**EXHIBIT 10.25**

 

CONFIDENTIALTREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILEDHEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST.  OMISSIONS ARE DESIGNATED AS [****]. ACOMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIESAND EXCHANGE COMMISSION.

 

**MOLYBDENUM SUPPLY AGREEMENT**

 

THIS MOLYBDENUM SUPPLY AGREEMENT (this “***Agreement***”) is madeand entered into as of the 14th day of May, 2008 by and between General Moly, Inc.,a Delaware corporation (“***GeneralMoly***”), and SeAH Besteel Corporation, a Korean corporation (“***Buyer***”). Each ofGeneral Moly and Buyer are individually referred to herein as a “***Party***” and togetheras the “***Parties***.”

 

**RECITALS**

 

A.            Eureka Moly, LLC (“***Eureka Moly***”) leasesand intends to operate a mine located in Eureka County, Nevada (the “***Mount Hope Mine***”)from which it intends to produce Technical Grade Molybdenum Oxide (“***TMO***”), in the form ofpowder and carbon-free briquettes, and Ferro-Molybdenum (“***Ferro Moly***”) thatmeet or exceed the standards on Exhibit A (collectively, the “***Products***”);

 

B.            As of the date hereof, (i) GeneralMoly, through its wholly-owned subsidiary Nevada Moly, LLC, owns an 80% equityinterest in Eureka Moly and (ii) POS-Minerals Corporation, a Delawarecorporation and affiliate of POSCO Canada Ltd., owns a 20% equity interest inEureka Moly; and

 

C.            General Moly wants to sell to Buyer, andBuyer wants to purchase from General Moly, Products available from GeneralMoly’s share of production at the Mount Hope Mine upon the terms andsubject to the conditions set forth herein.

 

NOW, THEREFORE, for good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,the Parties, intending to be legally bound, agree as follows:

 

**AGREEMENT**

 

1.             **Definitions and Construction**.

 

1.1           Defined Terms.  In addition to the capitalized terms definedelsewhere in this Agreement, for purposes of this Agreement:

 

“***Affiliate***”of any Person means any other Person directly or indirectly, through one ormore intermediaries, controlling, controlled by or under common control withsuch Person.  A Person will be deemed tocontrol another Person if the controlling Person is the beneficial owner 

 

1

----

 

of greaterthan 50% of any class of voting securities (or other voting or equityinterests) of the controlled person or possesses, directly or indirectly, thepower to direct or cause the direction of the management or policies of thecontrolled Person, whether through ownership of capital stock, by contract orcredit arrangement, as trustee or executor, or otherwise.

 

“***Business Day***”means a day other than a Saturday or Sunday or a day on which banks arerequired or authorized to be closed in the state of New York.

 

“***CIF***”has the meaning given to it in the International Chamber of Commerce’s officialrules for the interpretation of trade terms, which rules came intoforce on January 1, 2000.

 

“***First Threshold***”per pound of molybdenum contained in the Products means

 

(a)  for 2008, [****], and

 

(b)  for 2009 and thereafter, an amount calculated as follows:

 

[****]x Threshold Adjustment

 

For clarification, (i) the FirstThreshold will only be adjusted [****], which will occur [****]of the informationn necessary to calculate the applicable [****]Percentage Increase becoming [****] available [****], (ii) to the extent theinformation necessary to calculate such adjustment is not available [****],the adjustment will be calculated when such information becomes available andapplied retroactively [****] and (iii) in no event shall the First Threshold beless than the Floor Price. All adjustments will be retroactive to the productsales [****].Appropriate retroactive adjustments will be reflected in the following month’sinvoice cycle and will be subject to the same payment terms as regular sales.

 

“***Floor Price***”per pound of molybdenum contained in the Products means:

 

(a) for 2008, [****],and

 

(b) for 2009 and thereafter:

 

[****]  x  (1 +[****]Percentage Increase)

 

For clarification, (i) the Floor Pricewill only be adjusted [****], which will occur [****] ofthe information necessary to calculate the applicable [****] Percentage Increase becoming [****]available [****], (ii) to the extent the information necessary tocalculate such adjustment is not available [****], the adjustment will becalculated when such information becomes available and applied retroactively [****],and (iii) the Floor Price will be calculated as set forth above regardlessof the Market Price or any other adjustments to the Product Price (as definedin Section 3). All adjustments will be retroactive to the productsales [****].Appropriate retroactive adjustments will be reflected in the following month’sinvoice cycle and will be subject to the same payment terms as regular sales.

 

“***Losses***”means any claims, losses, liabilities, damages, demands, fines, penalties,administrative and judicial proceedings and orders, judgments, remedial action,enforcement 

 

2

----

 

actions of anykind, and all reasonable and documented costs and expenses incurred inconnection therewith (including reasonable attorneys’ fees).

 

“***Market Price***”means the average of the Platt’s Metals Week published prices for TMO DealerOxide over (a) the period of the month of delivery or (b) the periodover the month prior to the month of delivery, as Buyer may determine annuallypursuant to Section 3.3.  Inthe event that the basis for the Market Price currently in general use ceasesto exist or ceases to be published, the Parties shall meet promptly with a viewto agreeing on a new pricing basis and the date for bringing such basis intoeffect.

