Exhibit 10.23

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 30th day of January, 2007 (the “Effective Date”), between IDAHO GENERAL MINES, INC. (the “Company”), and ANDREW J. RUSSELL (“Employee”).

 

WITNESSETH

 

WHEREAS, the Company is in the mining business and wishes to retain the services of the most highly qualified mining professionals; and

 

WHEREAS, Employee has been an employee of the Company since August 16, 2006, serving as a Senior Manager Permitting and Technical; and

 

WHEREAS, Employee has been the Senior Manager of Permitting and Technical of the Company since that date; and

 

WHEREAS, the Company desires to restate its employment arrangement with Employee and employ Employee as its Director of Projects and Operations (“DPO”); and

 

WHEREAS, Employee desires to by employed by the Company as its DPO all on the terms and conditions provided herein; and

 

NOW, THEREFORE, in consideration of the foregoing, and the respective covenants and promises of the parties contained herein, the Company and Employee enter into this Agreement and agree as follows:

 

1.              DESCRIPTION OF SERVICES

 

1.1            Employer is a resident of Arizona and the Company understands his base of operation as DPO will be from the Phoenix, Arizona area.  Employee understands that despite the foregoing, his duties will require extensive travel to, without limitation, the location of the Company assets and its headquarters.  Employee shall, to the best of his ability, industriously and faithfully perform the responsibilities as DPO of the Company.  Employee shall devote all of his business time, attention, skill and efforts exclusively to the business and affairs of Company.  Employee represents and warrants that he has the necessary knowledge and experience to competently and professionally accomplish the duties of DPO as outlined in this Agreement.

 

1.2            Subject to the direction of the Chief Executive Officer, Employee’s duties as DPO of the Company, at the Company’s sole discretion, may include from time to time, without limitation, any or all of the following:

 

(a)            Overall management of all day-to-day Company operations;

 

(b)            Management of all staffing requirement for Company day-to-day operations;

 

 

(c)            Development of budgets and forecasts fat-review and adoption by the Company for all day-to-day operations of the Company;

 

(d)            Management of all Company day-to-day operations within budgets adopted by the Company from time to time;

 

(e)            Attainment of goals adopted by the Company for its day-to-day operations; and

 

(f)             Such other duties that may be assigned to Employee from time to time by the Company.

 

Employee’s duties shall also include other obligations as set forth elsewhere in this Agreement.

 

1.3            Except with the prior written consent of the Company, Employee will not during the term of this Agreement undertake or engage in any other employment or occupation.  It is understood that Russell is an owner in two businesses unrelated to the Company and that these entities are in no way in market competition with the Company.  Such entities do from time to time require the tertiary involvement of Russell.  This provision shall not preclude membership in professional societies, lecturing or the acceptance of honorary positions, that are in any case incidental to Employee’s employment by the Company and which are not adverse or antagonistic to the Company, its business or prospects, financial or otherwise.

 

2.              TERM OF AGREEMENT/EARLY TERMINATION

 

2.1            Subject to the provisions for early termination as hereinafter provided, the term of this Agreement shall commence as of the Effective Date and shall terminate automatically thirty-six (36) months after the Effective Date (the “Term”) unless the parties, prior to the end of the Term, enter into a written agreement renewing or extending this Agreement.

 

2.2            Despite the Term of this Agreement set forth in Section 2.1 above, the Company shall have the right to earlier terminate this Agreement:

 

(a)            at any time without Cause upon thirty (30) days prior written notice.  In such case, Employee will receive, as the only obligation of the Company to Employee, any portion of his Base Compensation (as defined in Section 3.1) earned through the date of termination, but not yet paid to Employee, plus a severance payment equal to eighteen (18) months of his annual Base Compensation and any declared bonus(es) not yet paid.  Upon termination, any granted stock options, warrants and stock grants will immediately vest.

 

(b)            at any time with Cause without notice.  In such case, Employee will receive, as the only obligation of the Company to Employee, his Base Compensation earned through the date of termination but not yet paid to Employee.  For the purposes of this Agreement and except as set forth elsewhere herein, Cause shall mean the good faith determination by the Company that:

 

(i)             Employee has committed a material breach of an obligation to the Company under the terms of this Agreement;

 

2

 

(ii)            Employee has neglected, failed or refused to perform his duties hereunder (other than as a result of physical or mental illness);

 

(iii)           Employee has failed to timely progress towards the goals assigned to Employee by the Company from time to time;

 

(iv)           Employee has committed an act of personal dishonesty including, without limitation, an act or omission intended to result in personal enrichment of Employee at the expense of the Company;

 

(v)            Employee has committed a willful or intentional act that could reasonably be expected to injure the reputation, business, or business relationships of the Company or Employee’s reputation or business relationships;

 

(vi)           Employee has perpetrated an intentional fraud against or affecting the Company or any customer, supplier, client, agent, or employee thereof; or

 

(vii)          Employee has been convicted (including conviction on a nolo contendere, no contest, or similar plea) of a felony or any crime involving fraud, dishonesty, or moral turpitude.

 

With respect to any of the matters set forth in (i) - (iii) above, the Company must give Employee notice of the deficiency and a reasonable opportunity to correct the deficiency prior to termination.  In the event that the Company has given notice of a deficiency and makes a determination that the deficiency has not been cured within a reasonable period of time, Employee’s employment may be terminated for Cause.

