Metal within 30 days after delivery of
the Metal. If the laboratory analysis performed by MC or its nominee shows any
Metal to be below the minimum purity standard, MC will inform SMC within 24
hours of receipt by MC of the results of the laboratory analysis. In such
event, SMC shall arrange to have adequate samples of the Metal in doubt check-
assayed by an independent, certified good London Zurich assayer reasonably
acceptable to both parties, whose decision shall be final and binding upon the
parties and who in so deciding shall be deemed to be acting as an expert and not
as an arbitrator. The cost of such check-assay will be borne by the party
against whom an award is made. If the results of the check-assay indicate that
the Metal is below the minimum purity standard, MC will promptly return such
Metal in its original state and packing to SMC at SMC's expense, and SMC will
replace the Metal in doubt within five Business Days. If MC has put the Metal
into solution or the digestion process or has otherwise changed the form of the
Metal, SMC shall have no liability for breach of warranty hereunder. Except as
otherwise provided in this Section 11, all other claims shall be made by written
notice from MC to SMC within 60 days after the delivery in question, or else any
such claims shall be deemed to have been waived. EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED IN THIS AGREEMENT, NO CLAIMS WHATSOEVER SHALL BE MADE
HEREUNDER FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
Section 12. Limitation of Liability. SMC shall not be liable for any
-----------------------
prospective or speculative profits or special, indirect, consequential, punitive
or exemplary damages, and SMC's liability with respect to this Agreement or any
action in connection herewith whether in contract, tort, or otherwise shall not
exceed the price of that portion of the Metal on which liability is asserted.
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Section 13. Compliance with Laws. To the extent applicable, the parties
--------------------
agree to comply with all laws, ordinances rules, codes, regulations and lawful
orders of any federal, state or local governmental authority applicable to
performance of the Agreement.
Section 14. Force Majeure.
-------------
(a) Effect of Occurrence. In the event that either party is
--------------------
rendered unable, wholly or in part, by force majeure applying to it, to carry
out its obligations under this Agreement, it is agreed that such obligations of
such party, so far as they are affected by such force majeure, shall be
suspended during the continuance of any inability so caused, but for no longer
period; provided that MC shall not be excused by any event of force majeure from
making timely payments for Metal delivered prior to the effective date of their
notice of force majeure. The parties agree that the various periods and terms
provided for herein shall be extended for a period equivalent to such period of
force majeure unless the Agreement is terminated pursuant to Section 9. The
party claiming that an event of force majeure has occurred will promptly notify
the other party of the commencement and termination of any event of force
majeure. Prompt notice of force majeure shall be given by the party invoking it
to the other party, setting out the nature and full details thereof, the extent
of the interruption and the anticipated duration of the interruption.
(b) Definition. The term "force majeure" as employed herein,
----------
shall mean causes beyond the reasonable control of the parties, including, but
not limited to, acts of God, explosions, fires, floods, breakdowns or damage to
SMC's mine(s) or related equipment or facilities, breakdowns or damage to all
the manufacturing plants of the MMC Group Companies, failure of plant or
equipment to operate according to plans or specifications, war or warlike
hostilities, riots, strikes, labor disputes, lockouts, unavoidable accidents,
uncontrollable delays in transportation, non-availability of any adequate means
of transportation, any state or federal laws, regulations or requirements
(expressly including inability to obtain or amend necessary governmental
approvals, licenses or permits on reasonably acceptable terms), geological,
technical, metallurgical, mining, construction or processing problems, non-
availability of supplies, power shortages, court orders, acts of military
authority, acts or failures to act of federal, state or local agencies or
regulatory bodies and inability to obtain timely refining of appropriate
quantity of materials necessary to produce the required amounts of Metal;
provided, however, that performance shall be resumed within a reasonable period
of time after such cause has been removed and in the event not resumed within
nine months, the other party shall be entitled to terminate this Agreement
pursuant to Section 9; and provided further that neither party shall be required
against its will to adjust any labor dispute or to question the validity of or
to refrain from judicially testing the validity of any federal, state or local
order, regulation or statute or to refrain from pursuing its legal or equitable
remedies against any third party. Notwithstanding the foregoing, the parties
agree that this Section 14 is not intended to provide relief from economic
conditions such as, but not limited to, market situations that provide lower or
higher prices than in effect under this Agreement.