 

“***Maximum Amount***”means [****] 4.4 million pounds of molybdenumcontained in the Products.

 

 “***Mine Plan***” means the “BankableFeasibility Study—Project Definition” dated August 29, 2007 relating tothe Mount Hope Mine, a copy of which has been provided to Buyer.

 

“***Minimum Amount***”means [****] 3.6 million pounds of molybdenumcontained in the Products.

 

“***Person***”means an individual, limited or general partnership, corporation, trust,limited liability company, unincorporated organization, association, jointventure or a government or agency or political subdivision or instrumentalitythereof.

 

“[****]***Percentage Increase***” means [****].

 

“***SecondThreshold***” per pound of molybdenum contained in the Productsmeans

 

(a)  for 2008, [****], and

 

(b)  for 2009 and thereafter: [****] x Threshold Adjustment

 

For clarification, (i) the SecondThreshold will only be adjusted [****], which will occur [****]of the information necessary to calculate the applicable [****]Percentage Increase becoming [****] available [****] (ii) to the extent theinformation necessary to calculate such adjustment is not available [****],the adjustment will be calculated when such information becomes available andapplied retroactively [****] and (iii) in no event shall the Second Threshold beless than the Floor Price.  Alladjustments will be retroactive to the product sales [****]. Appropriate retroactiveadjustments will be reflected in the following month’s invoice cycle and willbe subject to the same payment terms as regular sales.

 

“***Term***” means the term of this Agreement as setforth in Section 5.

 

“***Third******Threshold***”per pound of molybdenum contained in the Products means

 

(a)  for 2008, [****], and

 

3

----

 

(b)    for 2009 and thereafter:  [****] x Threshold Adjustment

 

For clarification, (i) the ThirdThreshold will only be adjusted [****], which will occur [****] ofthe information necessary to calculate the applicable [****] Percentage Increase becoming [****]available [****], (ii) to the extent the information necessary tocalculate such adjustment is not available [****] the adjustment will be calculatedwhen such information becomes available and applied retroactively [****] and(iii) in no event shall the Third Threshold be less than the Floor Price.All adjustments will be retroactive to the product sales [****].Appropriate retroactive adjustments will be reflected in the following month’sinvoice cycle and will be subject to the same payment terms as regular sales.

 

 “***Three****-**Month LIBOR***” means the rate fordeposits in U.S. Dollars for a period of three months that appears on Reuters page LIBOR01(or such other replacement page) as of 11:00 a.m. London time on the datean applicable invoice is due hereunder. If Three-Month LIBOR is not availablefrom such source, the Three-Month LIBOR will be based on quotations from fourmajor reference banks in the London interbank market for deposits in U.S.dollars for a period of three months.

 

“***Threshold Adjustment***” means an amountcalculated as follows (in no event shall any Threshold Adjustment be less than1):  1  +   ([****]Percentage Increase x [****])

 

1.2           Construction.

 

1.2.1        The words “include,” “includes,” and “including”will be deemed to be followed by “without limitation.”

 

1.2.2        Any reference to a natural person includes alegal entity and vice versa.

 

1.2.3        Any term importing the singular includes theplural and vice versa.

 

1.2.4        Any reference to a gender includes the othergenders.

 

1.2.5        The headings in this Agreement have beeninserted for convenience only and will not be taken into account in itsinterpretation.

 

2. ** Commencement Date and Supply PurchaseCommitments**

 

2.1 No Obligation Until Commencement Date.  No obligation to supply Product under thisAgreement will exist prior to the first month following two consecutive monthsduring which output at the Mount Hope Mine equals or exceeds 1.3 million poundsof molybdenum contained in the TMO produced (the “***Commencement Date***”).

 

2.2 Supply of Products After CommencementDate.  Upon the terms and subject tothe conditions set forth in this Agreement, General Moly agrees to supply tothe Buyer, and Buyer agrees to purchase from General Moly, to the extentProducts are available from General Moly’s

 

4

----

 

share of production at the Mount Hope Mine after satisfaction ofGeneral Moly’s existing contractual obligations relating to the supply ofProduct with ArcelorMittal Purchasing SAS (the “***Available Production***”), the amounts ofProducts as follows (each, an “***Annual Amount***”):

 

2.2.1        For the calendar year in which the CommencementDate occurs, the amount of Products specified by Buyer in a written notice toGeneral Moly delivered at least 30 days after the Commencement Date, whichamount may not be less than the Minimum Amount and not more than the MaximumAmount (which Minimum Amount and Maximum Amount shall be prorated for theportion of the calendar year remaining from the Commencement Date).  Pending Buyer’s delivery of such notice, andin the event that Buyer does not timely deliver such notice, the amount ofProducts for such year will equal the Maximum Amount.

 

2.2.2        For each calendar year following the calendaryear in which the Commencement Date occurs, the amount of Products specified byBuyer in a written notice to General Moly delivered at least 60 days prior tothe end of the previous calendar year, which amount may not be less than theMinimum Amount or exceed the Maximum Amount (which Minimum Amount and MaximumAmount shall be prorated for the portion of the calendar remaining under theterm of this Agreement, as applicable). If Buyer does not timely deliver such notice, the amount of Products forany such year will equal the Annual Amount for the previous year.