 

(c)            automatically upon the death of Employee.  In such event, the Company shall pay Employee’s estate the Base Compensation earned through the date of his death but not yet paid to Employee, any declared bonus(es) not yet paid and Base Compensation through the Term of this Agreement.  Upon Employee’s death, any granted stock options, warrants and stock grants held by Employee shall immediately vest and be exercisable by Employee’s heirs, executors, administrators or personal representatives in accordance with the then current Stock Option Plan of the Company.

 

(d)            automatically upon the inability of Employee to satisfactorily perform the duties set forth in Section 1.2 or as assigned to him by the Company from time to time by reason of mental or non-industrial physical illness or injury not amounting to a disability under the applicable law, for a period of one hundred eighty (180) days.  In such event, the Company shall pay Employee the Base Compensation earned but unpaid to Employee through the date of termination and any declared bonus(es) not yet paid.  Upon such inability, any granted stock options, warrants and stock grants will immediately vest.

 

(e)            automatically upon a Change of Control, in which event the Company shall pay to Employee one hundred thirty-eight percent (138%) of his annual Base Compensation, plus one hundred thirty-eight percent (138%) of his annual budgeted bonus.  Furthermore, all granted stock options, grants and warrants will vest upon the effective date of

 

3

 

the closing of the Change of Control event.  For the purposes of this Agreement, Change of Control shall mean:

 

(i)             The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this Section 2.2(e)), the following acquisitions shall not constitute a Change of Control:  (i) any acquisition directly from the Company, (ii) any acquisition by the Company, or (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliated Company;

 

(ii)            Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or the acquisition of assets or stock of another entity by the Company (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the outstanding Company common stock and the outstanding Company voting securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the outstanding Company common stock and the outstanding Company voting securities, as the case may be, and (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirection, 50% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination;

 

(iii)           A transfer, sale or disposition of all or substantially all of the operating assets of the Company to an unrelated party;

 

(iv)           Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company; or

 

(v)            Any time at which individuals who, as of the date hereof, 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 date hereof whose election, or nomination for election by the Company’s shareholders, was

 

4

 

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.

 

2.3            Despite the Term of this Agreement set forth in Section 2.1 above, Employee shall have the right to terminate this Agreement upon ninety (90) days prior written notice to the Company for any reason provided the Company may waive the notice period.  In such event, Employee will receive as the sole obligation of the Company to Employee his Base Compensation earned through the date of termination but not yet paid to Employee.

 

2.4            Russell shall be entitled to terminate his employment with the Company for “Good Reason,” in which case Russell will receive as the only obligation of the Company to Russell any portion of his Base Compensation earned through the date of termination, but not yet paid to Russell, plus a severance payment equal to one (1) year of his annual Base Compensation, plus all granted stock options, grants and warrants shall automatically vest.  For purposes of this Agreement, “Good Reason” shall mean (i) a substantial diminution in Russell’s duties; (ii) any direction or requirement that Russell engage in conduct that could reasonably be construed to violate local, state or federal law; and (iii) failure to pay base salary due pursuant to this Agreement in a timely manner.

 

Following any notice of termination, each party shall cooperate with the other in all matters relating to the winding up of Russell’s work on behalf of the Company.

 

3.              COMPENSATION.

 

3.1            Base Compensation .  During the Term hereof, Base Compensation shall be payable to Employee based on an annual rate of Two Hundred Thousand Dollars ($200,000.00).  Said Base Compensation shall be payable monthly in arrears in accordance with the Company’s regular payroll procedures, policies and practices.  Base Compensation shall be reviewed and adjusted annually by the Company as it deems appropriate.

 

3.2            Incentive Compensation .

 

(a)            Initial Stock Option .  The Company will grant Employee options to purchase One Hundred Forty Thousand (140,000) Shares of Common Stock in the Company on the Effective Date of this Agreement at the Shares’ public price.  This option will vest upon the effective date of this Agreement.  An option of an additional Sixty Thousand (60,000) Shares of Common Stock previously granted Employee will vest pursuant to a Stock Option Agreement previously executed by the parties.

 

(b)            Annual Bonus .  On the condition that the Company, in good faith, determines that Employee diligently pursued the goals, tasks and/or projects assigned to him from time to time and the results of his efforts for the Company have otherwise been satisfactory, the Company will pay to Employee, on or before forty-five (45) days following Employee’s initial twelve (12) months with the Company and on or before forty-five (45) days after the second twelve (12) months with the Company and upon the last day of this Agreement, so long as Employee remains an employee of the Company on the date the bonus payment was earned, an annual bonus in the amount of no less than fifty percent (50%) of Employee’s Base Compensation for the foregoing twelve (12) month period.

 

5

 

(c)            2007 Performance Bonus and Restricted Stock Grant .  On the condition that the Company completes a “Bankable Engineering Document” as determined by the Board of Directors of the Company during calendar year 2007, the Company will pay to Employee Fifteen Thousand Dollars ($15,000.00) and grant to Employee a Restrictive Stock Grant of Ten Thousand (10,000) Shares of Common Stock in the Company, all within forty-five (45) days of the end of calendar year 2007 and which Restricted Stock Grant will be provided pursuant to a Restricted Stock Grant Award Agreement.

