Exhibit 10.31

 

CONFIDENTIAL TREATMENT REQUESTED

 

SUPPLY AGREEMENT

 

This SUPPLY AGREEMENT (“Agreement”) is made as of this 29th day of January 2010
and effective as of January 1, 2010 (“Effective Date”), by and between:

 

 

 

AXT, Inc.

 

 

4281 Technology Drive

 

 

Fremont, CA 94538, USA

 

 

Hereinafter referred to as “AXT”

 

 

 

and

 

Azur Space Solar Power GmbH

 

 

Theresienstrasse 2

 

 

74072 Heilbronn, Germany

 

 

Hereinafter referred to as “Azur Space”

 

Preamble

 

Azur Space has requirements for Germanium (Ge) substrates hereinafter referred
to as “substrates” to be used by Azur Space as raw materials to manufacture
Solar Cell Epi wafers, and AXT is willing, subject to the terms and conditions
of this Agreement, to supply Azur Space with such substrates.

 

Now, therefore, in consideration of the foregoing and the mutual premises
hereinafter contained, AXT and Azur Space hereby agree as follows:

 

1.                                       Definitions.

 

1.1                                             Blanket Purchase Order shall
mean a binding open purchase order identifying the Product to be purchased by
Product Identification Number, and indicating a global quantity of Products to
be delivered within the Initial Term as well as associated price, in accordance
with the Product Purchase Addendum.

 

1.2                                             Products shall mean substrates
to be purchased hereunder, as identified on the Product Purchase Addendum.

 

1.3                                             Product Purchase Addendum shall
mean the addendum to this Agreement attached as Appendix A, as may be modified
during the term hereof as provided in this Agreement, setting forth the Products
to be purchased hereunder together with their respective Specifications and
agreed upon purchase price.

 

1.4                                             Purchase Order shall mean an
official purchase order for Products made by Azur Space or an Ordering Entity
for any Products that are not within the Minimum Purchase.

 

1.5                                             Purchase Order Release shall
mean an official purchase order release made against the Blanket Purchase Order
issued by Azur Space to AXT; to be issued a minimum of 4 weeks lead-time.

 

1.6                                             Specification(s) shall mean the
current Product specifications set forth on the Purchase Addendum.  The
Specifications may only be changed by a writing signed by both parties.

 

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2.                                       Scope of Agreement.

 

2.1                                             Agreement.  The purpose of this
Agreement is to describe the terms and conditions under which the Products shall
be supplied by AXT to Azur Space. The terms of this Agreement represent the
entire agreement between the parties regarding its subject matter and shall
prevail over the terms of any prior or contemporaneous agreements (whether
written or oral) to the extent they may be inconsistent or in conflict with the
terms of this Agreement. The terms of the Agreement represent the entire
Agreement as of this date and any changes to the terms and conditions of this
Agreement have to be mutually agreed to.

 

2.2                                             Ordering Entities.  Azur Space
shall be responsible for any act or omission of Azur Space and any entity
controlled by, under common control with, or controlling Azur Space, or acting
in its stead and with compliance with all of the terms of this Agreement.  Azur
Space hereby guarantees payment for Products released pursuant to a Purchase
Order Release issued on behalf of Azur Space.

 