 

2.2.3        For clarification, allreferences to “pounds” in this Section 2.2 refer to pounds ofmolybdenum contained in the Products.

 

2.3           Monthly Quantities; Shortfalls.  Declared quantity of product shall be takenin roughly equal monthly quantities over the course of the particular calendaryear (or shorter period, as applicable). The Parties will reasonably cooperate with each other in connection withforecasting, ordering and delivery schedules and procedures.  In the event that General Moly does notdeliver the full installment amount of Products in any given month, Buyer isentitled to demand that 100% of any such shortfall (the “***Shortfall Amount***”) bedelivered in the following six month(s), provided that (a) there isAvailable Production to cover such Shortfall Amount, (b) no ShortfallAmount will be delivered if the aggregate amount of Products delivered in theportion of such year that has passed is equal to or exceeds the prorated AnnualAmount for such period and (c) any Products from the Mount Hope Mine thatany third party owns or controls will not be considered available to fulfillany Shortfall Amount.

 

2.4           Take-or-Pay.  Notwithstanding anything herein to thecontrary, Buyer agrees that in the event that Buyer fails to take delivery ofProducts made available by General Moly in the amounts and on the terms setforth in this Agreement, Buyer will still be obligated to pay General Moly withrespect to such Products as though Buyer had taken delivery pursuant to theterms of this Agreement.

 

2.5           Composition of Products.  All Product contemplated under this agreementshall conform to the specification listed in Section 2.6 and shall besupplied as TMO in powder form in bulk except as specifically agreed otherwiseby the Parties.  To the extent availablefrom any

 

5

----

 

Available Production, General Moly will make available to Buyer Productin other forms and packaging at mutually agreed discounts or premiums dependingon the Product form selected.

 

2.6           Specifications.  The specifications and technical requirementsof the Products to be delivered hereunder are set forth in Exhibit A(the “***Specifications***”).  Notwithstanding anything herein to thecontrary, Buyer will not be required hereunder to purchase any Productswhich do not comply with the Specifications. General Moly will, at its expense, supply a certificate confirming thateach shipment of Products complies with the Specifications.

 

2.7           Restrictionson Use; Right of First Repurchase. All Products supplied by General Moly to Buyer hereunder are intendedfor consumption by Buyer and its Affiliates in their operations.  Accordingly, Buyer agrees not to sell orotherwise transfer such Products to a third party without General Moly’sconsent (such consent not to be unreasonably withheld or delayed); provided,however, that if Buyer or Buyer’s Affiliates significantly reduce theiroperations due to any event (including an Event of Force Majeure) and, as aresult, Buyer determines it is necessary to sell all or a portion of suchProducts it has received pursuant to this Agreement (the “***Reoffered Products***”),Buyer will notify General Moly in writing. If General Moly notifies Buyer in writing within three days of deliveryof such notice that it desires to repurchase all or any portion of theReoffered Products, Buyer will sell such Reoffered Products to General Moly ata Product Price determined pursuant to Section 3.  If General Moly does not notify Buyer withinsuch three-day period of its desire to repurchase all of the ReofferedProducts, or if General Moly elects to purchase less than all of the ReofferedProducts, Buyer will use commercially reasonable efforts to sell any suchunpurchased portion of the Reoffered Products to a third party within 60 daysat the then-prevailing Market Price, which sale will not require furtherconsent of General Moly.

 

3.             **Pricingand Payment Terms**. The price payable by Buyer to General Molyfor Products supplied by General Moly to Buyer pursuant to this Agreement (the “***Product Price***”) willbe equal to the Base Product Price plus any mutually agreed premiums orminus any mutually agreed discounts for Product supplied pursuant to the termsof this Agreement that is other than TMO in bulk.

 

3.1           BaseProduct Price.  The base pricepayable by Buyer to General Moly for Products supplied by General Moly to Buyerpursuant to this Agreement (the “***Base Product Price***”) will be as follows:

 

3.1.1        Ifthe Market Price is less than or equal to the Floor Price, the Base ProductPrice will be equal to the Floor Price; and

 

3.1.2        If the Market Priceexceeds the Floor Price, the Base Product Price will be determined as follows:

 

(a)           If the Market Price isless than or equal to the First Threshold, the Base Product Price will becalculated as follows:

 

6

----

 

Floor Price

+  [(Market Price – Floor Price)  x  [****])]

 

(b)           If the Market Price is more than the FirstThreshold but less than the Second Threshold, the Base Product Price will becalculated as follows:

 

Floor Price

+  [(First Threshold – Floor Price)  x  [****]]

+  [(Market Price – First Threshold)  x  [****]]

 

(c)           If the Market Price exceeds the SecondThreshold, the Product Price will be calculated as follows:

 

Floor Price

+  [(First Threshold – Floor Price)  x  [****]]

+  [(Second Threshold – First Threshold)  x  [****]]

+  [(Market Price – Second Threshold)  x  [****]]

