Document:

ex10_1.htm

     

    EXHIBIT
10.1

    TRANSITION
AGREEMENT

     

    THIS TRANSITION
AGREEMENT (this “Agreement”) is entered into effective as of May 5, 2009
(the “Effective Date”), by and among TETRA TECHNOLOGIES, INC., a Delaware
corporation (the “Company”) and GEOFFREY M. HERTEL (the
“Employee”).

     

    W
I T N E S S E T H :

     

    WHEREAS, the
Employee has been employed by the Company in various capacities since 1993, most
recently serving as its President and Chief Executive Officer;

     

    WHEREAS, the
Employee has as of the Effective Date resigned from the position of President
and Chief Executive Officer and the parties have mutually agreed to continue the
Employee’s employment by the Company as herein provided; and

     

    WHEREAS, the
Employee and the Company desire to enter into this Agreement to set forth the
terms and conditions of the Employee’s continued employment by the
Company.

     

    NOW, THEREFORE, in
consideration of the mutual covenants and promises herein contained, and
intending to be legally bound hereby, the Company and the Employee hereby agree
as follows:

     

    1. Employment.

     

    1.1 The Company hereby
agrees to continue to employ the Employee, and the Employee hereby agrees to
accept continued employment with the Company, upon the terms and for the period
set forth in this Agreement.

     

    1.2 Unless sooner
terminated in accordance with the terms of this Agreement, the Employee’s term
of employment hereunder shall mean the period commencing on the Effective Date
and ending on January 5, 2012 (the “Employment
Period”).  

     

    2. Duties.

     

    2.1 During the
Employment Period, the Employee shall serve in such positions as the Company’s
Board of Directors (the “Board”) may determine from time to time. The Employee
shall be subject to the supervision of, and shall have such authority as is
delegated to him by the Chief Executive Officer.

     

    2.2 In addition to the
foregoing description of the Employee’s duties, during the Employment Period the
Company shall, if so recommended by the Nominating and Corporate Governance
Committee (the “Governance Committee”) of the Board, (i) nominate and
recommend the Employee for membership on the Board, and (ii) use
commercially reasonable efforts to cause the Employee to be nominated and
recommended for membership on the board of directors of Compressco Partners GP
Inc. (“Compressco GP”), the general partner of Compressco Partners, L.P.
(“Compressco Partners”), and to serve as chairman of that board of
directors.  If so elected, the Employee shall, without further
compensation during the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Employment Period
and on a basis consistent with other directors after the Employment Period,
serve as a member of the Board and as a member of the board of directors of
Compressco GP.

     

    2.3 During the
Employment Period, the Employee agrees to devote such time as reasonably
required to carry out and perform the responsibilities assigned to the Employee
hereunder.  Notwithstanding the foregoing, during the Employment
Period it shall not be a violation of this Agreement for the Employee
(i) to serve on industry-related, civic or charitable boards or committees,
(ii) with the approval of the Company’s Governance Committee and the Board,
to serve on other corporate boards or committees, and (iii) to continue to
own and manage his personal investments including, without limitation, his
current oil and gas interests as described on Exhibit A
attached hereto and incorporated herein and, with the approval of the Board,
invest in, acquire and/or manage additional oil and gas interests, so long as
any activities described in clauses (i), (ii) and (iii) do not
significantly interfere with the performance of the Employee’s responsibilities
as an employee of the Company in accordance with this Agreement and, in the case
of the activities described in clause (ii), will not, in the good faith
judgment of the Board, constitute an actual or potential conflict of interest
with the business activities of the Company or its affiliated
companies.  It is expressly understood and agreed that to the extent
that any such activities have been conducted by the Employee prior to the date
hereof, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the date hereof shall not
thereafter be deemed to interfere with the performance of the Employee’s
responsibilities to the Company.

     

    2.4 In connection with
the Employee’s employment hereunder, the Employee shall be based at the
Company’s headquarters located in The Woodlands, Texas, or at any other office
which is the headquarters of the Company and is less than 50 miles from such
location, provided, however, that the Employee may be required to travel on the
business of the Company to the extent consistent with the duties and obligations
of the Employee pursuant to this Agreement.  The Company acknowledges
that Employee may work remotely either from his home office or his vacation home
as he has in the past from time to time.

     

    3. Compensation
and Related Matters.

     

    3.1 Base
Salary.  During the Employment Period, the Employee shall
receive a monthly base salary equal to $33,333 (“Base Salary”), which shall be
paid in accordance with the Company’s standard payroll practice.

     

    3.2 Annual
Bonus.

     

    (a) During the
Employment Period, the Employee shall be eligible for an annual bonus (the
“Annual Bonus”) for each calendar year ending during the Employment Period
(calendar years ending December 31, 2009, 2010 and 2011) on the same basis
as other executive officers under the Company’s then current discretionary
performance-based cash bonus program (or its successor), which shall be payable
in accordance with the terms of such program.  The Employee’s target
payout for the Annual Bonus will be $200,000 for the 2009 and 2010 calendar
years and $83,200 for the 2011 calendar year.  Payment of the Annual
Bonus, if awarded, will be made in a lump sum cash payment in accordance with
the terms of the Company’s discretionary 

     

    
      
        
        

      

      
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    performance-based
cash bonus program (or its successor) but in no event earlier than
January 1 of, and no later than March 31 of the calendar year
immediately following the calendar year in respect of which the Annual Bonus is
awarded.  Except as otherwise expressly provided in Section 5
hereof, any Annual Bonus payable under this Section 3.2 shall not be
payable unless the Employee is employed by the Company on the last day of the
period to which such Annual Bonus relates.

     

    (b) Notwithstanding the
foregoing, in the event a Change in Control (as herein defined)
occurs  on or before December 31, 2009, Employee shall be entitled to
receive the target payout for the Annual Bonus for 2009.  Any payment
of the 2009 Annual Bonus pursuant to this Section 3.2(b) shall be made within 7
calendar days of the effective date of the Change in Control.  The
foregoing shall only apply to a Change in Control that occurs on or before
December 31, 2009.  In the event a Change in Control occurs during the
Employment Period and after December 31, 2009, the Employee’s right to receive
any Annual Bonus hereunder shall remain subject to the discretion of the Board
and satisfaction of any applicable performance criteria.

     

    (c) For purposes of
this Agreement, a “Change in Control” shall be deemed to have occurred upon any
of the following events:

     

    (i) any “person” (as
defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange
Act”), and as modified in Section 13(d) and 14(d) of the Exchange Act) other
than (A) the Company or any of its subsidiaries, (B) any employee benefit plan
of the Company or any of its subsidiaries, (C) any entity controlled by the
Company, (D) a company owned, directly or indirectly, by stockholders of the
Company in substantially the same proportions as their ownership of the Company,
or (E) an underwriter temporarily holding securities pursuant to an offering of
such securities ( a “Person”), becomes the “beneficial owner” (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50% of the shares of voting stock of the Company
then outstanding;

     

    (ii) the consummation of
any merger, organization, business combination or consolidation of the Company
or one of its subsidiaries with or into any other company, other than a merger,
reorganization, business combination or consolidation which would result in the
holders of the voting securities of the Company outstanding immediately prior
thereto holding securities which represent immediately after such merger,
reorganization, business combination or consolidation more than 50% of the
combined voting power of the voting securities of the Company or the surviving
company or the parent of such surviving company;

     

    (iii) the consummation of
a sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition if the holders of the voting
securities of the Company outstanding immediately prior thereto hold securities
immediately thereafter which represent more than 50% of 

     

    
      
        
        

      

      
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    the combined voting
power of the voting securities of the acquiror, or parent of the acquiror, of
such assets;

     

    (iv) the stockholders of
the Company approve a plan of complete liquidation or dissolution of the
Company; or

     

    (v) individuals who, as
of the Effective Date, constitute the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the Effective Date whose
election by the Board, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an election contest with respect to the election or removal of
directors or other solicitation of proxies or consents by or on behalf of a
person other than the Board.

     

    Notwithstanding the
foregoing, however, in any circumstance or transaction in which compensation
would be subject to the income tax under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) if the foregoing definition of “Change in
Control” were to apply, but would not be so subject if the term “Change in
Control” were defined herein to mean a “change in control event” within the
meaning of Treasury Regulation § 1.409A-3(i)(5), then “Change in Control” shall
mean a “change in control event” within the meaning of Treasury Regulation §
1.409A-3(i)(5), but only to the extent necessary to prevent such compensation
from becoming subject to the income tax under Section 409A of the
Code

     

    3.3 Compressco IPO
Bonus.

     

    (a) It is contemplated
that the duties of the Employee hereunder will include assisting the Company and
Compressco GP and Compressco Partners, in completing an initial public offering
by Compressco Partners.  If on or before June 30, 2010 Compressco
Partners shall complete the Compressco IPO (as herein defined), Employee shall
be entitled to a cash bonus (the “Compressco IPO Bonus”) from the Company in the
applicable amount set forth below based upon the Market Capitalization (as
herein defined) of Compressco Partners:

     

    
      	
              Market

              Capitalization

            	 	
              Compressco

              IPO Bonus

            
	
              $0.00 to
      $300,000,000

            	 	
              $250,000

            
	
              $300,000,001
      to $500,000,000

            	 	
              $500,000

            
	
              $500,000,001
      to $700,000,000

            	 	
              $700,000

            
	
              in excess of
      $700,000,000

            	 	
              $900,000

            
	 
    	 	 
    

    

     

    
      
        
        

      

      
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    For purposes of
this Agreement, the “Market Capitalization” of Compressco Partners shall be an
amount equal to (i) the initial public offering price of the common units
of Compressco Partners offered to the public in the Compressco IPO, multiplied
by (ii) the total number of common units of Compressco Partners which are
outstanding immediately following the exercise or expiration of the
underwriters’ overallotment option in the Compressco IPO.

     

    (b) The Compressco IPO
Bonus, if earned, shall be payable in a lump sum cash payment at such time as
determined by the Board but in any event no later than the sooner to occur of
(i) the date which is 120 days after the consummation of the Compressco
IPO, or (ii) the date which is two and one-half months following the end of
the year in which such Compressco IPO is completed.

     

    (c) For purposes of
this Agreement, the “Compressco IPO” shall mean the issuance by Compressco
Partners of its common units representing limited partnership interests in an
underwritten primary public offering (other than a registration statement on
Form S-4, S-8 or any similar form) pursuant to an effective registration
statement filed with the United States Securities and Exchange Commission (the
“SEC”) in accordance with the Securities Act of 1933, as amended.

     

    3.4 Transition
Bonus.

     

    (a) It is further
contemplated that the duties of the Employee hereunder will include assisting in
the transition of leadership to Stuart M. Brightman, the Company’s Chief
Executive Officer, and the succession of Mr. Brightman into his role as Chief
Executive Officer and the succession of Edwin H. Goldman into his role as Senior
Vice President of the Company’s Offshore Division.  Subject to the
terms hereof, the Employee shall be entitled to receive, at the discretion of
the Board and the Compensation Committee, the following lump sum cash bonus
payments (i) up to $120,000 based upon the performance of Mr. Brightman during
the period from May 5, 2009 until May 4, 2010 (the “First Performance Period”)
in his succession as the Chief Executive Officer (the “Brightman First Period
Bonus”), (ii) up to $120,000 based upon the performance of Mr. Brightman during
the period from May 5, 2010 until May 4, 2011 (the “Second Performance Period”)
in his succession as the Chief Executive Officer, (iii) up to $80,000 based upon
the performance of Mr. Goldman during the First Performance Period as Senior
Vice President of the Company’s Offshore Division (the “Goldman First Period
Bonus”), and (iv) up to $80,000 based upon the performance of Mr. Goldman during
the Second Performance Period as Senior Vice President of the Company’s Offshore
Division (the foregoing may be referred to individually as a “Transition Bonus”
and collectively as the “Transition Bonuses”).

     

    (b) The Transition
Bonuses shall be evaluated and determined over the First Performance Period and
the Second Performance Period, respectively.  Employee’s right to
receive all or any part of each of the Transition Bonuses shall be subject to
the complete discretion of the Board and the Compensation Committee, taking into

     

    
      
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    consideration such
factors as they may deem relevant.  The Board and the Compensation
Committee must make their determination of whether one or more Transition
Bonuses is payable for the First Performance Period between May 5, 2010 and May
15, 2010 and if one or more Transition Bonuses is determined to be payable, the
Company shall pay such Transition Bonus(es) on or before May 15,
2010.  The Board and the Compensation Committee must make their
determination of whether one or more Transition Bonuses is payable for the
Second Performance Period between May 5, 2011 and May 15, 2011 and if one or
more Transition Bonuses is determined to be payable, the Company shall pay such
Transition Bonus(es) on or before May 15, 2011.  Except as otherwise
expressly provided in Section 5 hereof, any Transition Bonus payable under this
Section 3.4 shall not be payable unless the Employee is employed by the Company
on the date the payment is determined.