Section 15. Dispute Resolution. Except as otherwise provided in this
------------------
Agreement, the parties hereby agree that any dispute, controversy or claim
arising under this Agreement, or the breach thereof (a "Dispute"), shall first
be subject to the informal dispute resolution procedures set
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<PAGE>
forth in this Section 15. The party asserting the existence of a Dispute as to
the interpretation of any provision of this Agreement or the performance by the
other party of any of its obligations hereunder shall notify the other party in
writing of the nature of the asserted Dispute. Within 10 Business Days of
receipt of such notice, representatives from each party shall arrange and have a
personal or telephone conference in which they attempt to resolve such Dispute.
If those individuals are unable to resolve the Dispute within such time frame,
the Dispute shall be settled by arbitration administered in the State of New
York under the rules of the American Arbitration Association then in effect for
the resolution of commercial disputes by an arbitrator(s) selected by mutual
agreement of the parties, or by the American Arbitration Association absent such
mutual agreement, and judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Any findings of such
arbitration shall be final and binding on the parties, and all reasonable costs
(including attorneys' fees) incurred as a result of a Dispute being referred to
arbitration will be borne by the party against whom any award is made. This
Section 15 provides the exclusive means of resolving disputes under this
Agreement.
Section 16. Representations and Warranties. Each of the parties
------------------------------
represents and warrants as follows:
(a) Good Standing. That it is a corporation duly incorporated
-------------
and in good standing in its state of incorporation and that it is qualified to
do business and is in good standing in those states where necessary in order to
carry out the purposes of this Agreement;
(b) Performance. That it has the capacity to enter into and
-----------
perform this Agreement and all transactions contemplated herein and that all
corporate and other actions required to authorize it to enter into and perform
this Agreement have been properly taken;
(c) No Breach. That it will not breach any other agreement or
---------
arrangement by entering into or performing this Agreement; and
(d) Due Execution and Delivery. That this Agreement has been
--------------------------
duly executed and delivered by it and is valid and binding upon it and
enforceable against it in accordance with its terms; provided, however, that no
representation or warranty is made as to the remedy of specific performance or
other equitable remedies for the enforcement of this Agreement or any other
agreement contemplated hereby, and provided further that this representation is
limited by applicable bankruptcy, insolvency, moratorium, and other similar laws
affecting generally the rights and remedies of creditors and secured parties.
Section 17. Notices. Any notice, election, report or other
-------
correspondence (collectively, "Notices") required or permitted hereunder shall
be in writing and (i) delivered personally to an officer of the party to whom
directed; (ii) sent by registered or certified United States mail, postage
prepaid, return receipt requested; (iii) sent by reputable overnight courier; or
(iv) sent by facsimile transmission with confirmation of receipt. All such
Notices shall be addressed to the party to whom directed as follows:
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SMC: Stillwater Mining Company
717 17th Street, Suite 1480
Denver, Colorado 80202
Attn: Vice President of Metals Marketing
with a copy to: Chief Financial Officer
Facsimile: (303) 978-2590
MC: Mitsubishi Corporation
6-3, Marunouchi 2-Chome, Chiyoda-Ku
Tokyo 100-8088 JAPAN
Attn: Mr. Hirokatsu Shiraki
Facsimile: 81-3-3210-3650
with a copy to: Hoyu Nomi
Facsimile: 212-605-1936
Either party may, from time to time, change its address for future Notices
hereunder by Notice in accordance with this Section 17. All Notices shall be
complete and deemed to have been given or made when mailed or sent by overnight
courier, or upon personal delivery when delivered personally or when receipt is
confirmed when sent by facsimile transmission.
Section 18. Publicity. Neither SMC nor MC will issue or approve an
---------
advertisement, promotional material, news release or other form of publicity
concerning this Agreement or the transactions contemplated herein without the
prior approval of the other party as to the contents of such advertisement,
promotional material, news release or publicity and the timing of its release,
which approval cannot be unreasonably withheld.
Section 19. Confidentiality. The terms of the Confidentiality Agreement
---------------
shall continue in full force and effect.