 

(d)           If the Market Price exceeds the ThirdThreshold, the Product Price will be calculated as follows:

 

Floor Price

+  [(First Threshold – Floor Price)  x  [****]]

+  [(Second Threshold – First Threshold)  x  [****]]

+  [(Third Threshold –Second Threshold)  x  [****]]

+  [(Market Price – Third Threshold)  x  [****]]

 

3.3           Determinationof Market Price.  No later than November 30of each year during the term of this Agreement, Buyer will give written noticeto General Moly of the product forms, types and packaging requested to besupplied hereunder in the following calendar year.  The Parties agree to cooperate in good faithto reach agreement to determine premiums and/or discounts for Product suppliedpursuant to the terms of this Agreement that is other than TMO in bulk.  To the extent the Parties cannot reach suchagreement by December 31 of the year in which such notice was delivered,the Products for the following calendar year shall be supplied as TMO in bulk.

 

**4.****             Deliveries andInvoices.**

 

4.1           Delivery Point.  Except as otherwise set forth herein, allProducts will be delivered CIF major Korean Port of discharge.

 

4.2           Invoices.  Upon each shipment of Products, General Molywill invoice Buyer for the corresponding Product Price.  The amount shown on such invoice will be dueand payable by wire transfer to an account identified by General Moly within 15days of the end of the month in which the Product is delivered, subject to anyAssay Adjustment as set forth in Section 4.3.  If Buyer fails to pay any invoice amount pursuantto this Agreement on or before the applicable 

 

7

----

 

due date, interest on the unpaid amount at a rate per annum equal toThree-Month LIBOR plus 1.5% each year will accrue from the applicable due dateuntil the full invoice amount is paid.

 

4.3           AssayingAdjustments.

 

4.3.1        Buyer has the right to appoint a neutralsampler (the “***Sampler***”),approved by General Moly (which approval will not be unreasonably withheld ordelayed), to take samples of the Products at the applicable deliverypoint.  In the event that Buyerdetermines that General Moly has delivered non-conforming Product which shouldresult in an adjustment to the Product Price (an “***Assay Adjustment***”), Buyer will notifyGeneral Moly in writing of such determination (along with its results ofanalysis of such Product) within 20 days of receipt of such shipment.  The Parties will appoint a mutually agreeablethird party to assist in the resolution of such matter (the “***Referee***”) within 30days of delivery of such notice.  If theParties fail to so appoint the Referee within such 30-day period, SGS Group (orsuch other mutually agreeable third party, in the event that SGS Group or itssuccessor ceases to exist) will appoint the Referee at any Party’s request.  The Referee will analyze the sample of suchProduct taken by the Sampler, whose determination will be final and bindingupon the Parties.

 

4.3.2        The costs and expenses related to theprocedures set forth in this Section 4.3 (including the costs of theSampler) will be borne by the Party whose results are furthest from the resultsof the Sampler.  In the event that theresults of the Sampler are exactly between those of General Moly and the Buyer,each of General Moly and the Buyer will bear 50% of any such costs andexpenses.  For the purpose of theforegoing, the “results” of General Moly will refer to the assay results setforth on the related invoice.

 

4.3.3        In the event that the final determinationresults in an obligation on a Party to pay additional amounts or to reimburseany sum, such payment or reimbursement will be settled by credit or debitnotes.

 

4.4           No Prejudice.  Payment of an invoice by Buyer does notconstitute acceptance of the Products covered by such invoice and is withoutprejudice to any and all claims Buyer may have against General Moly inconnection therewith.  Buyer willhave the right to accept any portion of any shipment of Productsnotwithstanding that it may reject the balance thereof.  Acceptance by Buyer of all or any portionof a shipment of Products will not constitute a waiver of any claim whichBuyer may have regarding the Products.

 

5.             **Term;Termination**.

 

5.1           Term. The initial term of this Agreement will commence on the date hereof andexpire on the last day of the sixtieth (60th) month following theCommencement Date unless sooner terminated in accordance with this Section 5or extended in accordance with Section 2.3.

 

5.2           Termination.  This Agreement may be terminated by:

 

8

----

 

(a)           either Party at any time in the event of amaterial breach of this Agreement by the other Party, provided a writtentermination notice identifying the material breach has been sent to thebreaching Party and the breach has not been cured within 60 days from thedate of said notice; provided that for clarification purposes any breach of Section 2.7will be considered to be a “material breach” of this Agreement;

 

(b)           either Party at any time, by written notice,in the event:

 

(i)            of insolvency of the other Party;

 

(ii)           of the filing of a voluntary petition inbankruptcy of the other Party;

 

(iii)          of the making of an assignment for thebenefit of creditors by the other Party, excluding assignments of accountsreceivable;

 

(iv)          of the inability of the other Party to payits debts as they come due;

 

(v)           the other Party has a receiver or othercustodian of any kind appointed to administer any substantial amount of theother Party’s property;

 

(vi)          of the filing of an involuntary petition inbankruptcy with respect to the other Party;

 

(vii)         any proceedings for the reorganization of theother Party, or for the readjustment of any of the other Party’s debts, underany laws, now or hereafter existing, for the relief of insolvent debtors, willbe commenced by or against the other Party; or

 

(viii)        of the discontinuation by the other Party ofits business; or

 

(c)           by Buyer, by written notice, in the eventthat after the Commencement Date, General Moly fails to meet the deliveryrequirements of Products set forth in Section 2 for a period ofthree consecutive months.