Blanket Purchase Order.  Azur Space agrees to issue a Blanket Purchase Order
(the “Blanket Purchase Order”) within thirty (30) days from the Effective Date
for 4” Wafer Products with either 140um or 175um thickness The Blanket Purchase
Order shall be a Blanket Take or Pay Purchase Order for a minimum of [***(***)]
4” wafers at US[$***] per wafer Delivered Duty Unpaid (the “Initial Price”),
with an option to purchase an additional [***(***)] 4” Wafer Products over years
3, 4, and 5 per the price adjustment clause and an option to purchase an
additional [***(***)] 4” Wafer Products in year 2010 and an additional
[***(***)] 4” Wafer Products in Year 2011 at the agreed price of [$***] per
Wafer Product. Any 4” Wafer Product demands over and above [***(***)] for Year
2010 and [***(***)] for Year 2011 shall be priced by comparing the price of Ge
as of September 30, 2009 of [$***] per kilo to the posted price of Ge Metal as
posted at www.Metal-Pages.com the month the order or orders are placed. The
adjustment price shall be per the formula set forth for years 3, 4, and 5 of
this contract. All purchase orders submitted by Azur Space after September 1,
2009 are deemed to be/have been part of the Blanket Purchase Order. The Initial
Price shall be the purchase price for each 4” wafer purchased during the first
two years of this Agreement, through December 31, 2011.  This Initial Price per
wafer shall be adjusted for wafers purchased during years 3, 4, and 5 based on
the percentage change in Ge metal prices as posted at www.Metal-Pages.com (or
other equivalent website to be mutually agreed).  The adjustment in the Initial
Price, and in each price determined annually thereafter, shall be agreed by
September 30 of each year.  The adjustment shall be made by comparing the price
of Ge as of September 30 for the current year with the price of Ge as of
November 30 for the prior year, multiplied by [***] %.  The price established by
the Initial Price is based on a Ge price of US[$***].  For example: if Ge metal
price increases to [$***] per kilogram as of September 30, 2011, difference =
[$***] - [$***]=[$***]or [***]%.  Accordingly, the Initial Price would be
adjusted beginning January 1, 2012 by [***]% (being [***]% x [***]% = [***]%;
US[$***] increased by [***]% = US[$***]). If Ge Metal Prices increases beyond
[$***] per kilogram, Azur Space is entitled to submit a termination of this
agreement

 

2.3                                 Purchase Order Releases.  Azur Space shall
issue Purchase Order Releases for Products against the Minimum Purchase within
the Initial Term (as defined in Section 3 below).  The Blanket Purchase Order,
all Purchase Orders and Purchase Order Releases are firm and non cancelable by
Azur Space.  Azur Space is responsible for the full price of Products as ordered
in the Blanket Purchase Order, any Purchase Order or Purchase Order Release
submitted by or on behalf of Azur Space.  In the event AXT fails to deliver the
Minimum Purchase per the forecast submitted by Azur Space, all competitor wafers
purchased by Azur Space to fulfill the shortfall arising as a result of AXT’s
default of the delivery date shall be included in and counted as part of the
Minimum Purchase quantity.  Azur Space agrees to be bound under this Agreement
to purchase the annual Minimum Purchase Take or Pay quantities per the schedule
below such that the total purchase over the 2 years by Azur Space is a minimum
of [***(***)] 4” Ge wafers with a commitment from AXT to provide the estimated
requirements for years 3, 4 and 5:

 

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Periods

 

Minimum Quantity

 

 

 

 

 

January 1, 2010 to December 31, 2010

 

[***(***)]

 

January 1, 2011 to December 31, 2011

 

[***(***)]

 

 

 

 

 

 

 

Estimated Quantity

 

 

 

 

 

January 1, 2012 to December 31, 2012

 

[***(***)]

 

January 1, 2013 to December 31, 2013

 

[***(***)]

 

January 1, 2014 to December 31, 2014

 

[***(***)]

 

 

 

[***(***)]

 

 

During the Blanket Take or Pay Purchase Order for a minimum of [***(***)] 4”
Wafer Products, if there is non-delivery due to delays in production at AXT,
there will be a contractual penalty of 0.2% of the order value (net) per
calendar day that may be charged, limited to 10% of the order value. This
penalty does not apply should the delay result from a change in specification
and/or requirements determined by Azur Space.

 

The time of delivery specified in the order shall be binding. AXT agrees to
notify Azur Space immediately in writing should circumstances occur or become
obvious so that AXT is unable to keep the agreed upon time for delivery

 

No Additional Terms.  The acceptance of the Blanket Purchase Order, any Purchase
Order Release and/or a Purchase Order from Azur Space, whether electronically or
in hard copy form, is expressly conditioned upon Azur Space assent hereunder to
be bound by the terms and conditions in this Agreement, in lieu of the terms
contained in any such Azur Space Blanket Purchase Order, Purchase Order Release
and/or a Purchase Order.  The parties hereby reject all provisions contained in
communications from either party that conflict with or are inconsistent with the
terms contained herein.  The parties’ failure to object to any of the provisions
contained in either party’s documentation shall not be deemed a waiver of the
terms of this Agreement under any circumstances.