     

    (c) Notwithstanding the
foregoing, in the event of a Change in Control occurs on or before May 4, 2010,
then:

     

    (i)  if
Mr. Brightman shall remain employed by the Company immediately prior to the
effective date of the Change in Control, the Employee shall be entitled to
receive the full amount of the Brightman First Period Bonus, and

     

    (ii)   if
Mr. Goldman shall remain employed by the Company immediately prior to the
effective date of the Change in Control, the Employee shall be entitled to
receive the full amount of the Goldman First Period Bonus.

     

    Any Transition
Bonus payable pursuant to this Section 3.4(c) shall be payable within seven (7)
calendar days of the effective date of the Change in Control. If Mr. Brightman
or Mr. Goldman are not employed by the Company immediately prior to the Change
in Control, then Employee shall have no further right to receive the applicable
Transition Bonuses.

     

    The foregoing
provisions of this Section 3.4(c) shall only be applicable to a Change in
Control occurring on or before May 4, 2010. In the event the Change in Control
shall occur at any subsequent time during the Employment Period, the Employee’s
right to receive any Transition Bonus shall remain subject to the complete
discretion of the Board and the Compensation Committee, taking into
consideration such factors as they may deem relevant.

     

    3.5 Employee
Benefits.

     

    (a) Incentive, Savings and
Retirement Plans.  During the Employment Period and at the
discretion of the Board, the Employee shall be entitled to participate in all
incentive, stock option, savings and retirement plans, practices, policies and
programs generally available to other executive officers of the
Company.

     

    (b) Welfare Benefit
Plans. During the Employment Period, the Employee and/or the Employee’s
family, as the case may be, shall be eligible to participate in and shall
receive all benefits under welfare benefit plans, practices, policies and
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    provided by the
Company (including, without limitation, medical, prescription, dental,
disability, employee life, group life, and accidental death insurance plans and
programs) to the extent generally available to other executive officers of the
Company.

     

    (c) Expenses.  During
the Employment Period, the Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Employee in performing
the Employee’s duties and responsibilities hereunder in accordance with the
policies, practices and procedures of the Company as in effect for its executive
officers from time to time.

     

    4. Termination
of Employment.

     

    4.1 Death. The Employee’s
employment shall terminate automatically upon the Employee’s death during the
Employment Period.

     

    4.2 Disability.  If
the Company determines in good faith that a Disability of the Employee has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), the Company may give to the Employee written notice of its
intention to terminate the Employee’s employment. In such event, the Employee’s
employment with the Company shall terminate effective thirty (30) days after
receipt of such notice by the Employee (the “Disability Effective Date”),
provided that within the thirty (30) day period after such receipt, the Employee
shall not have returned to full-time performance of the Employee’s duties. For
purposes of this Agreement, “Disability” shall mean and be deemed to have
occurred if (i) the Employee is receiving benefits under the Company’s
long-term disability plan, or (ii) in the absence of the Employee’s receipt
of such benefits, the Employee has been unable to perform the essential
functions of his position, despite any reasonable accommodation required by law,
by reason of illness or injury for an aggregate of 180 days within any given
period of 360 consecutive days.

     

    4.3 Termination by the
Company.  The
Company may terminate the Employee’s employment during the Employment Period for
Cause.  For purposes of this Agreement, “Cause” shall
mean:

     

    (a) the willful and
continued failure of the Employee to perform substantially the Employee’s duties
and obligations hereunder (other than any such failure resulting from bodily
injury or disease or any other incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to the Employee
by the Chief Executive Officer or the Board which specifically identifies the
manner in which the Chief Executive Officer or the Board believes that the
Employee has not substantially performed the Employee’s duties;

     

    (b) Employee’s
conviction by a court of competent jurisdiction, or entry of a plea of guilty or
nolo contendere, to a
misdemeanor involving moral turpitude or a felony;

     

    (c) fraud, theft,
embezzlement or similar misappropriation of funds or property of the Company or
its affiliated companies; or

     

    
      
        
        

      

      
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    (d) the willful
engaging by the Employee in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company and/or its affiliated
companies, monetarily or otherwise.

     

    For purposes of
this provision, no act, or failure to act, on the part of the Employee shall be
considered “willful” unless it is done, or omitted to be done, by the Employee
in bad faith or without reasonable belief that the Employee’s action or omission
was in the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best interests of the Company and
its affiliated companies.

     

    4.4 Termination by
Employee.  The Employee may terminate his employment during the
Employment Period for (i) Good Reason, or (ii) for any other reason,
in the sole discretion of the Employee, upon 30 days’ advance written notice to
the Company.

     

    For purposes of
this Agreement, “Good Reason” shall mean, without Employee’s written consent,
any one of the following:

     

    (a) any failure by the
Company to comply with any of the provisions of Section 3 of this
Agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee;

     

    (b) any requirement for
the Employee to be based at any office or location other than as provided in
Section 2.4;

     

    (c) any purported
termination by the Company of the Employee’s employment otherwise than as
expressly permitted by this Agreement; or

     

    (d) any failure by the
Company to comply with and satisfy Section 10.3 of this
Agreement.

     

    4.5 Notice of
Termination. Any termination of the Employee’s employment hereunder by
the Company or the Employee (other than a termination pursuant to
Section 4.1) shall be communicated by a Notice of Termination to the other
party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) in the case of a termination
for Disability, Cause or Good Reason, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Employee’s
employment under the provision so indicated, and (iii) specifies the Date
of Termination (as herein defined); provided, however, that notwithstanding any
provision in this Agreement to the contrary, a Notice of Termination given in
connection with a termination for Good Reason shall be given by the Employee
within a reasonable period of time, not to exceed 30 days, following the
occurrence of the event giving rise to such right of termination.  The
failure by the Employee or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Disability, Cause or
Good Reason shall not waive any right of the Employee or the Company hereunder
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    preclude the
Employee or the Company from asserting such fact or circumstance in enforcing
the Employee’s or the Company’s rights hereunder.

     

    4.6 Date of
Termination.  For purposes of this Agreement, the “Date of
Termination” shall mean the effective date of the termination of the Employee’s
employment hereunder, which date shall be:

     

    (a) if the Employee’s
employment is terminated as a result of the Employee’s death, the date of the
Employee’s death;

     

    (b) if the Employee’s
employment is terminated because of the Employee’s Disability, the Disability
Effective Date;

     

    (c) if the Employee’s
employment is terminated by the Company for Cause, or by the Employee for Good
Reason, the date on which the Notice of Termination is given, or any later date
specified therein, as the case may be;

     

    (d) if the Employee’s
employment is terminated as a result of the expiration of the Employment Period
pursuant to Section 1.2, the date on which the Employment Period ends;
and

     

    (e) if the Employee’s
employment is terminated for any other reason, the date specified in the Notice
of Termination, which date shall in no event be earlier than the date such
notice is given.

     

    5. Obligations
of the Company upon Separation from Service.

     

    5.1 Good Reason; Death;
Disability; Other than For Cause.

     

    (a) Subject to the
provisions of Section 5.1(b) and Section 5.3 below, if, during the
Employment Period, the Employee’s Separation from Service (as defined in
Section 5.4(a) below) shall occur (1) by reason of the Employee’s
termination of the Employee’s employment hereunder for Good Reason, (2) by
reason of the Employee’s death, or (3) by reason of the Company’s
termination of the Employee’s employment hereunder as a result of the Employee’s
Disability or other than for Cause,

     

    (i) the Company shall
continue to pay to the Employee, his estate or heirs when due under the
Company’s normal payroll practices the Employee’s Base Salary through the end of
the Employment Period;

     

    (ii) the Company shall
pay to the Employee, his estate or heirs an amount equal to any Compressco IPO
Bonus that would have been payable to the Employee pursuant to and in accordance
with the provisions of Section 3.3 above as if the Employee’s employment
hereunder had not been terminated;

     

    (iii) the Company shall
pay to the Employee, his estate or heirs an amount equal to any Transition Bonus
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    Employee pursuant
to and in accordance with the provisions of Section 3.4 above be as if the
Employee’s employment hereunder had not been terminated;

     

    (iv) the Employee or his
heirs shall continue to be eligible to participate in any welfare benefit plans
contemplated by Section 3.5 above pursuant to the terms and conditions
thereof or pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”); and

     

    (v) to the extent not
previously paid, the Company shall timely pay to the Employee, his estate or
heirs when due (and in no event later than 30 days following the Employee’s
Separation Date) any business expenses incurred but not reimbursed through the
Separation Date, in accordance with the Company’s policies, practices and
procedures (the amount being described in this Section 5.1(a)(v) being
referred to as the “Accrued Obligations”).

     

    (b) If at any time
after termination of the Employee’s employment during the Employment Period and
otherwise during the Noncompete Period (as herein defined) the Employee breaches
any of the provisions of Sections 7, 8, or 9 hereof and the Employee fails
to cure, if possible, such breach within thirty (30) days after the Company has
given written notice of such breach, the Company will no longer be obligated to
make the payments contemplated by this Section 5.1.

     

    5.2 Cause; Other Than for Good
Reason.

     

    (a) If the Employee’s
Separation from Service occurs during the Employment Period by reason of the
Company’s termination of Employee’s employment hereunder for Cause, this
Agreement shall terminate without further obligations to the Employee hereunder
other than the obligation to pay the Employee’s Base Salary through the
Employee’s Separation Date and the timely payment or provision of deferred
compensation and other employee benefits if and when otherwise due.

     

    (b) If the Employee’s
Separation from Service occurs during the Employment Period by reason of the
Employee’s voluntary termination of his employment hereunder, excluding a
termination of such employment by the Employee for Good Reason, this Agreement
shall terminate without further obligations to the Employee hereunder other than
for (i) the payment of the Employee’s Base Salary through the Employee’s
Separation Date to the extent not theretofore paid, (ii) the payment of the
Accrued Obligations (which, subject to the provisions of Section 5.3 of
this Agreement, shall be paid to the Employee in a lump sum in cash within 30
days after the Employee’s Separation Date), and (iii) the timely payment or
provision of deferred compensation and other employee benefits if and when
otherwise due.

     

    5.3 Payment Delay for Specified
Employee.  Any provision of this Agreement to the contrary
notwithstanding, if the Employee is a Specified Employee (as herein defined) on
the Employee’s Separation Date, then any payment or benefit to be paid,
transferred or provided to the Employee pursuant to the provisions of this
Agreement that would be subject to the tax imposed by Section 409A if paid,
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    Agreement shall be
delayed and thereafter paid, transferred or provided on the first business day
that is six (6) months after the Employee’s Separation Date (or if earlier,
within thirty (30) days after the date of the Employee’s death following the
Employee’s Separation from Service) to the extent necessary for such payment or
benefit to avoid being subject to the tax imposed by Section 409A of the
Code.

     

    5.4 Certain
Definitions.

     

    (a) Separation from
Service. For purposes of this Agreement, “Separation from Service” shall
mean the Employee’s separation from service (within the meaning of Section 409A
of the Code and the regulations and other guidance promulgated thereunder) with
the group of employers that includes the Company and each affiliated company.
For this purpose, with respect to services as an employee, the Employee’s
Separation from Service shall occur on the date as of which the Employee and the
Company reasonably anticipate that no further services will be performed after
such date or that the level of bona fide services the Employee will perform
after such date (in any capacity, including as an employee or an independent
contractor) will permanently decrease to no more than 20% of the average level
of bona fide services performed (in any capacity, including as an employee or an
independent contractor) over the immediately preceding 36-month period (or the
full period of services to the Company if the Employee has been providing
services to the Company less than 36 months).

     

    (b) Specified Employee.
For purposes of this Agreement, “Specified Employee” shall mean a specified
employee within the meaning of Section 409A(a)(2) of the Code and the
regulations and other guidance promulgated thereunder.

     

    (c) Separation Date. For
purposes of this Agreement, “Separation Date” shall mean the date on which the
Employee’s Separation from Service occurs.