 

(d)            2007 Water Rights Bonus and Restricted Stock Grant .  On the condition that the Company obtains water rights in calendar year 2007, or following the State Water Rights Hearing, whichever occurs later, from private entities and/or the applicable governmental entity which, together, are sufficient to meet the Mount Hope Mine requirements when in full operation and in any event not less than the total available for purchase or allocable by the applicable government entity, the Company will pay to Employee Twenty Thousand Dollars ($20,000.00) and grant to Employee a Restricted Stock Grant of Twenty Thousand (20,000) Shares of Common Stock in the Company, all within forty-five (45) days of the acquisition of the water right and which Restricted Stock Grant will be provided pursuant to a Restricted Stock Grant Award Agreement.

 

(e)            2008 Performance Bonus and Restricted Stock Grant .  On the condition that the Company receives a favorable Record of Decision on the Mount Hope Mine (the “ROD”) within the term of this Agreement, the Company will pay to Employee Fifty Thousand Dollars ($50,000.00) and grant to Employee a Restricted Stock Grant of Twenty Thousand (20,000) Shares of Common Stock in the Company, all within forty-five (45) days of the receipt of the ROD, which Restricted Stock Grant will be provided pursuant to a Restricted Stock Grant Award Agreement.

 

(f)             Completion of Financing of Mount Hope Mine .  If during the term of this Agreement the Company obtains sufficient financing to commence operation of the Mount Hope Mine, Employee shall be eligible for a bonus in an amount as determined by the Company, but no less than One Hundred Thousand Dollars ($100,000.00), taking into account Employee’s contribution to this effort.

 

(g)            Commencement of Mining Operations at Mount Hope Mine .  If during the term of this Agreement or six (6) months thereafter, the Mount Hope Mine shall become operational, the Company shall pay to Employee Two Hundred Thousand Dollars ($200,000.00) and grant to Employee a Restricted Stock Grant of Forty Thousand (40,000) Shares of Common Stock in the Company, all within forty-five (45) days of the Mount Hope Mine becoming operational, which Restricted Stock Grant will be provided pursuant to a Restricted Stock Grant Award Agreement.

 

The decision as to whether the Company has achieved any of the goals set forth pursuant to this Section 3.2 shall be determined by the Company’s Board of Directors.  The Restricted Stock Grant Award Agreement shall mean the Restricted Stock Grant Award Agreement prepared by the Company for Restricted Stock Grants to employees of the Company as amended from time to time.

 

6

 

3.3            Business Expenses/Reimbursement of Disallowed Expenses .  The Company shall also reimburse Employee for other reasonable and necessary business expenses in connection with the performance by Employee of his duties or services hereunder, including business, entertainment and travel, subject to compliance with such policies regarding expenses and expense reimbursements as may be adopted from time to time by the Company.  If any compensation payment, medical reimbursement, employee fringe benefit, expense allowance payment or other expense incurred by the Company for the benefit of Employee is disallowed in whole or in part as a deductible expense of the Company for federal or state income tax purposes, Employee shall reimburse the Company, upon notice and demand, to the full extent of the disallowance.  In lieu of payment by Employee to the Company, Employee authorizes the Company to withhold amounts from Employee future compensation payments until the amount owed to the Company has been fully recovered.  The Company shall not be required to legally defend any proposed disallowance and the amount required to be reimbursed by Employee shall be the amount, as finally determined by agreement or otherwise, which is actually disallowed as a deduction.  This legally enforceable obligation is in accordance with the provisions of Revenue Ruling 69-115 and is for the purpose of entitling Employee to a business expense deduction for the taxable year in which the repayment is made to the Company.  In this manner, the Company shall be protected from having to bear the entire burden of a disallowed expense item.

 

3.4            Fringe Benefits .  During the term of Employee’s employment by Company, Employee shall be entitled to participate in the retirement and health and welfare benefits offered generally by Company to its employees, to the extent that Employee’s position, tenure, salary, health, and other qualifications make Employee eligible to participate.  Employee’s participation in such benefits shall be subject to the terms of the applicable plans, as the same may be amended from time to time.  Company does not guarantee the adoption or continuance of any particular employee benefit during Employee’s employment, and nothing in this Agreement is intended to, or shall in any way restrict the right of Company, to amend, modify or terminate any of its benefits during the Term of this Agreement.  Employee also will be entitled to all normal and customary perquisites of employment, including paid-time-off, available to employees of the Company at Employee’s level, subject to the stated terms and conditions of such perquisites.

 

4.              DISCLOSURE OF INFORMATION

 

4.1            Employee acknowledges that he will receive access to confidential and proprietary business information or trade secrets (“Confidential Information”) about the Company, that this information was obtained by the Company at great expense and is zealously guarded by the Company from unauthorized disclosure, and that Employee’s possession of this special knowledge is due solely to Employee’s employment with the Company.  In recognition of the foregoing, Employee will not at any time during employment or following termination of employment for any reason, disclose, use or make otherwise available to any third party any Confidential Information relating to the Company’s business, including its products, production methods and development; manufacturing and business methods and techniques; trade secrets, data, specifications, developments, inventions, engineering and research activity; marketing and sales strategies, information and techniques; long and short term plans; current and prospective dealer, customer, vendor, supplier and distributor lists, contacts and information; financial, personnel and information system information; and any other information concerning the

 

7

 

business of the Company which is not disclosed to the general public or known in the industry, except for disclosure necessary in the course of Employee’s duties for the Company.