 

2.4                                 No Waiver. The parties failure to object to
any of the provisions contained in either party’s documentation shall not be
deemed a waiver of the terms of this agreement under any circumstances.

 

3.                                       Term of Agreement.  This Agreement
shall enter into effect on the Effective Date and shall remain in effect until
December 31, 2014 (“Initial Term”), unless terminated earlier as provided in
Section 12.

 

4.                                       Price and Payment Terms.

 

4.1                                             Purchase Price.  The purchase
price(s) for the Products shall be in United States Dollars as set forth in
Section 2.3 and the Product Purchase Addendum.

 

4.2                                             Payment Terms.  AXT will issue
invoices on the date which Azur Space purchases the corresponding Products and
Azur Space will pay the invoice NET ninety (90) days from the date of delivery

 

5.                                       Products.

 

5.1                                             See products listed on the
Product Purchase Addendum.  The Product Purchase Addendum may be modified as
mutually agreed by the parties in writing.

 

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5.1.1                       Forecast of Products.

 

5.1.1.1                                  Forecasts by Azur Space.  Commencing on
the Effective Date of this Agreement and on a monthly basis or as required
thereafter, Azur Space shall prepare and issue to AXT rolling ninety (90) day
forecasts of its requirements for Products using the then current agreed upon
format (each, a “Forecast

 

5.1.1.2                                  Inventory. AXT, Inc shall maintain a
minimum inventory of [***(***)] 4” Ge wafers of each specification being
utilized and forecasted by Azur Space at its manufacturing location in China or
at some other designated site of its choosing

 

5.1.2                       Delivery of Products.  Products will be delivered
from AXT to Azur Space in Heilbronn, Germany or any other place that Azur Space
designates and Azur Space shall inspect the integrity of packaging, the identity
of Products by comparison with the delivery papers and notify AXT of any
discrepancies within the next thirty (30) business days. The initial inspection
of the integrity of the packaging will be limited to the outside packaging. If
upon later inspection of the packaging on the inside, there is found to be
damage, Azur Space shall notify AXT of any damage within thirty (30) business
days of such later inspection of the packaging on the inside.

 

5.1.3                       Acceptance.   If a Product does not conform to its
Specifications (a “Defect”), Azur Space shall notify AXT of the nature and
specifics of the nonconformity.

 

AXT shall work to correct nonconformities discovered during Azur Space
performance of Acceptance Tests and resubmit to Azur Space for re-testing within
a reasonable period of time.  In the event that Azur Space does not notify AXT
of any Defects during the Acceptance Period, such Product shall be deemed
accepted subject to Section 10 hereof.

 

5.1.4                       AXT’s Responsibilities.

 

5.1.4.1                                  Accuracy.  AXT is responsible for
ensuring accuracy of all shipment documentation.

 

6.                                       Products Packaging.  The Products will
be packaged, labelled and identified by AXT in accordance with the
Specifications agreed between Azur Space and AXT, as prevailing at the date of
shipment from AXT’s facility.

 

7.                                       Country of Origin.

 

7.1                                             Country of Origin.  AXT hereby
agrees that upon written request from Azur Space, AXT will identify the country
of origin of the Products and provide written notification of such country of
origin for Azur Space.

 

8.                                       Force Majeure.  Except for the payment
of fees, neither party shall be held responsible for any delay or failure in
performance of any part of this Agreement to the extent such delay or failure is
caused by an act of God or other similar causes beyond its control and without
the fault or negligence of the delayed or non-performing party (each a “Force
Majeure Event”).  In the event AXT fails to deliver 4” wafers per their
schedule, and Azur Space has no choice other than to utilize 4” wafers from
another vendor, all such 4” wafers utilized by Azur Space from other vendors
shall then be included in the total  [***(***)] take or pay contract. Delays by
vendors in manufacture or delivery of materials not caused by a Force Majeure
Event, or shortages of labor or materials resulting from general market
conditions (including price increases), shall not constitute a Force Majeure
Event.  A party who is delayed or fails to

 