     

    6. Confidential
Information.

     

    Employee
acknowledges that during the course of his employment with the Company since
1993 and in his services as a director of the Company since 1984, Employee has
been involved, and he will continue to be involved, in the development of the
Confidential Information (as herein defined) of the Company and its affiliated
companies, and he has had access, and will continue to have access, to
Confidential Information relating to the business and affairs of the Company and
its affiliated companies.  “Confidential Information” means and
includes all confidential and/or proprietary information, trade secrets and
“know-how” and compilations of information of any kind, type or nature (tangible
and intangible, written or oral, and including information contained, stored or
transmitted through any electronic medium), whether owned by the Company or its
affiliated companies, disclosed to the Company or its affiliated companies in
confidence by third parties or licensed from any third parties, which, at any
time during Employee’s employment or service as a director of the Company, is
developed, designed or discovered or otherwise acquired or learned by Employee
and which relates to the Company or its affiliated companies, partners,
business, services, products, processes, properties or assets, customers,
clients, suppliers, vendors or markets or such third
parties.  Confidential Information includes, by way of example and
without limitation, the following:  all patents, 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    inventions,
processes and formulae including any proprietary information regarding existing
and proposed products and services; information regarding existing and potential
customers, employees, contractors, and the industry not generally known to the
public; strategies, books, records and documents; the names of and other
information concerning customers, investors, and business affiliates such as
contact name, service or product provided, pricing for that customer, type and
amount of products and services used, credit and financial data, and/or other
information relating to the relationship with that customer; plans and
strategies for expansion or acquisition; budgets, financial and sales data,
pricing and costing data; sources of capacity and sources of supply; contracts
benefiting or obligating the Company or its affiliated companies; bids or
proposals submitted to or by any third parties; organizational structure;
personnel information, including salaries and responsibilities of personnel;
payment amounts or rates paid to consultants or other service providers; and
other confidential or proprietary information.

     

    7. Nondisclosure.

     

    Employee
acknowledges and agrees that the Company and its affiliated companies have put
in place certain policies and practices to safeguard such Confidential
Information.  Employee further acknowledges and agrees that such
Confidential Information constitutes a valuable, special and unique asset used
by the Company and its affiliated companies in their businesses to obtain a
competitive advantage over their competitors and was and is developed or
acquired by the Company and its affiliated companies at considerable time and
expense and is intended to be used solely for the benefit of the Company and its
affiliated companies.  Employee also acknowledges and agrees that
except for the Employee’s previous agreements to maintain the confidentiality of
such Confidential Information as set forth in that certain Agreement dated
February 26, 1993 between the Company and the Employee (the “Prior
Agreement”) and the Employee’s agreements contained in this Agreement, the
Company would not impart or provide access to such Confidential Information to
Employee.  Accordingly, Employee agrees that during Employee’s
lifetime, both during and after the term of Employee’s employment with the
Company, unless authorized by the Board in writing, Employee will (i) hold all
Confidential Information in strict confidence and will not, directly or
indirectly, disclose, make available, discuss, transmit, publish or use such
Confidential Information other than for the Company’s benefit and/or the benefit
of its affiliated companies and (ii) not, directly or indirectly, disclose, use,
cause, facilitate or allow any third party to use such Confidential Information
in any way, except as may be (A) authorized by the Company’s Chief
Executive Officer in writing, or (B) required by law or applicable legal
process.  In the event Employee becomes legally compelled to disclose
any Confidential Information, Employee will provide the Company with prompt
written notice so that the Company may seek a protective order or other
appropriate remedy with respect to such disclosure.  Employee further
acknowledges and agrees that the Company’s conduct in providing Employee with
Confidential Information in exchange for the Employee’s nondisclosure agreement
gives rise to the Company’s interest in restraining Employee from competing
against the Company as set forth in Section 8 and Section 9 hereof,
and that Employee’s agreement to those provisions is designed to enforce
Employee’s nondisclosure agreement.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    8. Noncompetition.

     

    8.1 Employee
acknowledges and agrees that his training, work and experience with the Company
and its affiliated companies will enhance his value to competitors, and that the
nature of the Confidential Information to which Employee has access will make it
difficult, if not impossible for Employee to work for any person or entity that
competes with the business of the Company and its affiliated companies without
disclosing or utilizing the Confidential Information to which Employee has
access during the course of Employee’s employment or term as a director of the
Company.  Employee further acknowledges that the Company and its
affiliated companies are principally engaged in the business as described in
Section 8.2 below and that the Company and its affiliated companies provide
products and services to customers throughout the United States of America and
in international markets.  Employee further acknowledges and agrees
that the Company’s agreement to provide Employee with access to its Confidential
Information is ancillary to and contingent upon Employee’s agreement that
Employee will not, unless authorized by the Board in writing, during the term of
his employment by the Company and for a period of three years immediately
following the Employee’s Separation Date (collectively, the “Noncompete
Period”), directly or indirectly:

     

    (a) carry on, initiate
or have any ownership interest in any business that services, manufactures or
distributes products or services similar to those of the Company or its
affiliated companies or that otherwise competes with the Company or its
affiliated companies in any geographic area or market where the Company or any
of its affiliated companies are conducting business as of the Separation Date or
have conducted business during the previous twelve (12) months, provided that
this Section 8.1(a) shall not apply to the ownership by Employee of less
than 5% of the outstanding shares of a publicly-held entity that has shares
listed for trading on a securities exchange registered with the SEC or through
the automated quotation system of a registered securities
association;

     

    (b) become employed by,
derive benefit from or otherwise provide services for compensation (as a
consultant, agent or otherwise) or divert the Company’s business to any person
or entity that competes with the business of the Company in any geographic area
or market where the Company or any of its affiliated companies are conducting
business as of the Separation Date or have conducted business during the
previous twelve (12) months; or

     

    (c) contact, solicit,
or divert, for the purpose of attempting to enter into a business relationship
related to the manufacture, distribution or servicing of products or services
manufactured, distributed, or provided by Company or its affiliated
companies, successors or assigns,
with any customer with whom the Company has had a contractual or business
relationship during the two-year period prior to the Separation
Date.

     

    8.2 The Company,
together with its affiliated companies, is an oil and gas services company with
an integrated calcium chloride and brominated products manufacturing operation
that supplies feedstocks to the energy markets, as well as other markets and the
business of the Company and it affiliated companies is conducted throughout the
United States and in international markets and includes, without limitation, the
following:  

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (a) the manufacture and
marketing of clear brine fluids, additives and other associated products and
services (including without limitation filtration and wellbore cleanup
services), for the oil and gas industry for use in well drilling, completion and
workover operations, as well as the marketing of certain clear brine fluids and
dry chemical products to a variety of domestic and international markets outside
the energy industry;

     

    (b) providing services
required for the abandonment of depleted oil and gas wells and the
decommissioning of platforms, pipelines and other associated equipment and
providing electric wireline, engineering, diving, workover, and drilling
services;

     

    (c) producing oil and
gas from properties acquired by the Company and its affiliated companies,
including conducting development and exploitation operations on its oil and gas
properties; and

     

    (d) providing
production testing equipment, technology or services, wellhead compression
equipment, technology or services, or equipment, technology or services required
for the separation and recycling of oily residuals generated from petroleum
refining operations.

     

    8.3 Employee
acknowledges and agrees that the scope of each of the agreements and promises
contained in this Section 8 are reasonable as
to time, area and scope of activity restrained and are necessary to protect
Company’s legitimate business interests.

     

    8.4 Notwithstanding the
foregoing, Employee shall be permitted during the Noncompete Period to continue
to own and manage his oil and gas interests,  (none of which are
located anywhere in the inland waters of or offshore in the Gulf of Mexico or in
East Baton Rouge Parish, Louisiana) and invest in, acquire and/or manage
additional oil and gas interests; provided, however, that the Employee may not,
either directly or indirectly, invest in, acquire and/or manage additional oil
and gas interests at any time during the Employment Period without the prior
approval of the Board; provided, that the foregoing limitation shall not apply
to (i) interests in oil and gas properties located anywhere other than (A) in
the inland waters of or offshore in the Gulf of Mexico or (B) in East Baton
Rouge Parish, Louisiana, or (ii) the ownership by Employee of less than 5% of
the outstanding shares of a publicly-held entity that has shares listed for
trading on a securities exchange registered with the SEC or through the
automated quotation system of a registered securities association.

     

    9. Non-Solicitation.

     

    During the
Noncompetition Period, the Employee will not directly or indirectly (i) induce
or attempt to induce any employee of Company or its affiliated companies,
successors, or assigns to terminate that employees’ employment with Company or
its affiliated companies, successors, or assigns; (ii) induce or attempt to
induce any consultant or independent contractor doing business with or retained
by Company or its affiliated companies, successors, or assigns to terminate
their consultancy or contractual relationship with Company or its affiliated
companies, successors, or assigns; (iii) induce or attempt to induce any
customer, supplier, vendor or any person to cease doing business with Company or
its affiliated companies, successors, or assigns; 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    and/or (iv) either
on his behalf or on behalf of any person or entity that competes with the
business of the Company, employ or retain, or attempt to employ or retain, any
employee, consultant or independent contractor of the Company or its affiliated
companies, successors, or assigns.

     

    10. Successors.

     

    10.1 This Agreement is
personal to the Employee and shall not be assignable by the Employee. This
Agreement shall inure to the benefit of and be enforceable by the Employee’s
legal representatives.

     

    10.2 This Agreement
shall inure to the benefit of and be binding upon the Company and its successors
and assigns.

     

    10.3 The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
“Company” shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.  

     

    11. Miscellaneous.

     

    11.1 Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICT OF LAWS.  WITH RESPECT TO ANY SUIT, ACTION, OR OTHER
PROCEEDING ARISING FROM OR RELATING TO THIS AGREEMENT, THE COMPANY AND EMPLOYEE
HEREBY IRREVOCABLY AGREE TO THE EXCLUSIVE PERSONAL JURISDICTION AND VENUE OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS AND ANY TEXAS
STATE COURT WITHIN MONTGOMERY COUNTY, TEXAS.

     

    11.2 Amendment.  This
Agreement may not be amended or modified other than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.

     

    11.3 Waiver.  Any
term or condition of this Agreement may be waived at any time by the party
hereto which is entitled to have the benefit thereof, but such waiver shall only
be effective if evidenced by a writing signed by such party, and a waiver on one
occasion shall not be deemed to be a waiver of the same or any other type of
breach on a future occasion. No failure or delay by a party hereto in exercising
any right or power hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right or power.

     

    11.4 Notices.  All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
               If to
      Employee:

            	 Geoffrey M.
      Hertel
	 	 c/o TETRA
      Technologies, Inc.
	 	 24955
      Interstate 45 North
	 	 The
      Woodlands, TX  77380
	
               If to
      Company:

            	 TETRA
      Technologies, Inc.
	 	 24955
      Interstate 45 North
	 	 The
      Woodlands, TX  77380
	 	 Attention:  President
	
              With a copy
      to:

            	 TETRA
      Technologies, Inc.
	 	 24955
      Interstate 45 North
	 	 The
      Woodlands, TX  77380
	 	 Attention:  General
      Counsel

    

     

    or to such other
address as either party shall have furnished to the other in writing in
accordance herewith. Notices and communications shall be effective when actually
received by the addressee.

     

    11.5 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 any other provision or any other jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.  The parties agree that a court of competent jurisdiction
making a determination of the invalidity or unenforceability of any term or
provision of this Agreement including, without limitation, the length of time,
type of activity, geographic area or other restrictions set forth in
Sections 6, 7, 8 or 9 of this Agreement, shall have the power to reduce the
scope, duration or area of any such term or provision, to delete specific words
or phrases from any such term or provision, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified.

     

    11.6 Injunctive
Relief.  In recognition of the fact that a breach by the
Employee of any of the provisions of Sections 6, 7, 8 or 9 of this
Agreement will cause irreparable damage to the Company and/or its affiliated
companies for which monetary damages alone will not constitute an adequate
remedy, the Company shall be entitled as a matter of right (without being
required to prove damages or furnish any bond or other security) to obtain a
restraining order, an injunction, an order of specific performance, or other
equitable or extraordinary relief from any court of competent jurisdiction
restraining any further violation of such provisions by the Employee or
requiring the Employee to perform the Employee’s obligations
hereunder.  Such right to equitable or extraordinary relief shall not
be exclusive but shall be in addition to all other rights and remedies to which
the Company or any of its affiliated companies may be entitled at law or in
equity, including without limitation the right to recover monetary damages for
the breach by the Employee of any of the provisions of this
Agreement.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    11.7 Withholding
Taxes.  The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.

     

    11.8 Entire
Agreement.  This Agreement constitutes the entire agreement
between the parties hereto concerning the subject matter hereof and, except for
the covenants contained in the Prior Agreement which are intended to be carried
forward by the covenants contained in Sections 6, 7, 8 and 9 of this
Agreement, this Agreement shall supersede any other prior agreement or
understanding, both written and oral, between the parties with respect to such
subject matter.