 

4.2            Upon termination of employment with the Company, Employee shall deliver to a designated Company representative all records, documents, hardware, software, and all other Company property in whatever form and all copies thereof in Employee’s possession.  Employee acknowledges and agrees that all such materials are the sole property of the Company and that Employee will certify in writing to the Company at the time of termination that Employee has complied with this obligation.

 

5.              DISCLOSURE AND ASSIGNMENT OF INVENTIONS

 

5.1            Employee agrees to promptly disclose to the Company inventions, ideas, processes, writings, designs, developments and improvements, whether or not protectable under the applicable patent, trademark or copyright statutes, which Employee makes, conceives, reduces to practice or learns during the period of employment by Company, either alone or jointly with others, relating to any business in which the Company, during the period of Employee’s employment, is or may be concerned (“the Inventions”).  Such disclosures shall be made by Employee to the Company in a written report, setting forth in detail the structures, procedures and methodology employed and the results achieved.

 

5.2            Consistent with and to the extent permitted by applicable law, Employee hereby assigns and agrees to assign to the Company all rights in and to the Inventions and proprietary rights therein, based thereon or related thereto, including, but not limited to, applications for United States and foreign patents and resulting patents.

 

5.3            Employee further agrees, without charge to the Company but at its expense, to assist the Company in every proper way and execute, acknowledge and deliver, during and after employment by the Company, all such documents necessary and perform such other legal acts as may be necessary, in the opinion of the Company, to obtain or maintain United States or foreign patents or other proprietary protection, for any and all Inventions made during his employment by the Company in any and all countries, and to vest title therein to the Company.

 

5.4            Employee acknowledges notice from the Company that this foregoing obligation to assign rights in and to any Inventions does not apply to an Invention for which no equipment, supplies, facility or trade secret information of Company was used and which was developed entirely on Employee’s own time and (1) which does not relate (A) directly to the business of the Company, or (B) to the Company’s actual or demonstrably anticipated research or development; or (2) which does not result from any work performed by Employee for the Company.

 

5.5            Employee further agrees that prior to separation from employment with the Company for any reason, Employee shall disclose to the Company, in a written report, all Inventions, the rights to which Employee has agreed to assign to the Company under 5.1 and 5.2 above, and which Employee has not previously disclosed.

 

8

 

6.              RESTRICTIVE COVENANTS

 

6.1            Non-Solicitation .

 

(a)            Employee specifically acknowledges that the Confidential Information described in 4.1 includes confidential data pertaining to current and prospective customers of the Company, that such data is a valuable and unique asset of the Company’s business and that the success or failure of the Company’s specialized business is dependent in large part upon the Company’s ability to establish and maintain close and continuing personal contacts and working relationships with such customers and to develop proposals which are specifically designed to meet the requirements of such customers.  Therefore, during Employee’s employment with the Company and for the twelve (12) months following termination of employment for any reason, except on behalf of he Company or with the Company’s prior written consent, Employee is prohibited from soliciting, either directly or indirectly, on his own behalf or on behalf of any other person or entity, all such customers with whom Employee had contact during the twenty-four (24) months preceding Employee’s termination of employment.

 

(b)            Employee specifically acknowledges that the Confidential Information described in 4.1 also includes confidential data pertaining to current and prospective employees and agents of the Company, and Employee further agrees that during Employee’s employment with the Company and for the twelve (12) months following termination of employment for any reason, Employee will not directly or indirectly solicit, on his own behalf or on behalf of any other person or entity, the services of any person who is an employee or agent of the Company or solicit any of the Company’s employees or agents to terminate their employment or agency with the Company.

 

(c)            Employee specifically acknowledges that the Confidential Information described in 4.1 also includes confidential data pertaining to current and prospective vendors and suppliers of the Company, Employee agrees that during Employee’s employment with the Company and for the twelve (12) months following termination of employment for any reason, Employee will not directly or indirectly solicit, on his own behalf or on behalf of any other person or entity, any Company vendor or supplier for the purpose of either providing products or services to competitors of the Company, as described in 6.1(b), or terminating such vendor’s or supplier’s relationship or agency with the Company.

 

(d)            Employee further agrees that, during Employee’s employment with the Company and for the twelve (12) months following termination of employment for any reason, Employee will do nothing to interfere with any of the Company’s business relationships.

 

6.2            Non-Competition .

 

(a)            Employee represents to the Company that Employee is not a party to any agreement with a prior employer or otherwise which would prohibit Employee from employment with the Company.  Employee further represents that he has provided to the Company copies of any and all agreements (e.g., non-competition, non-solicitation, or non-disclosure agreements) that might limit Employee’s ability, in any way, to perform the duties of Employee’s position on behalf of the Company, and Employee agrees to act at all times on behalf of the Company in a manner consistent with any such agreements.  Employee acknowledges and understands that the

 

9

 

Company will have no obligation to provide legal representation to Employee in the event a prior employer or other third party brings or threatens to bring an action against Employee for violating any such agreements; that the Company may elect, at its sole discretion, to provide legal representation to Employee but Employee may be required to reimburse the Company for any legal expenses paid on Employee’s behalf in the event Employee is found to have violated any such agreements; and that Employee may be terminated in the event the Company determines that Employee may have violated any such agreements.  Despite anything to the contrary herein, termination based upon the Company’s determination that Employee has violated this Section 6.2 shall be considered termination for Cause.