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perform as a result of a Force Majeure Event (“Affected Party”) shall use its
best efforts to mitigate and minimize any resulting delay in the performance of
the suspended obligation.  The Affected Party shall provide written notice to
the other party within forty eight (48) hours of learning of a Force Majeure
Event stating the nature and cause of the event, the anticipated length of the
delay, the measures proposed or taken by the Affected Party to minimize the
delay, and the timetable for implementation of such measures.  If a Force
Majeure Event occurs, neither party may (i) suspend this Agreement in whole or
in part for the duration of the delay; (ii) conduct business elsewhere and
deduct such business from any committed quantities; and/or (iii) extend the term
of this Agreement up to the length of time of the delay.  If AXT is the Affected
Party, Azur Space may terminate this Agreement or any part hereof without
penalty if the delay or failure in performance continues beyond twenty (20)
days. Likewise, if Azur Space is the Affected Party, AXT may terminate this
Agreement or any part hereof without penalty if the delay of failure in
performance continues beyond twenty (20) days.

 

9.                                       Quality Assurance.  AXT shall maintain
a “documented quality system,” such as an ISO 9001:2000, or equivalent, at each
AXT plant supplying Product or services to Azur Space, and shall make such
documented quality system available for Azur Space’s review.  AXT’s documented
quality system shall include, but is not limited to, programs for monitoring
AXT’s manufacturing and, improving AXT’s material and procurement process, and
implementing corrective and preventative actions.  Upon Azur Space’s written
request, AXT shall provide data verifying AXT’s compliance with such quality
system, including but not limited to process capability data and SPC charts for
key product parameters as agreed between Azur Space and AXT and identified in
the Specifications. Azur Space will have the right to audit AXT during this
agreement with thirty (30) days written notice.

 

10.                                 Changes.

 

10.1                                       AXT Changes.  No major Product or
process changes, design changes, or other alterations affecting the performance,
the mechanical form or fit, the compatibility or characteristics, or the life
reliability of Product that will impact or potentially impact the intrinsic
characteristics of the wafer being fabricated or of the resulting customer
device (collectively “Major Changes”) shall be made or incorporated in the
Product without the prior written approval of Azur Space.  AXT shall provide
written notice of any proposed Major Change at least ninety (90) days prior to
the implementation of the proposed Major Change. AXT shall provide to Azur Space
sufficient information describing the proposed Major Change in detail so as to
allow Azur Space to properly evaluate the impact of the proposed Major Change.
The following are examples of changes that are considered to be Major Changes,
and require Azur Space’s prior written approval:

 

(i)                                     changes in manufacturing processes
including locations and subcontractors;

 

(ii)                                  changes in final product control
specifications and testing methods;

 

(iii)                               changes in raw materials or raw materials
source for direct key materials;

 

(iv)                              changes in Product containers or packaging;

 

(v)                                 changes in final inspection procedures or
sample plans; and

 

(vi)                              changes to raw materials or raw materials
source, including each of the types of changes listed above. The parties will
update this list from time to time.

 

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11.                                 Warranty, Remedies, Return and Disclaimers.

 

11.1                                       Warranty.  AXT represents and
warrants that all Products for a period of six (6) months from the date of
delivery: (i) meet current industry standards, i.e., ISO 9001: 2000, with
respect to materials and workmanship and (ii)  conform to the Specifications. 
The foregoing warranty is subject to Azur Space storing the Products in
accordance with any AXT recommendations and the Specifications and is
invalidated if Azur Space does not comply with such AXT recommendations and the
Specifications. In the event the product is not utilized within 6 months , Azur
Space has the option to return said product to AXT to be reclean and repackage
at no expense — all transportation charges are to be the responsibility of Azur
Space

 

11.2                                       Remedies for Breach of Warranty.  If
any Products do not meet the warranties specified herein, AXT may, at AXT’s
option;

 

(i)                                     replace or correct at no cost to Azur
Space any defective or nonconforming Products pursuant to the Product return
procedures set forth in Section 10.3 below,

 

(ii)                                  Allow Azur Space to return any
nonconforming Products to AXT at AXT’s expense and recover from AXT the full
sales price and any packaging or shipping costs thereof.