 

5.3           Effect of Termination.  Unless notified otherwise by Buyer, upon atermination of this Agreement, General Moly will fill all outstandingobligations to supply the Products in accordance with the terms of thisAgreement through the date of Termination. Buyer will accept and pay for all conforming Products delivered inaccordance herewith.  Termination will bewithout prejudice to the rights and obligations of the Parties which haveaccrued prior to the effective date of termination.  Sections 4 and 6-24 willsurvive the expiration or termination of this Agreement.

 

6.             **Indemnification**.

 

6.1           Procedure.  If Buyer claims that any of the Products failto conform with the

 

9

----

 

Specifications or fail to be in compliance with all applicable laws(excluding claims relating to Assay Adjustments which will be resolved inaccordance with Section 4.3), Buyer will notify General Molyof its claim (“***Claim***”),and provide General Moly with all relevant documentation of the Claim, no laterthan 30 days after the date of delivery of such Products to Buyer.  Upon receipt of a Claim, General Moly willhave the right to inspect such Products and all evidence of the Claim, andGeneral Moly and Buyer will attempt to reach an agreement as to whetherthe Claim is valid.

 

6.2           Remedies.  If it is determined by the Parties that theClaim is valid, General Moly will elect one of the following actions to remedythe failure, and will deliver notice thereof to Buyer 30 days prior to takingany such action:

 

(a)           delivering to Buyer conforming Products toreplace the nonconforming Products;

 

(b)           refunding to Buyer thepurchase price paid by Buyer with respect to the nonconforming Products inreturn provided that General Moly will have the option to take possession ofthe nonconforming Products; or

 

(c)           applying a credit to the next purchase to bemade by Buyer hereunder.

 

If, upon receipt of notice of the intent to take one of the actions above,Buyer instead desires General Moly to take another action listed above toremedy the failure, Buyer will deliver notice of such desire to GeneralMoly.  If upon delivery of such noticethe Parties do not agree on the action to be taken, such matter will beresolved pursuant to the arbitration procedures set forth in Section 21.  The removal and replacement of nonconformingProducts will be at General Moly’s sole expense (including all costs oftransportation, duties, taxes and insurance), and General Moly will reimburseBuyer for all costs (including all costs incurred with respect totransportation, duties, taxes and insurance) incurred by Buyer inconnection with the replacement of nonconforming Products.

 

If the Parties cannot agree on the validity of a Claim, such matterwill be considered a Dispute and will be resolved pursuant to the arbitrationprocedures set forth in Section 21.

 

6.3           Limitations.  The remedies set forth in Section 6.2will be Buyer’s sole remedies for any Claims. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EXCEPT AS PROVIDEDHEREIN, GENERAL MOLY EXPRESSLY DISCLAIMS, AND MAKES NO OTHER EXPRESS OR IMPLIEDWARRANTIES OF ANY TYPE, WHETHER OF MERCHANTABILITY, FITNESS FOR A PARTICULARPURPOSE OR USE OR OTHERWISE, WITH RESPECT TO THE PRODUCTS.

 

6.4           Indemnification by General Moly.  General Moly will at all times defend,indemnify, protect and hold harmless Buyer and its affiliates and theirdirectors, officers, agents, employees, participants and assigns, from andagainst any and all Losses arising in whole or in part out of the willfulmisconduct and/or negligent performance of any obligations of General Molyunder this Agreement; *provided however*,that General Moly will not be required to indemnify any indemnified Person forany Losses to the extent resulting from the misconduct or

 

10

----

 

negligence of such indemnified Person.

 

6.5           Indemnification by Buyer.  Buyer will at all times defend, indemnify,protect and hold harmless General Moly and its affiliates and their directors,officers, agents, employees, participants and assigns, from and against any andall Losses whatsoever arising in whole or in part out of the arising in wholeor in part out of the willful misconduct and/or negligent performance of anyobligations of Buyer under this Agreement;*provided however*, that Buyer will not be required to indemnify anyindemnified Person for any Losses to the extent resulting from the misconductor negligence of such indemnified Person.