 

(b)            Employee covenants and agrees that during Employee’s employment with the Company and for the twelve (12) months following termination of employment for any reason, he will not, in any geographic market or in the molybdenum market anywhere which Employee worked on behalf of the Company during the twenty-four (24) months preceding his termination of employment, engage in or carry on, directly or indirectly, as an owner, employee, agent, associate, consultant or in any other capacity, a business competitive with that conducted by the Company.  A “business competitive with that conducted by the Company” shall mean any business or activity involved in the discovery or mining of molybdenum.  To “engage in or carry on” shall mean to have ownership in such business or consult, work in, direct or have responsibility for any area of such business, including but not limited to the following areas:  operations, sales, marketing, manufacturing, procurement or sourcing, purchasing, customer service, distribution, product planning, research, design or development.

 

(c)            For the twelve (12) months following termination of employment for any reason, Employee certifies and agrees that he will notify the President/CEO of the Company of his employment or other affiliation with any potentially competitive business or entity prior to the commencement of such employment or affiliation.

 

7.              NOTICES

 

Any notice, consent, approval, request, demand or other communication required or permitted hereunder must be in writing to be effective and shall be deemed delivered and received (i) if personally delivered or if delivered by telex or telecopy with electronic confirmation when actually received by the party to whom sent, or (ii) if delivered by mail (whether actually received or not), at the close of business on the fifth business day next following the day when placed in the federal mail, postage prepaid, certified or registered mail, return receipt requested, addressed as follows:

 

If to Employee:	Andrew J. Russell
	3265 South Oleander Drive
	Chandler, AZ 85248
	Fax No.  520-901-1694

 

10

 

If to Employer:	Robert L. Russell, Chairman
	Idaho General Mines, Inc.
	10 North Post Street
	Spokane, WA 99201
	Fax No.  509-838-0457
Copy to:	Michael F. Nienstedt, Esq.
	Witherspoon, Kelley, Davenport & Toole, P.S.
	U.S. Bank Building
	422 West Riverside Avenue, Suite 1100
	Spokane, WA 99201-0302
	Fax No.  509-458-2728

 

(or to such other address as any party shall specify by written notice so given)

 

8.              LEGAL REQUIREMENTS

 

Employee represents and warrants that, during the term of this Agreement (and thereafter for so long as Employee remains an employee of the Company), Employee shall comply with all legal requirements imposed by Environmental Laws imposed by any local, state or federal authority and the rules and regulations promulgated by any such entity.  For the purposes of this Agreement, Environmental Law shall mean all local, state or federal law, now or hereafter existing, that relate to health, safety or environmental protection.  Employee shall use his best efforts to comply in all material respects with, and shall use his best efforts, within the scope of his duties, to cause the Company to comply with, all other applicable laws and regulations governing the Company including, without limitation, all environmental laws and regulations.

 

9.              NO IMPLIED WAIVERS

 

Neither party shall waive any breach of any provision of this Agreement except in writing, nor shall any waiver so granted in any single instance not thereby be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision of this Agreement.

 

10.            HEADINGS

 

The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof, nor to affect the meaning thereof.

 

11.            GOVERNING LAW; JURISDICTION

 

This Agreement shall be governed by and construed under Idaho law, without regard to its conflict of laws principles.  The parties agree that any litigation in any way relating to this Agreement shall be venued in either federal or state court in Shoshone County, Idaho, and Employee hereby consents to the personal jurisdiction of these courts and waives any objection that such venue is inconvenient or improper.

 

11

 

12.           WAIVER OF JURY TRIAL

 

TO THE FULLEST EXTENT PERMITTED BY LAW, EMPLOYEE AND COMPANY HEREBY IRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ENFORCEMENT THEREOF.

 

13.            COMPLETE AGREEMENT - AMENDMENTS - PRIOR AGREEMENTS

 

The foregoing is the entire agreement of the parties with respect to the subject matter hereof and may not be amended, supplemented, canceled or discharged except by written instrument executed by both parties hereto.  This Agreement supersedes any and all prior agreements among the Company and Employee with respect to the matters covered.

 

14.            INVALIDITY

 

The invalidity or lack of enforceability of any particular provision in this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all other respects as though such invalid or unenforceable provisions were permitted.  Moreover, the parties agree to replace or have a Court replace such invalid provisions with a substitute provision that will satisfy the intent of the parties.

 

15.            SURVIVAL

 

Upon the expiration or termination of this Agreement for any reason, the provisions of this Section and the covenants of the parties herein shall survive and remain in full force and effect.

 

16.            BINDING OBLIGATIONS

 

The Employee and the Company acknowledge and understand that, unless expressly stated above, Employee’s obligations hereunder shall not be affected by the reasons for, circumstances of, or identity of the party who initiates the termination of Employee’s employment with the Company.

 

12

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth below, effective as of the date first set forth above.