 

11.3                                       Return of Products.  In the event
that Azur Space returns nonconforming Products to AXT pursuant to Sections
10.2(i) or (ii) above, Azur Space will notify AXT of the nonconformity and of
Azur Space’s intent to return the nonconforming Products.  Upon receipt of Azur
Space’s notification to AXT of the nonconformity, AXT will provide a Return
Material Authorization number (RMA#) within 48 hours after receipt of
notification unless otherwise agreed in writing by both parties.  AXT shall
provide all the assistance and authorization required to return the
nonconforming Products to AXT within 72 hours of the original notification, and
in the case of a return under Section 10.2(i) above, shall promptly deliver
replacement Products.  The nonconforming Products shall be returned to AXT at
AXT’s expense, AXT shall promptly investigate to determine the cause of the
nonconformity and shall notify Azur Space of its findings.

 

11.4                                       No Waiver.  No inspection or
acceptance, approval or acquiescence by Azur Space with respect to Products
shall relieve AXT from any portion of its warranty obligation nor shall waiver
by Azur Space of any Specification requirement for one or more items constitute
a waiver of such requirements for remaining items unless expressly agreed by plc
in writing.

 

11.5                                       Disclaimer of Warranty.  EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 10 ABOVE, AXT DOES NOT MAKE ANY OTHER WARRANTIES,
WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE.  ALL IMPLIED WARRANTIES AS TO
SATISFACTORY QUALITY, PERFORMANCE, MERCHANTABILITY, FITNESS FOR PARTICULAR
PURPOSE OR NON-INFRINGEMENT ARE EXPRESSLY DISCLAIMED.  AXT DOES NOT WARRANT THAT
THE PRODUCTS ARE ERROR-FREE OR THAT THEIR USE WILL BE UNINTERRUPTED.

 

12.                                 Limitation of Liability.

 

12.1                                       Disclaimer of Consequential Damages. 
IN NO EVENT SHALL AXT BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT,
EXEMPLARY, PUNITIVE, SPECIAL OR OTHER DAMAGES WHATSOEVER RESULTING FROM AXT’S
PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT OR THE FURNISHING,
PERFORMANCE OR USE OF ANY GOODS SOLD PURSUANT HERETO, WHETHER DUE TO BREACH OF
CONTRACT, BREACH OF WARRANTY, STRICT LIABILITY, PRODUCT LIABILITY, THE
NEGLIGENCE OF AXT OR OTHERWISE.

 

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12.2                                       Limitation on Liability.  IN NO EVENT
SHALL AXT’S LIABILITY EXCEED DOUBLE THE U.S. DOLLAR AMOUNT PAID BY AZUR SPACE
FOR THE COST OF THE PRODUCTS PAID BY AZUR SPACE UNDER THIS AGREEMENT.  THE
DAMAGE LIMITATIONS PROVIDED IN THIS AGREEMENT AND THE REMEDIES STATED HEREIN
SHALL BE EXCLUSIVE AND SHALL BE A PARTY’S SOLE REMEDY.  THIS LIMITATION ON
LIABILITY SHALL SURVIVE FAILURE OF ANY ESSENTIAL PURPOSE. IN THE EVENT OF A
DEFECT IDENTIFIED AS HAZE AZUR SPACE IS TO RETURN THE  WAFERS WITHOUT THEIR
PROPIETARY STRUCTURE BACK TO AXT, INC AT AXT, INC EXPENSE

 

12.3                                       Limitations on Limitations. 11.1 and
11.2 DO NOT APPLY WHERE AZUR SPACE IS HELD LIABLE BY ITS CUSTOMER(S) FOR DAMAGES
OUT OF AND/OR IN CONNECTION WITH PRODUCTS.

 

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13.                                 Termination.

 

13.1                                       In the event that either party
commits any breach of any provision of this Agreement and does not rectify such
default within a period of thirty (30) days after having received written
notice, specifying the default, the other party may terminate this Agreement
immediately; provided, however, that the sole remedy for nonconforming Products
shall be as set forth in Section 10 above. Further, should either party (i) be
adjudged or become insolvent; (ii) have any proceedings instituted by or against
it in bankruptcy, under insolvency laws, or for the party’s reorganization,
receivership, dissolution, or liquidation and such proceeding is not turned down
within 2 months; (iii) make an assignment for the benefit of creditors or any
general arrangement with creditors; or (iv) discontinue business or adopt a
resolution calling for same, the other party may terminate this Agreement for
cause upon 24-hours written notice.  Notwithstanding the above, either party
shall have the right to seek any other remedy that may be available at law or in
equity.