     

    11.9 Captions.  The
captions herein are inserted for convenience of reference only, do not
constitute a part of this Agreement, and shall not affect in any manner the
meaning or interpretation of this Agreement.

     

    [SIGNATURE PAGE TO
FOLLOW]

    
      
         

      

      
        17 

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF,
the Employee has executed this Agreement and, pursuant to the authorization from
its Board of Directors, the Company has executed this Agreement as of the day
and year first above written.

     

    THE
COMPANY:

    

    TETRA TECHNOLOGIES,
INC.

    By:/s/Stuart M.
Brightman                                                                           

    Stuart M.
Brightman, President and

    Chief Executive
Officer

     

    EMPLOYEE:

     

    /s/Geoffrey M.
Hertel                                                                           

    Geoffrey M.
Hertel

    

     

    18exhibit101.htm

      

    EXHIBIT 10.1 

    

    
       

    

    
      
        
          
            	  

                    
                      CONFIDENTIAL
      TREATMENT REQUESTED

                      --

                      CONFIDENTIAL
      PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY
      FILED WITH THE SECURITIES AND EXCHANGE COMMISSION

                    

                    

                  

          

        

      

    

     

    LONG-TERM SUPPLY
AGREEMENT

     

    HEMLOCK
SEMICONDUCTOR, LLC, a Delaware limited liability company with its principal
place of business at 12334 Geddes Road, Hemlock, Michigan 48626, and SUNPOWER
CORPORATION, a United States corporation with its principal place of business at
3939 North First Street, San Jose, California 95134 hereby enter into this
Long-Term Supply Agreement.

     

    WHEREAS,
Buyer desires to purchase and Seller desires to sell Products pursuant to the
terms and conditions of this Agreement for use by Buyer in the solar industry;
and

     

    WHEREAS,
subject to the terms and conditions herein, Buyer will purchase from Seller
specified amounts of Products at specific prices per kilogram over the Term of
this Agreement.

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

     

    1. Definitions.  The
terms defined in this Section shall have the meanings specified in this
Section.  Other terms in this Agreement that are not defined in this
Section 1 shall have the meanings ascribed to them elsewhere in this
Agreement.

     

    
      	
              (a)  

            	
              “Affiliate”
      of either party means an entity that controls said party, is controlled by
      said party, or is under common control or common ownership with said
      party.  For purposes of this definition, “control” and
      “controlled” mean the possession of the power to direct or cause the
      direction of the management and policies of such an entity, whether
      through the ownership of voting securities, by contract, by management
      agreement or otherwise.

            

    

     

    
      	
              (b)  

            	
              “Agreement”
      means this Long-Term Supply
Agreement.

            

    

     

    
      	
              (c)  

            	
              “Buyer”
      means SunPower Corporation.

            

    

     

    
      	
              (d)  

            	
              “Effective
      Date” means the date on which execution of this Agreement has been
      completed by both parties.

            

    

     

    
      	
              (e)  

            	
              “Gross
      Price” for each Product means the Gross Price per kilogram for each year
      of this Agreement as set forth in Section 4 hereof and Tables II A and B,
      and Tables III A - I, of Exhibit B, subject to the adjustments set
      forth in this Agreement.

            

    

     

    
      	
              (f)  

            	
              “Net
      Price” for each Product means the Gross Price per kilogram minus the
      Advance Payment per kilogram for each year of this Agreement set forth in
      Table I of Exhibit B, subject to the adjustments set forth in this
      Agreement.

            

    

     

    
      	
              (g)  

            	
              “Net
      Remaining Advance Payment Balance” for each calendar year is set forth in
      Table 1 of Exhibit B.

            

    

     

    
      	
              (h)  

            	
              “Seller”
      means Hemlock Semiconductor, LLC.

            

    

     

    
      
         

        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    2. Product.  As
used in this Agreement, “Product” or “Products” means solar grade
polycrystalline silicon as described in the specifications for the respective
Products, as set forth in Exhibit A (the “Product
Specifications”).  Buyer shall utilize the Products for its
manufacturing purposes in solar applications only and shall not, without the
prior written consent of Seller, resell or transfer the Products to anyone or
use the Products other than in Buyer’s solar manufacturing applications, subject
to the following exceptions:

     

    
      	
              (a)  

            	
              Buyer
      may transfer the Products without prior written consent of Seller to
      wholly-owned or majority-owned subsidiaries of the Buyer (hereinafter
      together with Buyer referred to as the “Buyer Group”) for Buyer’s
      manufacturing purposes in solar applications only, and for no other
      purpose; and

            

    

     

    
      	
              (b)  

            	
              Buyer
      may transfer the Products without prior written consent of the Seller to
      persons who have entered into supply agreements with a Buyer Group member
      to produce ingots and/or wafers from such transferred Products for such
      Buyer Group member, for Buyer’s manufacturing purposes in solar
      applications.  Buyer shall notify Seller of each such transfer,
      provide copies of the Buyer Group transfer agreements upon entering into
      such agreements and notify Seller upon termination of such
      agreements.

            

    

     

    If so
requested by Buyer, Seller may, in its sole discretion, agree to deliver
Products to carriers that are shipping to Buyer Group members or persons who
have entered into supply agreements with a Buyer Group member (as described in
Sections 2(a) and 2(b) hereof) for the limited purposes cited above, and any
such deliveries will constitute delivery to Buyer under this
Agreement.

     

    Buyer
acknowledges that the Products bearing Product Codes HSC DMS-L, HS DMS-L, HSC
900, HS 900, HSC 840, HS 840, HSC 850, HS 850, HSC SCE, HS SCE, HSC PTBS, HS
PTBS, HSC PCE, HS PCE, HSC P75, HS P75, HSC P80, HS P80 (for which prices are
set forth in Tables III A – I, in Exhibit B) may not be available to Buyer for
purchase under this Agreement unless and until Seller, in its sole discretion,
elects to offer one or more of such Products for sale to Buyer; and, if Seller
so elects, any such sales shall occur upon agreement of Buyer and
Seller.  Notwithstanding the preceding sentence, Buyer further
acknowledges and agrees that Seller, upon agreement with Buyer, may fill Buyer
orders for Products bearing Codes HSC DMS, HS DMS, HSC SGB and HS SGB (for which
prices are set forth in Tables II A – B) with any combination of Products,
including any of the products listed in the first sentence of this paragraph
(and priced in Tables III A – I).

     

    3. Term.  The
term of this Agreement shall commence on the Effective Date and (subject to
Section 19 hereof) shall continue through December 31, 2020 (the
“Term”).  Subject to Section 19, the Term may be extended, at Seller’s
sole discretion, for a period not to exceed 180 days (i.e., not beyond
June 29, 2021) so as to enable Seller to cure any default of its obligation
under this Agreement.

     

    4. Price.  The
Gross Price per kilogram for each Product for each calendar year shall be fixed
at the respective prices set forth in Tables II A and B, and Tables III A – I,
of Exhibit B, and is subject only to adjustments for Cost Structure Adjustments
(as provided in Section 8 

     

    
      
         

        
        

      

      
        2

        
          

        

      

      
        
        
hereof
and Exhibit C) and Taxes or other charges (as provided in Section 18
hereof).  The Gross Price per kilogram does not include the cost of
shipping.  All costs of shipping shall be borne by the
Buyer.

    

     

    5. Contract
Quantity.  “Contract Quantity” means the quantities of Products
that Buyer is obligated to purchase from Seller in each calendar year and in the
aggregate during the Term of this Agreement.  The Contract Quantity is
set forth in the aggregate and allocated by calendar year of purchase in Table I
of Exhibit B.  The Contract Quantity for each calendar year shall be
fulfilled based upon Buyer’s purchases among any of the respective Products in
that year.

     

    Buyer and
Seller acknowledge that in connection with their course of dealings in respect
of other purchase and sale agreements that are separate from and unaffected by
this Agreement, Buyer periodically issues purchase orders to Seller for
product(s) in which Buyer requests specified quantities, delivery dates and
delivery locations; and from time to time Buyer issues change orders to such
purchase orders.  Buyer and Seller hereby agree that (i)
notwithstanding such purchase order practices, nothing in this Section 5 shall
create any obligation under this Agreement to deliver purchase orders in
accordance with their prior purchase order practices, and (ii) in order to
constitute a purchase of Product toward fulfillment of Buyer's take or pay
purchase obligations under this Agreement, any purchase orders delivered by
Buyer to Seller shall expressly reference this Agreement and identify
specifically the portions of Product ordered in such purchase order as being
purchased under this Agreement, and absent such express reference and
identification, such purchases shall not count toward Buyer purchase obligations
under this Agreement.

     

    6. Non-Refundable
Advance Payment.  Buyer shall make a non-refundable,
unconditional, irrevocable advance payment to Seller in the amount of $*** (the
“Advance Payment”), payable as follows:

     

    ***

     

    

     

    

     

    Seller
understands and acknowledges that Buyer is making the Advance Payment to secure
the availability of the Contract Quantity of Products.  Buyer
acknowledges and agrees that, except as provided in Section 11 and Section 14,
there are no circumstances or occurrences that will require Seller to refund to
Buyer all or any portion of the Advance Payment.  The Advance Payment
shall be applied as a credit against the Gross Price of the Products that Buyer
is required to purchase during the Term of this Agreement, at the times and in
the amounts per kilogram shown on Table I of Exhibit B.

     

    7. Take or
Pay Agreement.  This Agreement is a take or pay agreement such
that, in addition to making the Advance Payment required under Section 6 hereof,
Buyer is absolutely

     

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
         

        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    and
irrevocably required to pay the Net Price per kilogram for the Contract Quantity
per calendar year over the Term of this Agreement.  In the event that
Buyer fails to order or take delivery of the Contract Quantity for a calendar
year then Seller shall invoice Buyer for the difference between the quantity of
Products ordered in that calendar year and the Contract Quantity of Product for
that calendar year at the Net Price in effect for HSC DMS and/or HS DMS for that
calendar year (subject to any price adjustment provided for in this Agreement,
including without limitation, under Section 8 or Section 18), and Buyer
shall pay the same in accordance with Section 9 hereof.

     

    8. Cost
Structure Adjustments.  The prices described in Section 4 and
set forth in Tables II A and B, and Tables III A – I, of Exhibit B are subject
to upward price adjustments based upon the prior years’ cumulative cost
increases in accordance with the formulae set forth in Exhibit C (“Cost
Structure Adjustments”).  The parties acknowledge and understand that
the indices used in calculating the Cost Structure Adjustments for electricity,
labor and silicon metal (as referenced in Exhibit C) for each of the respective
calendar years during the Term of this Agreement, beginning with 2009, will not
be available until the following year.  Based on past experience, the
parties anticipate that the indices for labor and silicon metal will be
published in the first quarter of the following year, and for electricity not
until the fourth quarter of the following year.  Irrespective of the
dates that any of the indices are published, commencing in 2009, as soon as is
reasonably practicable after Seller learns of the first index to be published,
Seller shall determine the Cost Structure Adjustment, if any, attributable to
that particular index, and shall notify Buyer of any such adjustment to the
Gross Price of the Products, and such adjustment shall be effective
retroactively to January 1 of that year.  Additional adjustments may
be made during that year as the remaining indices are published and the data
applied to the formulae in Exhibit C.  All price adjustments made in a
given year shall be cumulative, and all upward price adjustments shall remain in
effect until the respective Cost Structure Adjustment calculations are performed
in the following year.  In the event that in the following year the
calculation of a particular Cost Structure Adjustment determines that no upward
price adjustment is triggered for that cost index, or a price adjustment of a
different amount is triggered, then Seller shall, within 30 days of performing
such Cost Structure Adjustment, so notify Buyer and issue a credit to Buyer,
which shall be applied against future purchases required under this Agreement,
in the amount that Buyer paid an upward Cost Structure Adjustment for that
particular cost index, during a period in which no adjustment or a lower
adjustment applied.

     

    For
example, if cost increases for labor and silicon metal give rise to upward price
adjustments for calendar year 2015 and Seller learns of and so notifies Buyer of
those in April 2015, then Seller shall be entitled, in April 2015, to payment
for the full price increases for labor and silicon metal retroactive to January
1, 2015.  If, thereafter in October 2015, the cost of electricity
gives rise to an upward price adjustment and Seller learns of and so notifies
Buyer of that in October 2015, then Seller shall be entitled, in October 2015,
to payment for the full price of the electricity increase, retroactive to
January 1, 2015.  The upward price adjustments for each of these three
cost components will remain in effect until Seller performs the next annual Cost
Structure Adjustment calculations respectively, in 2016.  If, upon
performing the calculation for labor and silicon metal in, for example, April
2016, no upward price adjustment is triggered (which would have been effective
retroactive to January 1, 2016), then, within 30 days, Seller shall issue a
credit to Buyer to be applied against future purchases, in the amount of the

     

    
      
         

        
        

      

      
        4

        
          

        

      

      
        
        
applicable
2015 upward adjustment (e.g. for labor, silicon or electricity) per kilogram
that Buyer paid from January 1, 2016 until Seller gives notice.  If,
instead, upon performing the respective Cost Structure Adjustment calculations
in 2016, one or more upward price adjustments are triggered, they will be
effective retroactive to January 1, 2016.