 

7.             **ForceMajeure**.  Neither Partywill be liable to the other Party for default or delay in the performance ofits obligations hereunder when and to the extent that such default or delay iscaused by order, injunction or stay entered by any court with valid jurisdiction,war, civil commotion, strike, labor dispute, work stoppage or slowdown,storm, earthquake, explosion, insurrection, unavailability of fuel orutilities, epidemic or quarantine restriction, fire, flood, act of God,unavailability of material, failure of equipment, supplies or subcontractor,~~~~the inability to maintain in full force and effect all permits required tocarry out the Mine Plan or any other similar contingency beyond the reasonablecontrol of the Parties (the occurrence of any of the foregoing will be an “***Event of Force Majeure***”);provided, however, that during the period prior to the Commercial OperationsDate, adverse conditions in implementing the Mine Plan and environmentalcompliance requirements may also constitute Events of Force Majeure.  The occurrence of an Event of Force Majeurewill not be grounds for termination of this Agreement, absent the writtenconsent of the Parties otherwise; *provided,however*, that Buyer may, at its option, terminate thisAgreement if an Event of Force Majeure prevents, or Buyer reasonablyanticipates that it will prevent, General Moly from meeting its obligations inwhole or in substantial part under this Agreement for more thanthree consecutive months during the Term. Both General Moly and Buyer will use their commercially reasonablebest efforts to avoid the occurrence and remove the causes of an Event of ForceMajeure and to continue performance of their respective obligations hereunderpromptly following the removal of such causes. If an Event of Force Majeure prevents a Party from meeting itsobligations hereunder in part, but not in whole, the Parties will use theircommercially reasonable best efforts to equitably adjust the Parties’respective obligations hereunder consistent with and in furtherance of thepurposes hereof.  Should General Molyinvoke force majeure conditions, the Buyer will be entitled to obtain fromalternative sources such Products as it reasonably requires during the periodthat Events of Force Majeure subsist, and the quantities Products obtainedunder such conditions will be deducted from the amount of Products Buyer isrequired to purchase hereunder.

 

8.             **Confidentiality**.

 

8.1           During the Term, each of Buyer and GeneralMoly will be in a position to receive certain of each other’s confidential,privileged and proprietary information (“***Confidential Information***”); provided thatConfidential Information excludes any information:

 

(a)           which is or becomes available to the publicthrough no act, omission or fault of, and absent any breach of a covenant orobligation hereunder by, the Party whose obligation it is to keep suchinformation confidential;

 

11

----

 

(b)           which the Party whose obligation it is tokeep such information confidential may have received lawfully from any thirdParty without restrictions as to disclosure thereof and without breach of thisAgreement; or

 

(c)           which was developed by the Party whoseobligation it is to keep such information confidential without (as establishedby documentation or by other appropriate evidence) the use of the other Party’sConfidential Information or any breach of this Agreement or any otheragreement.

 

General Moly agrees that the Confidential Information of Buyer, andBuyer agrees that the Confidential Information of General Moly, is an integraland key part of the assets of each respective entity and that the unauthorizeduse or disclosure of the other Party’s Confidential Information would seriouslydamage the owner thereof in its business. As a consequence of the above, General Moly and Buyer hereby agreethat, during the Term and for a period of five years after the expiration ortermination hereof:

 

8.1.1        Neither of General Moly and Buyer will,directly or indirectly:

 

(a)           use any of the other Party’s ConfidentialInformation, except as may be necessary to perform its obligations hereunder;or

 

(b)           disclose, furnish or make accessible, orcause any Person to disclose, furnish or make accessible, any aspect of theother Party’s Confidential Information to any Person (other than the otherParty),

 

except, in either case (a) or (b), asset forth in Section 8.1.2 or as may be expressly authorized by theother Party in writing or as required by law or pursuant to a court order; *provided, however*, that prior to anycompelled disclosure, the Party whose obligation it is to keep such informationconfidential will have given the other Party notice of the circumstances relatingto such compelled disclosure and an opportunity to seek an appropriateprotective order with respect thereto.

 

8.1.2        Exceptas required by law or pursuant to a court order, each of General Moly and Buyerwill:

 

(a)           use no less than the care a reasonablyprudent Person would use in safeguarding his, her or its ConfidentialInformation;

 

(b)           limit access to the other Party’sConfidential Information to its employees and representatives who requireaccess to such Confidential Information for the purposes of performing itsobligations hereunder and who have agreed to be bound by the terms of this Section 8;and

 

(c)           refrain from any action or conduct whichmight reasonably or foreseeably be expected to compromise the confidential,privileged or proprietary 

 

12

----

 

nature of the other Party’s ConfidentialInformation.

 

8.1.3        Each of General Moly and Buyer will complywith reasonable requests made by the other from time to time regarding theprotection of the confidential, privileged and proprietary nature of the otherParty’s Confidential Information.  Uponthe written request of either Party, the other Party will promptly return tothe requesting Party all of the requesting Party’s Confidential Information,including any and all copies and summaries thereof, in each case in any format(whether written, electronic or otherwise).

 

8.1.4        For purposes of this Section 8, theterm “General Moly” will include all Affiliates of General Moly, and the term “Buyer”will include all Affiliates of Buyer. Nothing in this Section 8 will operate to prevent a Partyfrom disclosing such information as is required by applicable law or the rules orpolicies of any securities exchange on which a Party’s securities may belisted.

 

9.             **Waiver**. The failure of any Party to enforce at any time any of the provisions ofthis Agreement will in no way be construed to constitute a waiver of any suchprovision nor in any way to affect the validity of this Agreement or any parthereof, including the right of any Party thereafter to enforce each and everyprovision.  The waiver by any Party ofany breach or violation of any provision of this Agreement by the other Partywill not operate or be construed to be a waiver of any subsequent breach orviolation thereof.

