Exhibit 10.4
PALLADIUM AND RHODIUM SALES AGREEMENT
     This PALLADIUM AND RHODIUM SALES AGREEMENT (this “Agreement”) is made and
entered into this 8th day of August, 2007, by and between STILLWATER MINING
COMPANY, a Delaware corporation, whose address is 1321 Discovery Drive,
Billings, Montana 59102 (“SMC”), and GENERAL MOTORS CORPORATION, a Delaware
corporation, with a place of business at 777 Joslyn Ave., Pontiac, Michigan
48340-2925 (“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 sponge of
.9995 minimum purity and rhodium sponge of .9990 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 rhodium 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 have the meaning set forth in this Section 1.
          Actual Mined Metal means Palladium mined from SMC’s East Boulder Mine
and/or Stillwater Mine.
          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 GM’s pool account at Heraeus Metals Processing,
USA and/or Johnson Matthey, USA, as designated by GM on or before the last
Business Day of the Pricing Month. If GM fails to designate which location,
delivery will be made to the same Delivery Point(s) as the previous delivery.
          Old Agreement means the Palladium and Platinum Sales Agreement dated
as of August 17, 1998, as amended by the First Amendment Agreement to Palladium
and Platinum
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

 

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Sales Agreement dated as of November 20, 2000, and by the Second Amendment
Agreement to Palladium and Platinum Sales Agreement dated as of February 20,
2001, and the Third Amendment to Palladium and Platinum Sales Agreement dated as
of August 8, 2007, and as the same may be amended from time to time.
          Delivery Start Date means *** for Rhodium deliveries and the month
following the date of the last delivery of Palladium pursuant to the Old
Agreement.
          JM Reference Price Average means the monthly average of the daily
Johnson Matthey North America reference price for Rhodium, as published by
Johnson Matthey Inc. Precious Metals Marketing, USA, at approximately 9:30 am
Eastern Time.
          London PM Fix Average means the monthly average of the daily London
Platinum & Palladium Market (LPPM) PM Fix for Palladium, as published on LPPM
website www.lppm.org.uk.
          Metal means the palladium and/or rhodium 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.
          Palladium Option shall have the meaning set forth in Section 4(a).
          Pricing Month means the month during which pricing is determined
pursuant to Section 5 of this Agreement, and (i) with respect to Palladium, is
the month prior to the month of delivery (e.g. *** for delivery in ***), and
(ii) with respect to Rhodium, is the month that is three months prior to the
month of delivery (e.g. *** for delivery in ***).
          Rhodium means refined rhodium in sponge form with .9990 minimum
purity.
          Rhodium Option shall have the meaning set forth in Section 4(b).
     Section 2. Term. This Agreement shall have an initial term from *** through
and including ***. This Agreement is subject to earlier termination pursuant to
Section 9 and extension pursuant to Section 15.
     Section 3. Delivery. Beginning on the Delivery Start Date, SMC will sell
and deliver Metal FOB Delivery Point, and GM will purchase the quantities of
Metal set forth in Section 4, which shall be delivered no later than the *** 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.
     Section 4. Quantity and Source.
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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          (a) Palladium. ***.
          (b) Rhodium. ***.
     Section 5. Pricing. ***.
          (a) Palladium. ***.
          (b) Rhodium. ***.
     Section 6. Payment Terms. On the first Business Day following each Pricing
Month (i.e., the first Business Day of the month of delivery), SMC will inform
GM in writing via facsimile as to the formula-based pricing computations set
forth in Section 5 above for the actual quantities of Metal to be delivered by
SMC pursuant to this Agreement during the following month. 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 third Business Day following the confirmation of receipt. All payments
will be made in U.S. Dollars. If GM does not agree with SMC’s pricing
computations, GM shall timely notify SMC of the 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 7. Suspension of Delivery for Failure to Pay. Ten business days
after receipt by GM of written notice from SMC to GM of GM’s failure to pay
pursuant to the terms of Sections 6 and 7 (Why the reference to section 7)
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 8. 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 9. Warranty. SMC warrants that the Palladium supplied hereunder
shall have a minimum purity of .9995; that the Rhodium supplied hereunder shall
have a minimum purity of .9990; and that SMC will convey good title to the
Metal, free and clear of all liens and encumbrances payable by SMC. 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
for Palladium and .9990 for Rhodium.
          OTHER THAN THOSE EXPRESSLY STATED IN THIS AGREEMENT, THERE ARE NO
REPRESENTATIONS, GUARANTEES OR WARRANTIES, EXPRESSED OR IMPLIED, OF ANY KIND.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SMC EXPRESSLY DISCLAIMS ANY
WARRANTY OF MERCHANTABILITY, FITNESS, OR SUITABILITY FOR A PARTICULAR PURPOSE OR
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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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 10. 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 business 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 piles 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 14, this Agreement will terminate on
*** (except that the provisions of Sections 6, 9, 12, 13, 16 and 19 of this
Agreement will survive such termination).
     Section 11. 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
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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authority in any jurisdiction in connection with the transactions contemplated
herein. 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 12. 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 9 or this Section 12, 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 13. 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 14. 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. Stillwater represents that neither it nor any of
its subcontractors will utilize child, slave, prisoner or any other form of
forced or involuntary labor in the supply of Metals under this Agreement, or
engage in abusive employment or corrupt business practices. At GM’s request
Stillwater will certify in writing its compliance with the foregoing.
     Section 15. 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. 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.
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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          (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
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 15 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 16. 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 16. 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 17. Representations and Warranties. Each of the parties represents
and warrants as follows:
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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          (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 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 18. 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
1321 Discovery Drive
Billings, Montana 59102
Attn: Metals Marketing
Facsimile: (406) 373-8723
with a copy to: General Counsel
Facsimile: (406) 373-8723
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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GM:
General Motors Corporation
777 Joslyn Avenue
Mail Code 483-720-350
Pontiac, Michigan 48340-2925
Attn: PGM GM Global Commodity Manager
Facsimile: (248) 857-0068
with a copy to: Director, Nonferrous Metals
Facsimile: (248) 857-0064
Either party may, from time to time, change its address for future Notices
hereunder by Notice in accordance with this Section 18. 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 19. 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 20. 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.
     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.
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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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 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 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 27. Construction. This Agreement has been fully negotiated between
the parties. In interpreting this Agreement, there shall be no presumption that
either party drafted the language but rather the parties shall be deemed to have
shared equally in the drafting of the provisions of this Agreement.
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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     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.
[SIGNATURE PAGE FOLLOWS.]
 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                  STILLWATER MINING COMPANY   GENERAL MOTORS CORPORATION    
 
               
By:
  /s/ Francis R. McAllister
 
  By:   /s/ Enrique J. Driessen
 
   
Name:
  Francis R. McAllister   Name:   Enrique J. Driessen    
Title:
  Chairman and CEO   Title:   Dir. Nonferrous Metals    
 
               
By:
  /s/ John R. Stark                 By:        
 
               
Name:
  John R. Stark   Name:        
Title:
  Vice-President   Title:        

 
*   Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions are marked with a “***” in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.

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