    

     

    Under no
circumstances will there be any downward Cost Structure Adjustments to the Gross
Prices set forth in Tables II A and B, and Tables III A – I, of Exhibit
B.  Any Cost Structure Adjustment applicable under this Section 8
shall be in addition to and cumulative with any price adjustments for any other
price adjustments under this Agreement, including without limitation taxes or
other charges provided for in Section 18 hereof.

     

    Buyer
acknowledges that, should any of the cost indices referenced in Exhibit C that
are components of the Cost Structure Adjustment formulae no longer be published
as anticipated, or the data presentation, data provided, or data preparation be
changed such that Seller, in its sole and reasonable discretion, determines that
the purpose of this Cost Structure Adjustment provision has or will fail to
achieve its purpose, then Seller shall select a replacement index or benchmark,
which shall be binding upon Buyer’s written agreement, which consent shall not
be unreasonably withheld.

     

    9. Payment.  Payment
terms are net 30 days from the date of the invoice.  Finance charges
of ***% per month (***% per annum) shall be assessed on payments past due from
the payment due date to the date payment is received.  Failure to pay
invoices when due or finance charges when assessed may result in delayed or
cancelled shipments.  No deductions, setoffs, defenses or
counterclaims from invoices are permitted.  Delay or cancellation by
Seller of shipments resulting from Buyer’s non-payment will not relieve Buyer
from any obligation set forth in this Agreement.

     

    10. Freight
Terms, Title and Risk of Loss.  Freight terms for the shipment
of Products hereunder are FCA (Incoterms 2000) from any of Seller’s designated
shipping points.  Buyer shall bear all expenses of shipment, and Buyer
shall be solely responsible for the selection and engagement of
carriers.  Title and risk of loss for all Products shall pass to Buyer
upon delivery to carrier.

     

    11. Termination
and Damages.  The parties acknowledge that it is their express
intent that Buyer is obligated to purchase and Seller is obligated to deliver
the Contract Quantity over the Term of this Agreement, and that the basis and
circumstances under which the parties may terminate this Agreement prior to the
expiration of the Term of this Agreement are expressly limited to the terms of
this Section 11.

     

    
      	
              (a)  

            	
              Default
      by Seller-Failure to Supply Product.  Upon default by
      Seller of its obligation to deliver a material amount of the Contract
      Quantity of Product listed on Table I of Exhibit B, and such failure is
      not the result of a Force Majeure Event as defined in Section 19 or any
      default by Buyer, Buyer may serve a written notice of default upon
      Seller.  Seller shall have 180 days (commencing on the date
      written notice is received by Seller) to cure such default.  If
      such default is not cured within 180 days, and provided there is no
      uncured Buyer default, Buyer at its option may elect to terminate this
      Agreement by a second written notice
to

            

    

     

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
         

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Seller.  If
Buyer elects to terminate, Buyer shall be entitled to receive from Seller,
within thirty (30) days of Seller’s receipt of Buyer’s written election to
terminate this Agreement, an amount equal to the amount of the Advance Payment
that has not yet been applied to the price of Products purchased by Buyer,
without interest.

     

    If Buyer,
in its sole discretion, elects not to terminate this Agreement under the default
circumstances set forth above, then Buyer and Seller shall negotiate in good
faith toward modifying the terms of this Agreement, including, among other
terms, a new delivery schedule, the quantities to be supplied pursuant to that
schedule, and the applicable purchase price.

     

    Delay or
cancellation by Seller of shipments resulting from Buyer’s non-payment shall not
provide Buyer any termination rights or rights to damages set forth in this
Section 11.

     

    
      	
              (b)  

            	
              Limitation
      of Buyer’s Remedies.  EXCEPT AS PROVIDED IN SECTION
      11(a), SECTION 14, SECTION 15 AND SECTION 17 HEREOF, NO OTHER REMEDY
      (INCLUDING, BUT NOT LIMITED TO, INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR
      LOST PROFITS, LOST SALES, INJURY TO PERSON OR PROPERTY, OR ANY OTHER
      INCIDENTAL OR CONSEQUENTIAL LOSS) SHALL BE AVAILABLE TO
    BUYER.

            

    

     

    
      	
              (c)  

            	
              Default
      by Buyer.  Upon receipt of written notice from Seller of
      default by Buyer of its obligation
to:

            

    

     

    
      	
              (i)  

            	
              make
      any installment of the Advance Payment;
or

            

    

     

    
      	
              (ii)  

            	
              comply
      with its purchase or take-or-pay obligations;
or

            

    

     

    
      	
              (iii)  

            	
              make
      payment for the Products;

            

    

     

    Buyer
shall have 180 days to cure such default.  If such default continues
for more than 180 days after Buyer received notice thereof, or if any of Buyer’s
representations and warranties in this Agreement (including without limitation
in Section 21) were not true and accurate as of the Effective Date or become
untrue or inaccurate during the Term of this Agreement, Seller may, at its
option, terminate this Agreement by written notice to Buyer, and Seller will
have no further obligation to supply Product to Buyer, and Seller will thereupon
be entitled to the following damages:

     

    
      	
              A.  

            	
              payment
      by Buyer to Seller of all Advance Payment amounts due under Section 6 and
      not yet paid by Buyer to Seller;
and

            

    

     

    
      	
              B.  

            	
              retention
      of any Net Remaining Advance Payment Balance;
  and

            

    

     

    
      	
              C.  

            	
              payment
      by Buyer to Seller for all Product delivered;
  and

            

    

     

    
      
         

        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              D.  

            	
              acceleration
      of payment by Buyer to Seller for all remaining Contract Quantity of
      Product at the Net Price in effect for HSC DMS and/or HS DMS at the time
      of Buyer’s default, subject to any price adjustment provided for in this
      Agreement, including without limitation, under Section 8 or Section
      18.

            

    

     

    Buyer
acknowledges and agrees that payments made by Buyer under this Section 11(c) do
not constitute a penalty.

     

    Buyer
acknowledges and agrees that the 90-day cure period provided in this Section
11(c) is not intended to and shall not extend the payment terms beyond those set
forth in Section 9 hereof.

     

    12. Confidentiality
and Trade Secrets.

     

    
      	
              (a)  

            	
              Seller
      and Buyer acknowledge and agree that certain information each party has
      received or may receive from the other party or from a Seller or Buyer
      Affiliate in connection with this Agreement, including information
      regarding research, technology, technical specifications, product
      developments, marketing plans or conditions, products, business
      strategies, and the like, constitutes “Confidential Information” of the
      other party and shall be deemed disclosed by the other party to the
      receiving party.  The purpose for exchanging Confidential
      Information is to allow the parties to use Confidential Information solely
      for the purpose of meeting their obligations and responsibilities under
      this Agreement.  The party receiving any Confidential
      Information, and its employees, attorneys, financial advisors, officers,
      directors, shareholders and members who receive Confidential Information,
      shall not, except with the prior written consent of the disclosing party,
      (i) use Confidential Information for any purpose other than those purposes
      permitted under this Agreement, whether for itself or for the benefit of
      another, or (ii) divulge, disclose, publish or communicate, to any person,
      firm, corporation or entity, in any manner whatsoever, the terms of this
      Agreement or any Confidential Information of the disclosing party;
      provided, however, that (i) each party hereto may use, divulge, disclose
      or communicate the terms of this Agreement or Confidential Information of
      the disclosing party to its Affiliates, members, and/or shareholders, and
      Affiliates of those entities, on a “need-to-know” basis, subject to the
      provisions of this Section 12, without first obtaining the other party’s
      written consent, and (ii) Buyer may use, divulge, disclose or communicate
      the terms of this Agreement or Confidential Information of the disclosing
      party to persons who have entered into a supply agreement with a Buyer
      Group member (as provided in Section 2(b) hereof) on a “need to know”
      basis, subject to the provisions of this Section 12, provided that Seller
      has consented in writing in advance to such disclosure, which consent
      shall not be unreasonably withheld.  Each party further agrees,
      for itself and for any person to whom a disclosure is permitted and made,
      to use the same degree of care to maintain as confidential and to avoid
      non-permitted use or disclosure of the Confidential Information disclosed
      to it under this Agreement as it employs with respect to its own
      confidential information, but at all times shall use at least reasonable
      care to 

            

    

     

    
      
         

        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
    

     

    
      	 	 protect
      against a non-permitted use or disclosure.  Confidential
      Information does not and shall not include information
  that:

    

     

    
      	
              (i)  

            	
              was
      already known to the receiving party at the time such Confidential
      Information is disclosed by the other
party;

            

    

     

    
      	
              (ii)  

            	
              was
      or became publicly known through no wrongful act of the receiving
      party;

            

    

     

    
      	
              (iii)  

            	
              was
      rightfully received from a third party without
  restriction;

            

    

     

    
      	
              (iv)  

            	
              was
      independently developed by the receiving party;
  or

            

    

     

    
      	
              (v)  

            	
              was
      required for legal or financial reporting purposes to be disclosed;
      provided, however, that the party being required to disclose shall, if
      circumstances permit, provide advance notice to the other party and shall
      allow the other party a reasonable opportunity to oppose such disclosure,
      if appropriate, and assist the other party, at such party’s sole expense,
      in obtaining a protective order or other method of maintaining
      confidentiality of such Confidential
  Information.

            

    

     

    The
obligations not to use and not to disclose Confidential Information received by
a party under this Agreement shall continue during the Term of this Agreement
and for a period of three (3) years thereafter, and thus survive the termination
or expiration of this Agreement.

     

    
      	
              (b)  

            	
              The
      parties further acknowledge and agree that certain of the Confidential
      Information that has been or will be provided to Buyer in connection with
      this Agreement concerns technical information related to the Products, the
      design, composition, performance, characteristics, manufacture, and use of
      the Products, and applications for the Products, including research, test
      results, and test methodologies, and also constitutes or reflects trade
      secrets of Seller or an Affiliate of Seller (herein collectively “Seller’s
      Trade Secrets”).  Buyer acknowledges and agrees that Seller’s
      Trade Secrets are owned by Seller or an Affiliate of Seller, are secret,
      are being provided to Buyer in confidence, are the subject of reasonable
      efforts by Seller to keep them secret, and that Seller has derived value
      because of their secrecy, as evidenced in part by the parties entering
      into this Agreement.  Buyer agrees for itself and any person to
      whom a disclosure is permitted and made, to use the same degree of care to
      maintain as confidential and to avoid any non-permitted use or disclosure
      of Seller’s Trade Secrets as it employs with respect to its own trade
      secret information, but at all times shall use at least reasonable care to
      protect Seller’s Trade Secrets against non-permitted use or
      disclosure.  The obligations not to use and not to disclose
      Seller’s Trade Secrets shall continue during the Term of this Agreement
      and, with respect to each Seller Trade Secret, for so long thereafter as
      Seller and/or Seller’s Affiliate maintains such Trade Secret as a trade
      secret, and thus survive the termination or expiration of this
      Agreement.

            

    

     

    
      
         

        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	
              (c)  

            	
              Buyer
      will be liable for any breach of this Section 12 by any Buyer Group
      members or any person to whom Buyer is permitted to disclose Seller’s
      Confidential Information and/or Seller’s Trade Secrets.  In the
      event of a breach or a threatened breach of this Section 12, Buyer
      acknowledges and agrees that Seller will face irreparable injury which
      cannot be completely or adequately remedied by monetary damages and that
      Seller shall be entitled, in addition to remedies otherwise available at
      law or in equity, to a temporary restraining order, a preliminary
      injunction, and a final injunction enjoining such breach or threatened
      breach.

            

    

     

    
      	
              (d)  

            	
              Seller
      will be liable for any breach of this Section 12 by any person to whom
      Seller is permitted to disclose Buyer’s Confidential
      Information.  In the event of a breach or a threatened breach of
      this Section 12, Seller acknowledges and agrees that Buyer will face
      irreparable injury which cannot be completely or adequately remedied by
      monetary damages and that Buyer shall be entitled, in addition to remedies
      otherwise available at law or in equity, to a temporary restraining order,
      a preliminary injunction, and a final injunction enjoining such breach or
      threatened breach.