 

		COMPANY:
		IDAHO GENERAL MINES, INC.
		By:	/s/ Robert L. Dumont 1/31/07
		Its:	CFO
		EMPLOYEE:
		/s/ Andrew J. Russell   Jan 31, 2007
		ANDREW J. RUSSELL

 

13

Exhibit 10.24

 

AMENDMENT TO AMENDED AND RESTATED
EMPLOYMENT AGREEMENT BETWEEN
GENERAL MOLY, INC., SUCCESSOR TO IDAHO GENERAL MINES, INC.
AND
ANDREW J. RUSSELL

 

RECITALS

 

1.              This Amendment to Amended and Restated Employment Agreement (“Amendment”) is between Andrew J. Russell (“Employee”) and General Moly, Inc., the successor to Idaho General Mines, Inc. (“the Company”).

 

2.              The Company’s predecessor, Idaho General Mines, Inc., and Employee entered an Amended and Restated Employment Agreement (“Agreement”) on January 30, 2007.

 

3.              The Amended and Restated Employment Agreement referenced herein remains in full force and effect, except as set forth below.

 

NOW, IN CONSIDERATION of the foregoing, and the respective covenants and promises of the parties, the Company and the Employee enter this Amendment and agree as follows:

 

1.              Section 3.2(b) of the parties’ Agreement is hereby changed to provide that the “Annual Bonus,” payable to Employee in accordance with that Section 3.2(b), shall be paid on or before forty-five (45) days following the end of each calendar year within the term of the Agreement.

 

2.              Accordingly, the parties agree, in accordance with the conditions contained in Section 3.2(b) of the Agreement, the Company will pay Employee an Annual Bonus on or before forty-five (45) days following December 31, 2007, within forty-five (45) days following December 31, 2008, and within thirty (30) days following December 31, 2009.  The remaining provisions of the Agreement, and of Section 3.2(b) of the Agreement, will remain unchanged, including those provisions dealing with the conditions under which Employee is eligible for an Annual Bonus.

 

The parties have executed this Amendment on the dates set forth below, to be effective as of the later of such dates.

 

		COMPANY:
		General Moly, Inc.
1/14/08		By:	/s/ Bruce Hansen
Date		Its:	CEO
		EMPLOYEE:
1/14/08		/s/ Andy Russell
Date		Andrew J. Russell

 

EXHIBIT 10.25

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST.  OMISSIONS ARE DESIGNATED AS [****]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

MOLYBDENUM SUPPLY AGREEMENT

 

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

 

RECITALS

 

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

 

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

 

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

 

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

 

AGREEMENT

 

1.              Definitions and Construction .

 

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

 

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

 

1

 

of greater than 50% of any class of voting securities (or other voting or equity interests) of the controlled person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of capital stock, by contract or credit arrangement, as trustee or executor, or otherwise.

 

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

 

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

 

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

 

(a)  for 2008, [****], and

 

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

 

[****] x Threshold Adjustment

 

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

 

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

 

(a) for 2008, [****], and

 

(b) for 2009 and thereafter:

 

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

 

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

 

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

 

2

 

actions of any kind, and all reasonable and documented costs and expenses incurred in connection therewith (including reasonable attorneys’ fees).

 

“ Market Price ” means the average of the Platt’s Metals Week published prices for TMO Dealer Oxide over (a) the period of the month of delivery or (b) the period over the month prior to the month of delivery, as Buyer may determine annually pursuant to Section 3.3 .  In the event that the basis for the Market Price currently in general use ceases to exist or ceases to be published, the Parties shall meet promptly with a view to agreeing on a new pricing basis and the date for bringing such basis into effect.

 

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

 

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

 

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

 

“ Person ” means an individual, limited or general partnership, corporation, trust, limited liability company, unincorporated organization, association, joint venture or a government or agency or political subdivision or instrumentality thereof.

 

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

 

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

 

(a)  for 2008, [****], and

 

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

 

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

 

“ Term ” means the term of this Agreement as set forth in Section 5 .

 

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

 

(a)  for 2008, [****], and

 

3

 

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

 

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

 

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

 

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

 

1.2            Construction .

 

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

 

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

 

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

 

1.2.4         Any reference to a gender includes the other genders.

 

1.2.5         The headings in this Agreement have been inserted for convenience only and will not be taken into account in its interpretation.

 

2.   Commencement Date and Supply Purchase Commitments

 

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

 

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

 

4

 

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

 

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

 

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

 

2.2.3         For clarification, all references to “pounds” in this Section 2.2 refer to pounds of molybdenum contained in the Products.

 

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

 

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

 

2.5            Composition of Products .  All Product contemplated under this agreement shall conform to the specification listed in Section 2.6 and shall be supplied as TMO in powder form in bulk except as specifically agreed otherwise by the Parties.  To the extent available from any

 

5

 

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

 

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

 

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

 

3.              Pricing and Payment Terms . The price payable by Buyer to General Moly for Products supplied by General Moly to Buyer pursuant to this Agreement (the “ Product Price ”) will be equal to the Base Product Price plus any mutually agreed premiums or minus any mutually agreed discounts for Product supplied pursuant to the terms of this Agreement that is other than TMO in bulk.