 

14.                                 Confidentiality.

 

14.1                                       Confidential Information.  Each party
acknowledges that, in the course of performing its duties under this Agreement,
it may receive information relating to the other party, which the receiving
party knows, or has reason to know, is confidential or proprietary information
of the other party or is identified as confidential and/or proprietary nature
(“Confidential Information”).  The receiving party shall at all times both
during the term of this Agreement and for a period of five (5) years thereafter,
keep and hold such Confidential Information in confidence, and shall not use
such Confidential Information for any purpose, other than as may be reasonably
necessary for the performance of its duties pursuant to this Agreement.  The
receiving party shall not disclose any Confidential Information to any person or
entity, other than to the receiving party’s employees or consultants as may be
reasonably necessary for purposes of performing its duties hereunder; provided
that such employees and consultants have first entered into agreements at least
as protective of the Confidential Information as the terms and conditions of
this Section 13.

 

14.2                                       Exceptions.  The parties’ obligation
under Section 13.1 with respect to any portion of Confidential Information,
shall not apply to any such portion that the receiving party can document: 
(a) was lawfully in the public domain at or subsequent to the time such portion
was communicated to the receiving party by the disclosing party through no fault
of the receiving party; (b) was rightfully in the receiving party’s possession
free of any obligation of confidence at or subsequent to the time such portion
was communicated to the receiving party by the disclosing party; or (c) was
developed by employees or agents of the receiving party independently of and
without reference to any information communicated to the receiving party by the
disclosing party.  A disclosure of any portion of Confidential Information,
either: (a) in response to a valid order by a court or other governmental body;
or (b) otherwise as required by law, shall not be considered to be a breach of
this Agreement or a waiver of confidentiality for other purposes; provided,
however, that the party being required to disclose the information shall provide
prompt prior written notice thereof to the other party to enable the other party
to seek a protective order or otherwise prevent such disclosure. Non disclosure
shall remain in force for five (5) years for the duration of this Agreement, and
for a further period of three (3) years after the end of the Agreement.

 

14.3                                       Advertising.  Each party agrees that
it shall not publish or cause to be disseminated through any press release,
public statement, or marketing or selling effort any information that relates to
the other party or this Agreement without the prior written approval of the
other party.

 

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15.                                 General Terms and Conditions.

 

15.1                                       Modifications, Appendices, Addenda.

 

15.1.1                  No modification of this Agreement shall be valid unless
in writing, signed by an authorized representative of each party.

 

15.1.2                  Each Addendum hereto is an integral part of this
Agreement. In the event of any conflict between the contents of this Agreement
and any Addendum the regulations of this Agreement shall prevail.

 

15.2                                       Severability.  If any provision of
this Agreement is declared void, invalid, or illegal by any governmental,
judicial or arbitral authority, the validity or legality of any of the other
provisions and of the entire Agreement shall not be affected thereby and the
parties shall replace such provision with one as near in substance as possible
to the original provision.

 

15.3                                       Notices.  All notices relating to
this Agreement shall be in writing and shall be deemed given (i) in the case of
mail, on the date deposited in the mail, postage prepaid, either registered or
certified, with return receipt requested (or its equivalent); (ii) in the case
of personal delivery to an authorized representative or officer of the party, or
in the case of express courier service or overnight delivery service of national
standing, on the date of delivery or attempted delivery (if receipt is refused);
or (iii) in the case of facsimile, 24 hours after it has been sent provided that
a duplicate copy of such notice is also promptly sent pursuant to (i) or
(ii) above.  Notices shall be addressed to the parties as set forth on the first
page hereof, but each party may change its address by written notice in
accordance with this section.

 

15.4                                       Compliance With Law.  In the
performance of this Agreement, each party shall at all times comply with all 
relevant governmental laws, statutes, ordinances, rules, regulations, orders,
and other requirements, including, without limitation, such governmental
requirements applicable to environmental protection, health, safety, wages,
hours, equal employment opportunity, nondiscrimination, working conditions,
import or export control, customs, and transportation.