            

    

     

    13. Limited
Warranty.  Buyer acknowledges and agrees that Seller warrants
only that: (i) upon delivery to the carrier, the Products will meet the
applicable Product Specifications, as set forth in Exhibit A and (ii) the
Products will be delivered free from any security interest, lien or
encumbrance.  THIS LIMITED WARRANTY IS IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, SUCH WARRANTIES BEING
EXPRESSLY DISCLAIMED.

     

    14. Limited
Remedy for Non-Conforming Products.  Seller shall be given
reasonable and prompt written notice and opportunity to examine any claim by
Buyer that the Products are not compliant with the Limited Warranty set forth in
Section 13.  Buyer agrees that its sole and exclusive remedy against
Seller, in the event of a breach of the Limited Warranty set forth in Section
13, shall be limited, at Seller’s sole discretion, to either: (i) the revision,
repair or replacement of Products that are not compliant with Section 13 or (ii)
refund payment not to exceed the purchase price (including any Advance Payment
applied to such purchases) of the specific non-compliant Products.  In
the event that Seller elects to remedy any breach of the Limited Warranty under
section (ii) of the preceding sentence, any quantity of Product for which the
purchase price has been refunded will reduce Seller’s obligation to supply
Product and Buyer’s obligation to purchase Product hereunder by an equivalent
amount.  Buyer further acknowledges and agrees that in the event that
Seller elects to make refund payments as provided in the alternate remedy (ii)
above, this exclusive remedy provision shall not have failed of its essential
purpose.  Any replacement or refund is conditional on Buyer giving
Seller written notice within 90 days from the date of shipment by Seller that
the Products are other than as warranted.  Failure by Buyer to give
this written notice within the 90-day period shall constitute a waiver by Buyer
of all claims under this Agreement with respect to any claim of defect of the
Products.  If requested by Seller, all unconsumed Products alleged by
Buyer to be other than as warranted in Section 13 shall be returned to Seller
freight collect.

     

    
      
         

        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    15. Limitation
on Damages.  THE DAMAGE LIMITATION FOR BREACH OF THE LIMITED
WARRANTY OF SECTION 13 IS AS SET FORTH IN SECTION 14
ABOVE.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY,
SELLER’S MAXIMUM AGGREGATE LIABILITY FOR ANY OTHER CLAIMS ARISING OVER THE TERM
OF THIS AGREEMENT, IF ANY, FOR ALL DAMAGES, INCLUDING WITHOUT LIMITATION
CONTRACT DAMAGES AND DAMAGES FOR INJURIES TO PERSONS OR PROPERTY, WHETHER
ARISING FROM SELLER’S BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE,
PRODUCT LIABILITY, STRICT LIABILITY, OR OTHER TORT, IS LIMITED TO BUYER’S NET
REMAINING ADVANCE PAYMENT BALANCE, WITHOUT INTEREST, (AS SET FORTH IN TABLE I OF
EXHIBIT B) AT THE TIME SUCH LIABILITY IS DETERMINED.  IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL, OR
SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST REVENUES AND
PROFITS.  THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF
ESSENTIAL PURPOSE OF THE LIMITED REMEDY OR ANY OTHER REMEDY SET FORTH IN THIS
AGREEMENT.

     

    16. Exclusion
and Waiver of Remedies, Liability and Damages As Against Seller’s
Affiliates.  Buyer acknowledges and agrees that any and all
potential claims, remedies, liabilities or damages sought by Buyer against
Seller arising directly or indirectly from Seller’s performance under this
Agreement may be asserted by Buyer against Hemlock Semiconductor, LLC only, and
not against any Affiliates of Hemlock Semiconductor, LLC.  Buyer
further acknowledges and agrees that only Hemlock Semiconductor, LLC will be
answerable at law or in equity for the obligations of Seller to perform under
this Agreement, and Buyer hereby forever waives any and all claims that it might
seek to assert against any Affiliate of Hemlock Semiconductor, LLC relating
directly or indirectly to this Agreement.

     

    17. Patents.  If
any suit is brought against Buyer for infringement of any United States Letters
Patent, alleging that the Products manufactured by Seller, or an Affiliate of
Seller, infringe any United States Letters Patent, Seller shall, at its own
expense, defend and control the suit against these allegations only, and shall
pay any award of damages assessed against Buyer in the suit only to the extent
that the damages are awarded in connection specifically with a final
adjudication, with all appeals as of right exhausted or waived, that the Product
infringes a not invalid patent claim that is not unenforceable, provided that
Buyer has not materially changed the Product by subsequent processes and gives
Seller prompt notice in writing of the institution of the suit and, to the full
extent of Buyer’s power to do so, Buyer permits Seller to defend and control the
suit against these allegations.  The above fully expresses Buyer’s
exclusive remedy and Seller’s sole responsibility with respect to infringement
of any patent by the Products, and Seller EXPRESSLY DISCLAIMS ANY OTHER WRITTEN
OR UNWRITTEN, EXPRESS OR IMPLIED, WARRANTY AGAINST INFRINGEMENT with respect to
the Products.  In no circumstance shall Seller be liable to defend or
pay any award of damages assessed against Buyer in any suit or cause of action
alleging that the use of the Products infringes any patent.

     

    18. Taxes and
Other Charges.  In the event that any governmental authority
(federal, state, local or otherwise) imposes, levies or assesses a tax,
surcharge, assessment or any other additional charge on the production, sale,
use, transportation, shipment, conveyance or delivery of the Products, Seller
may (at its sole option), in accordance with applicable law, add 

     

    
      
         

        
        

      

      
        10

        
          

        

      

      
        
        
all or
any portion of such tax, surcharge, etc., to the Gross Price of the
Products.  This tax, surcharge, etc., shall include (but not be
limited to):  charges associated with environmental factors (e.g.,
carbon charges, charges associated with green-house gases), emission fees, and
charges required for the purchase of carbon or emission off-sets and
credits.  The price may be adjusted upward regardless of whether such
charges are incurred directly by Seller or imposed indirectly upon it (e.g.,
charges imposed on an energy provider and billed indirectly to
Seller).

    

     

    19. Force
Majeure.  Neither Buyer nor Seller shall be liable for delays
or failures in performance of its obligations under this Agreement that arise
out of or result from causes beyond such party's control, including without
limitation: acts of God; acts of the Government or the public enemy; natural
disasters; fire; flood; epidemics; quarantine restrictions; strikes; freight
embargoes; war; acts of terrorism; and, in the case of Seller only, a default of
a Seller supplier (in each case, a “Force Majeure Event”).  In the
event of any such delay or failure of performance by Buyer or Seller, the other
party shall remain responsible for any obligations that have
accrued to it but have not been performed by it as of the date of the
Force Majeure Event.  When the party suffering from the Force Majeure
Event is able to resume performance, the other party shall resume its
obligations hereunder.  The Term of this Agreement may be extended for
a period not to exceed two (2) years, so as to complete the purchase and
delivery of Product affected by a Force Majeure Event.  The party
suffering a Force Majeure Event shall provide the other party with prompt
written notice of (i) the occurrence of the Force Majeure Event, (ii) the
date such party reasonably anticipates resuming performance under this Agreement
and, if applicable, (iii) such party's request to extend the Term of this
Agreement.

     

    In
addition, if due to a Force Majeure Event, Seller is unable to supply sufficient
goods to meet all demands from customers and internal uses, Seller shall have
the right to allocate supply among its customers in any manner in which Seller,
in its sole discretion, may determine.

     

    Notwithstanding
anything in this Agreement to the contrary, in the event that due to a Force
Majeure Event the party suffering such event is unable to perform its
obligations under this Agreement for longer than two (2) years after the event
occurs, the other party shall have the right to terminate this
Agreement.

     

    20. No Third
Party Beneficiary Rights; No Rights or Remedies To Buyer
Group.

     

    This
Agreement establishes no third party beneficiary rights in any persons or
entities not parties hereto, including without limitation any Buyer Group
members or persons who have entered into supply agreements with a Buyer Group
member (as described in Sections 2(a) and 2(b) hereof); and, no provision
in this Agreement shall be construed or deemed in any way to inure to the
benefit of any persons or entities not parties hereto, including, but not
limited to, any person or entity described in Sections 2(a) and 2(b), so as to
constitute any such person or entity as a third party beneficiary of any or all
of this Agreement or otherwise give rise to any cause of action to such third
party.

     

    No Buyer
Group members or other persons who have entered into supply agreements with a
Buyer Group member (as described in Sections 2(a) and 2(b) hereof) shall have
any rights or remedies against Seller under any provision of this Agreement,
including without limitation 

     

    
      
         

        
        

      

      
        11

        
          

        

      

      
        
        
Section
11, Section 12, Section 14, Section 15 and Section 17, and Buyer shall indemnify
Seller pursuant to Section 22 hereof for any claim asserted against Seller by
any such person or entity.

    

     

    21. Representations
and Warranties.  Each of Buyer and Seller hereby represents and
warrants to the other as follows:

     

    
      	
              (a)  

            	
              Organization
      and Good Standing.  Such party is a corporation or
      limited liability company, as applicable, duly organized, validly existing
      and in good standing under the laws of its jurisdiction of organization
      and has the requisite corporate or limited liability company, as
      applicable, power authority to own, lease and operate its properties and
      to carry on its business as now conducted.  Such party is not in
      default under or in violation of any provisions of its organizational
      documents.

            

    

     

    
      	
              (b)  

            	
              Authority
      and Enforceability.  Such party has all corporate or
      limited liability company, as applicable, power and authority to execute
      and deliver this Agreement and perform its obligations
      hereunder.  The execution and delivery by such party of this
      Agreement and the performance by such party of the transactions
      contemplated hereby have each been duly and validly authorized by all
      necessary corporate or limited liability company, as applicable,
      action.  This Agreement has been duly executed and delivered by
      such party and, assuming due execution and delivery by the other party,
      constitutes a valid and binding obligation of such party, enforceable
      against it in accordance with its
terms.

            

    

     

    
      	
              (c)  

            	
              No
      Conflicts; Consents.  The execution and delivery of this
      Agreement by such party, the performance by it of its obligations
      hereunder, and the compliance by it with the terms and conditions hereof,
      will not: (i) violate any provision of its organizational documents, or
      (ii) violate any law, rule, regulation, accounting principle, financial
      disclosure obligation, or order of any court or governmental authority or
      agency that is applicable to or binding on such party.  The
      execution and delivery by such party of this Agreement and the performance
      by such party of its obligations hereunder do not require: (a) any
      authorization, consent or approval of, or notice to, any person or entity
      under any contract or agreement to which such party is party; or (b) any
      authorization, consent, approval, certification, license or order of, or
      any filing with or notice to, any governmental
  entity.

            

    

     

    
      	
              (d)  

            	
              Legal
      Proceedings.  There are no legal proceedings pending or,
      to the knowledge of such party, threatened before any governmental
      department, commission, board, agency, or instrumentality that would
      prevent the execution and delivery by such party of this Agreement, the
      consummation of the transactions contemplated hereby or the performance by
      such party of its obligations hereunder, or that would otherwise adversely
      affect the validity or enforceability of this Agreement, nor, to the
      knowledge of such party, is there any reasonable basis for any such
      proceeding.

            

    

     

    
      
         

        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    22. Indemnification.  Except
as provided in Section 17 hereof, Buyer shall defend, indemnify and hold
harmless Seller, its owners, members, Affiliates, officers, directors, employees
and agents (collectively the “Seller Indemnitees”) from and against any and all
liability, loss, and expense (including reasonable attorneys’ fees) as a result
of third party claims or actions arising out of Seller’s performance under this
Agreement, the sale or use of the Products or the handling or further processing
thereof following delivery by Seller to Buyer hereunder; provided, however, that
Buyer shall have no obligation to indemnify the Seller Indemnitees for any
liability, loss, claims, or expense (including attorneys’ fees) to the extent
established in a final judgment by a court of competent jurisdiction to have
resulted from a Seller Indemnitee’s gross negligence or willful
misconduct.

     

    23. Notice.  Any
notice, demand or other communication required or permitted to be given under
this Agreement shall be in writing and shall be deemed delivered to a party (i)
when actually received by the representatives designated below to receive
notices, or (ii) (a) when delivered to the designated recipients’ addresses
listed below (addressed to the designated recipients) by certified or registered
mail (return receipt requested) and (b) when delivered by confirmed facsimile to
the recipients’ numbers designated below.  Either party may change its
addresses or representatives for receiving notices upon notice to the
other.