 

3.1            Base Product Price .  The base price payable by Buyer to General Moly for Products supplied by General Moly to Buyer pursuant to this Agreement (the “ Base Product Price ”) will be as follows:

 

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

 

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

 

(a)            If the Market Price is less than or equal to the First Threshold, the Base Product Price will be calculated as follows:

 

6

 

Floor Price

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

 

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

 

Floor Price

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

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

 

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

 

Floor Price

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

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

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

 

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

 

Floor Price

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

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

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

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

 

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

 

4.              Deliveries and Invoices .

 

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

 

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

 

7

 

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

 

4.3            Assaying Adjustments .

 

4.3.1         Buyer has the right to appoint a neutral sampler (the “ Sampler ”), approved by General Moly (which approval will not be unreasonably withheld or delayed), to take samples of the Products at the applicable delivery point.  In the event that Buyer determines that General Moly has delivered non-conforming Product which should result in an adjustment to the Product Price (an “ Assay Adjustment ”), Buyer will notify General Moly in writing of such determination (along with its results of analysis of such Product) within 20 days of receipt of such shipment.  The Parties will appoint a mutually agreeable third party to assist in the resolution of such matter (the “ Referee ”) within 30 days of delivery of such notice.  If the Parties fail to so appoint the Referee within such 30-day period, SGS Group (or such other mutually agreeable third party, in the event that SGS Group or its successor ceases to exist) will appoint the Referee at any Party’s request.  The Referee will analyze the sample of such Product taken by the Sampler, whose determination will be final and binding upon the Parties.

 

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

 

4.3.3         In the event that the final determination results in an obligation on a Party to pay additional amounts or to reimburse any sum, such payment or reimbursement will be settled by credit or debit notes.

 

4.4            No Prejudice .  Payment of an invoice by Buyer does not constitute acceptance of the Products covered by such invoice and is without prejudice to any and all claims Buyer may have against General Moly in connection therewith.  Buyer will have the right to accept any portion of any shipment of Products notwithstanding that it may reject the balance thereof.  Acceptance by Buyer of all or any portion of a shipment of Products will not constitute a waiver of any claim which Buyer may have regarding the Products.

 

5.              Term; Termination .

 

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

 

5.2            Termination .  This Agreement may be terminated by:

 

8

 

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

 

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

 

(i)             of insolvency of the other Party;

 

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

 

(iii)           of the making of an assignment for the benefit of creditors by the other Party, excluding assignments of accounts receivable;

 

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

 

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

 

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

 

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

 

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

 

(c)            by Buyer, by written notice, in the event that after the Commencement Date, General Moly fails to meet the delivery requirements of Products set forth in Section 2 for a period of three consecutive months.

 

5.3            Effect of Termination .  Unless notified otherwise by Buyer, upon a termination of this Agreement, General Moly will fill all outstanding obligations to supply the Products in accordance with the terms of this Agreement through the date of Termination.  Buyer will accept and pay for all conforming Products delivered in accordance herewith.  Termination will be without prejudice to the rights and obligations of the Parties which have accrued prior to the effective date of termination.  Sections 4 and 6-24 will survive the expiration or termination of this Agreement.

 

6.              Indemnification .

 

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

 

9

 

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

 

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

 

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

 

(b)            refunding to Buyer the purchase price paid by Buyer with respect to the nonconforming Products in return provided that General Moly will have the option to take possession of the nonconforming Products; or

 

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

 

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

 

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

 

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

 

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

 

10

 

negligence of such indemnified Person.

 

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

 

7.              Force Majeure .  Neither Party will be liable to the other Party for default or delay in the performance of its obligations hereunder when and to the extent that such default or delay is caused by order, injunction or stay entered by any court with valid jurisdiction, war, civil commotion, strike, labor dispute, work stoppage or slowdown, storm, earthquake, explosion, insurrection, unavailability of fuel or utilities, epidemic or quarantine restriction, fire, flood, act of God, unavailability of material, failure of equipment, supplies or subcontractor, the inability to maintain in full force and effect all permits required to carry out the Mine Plan or any other similar contingency beyond the reasonable control of the Parties (the occurrence of any of the foregoing will be an “ Event of Force Majeure ”); provided, however, that during the period prior to the Commercial Operations Date, adverse conditions in implementing the Mine Plan and environmental compliance requirements may also constitute Events of Force Majeure.  The occurrence of an Event of Force Majeure will not be grounds for termination of this Agreement, absent the written consent of the Parties otherwise; provided, however , that Buyer may, at its option, terminate this Agreement if an Event of Force Majeure prevents, or Buyer reasonably anticipates that it will prevent, General Moly from meeting its obligations in whole or in substantial part under this Agreement for more than three consecutive months during the Term.  Both General Moly and Buyer will use their commercially reasonable best efforts to avoid the occurrence and remove the causes of an Event of Force Majeure and to continue performance of their respective obligations hereunder promptly following the removal of such causes.  If an Event of Force Majeure prevents a Party from meeting its obligations hereunder in part, but not in whole, the Parties will use their commercially reasonable best efforts to equitably adjust the Parties’ respective obligations hereunder consistent with and in furtherance of the purposes hereof.  Should General Moly invoke force majeure conditions, the Buyer will be entitled to obtain from alternative sources such Products as it reasonably requires during the period that Events of Force Majeure subsist, and the quantities Products obtained under such conditions will be deducted from the amount of Products Buyer is required to purchase hereunder.

 

8.              Confidentiality .

 

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

 

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

 

11

 

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

 

(c)            which was developed by the Party whose obligation it is to keep such information confidential without (as established by documentation or by other appropriate evidence) the use of the other Party’s Confidential Information or any breach of this Agreement or any other agreement.