 

10.           **Governing Law**.  This Agreement will be governed by the lawsof the State of New York, without giving effect to any of the provisionsthereof that would require the application of the substantive laws of any otherjurisdiction.

 

11.           **Notices**.  All notices and other communicationshereunder will be effective if in writing and delivered (a) in person(which will be deemed to be received upon receipt), (b) by overnightcourier (which will be deemed to be received one Business Day thereafter), (c) byfacsimile transmission (which will be deemed to be received upon receipt) or (d) mailedby certified mail, postage prepaid, return receipt requested (which will bedeemed to be received three business days thereafter), as follows (or at such otheraddress for a Party as will be specified by like notice):

 

If to GeneralMoly:

 

General Moly, Inc.

1726 Cole Blvd., Suite 115

Lakewood, Colorado  80401

Attention: Chief Executive Officer

Facsimile: (303) 928-8598

 

With a copy (which will not constitutenotice) to:

 

Kirkpatrick & Lockhart Preston GatesEllis LLP

925 Fourth Avenue, Suite 2900

Seattle, Washington  98104

Attention: Gary J. Kocher

Facsimile: (206) 623-7022

 

13

----

 

If to Buyer:

 

SeAH Besteel Corporation

1-6, Soryong-dong, Kunsan, Korea (573-711)

Attention: Chief Executive Officer

Facsimile: (63)460-8374

 

All such notices and other communications will be effective whenreceived.

 

12.           **Interpretation**.  The Parties have participated jointly in thenegotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, thisAgreement will be construed as if drafted jointly by the Parties and nopresumption or burden of proof will arise favoring or disfavoring any Partybecause of the authorship of any provision of this Agreement.

 

13.           **Assignment**.  This Agreement will be binding upon, inure tothe benefit of and be enforceable by the respective successors and permittedassigns of the Parties.  This Agreementmay not be assigned or otherwise transferred by Buyer or General Molywithout the prior written consent of the other Party; *provided* that Buyer may, without theconsent of General Moly, assign its rights and obligations under this Agreementto an Affiliate of Buyer.  Buyer herebyacknowledges that any proposed assignment by Buyer to any other Party, byoperation of law or otherwise, is subject to General Moly’s consent, which willbe in General Moly’s sole discretion and may be conditioned upon amendment tothe payment terms set forth herein.

 

14.           **Relationship of the Parties**.  It is understood that each Party isconducting business as a separate and distinct legal entity.  Under no circumstances will either Party, itsagents and/or employees be considered agents, partners, representatives oremployees of the other Party.  NeitherParty will have the right to act as the legal representative of the other Partyor to bind such other Party in any respect whatsoever or to incur any debts orliability in the name of or on behalf of such other Party.  This Agreement creates no relationships ofjoint venturers, partners, associates or principal and agent between theParties.

 

15.           **Severability**.  The provisions of this Agreement will bedeemed severable and the invalidity or unenforceability of any provision willnot affect the validity or enforceability of the other provisions hereof; *provided* that if any provision of thisAgreement, as applied to any Party or to any circumstance, is adjudged by agovernmental body, arbitrator, or mediator not to be enforceable in accordancewith its terms, the Parties agree that the governmental body, arbitrator, ormediator making such determination will have the power to modify the provisionin a manner consistent with its objectives such that it is enforceable, and/orto delete specific words or phrases, and in its reduced form, such provisionwill then be enforceable and will be enforced.

 

16.           **Taxes and Expenses**.     Except as expressly providedherein, each Party will be

 

14

----

 

responsible for payment of all taxes, if any, imposed upon it byapplicable law in connection with this Agreement; provided, that with respectto any new or increased taxes that come into effect due to changes in law afterthe date of this Agreement, General Moly will only be responsible for theportion of such taxes that are commonly borne by suppliers of Products in theindustry.  Each Party will pay all of itsown administrative expenses, including the fees and expenses of its counsel andother agents and representatives, incurred in connection with the preparation,execution and performance of this Agreement.

 

17.           **Currency**.  All references to dollars or amounts of moneyin this Agreement are references to United States Dollars.

 

18.           **Counterparts; Facsimile Signatures**.  This Agreement may be executed in twocounterparts, and each such counterpart will be deemed to be an originalinstrument, but all such counterparts together will constitute but oneagreement.  This Agreement may beexecuted by facsimile signatures.

 

19.           **Entire Agreement**.  This Agreement, including the attachedExhibits which are hereby incorporated herein by this reference, constitutesthe entire agreement and understanding of the Parties in respect of its subjectmatter and supersedes all prior understandings, agreements, or representationsby or among the Parties, written or oral, to the extent they relate in any wayto the subject matter hereof.

 

20.           **Amendment**.  No amendment, modification or addition to thisAgreement will be effective unless it is in writing and executed by bothParties.

 

21.           **Arbitration**.

 

21.1         GoodFaith Negotiation.  In the event ofany dispute, claim or controversy (except with respect to assaying issues asset forth in Section 4.3) (a “***Dispute***”) arising out of or in connectionwith this Agreement, a Party may deliver written notice to the other Party ofsuch Dispute requesting to resolve such Dispute pursuant to thisAgreement.  Upon delivery of such notice,members of senior management of each Party will meet as promptly as practicablein a good faith attempt to resolve such Dispute.