     

    
      	
               
      

            	
              If
      to Seller to:

            	
              Hemlock
      Semiconductor, LLC

            

    

     

    
      	
               
      

            	
              12334
      Geddes Road

            

    

     

    
      	
               
      

            	
              Hemlock,
      Michigan  48626

            

    

     

    

     

    
      	
               
      

            	
              Attn.:
      Vice President of Marketing

            

    

     

    
      	
               
      

            	
              Fax
      No.: (989) 642-7400

            

    

     

    
      	
               
      

            	
              With
      a copy to:

            	
              Hemlock
      Semiconductor, LLC

            

    

     

    
      	
               
      

            	
              12334
      Geddes Road

            

    

     

    
      	
               
      

            	
              Hemlock,
      Michigan  48626

            

    

     

    

     

    
      	
               
      

            	
              Attn.:
      General Counsel/Legal Department

            

    

     

    
      	
               
      

            	
              Fax
      No.: (989) 642-7400

            

    

     

    
      	
               
      

            	
              If
      to Buyer to:

            	
              SunPower
      Corporation

            

    

     

    
      	
               
      

            	
              Attn:  Jon
      Whiteman

            

    

     

    
      	
               
      

            	
              3939
      North First Street

            

    

     

    
      	
               
      

            	
              San
      Jose, California  95134

            

    

     

    

     

    
      	
               
      

            	
              Fax
      No.:  (408) 240-5402

            

    

     

    
      	
               
      

            	
              With
      a copy to:

            	
              SunPower
      Corporation

            

    

     

    
      	
               
      

            	
              Attn:  General
      Counsel

            

    

     

    
      	
               
      

            	
              3939
      North First Street

            

    

     

    
      	
               
      

            	
              San
      Jose, California  95134

            

    

     

    

     

    
      	
               
      

            	
              Fax
      No.:  (408) 240-5402

            

    

     

    
      
         

        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    24. Choice of
Law.  This Agreement is made in, and shall be governed and
controlled in all respects by the laws of the State of Michigan, U.S.A.
(specifically disclaiming the United Nations Convention on Contracts for the
International Sale of Goods), without giving any effect to any choice or
conflict of law provision or rule that would cause application of the laws of
any jurisdiction other than that set forth in this Section.  All
disputes, including those related to interpretation, enforceability, validity,
and construction, shall be determined under the laws of the State of Michigan,
without regard to any conflict of law provisions.

     

    25. Choice of
Forum; Time Period.  The parties submit to the exclusive
jurisdiction of the Circuit Court for the County of Saginaw, State of Michigan,
U.S.A. for all disputes and actions arising, directly or indirectly, out of this
Agreement, the performance of this Agreement, or the breach of this
Agreement.  Any action arising, directly or indirectly, out of this
Agreement must be commenced within two (2) years after the cause of action has
accrued.

     

    26. Waiver.  A
party’s failure to exercise a right or remedy, or a party’s acceptance of a
partial or delinquent payment, shall not operate as a waiver of any of such
party’s rights or the other party’s obligations under the Agreement and shall
not constitute a waiver of such party’s right to declare an immediate or a
subsequent default.

     

    27. Severability.  If
one or more of the provisions of this Agreement shall be found by the court with
jurisdiction to be illegal, invalid or unenforceable, it shall not affect the
legality, validity or enforceability of any of the remaining provisions of this
Agreement.  The parties agree to attempt to substitute for any
illegal, invalid or unenforceable provision a legal, valid or enforceable
provision that achieves to the greatest extent possible the economic objectives,
allocation of responsibility, or limitation of warranties and damages of the
illegal, invalid or unenforceable provision.

     

    28. Merchants/Sophisticated
Parties.  Seller and Buyer acknowledge and agree that: (i) both
are sophisticated business entities with expertise and experience in all matters
relating to this Agreement; (ii) Buyer and Seller are both “merchants,” and this
Agreement is “between merchants,” as those terms are defined and used in the
Michigan law; (iii) there was equal bargaining power between the parties in
their negotiation and execution of this Agreement; (iv) neither party acted
under any duress, economic or otherwise, when considering and entering into this
Agreement; and (v) both parties had a full opportunity, and did, consult with
their respective counsel before entering into this Agreement.

     

    29. Integration.  This
Agreement and the Exhibits attached hereto, constitute the entire understanding
between the parties with respect to the subject matter of the Agreement and
supersede any prior discussions, representations, negotiations, agreements,
memoranda of understanding and the like.  Additional or different
terms contained in any Buyer document (including, without limitation, any
purchase order, estimate, order acknowledgement, or payment remittance) shall
not be binding, and shall not create, nor be construed to create any
modification of Buyer’s or Seller’s rights or obligations under this
Agreement.  Modifications to the Agreement may be made only in a
writing signed by each party.

     

    30. Assignments.  No
assignment of the Agreement or of any right or obligation under the Agreement
shall be made by either party without the prior written consent of the other

     

    
      
         

        
        

      

      
        14

        
          

        

      

      
        
        
party,
which consent shall not be unreasonably withheld.  In the event of a
proper assignment, the Agreement shall be binding upon and inure to the benefit
of the assigning party’s successors and assigns; and, in the event of a default
by the assignee, the assignor will remain liable.

    

     

    31. Dollars.  All
references to monetary amounts shall be in U.S. Dollars.

     

    32. Captions.  Captions
and section headings in this Agreement are for reference purposes only and are
not intended to be substantive portions of this Agreement between the
parties.

     

    33. Agreement
Preparation.  This Agreement shall be considered for all
purposes as prepared through the joint efforts of the parties and shall not be
construed against one party or the other as a result of the manner in which this
Agreement was negotiated, prepared, drafted or executed.

     

    34. Execution
Deadline.  This Agreement must be executed by Buyer and
returned to Seller before December 31, 2008.  If the Agreement is not
executed and returned to Seller by that date, Seller’s offer to enter into this
Agreement shall be revoked and shall be considered never to have been
made.

     

    

    ACCEPTED
AND AGREED:

    

    
      	 
      	 
      
	
              SUNPOWER
      CORPORATION

            	
              HEMLOCK
      SEMICONDUCTOR, LLC

            
	
              By: /s/ Marty T. Neese

            	
              By: /s/ Gary R. Homan

            
	
              Printed
      Name: Marty T. Neese

            	
              Printed
      Name: Gary R. Homan

            
	
              Title:
      Chief Operating Officer

            	
              Title:
      Vice President

            
	
              Date: January 9, 2009

            	
              Date: January 6,
2009

            

    

    

    
      
        
           

           

        

         

         

      

      
        15

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    PRODUCT
SPECIFICATION

     

    POLYCRYSTALLINE
SILICON SPECIFICATION & DESCRIPTION

     

    ***

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
        
           

        

         

         

      

      
        A-1

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    

     

    TABLE
I

    

    
      	 
      	
              Total
      Contract Quantity

              (in
      Kilograms)

              ***

               

            	 
      	
              Total
      Advance Payment

               

              $***

               

            
	
               

              Calendar
      Year

            	
              Contract
      Quantity

              Per
      Year

              (in
      Kilograms)

            	
              Advance
      Payment

              Per
      Kilogram

            	
              Net
      Remaining Advance

              Payment
      at Year-End

              (to
      be Prorated for Buyer Payments for Contract Quantity)

            
	
              2011

            	
              ***

            	
              $***

            	
              $***
      **

            
	
              2012

            	
              ***

            	
              $***

            	
              $***

            
	
              2013

            	
              ***

            	
              $***

            	
              $***

            
	
              2014

            	
              ***

            	
              $***

            	
              $***

            
	
              2015

            	
              ***

            	
              $***

            	
              $***

            
	
              2016

            	
              ***

            	
              $***

            	
              $***

            
	
              2017

            	
              ***

            	
              $***

            	
              $***

            
	
              2018

            	
              ***

            	
              $***

            	
              $***

            
	
              2019

            	
              ***

            	
              $***

            	
              $***

            
	
              2020

            	
              ***

            	
              $***

            	
              $***

            

    

    

    **Does
not include $*** of Advance Payment to be paid to Seller in ***

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
        
           

        

         

         

      

      
        A-2

        
          

        

      

      
         

      

    

    EXHIBIT
B (continued)

    

    

    

    Table
II A

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      DMS or HSC DMS

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            

    

    

    

    

    Table
II B

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      SGB OR HSC SGB

            	
              Chunk

            	
              10
      kg Bags

            	
              $***

            	
              $***

            

    

    

     

    

     

    

     

    

     

    

     

    

     

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
        
           

        

         

         

      

      
        B-3

        
          

        

      

      
         

      

    

    EXHIBIT
B (continued)

     

    Table
III A*

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      DMSL or HSC DMSL

            	
              Big
      Piece

            	
              10
      kg Bags

            	
              $***

            	
              $***

            

    

    

    Table
III B*

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      900  or HSC 900

            	
              Chunk

            	
              Bulk

            	
              $***

            	
              $***

            

    

    

    Table
III C*

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      840 or HSC 840

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            

    

    

     

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
        
           

        

         

         

      

      
        B-4

        
          

        

      

      
         

      

    

    EXHIBIT
B (continued)

     

    Table
III D*

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      850 or HSC 850

            	
              Chips

            	
              10
      kg Bags

            	
              $***

            	
              $***

            

    

    

    Table
III E*

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      SCE or HSC SCE

            	
              Carbon
      Ends

            	
              Bulk

            	
              $***

            	
              $***

            

    

    

    Table
III F*

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2012

            	
              HC
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      PTBS or HSC PTBS

            	
              Fall-Out

            	
              Bulk

            	
              $***

            	
              $***

            

    

    

     

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
        
           

        

         

         

      

      
        B-5

        
          

        

      

      
         

      

    

    EXHIBIT
B (continued)

     

    Table
III G*

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      PCE or HSC PCE

            	
              Etched
      CE

            	
              10
      kg Bags

            	
              $***

            	
              $***

            

    

    

    Table
III H*

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      P75 or HSC P75

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            

    

    

    Table
III I*

    

    
      	
              Calendar
      Year

            	
              Product

            	
              Type

            	
              Package

            	
              Gross
      Price Per kg

            	
              Net
      Price Per kg

            
	
              2011

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2012

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2013

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2014

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2015

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2016

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2017

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2018

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2019

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            
	
              2020

            	
              HS
      P80 or HSC P80

            	
              Processed
      Fines

            	
              Drum

            	
              $***

            	
              $***

            

    

    

     

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
         

        
        

      

      
        B-6

        
          

        

      

      
        
        

      

    

    

    

    *  This
Product may not be available to Buyer for purchase under this Agreement unless
and until Seller, in its sole discretion, elects to offer it for sale to Buyer;
and, if Seller so elects, it shall be in Seller’s sole discretion to determine
the timing and quantity of any such sales.  Seller however, upon
agreement with Buyer, may fill Buyer orders for Products bearing Codes HSC DMS,
HS DMS, HSC SGB and HS SGB (for which prices are set forth in Table II A – B)
with this product and/or with any combination of Products.

    

    
      
        
           

        

         

         

      

      
        B-7

        
          

        

      

      
         

      

    

    

     

    EXHIBIT
C

     

               Electricity
Cost Increases:  The parties agree that, pursuant to the
formula set forth herein, increases in the cost of electricity that exceed the
Cumulative Electricity Base Percentage may increase the Gross Price of the
Products.  Specifically, Seller shall increase the Gross Price of each
Product by $*** per kilogram for each whole percentage point that the Cumulative
Average Actual Electricity Percentage exceeds the Cumulative Electricity Base
Percentage for a calendar year.

    

    “Cumulative Electricity Base
Percentage” means a constant rate of increase of ***% for each calendar year
(“Electricity Base Percentage”) commencing with calendar year 2009, compounded
annually through the end of the Term of this Agreement.

    

    “Actual Electricity Percentage” means
the percentage change from one year to the next in the rate known as the Average
Price by State By Type of Provider (industrial price, full service providers)
published by the Energy Information Administration (“EIA”).  The
applicable rate used in calculating the percentage change from year to year
shall be an average of the EIA rates for Michigan and Tennessee.  The
Actual Electricity Percentages will begin with the rate change from calendar
year 2007 to calendar year 2008, as reflected in the EIA data that is expected
to be published in the fourth quarter of 2009.  Such change from 2007
to 2008 will be the Actual Electricity Percentage applicable in
2009.  Seller shall make the same calculation annually through the end
of the Term of this Agreement, each time comparing the rates for the immediately
preceding two years.  The parties anticipate that 2019 will be the
last year before the end of the Term of this Agreement for which EIA data will
be used for purposes of making a price adjustment, if any, effective January 1,
2020.

    

    “Cumulative Average Actual Electricity
Percentage” means the percentage change of the Actual Electricity Percentage for
each year, beginning in calendar year 2009, compounded annually through the end
of the Term of this Agreement.