 

14.5.                                    Waiver or Modification.  No provision
of this Agreement can be waived or amended in favor of either Party except by
written consent of the other Party, which consent shall specifically refer to
such provision and explicitly make such waiver or amendment.  No failure or
delay by either Party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or future exercise thereof or the exercise of any
other right, power or privilege hereunder.  In addition, no failure or delay by
either Party in exercising any right, power or privilege under or waiver of any
provision of any prior or other agreement between the Parties shall operate as a
waiver of any provision of this agreement.

 

16.                                 Applicable Law. Except for the right of
either party to apply to a court of competent jurisdiction for a temporary
restraining order, a preliminary injunction, or other equitable relief to
preserve the status quo or prevent irreparable harm pending the appointment of
one or more arbitrators, any dispute between Azur Space and AXT under this
Agreement involving its interpretation or the obligations of a party hereto,
shall be determined by binding arbitration conducted in English.  Arbitration
shall be held in accordance with the Commercial Arbitration Rules of the
American Arbitration Association.  Arbitration may be conducted by one (1)
attorney arbitrator by mutual agreement or by three (3) arbitrators if the
parties are unable to agree on a single arbitrator within thirty (30) days of
first demand for arbitration.  In the case of a three-arbitrator panel being
necessary, the chairman and one other arbitrator shall be attorneys at law, and
the third arbitrator shall have a background or training in either

 

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computer law, computer science, computer engineering, or marketing of computer
industry products.  The arbitrators shall have the authority to permit
discovery, to the extent deemed appropriate by the arbitrators, upon request of
a party.  The arbitrators shall have no power or authority to add to or detract
from the agreements of the parties.  The costs of the arbitration shall be borne
equally pending the arbitrator’s award.  The arbitrator shall have the authority
to grant any temporary, preliminary, or permanent injunctive or other equitable
relief in a form substantially similar to that would otherwise be granted by a
court.  The arbitrators shall have no authority to award punitive or
consequential damages.  The resulting arbitration award may be enforced by all
lawful remedies, including without limitation injunctive or other equitable
relief in any court of competent jurisdiction.  The trial courts of the State of
California are courts of competent jurisdiction.  The parties agree to submit to
the jurisdiction of those courts, as applicable, for all purposes concerning any
arbitration. This Agreement shall be governed by the laws of Germany under
exclusion of the CISG.

 

17.                                 Binding Effect. Neither party shall assign
this Agreement without the prior written consent of the other party.  Subject to
the foregoing, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

 

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Date:  January 29, 2010

 

 

AXT, Inc.

 

Azur Space Solar Power GmbH

 

 

 

 

 

 

 

By:

/s/ Robert G. Ochrym

 

By:

/s/ Patrick Kilper

 

 

 

 

 

 

 

Authorized Signature

 

Authorized Signature

 

 

 

 

 

 

 

 

 

Robert G. Ochrym

 

Patrick Kilper

 

 

 

 

 

Print Name

 

Print Name

 

 

 

 

 

 

 

 

 

VP Business Development

 

Manager—Supply Management

 

 

 

 

 

Print Title

 

Print Title

 

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Appendix A:

 

PRODUCT PURCHASE ADDENDUM

 

Product

 

Price

 

Specifications

 

 

 

 

 

4” Ge Wafer

 

·                 For Products within the Minimum Purchase- [$***] Delivered
Duty Unpaid per Product first and second years with Ge Metal at a per kilogram
price of [$***]

·                 Year 3 price to be adjusted according to the % change in price
of Ge Metal as posted the last quarter of year 2 in the Metal Pages multiplied
by [***]%

·                 Year 4 price to be adjusted according to the % change in price
of Ge Metal as posted the last quarter of year 3 in the Metal Pages multiplied
by [***]%

·                 Year 5 price to be adjusted according to the % change in price
of Ge Metal as posted the last quarter of  year 4 in the Metal Pages multiplied
by [***]%

 

Azur specifications —.

HNR0080140-00-01 E

HNR00800126-00-02 E

 

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