 

21.2         BindingArbitration.

 

21.2.1      If a Dispute is not resolved pursuant to Section 21.1by the Parties within 30 days of the delivery of written notice thereof(or such longer period as the Parties may mutually agree), either Party maymake a written demand for binding arbitration in accordance with this Section 21.2.  The Dispute will then be submitted to andresolved by binding arbitration in accordance with the Rules ofArbitration of the International Chamber of Commerce by an Arbitral Tribunalappointed in accordance with such Rules. The arbitration will be conducted in Seattle, Washington.  The Arbitral Tribunal shall comprise threearbitrators.  Each of General Moly andBuyer will appoint one arbitrator.  Thetwo arbitrators so appointed will together appoint the third arbitrator.  If the Buyer or General Moly fail to choose anarbitrator within 14 days after receiving notice of

 

15

----

 

commencement of arbitration, or if the twoarbitrators fail to choose a third arbitrator within 14 days after theirappointment, the Court of Arbitration of the International Chamber of Commerceshall upon the request of the Buyer or General Moly appoint the arbitrator(s) tocomplete the Arbitral Tribunal.  Thearbitration will be governed in accordance with (i) the provisions of thisAgreement and (ii) the governing law as specified in Section 10,except to the extent such law conflicts with the provisions of this Agreement,in which event the provisions of this Agreement will prevail.

 

21.2.2      The arbitration shall be conducted in English,and all documents delivered or produced pursuant to the arbitration shall be inEnglish.  The Parties will provide to thearbitrators all information pertaining to the dispute that the arbitrators mayrequest, provided that all information supplied by any Party will be deemed tobe confidential, and the arbitrators and other participants in the dispute willprotect such information from disclosure to the same extent as provided in Section 8.

 

21.2.3      The arbitrators will be instructed to render adecision within 60 days after selection and will be required to state inwriting the reasoning on which the decision and any award rests.  The arbitrators will have the power to awardcounsel fees and expenses, as well as dispute resolution costs (including anyfee for the arbitrators), to the prevailing Party.  Judgment upon the award rendered may be enteredin any court having jurisdiction or application may be made to such court for ajudicial acceptance of the award and an order of enforcement, as the case maybe.  The arbitrators will not award anyconsequential, incidental, indirect, special, punitive or exemplary damageshereunder or in connection herewith.  Thearbitration award shall be final and binding upon the Parties to sucharbitration and may be enforced in any court having jurisdiction.

 

21.2.4      The performance of this Agreement shall not besuspended, cease or be delayed by the reference of a Dispute to arbitration.

 

21.3         Limitations.  Notwithstanding anything contained in this Section 21,all disputes regarding Assay Adjustments will be resolved in accordance with Section 4.3.  In addition, nothing contained in this Section 21will prohibit or limit any Party from seeking and obtaining equitable relief(including temporary restraining orders and preliminary and permanentinjunctions or stays) to which it would otherwise be entitled from a court ofcompetent jurisdiction.

 

22.           **Limitation of Liability**.  UNDER NO CIRCUMSTANCES WILL GENERAL MOLY ORBUYER BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVEOR EXEMPLARY DAMAGES HEREUNDER OR IN CONNECTION HEREWITH.

 

23.           **Third Party Beneficiaries**.  Except as expressly contemplated by Sections6.4 and 6.5, there are no third party beneficiaries having rightsunder or with respect to this Agreement.

 

24.           **Remedies Cumulative**.  All remedies available to the Parties forbreach of this 

 

16

----

 

Agreement are cumulative and may be exercised concurrently orseparately, and the exercise of any one remedy shall not be deemed an electionof such remedy to the exclusion of other remedies.

 

[Signature page follows]

 

17

----

 

IN WITNESS WHEREOF, Buyer andGeneral Moly have duly executed this Agreement as of the date first abovewritten.

 
|   | **GENERAL MOLY, INC.**       |
|--------|------------------------------|
|   | ** **                   |
|   |                         |
|   | By:                          | */s/ Bruce  D. Hansen* |
|   | Name:                        | Bruce D.  Hansen |
|   | Title:                       | Chief  Executive Officer |
|   |                         |
|   |                         |
|   | **SEAH BESTEEL CORPORATION** |
|   |                         |
|   |                         |
|   | By:                          | */s/ Lee  Sung Hwi* |
|   | Name:                        | Lee Sung Hwi |
|   | Title:                       | Chief Executive Officer |
|        |                              |  |  |

 

 

[Signature Page to Molybdenum Supply Agreement]

 

----

 

Exhibit A

 

Specifications

 

**SPECIFICATION MOLYBDENUM OXIDE**

 
| ***Mo*** | [****] |
|----------|--------|
|     |   |
| ***Cu*** | [****] |
|     |   |
| ***S***  | [****] |
|     |   |
| ***C***  | [****] |
|     |   |
| ***P***  | [****] |
|     |   |
| ***Si*** | [****] |

 

A-1

----