    

    
      	
              Example of Electricity Cost
      Increases

                

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              2009

            	
              2010

            	
              2011

            	
              2012

            	
              2013

            	
              2014

            	
              2015

            	
              2016

            	
              2017

            	
              2018

            	
              2019

            	
              2020

            
	
              Electricity
      Base Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Cumulative
      Electricity Base Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Actual
      Electricity Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Cumulative
      Average Actual Electricity Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Percentage
      Difference:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Price
      Change / KG:

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            

    

    

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
        
           

        

         

         

      

      
        C-1

        
          

        

      

      
         

      

    

    EXHIBIT
C (continued)

     

    In the above example, the Annual
Electricity Percentage for 2009 is ***%, reflecting the rate change from 2007 to
2008.  The Annual Electricity Percentage for 2010 is ***%, reflecting
the rate change from 2008 to 2009.  The Cumulative Electricity Base
Percentage in 2010 is ***%, reflecting the annual compounding of the Electricity
Base Percentage beginning in 2009.  There is no upward price
adjustment for 2009 or 2010 because the Cumulative Average Actual Electricity
Percentage does not exceed the Cumulative Electricity Base Percentage by at
least one whole percentage point in either year; rather, it is ***% lower in
2009 and ***% lower in 2010.  Notwithstanding that the Cumulative
Average Actual Electricity Percentage is lower than the Cumulative Average
Electricity Base Percentage, there are no downward price adjustments, and the
same is true for 2011.  The Gross Price increase of $*** per kilogram
effective January 1, 2012, reflects that the Cumulative Average Actual
Electricity Percentage of ***% exceeds the Cumulative Electricity Base
Percentage of ***% by ***%, or, by at least more than one whole percentage
point, thereby triggering an upward price adjustment for
electricity.

    

    The upward price adjustment of $*** per
kilogram effective January 1, 2012 is in addition to any price adjustment for
labor or silicon metal, and remains in effect until Seller performs the Cost
Structure Adjustment calculation for electricity in 2013.  In this
example, there is no upward price adjustment imposed retroactive to January 1,
2013 because the Cumulative Actual Electricity Percentage of ***% exceeds the
Cumulative Electricity Base Percentage of ***% by only ***%, or, by less than
one whole percentage point.  Buyer, however, will have continued to
pay the $*** per kilogram that was imposed for 2012 until Seller performed the
Cost Structure Adjustment calculation in 2013, and therefore Seller, within 30
days of determining that no upward adjustment applies for 2013, owes Buyer a
credit in the amount of $*** per kilogram purchased between January 1, 2013 and
the date Seller gives notice of no upward adjustment.  In 2016, the
upward price adjustment of $*** per kilogram reflects that the Cumulative
Average Actual Electricity Percentage of ***% exceeds the Cumulative Electricity
Base Percentage of ***% by two whole percentage points, thereby resulting in an
upward price adjustment of $*** per kilogram x 2, for a total upward price
adjustment of $*** per kilogram.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
        
           

        

         

         

      

      
        C-2

        
          

        

      

      
         

      

    

    EXHIBIT
C (continued)

     

    

    Labor
Cost Increases:  The parties agree that, pursuant to the
formula set forth herein, increases in the cost of labor that exceed the
Cumulative Labor Base Percentage may increase the Gross Price of the
Products.  Specifically, Seller shall increase the Gross Price of each
Product by $*** per kilogram for each whole percentage point that the Cumulative
Actual Labor Percentage exceeds the Cumulative Labor Base Percentage for a
calendar year.

    

    “Cumulative Labor Base Percentage”
means a constant rate of increase of ***% for each calendar year (the “Labor
Base Percentage”) commencing with calendar year 2009, compounded annually
through the end of the Term of this Agreement.

    

    “Actual Labor Percentage” means the
compensation cost change, expressed as a twelve-month percentage change in the
Employment Cost Index published by the United States Department of Labor for
compensation costs for civilian workers not seasonally adjusted
(“ECI”).  The Actual Labor Percentages will begin with the
compensation cost change for calendar year 2008, as reflected in ECI data that
is expected to be published in the first quarter of 2009, measuring the change
from December 2007 to December 2008.  Seller shall, annually through
the end of the Term of this Agreement ascertain the ECI data for the immediately
preceding December to December period.  The parties anticipate that
2019 will be the last year before the end of the Term of this Agreement for
which ECI data will be used for purposes of making a price adjustment, if any,
effective January 1, 2020.

    

    “Cumulative Actual Labor Percentage”
means the percentage change of the Actual Labor Percentage for each calendar
year, beginning in calendar year 2009, compounded annually through the end of
the Term of this Agreement.

    

    
      	
              Example of Labor Cost
    Increases

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              2009

            	
              2010

            	
              2011

            	
              2012

            	
              2013

            	
              2014

            	
              2015

            	
              2016

            	
              2017

            	
              2018

            	
              2019

            	
              2020

            	 
      
	
              Labor
      Base Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	 
      
	
              Cumulative
      Labor Base Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	 
      
	
              Actual
      Labor Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	 
      
	
              Cumulative
      Actual Labor Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	 
      
	
              Percentage
      Difference:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	 
      
	
              Price
      Change / KG:

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	 
      

    

    

    In the above example, the Actual Labor
Percentage for 2009 is ***%, reflecting the compensation cost change from
December 2007 to December 2008, expressed as a percentage.  The Actual
Labor Percentage for 2010 is again ***%, reflecting the same rate change from
December 2008 to December 2009.  The Cumulative Actual Labor
Percentage for 2010 is ***%, reflecting the annual compounding of the Actual
Labor Percentage beginning in 2009.

    

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
         

        
        

      

      
        C-3

        
          

        

      

      
        
        

      

    

    There is
no upward price adjustment for 2009 or 2010 because the Cumulative Actual Labor
Percentage does not exceed the Cumulative Labor Base Percentage by at least one
whole percentage point in either year; rather, it is ***% lower in 2009 and ***%
lower in 2010.  Notwithstanding that the Cumulative Actual Labor
Percentage is lower the Cumulative Labor Base Percentage in 2009 and 2010, there
are no downward price adjustments, and the same is true for 2011 to
2017.  The Gross Price increase of $*** per kilogram effective January
1, 2018, reflects that the Cumulative Actual Labor Percentage of ***% exceeds
the Cumulative Labor Base Percentage of ***% by ***%, or, by at least one whole
percentage point, thereby triggering an upward price adjustment for
labor.

    

    The upward price adjustment of $*** per
kilogram effective January 1, 2018 is in addition to any price adjustment for
electricity or silicon metal, and in effect until Seller performs the Cost
Structure Adjustment calculation for labor in 2019.  In this example,
there is no upward price adjustment imposed retroactive to January 1, 2019
because the Cumulative Actual Labor Percentage of ***% exceeds the Cumulative
Labor Base Percentage of ***% by only ***%, or, by less than one whole
percentage point.  Buyer, however, will have continued to pay the $***
per kilogram that was imposed for 2018 until Seller performed the Cost Structure
Adjustment calculation in 2019, and therefore Seller, within 30 days of
determining that no upward adjustment applied for 2019, owes Buyer a credit in
the amount of $*** per kilogram purchased between January 1, 2019 and the date
Seller gives notice of no upward adjustment.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

    
      
         

         

      

      
        C-4

        
          

        

      

      
         

      

    

    EXHIBIT
C (continued)

     

               Silicon
Metal Cost Increases:  The parties agree that, pursuant to the
formula set forth herein, increases in the cost of silicon metal that exceed the
Cumulative Silicon Metal Base Percentage may increase the Gross Price of the
Products.  Specifically, Seller shall increase the Gross Price of each
Product by $*** per kilogram for each whole percentage point that the Cumulative
Actual Silicon Metal Percentage exceeds the Cumulative Silicon Metal Base
Percentage for a calendar year.

    

    “Cumulative Silicon Metal Base
Percentage” means a constant rate of increase of ***% (the “Silicon Metal Base
Percentage”) for each calendar year commencing with calendar year 2009,
compounded annually through the end of the Term of this Agreement.

    

    “Actual Silicon Metal Percentage,” for
2009 only, is calculated as the percentage change between an assumed price of
$*** per kilogram and the December 2008 USA CRU Spot – Import price, as
published by CRU International LTD (by subscription only) (“CRU Spot”), which is
expected to be published first quarter of 2009.  For 2010, the Actual
Silicon Metal Percentage will be the percentage price change from December 2008
to December 2009, based on CRU Spot data expected to be published in the first
quarter of 2010.  Seller shall make the same calculation annually
through the end of the Term of this Agreement, each time comparing the CRU Spot
price published for December of the immediately preceding two
years.  The parties anticipate that 2019 will be the last year before
the end of the Term of this Agreement for which CRU Spot data will be used for
purposes of making a price adjustment, if any, effective January 1,
2020.

    

    “Cumulative Actual Silicon Metal Base
Percentage” means the percentage change of the Actual Silicon Metal Percentage
for each year beginning in 2009, compounded annually through the end of the Term
of this Agreement.

    

    
      	
              Example of Silicon Metal Cost
      Increases

            	 
      
	 
      	
              2009

            	
              2010

            	
              2011

            	
              2012

            	
              2013

            	
              2014

            	
              2015

            	
              2016

            	
              2017

            	
              2018

            	
              2019

            	
              2020

            
	
              Silicon
      Metal Base Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Cumulative
      Silicon Metal Base Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Actual
      Silicon Metal Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Cumulative
      Actual Silicon Metal Percentage:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Percentage
      Difference:

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            	
              ***%

            
	
              Price
      Change / KG:

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            	
               $***

            

    

    

               In
the above example, the Actual Silicon Metal Percentage for 2009 of ***% reflects
the percentage change between the price of $*** per kilogram and the CRU Spot
price for

    

    

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

     

    
      
         

        
        

      

      
        C-5

        
          

        

      

      
        
        

      

    

    December
2008.  The Actual Silicon Metal Percentage for 2010 is ***%,
reflecting the CRU Spot price change from December 2008 to December
2009.  The Cumulative Silicon Metal Base Percentage in 2010 is ***%,
reflecting the annual compounding of the Silicon Metal Base Percentage beginning
in 2009.  There is no upward price adjustment for 2009 or 2010 because
the Cumulative Actual Silicon Metal Percentage does not exceed the Cumulative
Silicon Metal Base Percentage by at least one whole percentage point in either
year; rather, it is ***% lower in 2009 and ***% lower in
2010.  Notwithstanding that the Cumulative Actual Silicon Metal
Percentage is lower than the Cumulative Silicon Metal Base Percentage, there are
no downward price adjustments, and the same is true for 2011 -
2013.  The Gross Price increase of $*** per kilogram in 2014 reflects
that the Cumulative Actual Silicon Metal Percentage of ***% exceeds the
Cumulative Silicon Metal Base Percentage of ***% by ***%, or, by at least more
than one whole percentage point, thereby triggering an upward price adjustment
for silicon metal.  That upward price adjustment of $*** per kilogram
is effective January 1, 2014, is in addition to any price adjustment for
electricity or labor, and remains in effect until Seller performs the Cost
Structure Adjustment calculation for silicon metal in 2015.  In 2015,
the upward price adjustment of $*** per kilogram reflects that the Cumulative
Actual Silicon Metal Percentage of ***% exceeds the Cumulative Silicon Metal
Base Percentage of ***% by ***%, or, by more than two whole percentage points,
thereby resulting in an upward price adjustment of $*** per kilogram x 2, for a
total upward price adjustment of $***.  The upward price adjustment of
$*** is effective January 1, 2015 and remains in effect until Seller performs
the Cost Structure Adjustment calculation for silicon metal in
2016.

    

    In this example, the Cost Structure
Adjustment calculation in 2016 also results in an upward price adjustment of
$*** per kilogram.  Buyer will have continued to pay the $*** per
kilogram that was imposed for 2015 until Seller performed the Cost Structure
Calculation for 2016; therefore no credit is due, and the $*** per kilogram
upward price adjustment effective January 1, 2016 will remain in effect until
Seller performs the Cost Structure Adjustment calculation for silicon metal in
2017.  Here, the calculation in 2017 results in an upward price
adjustment of only $*** per kilogram.  Buyer, however, will have
continued to pay the $*** per kilogram adjustment from 2016 until Seller
performed the Cost Structure Adjustment calculation in 2017, and therefore
Seller, within 30 days of determining that a $*** per kilogram upward adjustment
applied for 2017, owes Buyer a credit in the amount of $*** per kilogram
purchased between January 1, 2017 and the date Seller gives notice of the $***
per kilogram upward adjustment.  

    

    

    

    

    

    

    

    

    

    

    

    ***
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

    
      
        
           

        

         

         

      

      
        C-6

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