 

General Moly agrees that the Confidential Information of Buyer, and Buyer agrees that the Confidential Information of General Moly, is an integral and key part of the assets of each respective entity and that the unauthorized use or disclosure of the other Party’s Confidential Information would seriously damage the owner thereof in its business.  As a consequence of the above, General Moly and Buyer hereby agree that, during the Term and for a period of five years after the expiration or termination hereof:

 

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

 

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

 

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

 

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

 

8.1.2        Except as required by law or pursuant to a court order, each of General Moly and Buyer will:

 

(a)            use no less than the care a reasonably prudent Person would use in safeguarding his, her or its Confidential Information;

 

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

 

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

 

12

 

nature of the other Party’s Confidential Information.

 

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

 

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

 

9.              Waiver .  The failure of any Party to enforce at any time any of the provisions of this Agreement will in no way be construed to constitute a waiver of any such provision nor in any way to affect the validity of this Agreement or any part hereof, including the right of any Party thereafter to enforce each and every provision.  The waiver by any Party of any breach or violation of any provision of this Agreement by the other Party will not operate or be construed to be a waiver of any subsequent breach or violation thereof.

 

10.            Governing Law .  This Agreement will be governed by the laws of the State of New York, without giving effect to any of the provisions thereof that would require the application of the substantive laws of any other jurisdiction.

 

11.            Notices .  All notices and other communications hereunder will be effective if in writing and delivered (a) in person (which will be deemed to be received upon receipt), (b) by overnight courier (which will be deemed to be received one Business Day thereafter), (c) by facsimile transmission (which will be deemed to be received upon receipt) or (d) mailed by certified mail, postage prepaid, return receipt requested (which will be deemed to be received three business days thereafter), as follows (or at such other address for a Party as will be specified by like notice):

 

If to General Moly:

 

General Moly, Inc.

1726 Cole Blvd., Suite 115

Lakewood, Colorado  80401

Attention: Chief Executive Officer

Facsimile: (303) 928-8598

 

With a copy (which will not constitute notice) to:

 

Kirkpatrick & Lockhart Preston Gates Ellis LLP

925 Fourth Avenue, Suite 2900

Seattle, Washington  98104

Attention: Gary J. Kocher

Facsimile: (206) 623-7022

 

13

 

If to Buyer:

 

SeAH Besteel Corporation

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

Attention: Chief Executive Officer

Facsimile: (63)460-8374

 

All such notices and other communications will be effective when received.

 

12.            Interpretation .  The Parties have participated jointly in the negotiation and drafting of this Agreement.  If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party because of the authorship of any provision of this Agreement.

 

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

 

14.            Relationship of the Parties .  It is understood that each Party is conducting business as a separate and distinct legal entity.  Under no circumstances will either Party, its agents and/or employees be considered agents, partners, representatives or employees of the other Party.  Neither Party will have the right to act as the legal representative of the other Party or to bind such other Party in any respect whatsoever or to incur any debts or liability in the name of or on behalf of such other Party.  This Agreement creates no relationships of joint venturers, partners, associates or principal and agent between the Parties.

 

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

 

16.            Taxes and Expenses .      Except as expressly provided herein, each Party will be

 

14

 

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

 

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

 

18.            Counterparts; Facsimile Signatures .  This Agreement may be executed in two counterparts, and each such counterpart will be deemed to be an original instrument, but all such counterparts together will constitute but one agreement.  This Agreement may be executed by facsimile signatures.

 

19.            Entire Agreement .  This Agreement, including the attached Exhibits which are hereby incorporated herein by this reference, constitutes the entire agreement and understanding of the Parties in respect of its subject matter and supersedes all prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.

 

20.            Amendment .  No amendment, modification or addition to this Agreement will be effective unless it is in writing and executed by both Parties.

 

21.            Arbitration .

 

21.1          Good Faith Negotiation .  In the event of any dispute, claim or controversy (except with respect to assaying issues as set forth in Section 4.3 ) (a “ Dispute ”) arising out of or in connection with this Agreement, a Party may deliver written notice to the other Party of such Dispute requesting to resolve such Dispute pursuant to this Agreement.  Upon delivery of such notice, members of senior management of each Party will meet as promptly as practicable in a good faith attempt to resolve such Dispute.

 

21.2          Binding Arbitration .

 

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

 

15

 

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

 

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

 

21.2.3       The arbitrators will be instructed to render a decision within 60 days after selection and will be required to state in writing the reasoning on which the decision and any award rests.  The arbitrators will have the power to award counsel fees and expenses, as well as dispute resolution costs (including any fee for the arbitrators), to the prevailing Party.  Judgment upon the award rendered may be entered in any court having jurisdiction or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be.  The arbitrators will not award any consequential, incidental, indirect, special, punitive or exemplary damages hereunder or in connection herewith.  The arbitration award shall be final and binding upon the Parties to such arbitration and may be enforced in any court having jurisdiction.

 

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

 

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

 

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

 

23.            Third Party Beneficiaries .  Except as expressly contemplated by Sections 6.4 and 6.5 , there are no third party beneficiaries having rights under or with respect to this Agreement.

 

24.            Remedies Cumulative .  All remedies available to the Parties for breach of this

 

16

 

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

 

[Signature page follows]

 

17

 

IN WITNESS WHEREOF, Buyer and General Moly have duly executed this Agreement as of the date first above written.

 

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

 

 

[Signature Page to Molybdenum Supply Agreement]