Section 20. Consumption by MMC Group Companies. The parties acknowledge
----------------------------------
that MC will purchase Metal for purposes of reselling such Metal to the MMC
Group Companies, for consumption by the MMC Group Companies in the manufacture
of automobiles worldwide.
Section 21. Entire Agreement. This Agreement and the Confidentiality
----------------
Agreement represent the complete agreement between the parties hereto and
supersede all prior or contemporaneous oral or written agreements of the parties
to the extent they relate in any way to the subject matter hereof or thereof.
Section 22. Relationship of the Parties. Nothing contained in this
---------------------------
Agreement shall be deemed to constitute either party the partner of the other,
nor, except as otherwise herein expressly provided, to constitute either party
the agent or legal representative of the other, nor to create any fiduciary
relationship between them. It is not the intention of the parties to create,
nor shall this Agreement be construed to create, any mining, commercial or other
partnership. Neither party shall have any authority to act for or to assume any
obligation or responsibility on behalf of the other
10
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party, except as otherwise expressly provided herein. The rights, duties,
obligations and liabilities of the parties shall be several and not joint or
collective. Each party shall be responsible only for its obligations as herein
set out and shall be liable only for its share of the costs and expenses as
provided herein. Each party shall indemnify, defend and hold harmless the other
party, its directors, officers, employees, agents and attorneys from and against
any and all losses, claims, damages and liabilities arising out of any act or
any assumption of liability by the indemnifying party, or any of its directors,
officers, employees, agents and attorneys done or undertaken, or apparently done
or undertaken, on behalf of the other party, except pursuant to the authority
expressly granted herein or as otherwise agreed in writing between the parties.
Section 23. No Implied Covenants. There are no implied covenants
--------------------
contained in this Agreement other than those of good faith and fair dealing.
Section 24. Binding Effect; No Assignment. This Agreement shall bind
-----------------------------
and inure to the benefit of and be enforceable by the parties hereto and may not
be assigned by either party without the consent of the other party, which
consent shall not be unreasonably withheld, except with respect to (a) any
assignment to provide security in connection with any financing, expressly
including, by way of example and not limitation, assignments of royalty,
overriding royalties or net profits interests or production payments, or (b) any
merger, consolidation or other reorganization or transfer by operation of law,
or by purchase of the business of or substantially all of the assets of one of
the parties, with respect to which such consent by the nonassigning party will
not be required.
Section 25. Amendment and Waiver. Except as otherwise provided herein,
--------------------
no modification, amendment or waiver of any provision of this Agreement shall be
effective against either party unless such modification, amendment or waiver is
approved in writing by the parties hereto. The failure by either party to
demand strict performance and compliance with any part of this Agreement during
the term of this Agreement shall not be deemed to be a waiver of the rights of
such party under this Agreement or by operation of law. Any waiver by either
party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach thereof.
Section 26. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
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Section 27. Governing Law. The parties to this Agreement are domiciled
-------------
in two different countries. In order to create greater certainty with respect
to their legal rights and obligations under this Agreement, the parties desire
to adopt as the substantive law of this Agreement the law of a state within the
United States which has highly developed commercial law and precedent and which
is not the domicile of either party. The parties hereby agree that this
Agreement shall be construed in accordance with the laws of the State of New
York as though this Agreement were performed in full in the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York.
Section 28. Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
Section 29. Attorneys' Fees. In the event of any controversy, claim, or
---------------
dispute between the parties hereto, arising out of or relating to this Agreement
or the breach thereof, the prevailing party shall be entitled to recover from
the losing party reasonable expenses, attorneys' fees, and costs.
Section 30. Further Documents. At the request of either party, the
-----------------
parties shall execute and deliver any further instruments, agreements, documents
or other papers reasonably requested by that party to effect the purposes of
this Agreement and the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
STILLWATER MINING COMPANY MITSUBISHI CORPORATION
By:/s/William E. Nettles By:
------------------------ --------------------------
Name: William E. Nettles Name:
Title:Chief Executive Officer ------------------------
Title:
-----------------------
By:/s/Robert C. Lapple MITSUBISHI CORPORATION
------------------------
Name: Robert C. Lapple
Title:Vice President Metals Marketing /s/T. Mochihara
-----------------------------
T. MOCHIHARA
General Manager
Metals Dept.
13
