SECOND AMENDED & RESTATED SUPPLY AGREEMENT
Exhibit
10.73
[*]
= CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED FROM PUBLIC FILING PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT SUBMITTED TO THE U.S. SECURITIES AND EXCHANGE COMMISSION.
THE OMITTED INFORMATION, WHICH HAS BEEN IDENTIFIED WITH THE SYMBOL “[*],” HAS
BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SECOND
AMENDED & RESTATED SUPPLY AGREEMENT
This
Second Amended & Restated Supply Agreement (“Agreement”)
is
made as of the last date set forth on the signature page hereto (the
“Effective
Date”)
between SOLARFUN
POWER HONG KONG LIMITED,
a
company registered in Hong Kong (hereinafter “SOLARFUN”)
and
HOKU
MATERIALS, INC., a
Delaware corporation (hereinafter “HOKU”).
HOKU
and SOLARFUN are sometimes referred to in the singular as a “Party”
or
in
the plural as the “Parties”.
Recitals
Whereas,
Hoku Scientific, Inc. (“Hoku
Scientific”)
and
SOLARFUN are parties that certain First Amended & Restated Supply Agreement
dated as of January 7, 2008 (the “Supply
Agreement”),
pursuant to which Hoku Scientific agreed to sell to SOLARFUN, and SOLARFUN
agreed to purchase from Hoku Scientific, polysilicon for SOLARFUN’S general use
beginning in calendar year 2009 for a continuous period of eight years from
the
date of the first shipment.
Whereas,
Hoku Scientific has assigned all of its right, title and interest in the Supply
Agreement to HOKU, its wholly-owned subsidiary, pursuant to that certain Second
Assignment and Assumption Agreement dated as of February 4, 2008, by and between
Hoku Scientific and HOKU.
Whereas,
HOKU and SOLARFUN desire to amend and restate the Supply Agreement as
hereinafter set forth.
Whereas,
HOKU desires to supply polysilicon to SOLARFUN for its general use beginning
in
calendar year 2009 for a continuous period of eight years from the date of
the
first shipment.
Whereas,
in exchange for HOKU’s agreement to allocate the supply of polysilicon, SOLARFUN
desires to provide HOKU with a firm order for polysilicon upon the terms and
conditions provided herein.
NOW,
THEREFORE, in furtherance of the foregoing Recitals and in consideration of
the
mutual covenants and obligations set forth in this Agreement, the Parties hereby
agree as follows:
1. Definitions.
The
following terms used in this Agreement shall have the meanings set forth
below:
1.1. “Affiliate”
shall
mean, with respect to either Party to this Agreement, any entity that is
controlled by or under common control with such Party.
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1.2. “Agreement”
shall
mean this Second Amended & Restated Supply Agreement and all appendices
annexed to this Agreement as the same may be amended from time to time in
accordance with the provisions hereof.
1.3. “Facility”
shall
mean any facility used by HOKU for the production of the Product.
1.4. “Financing”
shall
mean HOKU’s receipt of gross aggregate proceeds of at least $75 million U.S.
Dollars from bank debt, equity financing (including the $25 million in proceeds
from HOKU’s private placement of common stock on February 29, 2008), customer
prepayments actually received in cash by HOKU for Products (not including
commitments for future prepayments, or amounts placed in escrow or secured
by
letters of credit), or any combination of the foregoing. For purposes of
this
Agreement, the terms “bank debt” and “equity financing” shall have the broadest
meaning possible to include, without limitation, bonds, debentures, credit
lines, convertible debt, common and preferred stock, equity-linked securities,
options and warrants; and HOKU’s “receipt” of such proceeds shall include,
without limitation, the receipt of a binding and legally enforceable commitment
from a lender to provide the Financing (or a portion thereof).
1.5. “First
Shipment Date”
shall
mean the first day of the calendar month in which HOKU commences deliveries
to
SOLARFUN of Products pursuant to this Agreement.
1.6. “Minimum
Annual Quantity of Product”
means
[*] ([*] kilograms) of Product during the first Year and [*] metric tons
([*]
kilograms) during each of the second through tenth Year, inclusive.
1.7. “Product”
shall
mean the raw polysilicon in chunk form manufactured by HOKU and sold to SOLARFUN
pursuant to this Agreement.
1.8. “Product
Specifications”
shall
mean the quality and other specifications set forth on Appendix 2 to this
Agreement.
1.9. “Term”
shall
mean the period during which this Agreement is in effect, as more specifically
set forth in Section 9
of this
Agreement.
1.10. “Total
Deposit”
shall
mean all deposits or prepayments made by SOLARFUN to HOKU hereunder including
without limitation the Initial Deposit and the Main Deposit.
1.11. “Year”
shall
mean each of the ten (10) twelve-month periods commencing on the First Shipment
Date.
2. Ordering.
Starting
on the First Shipment Date and each Year during the term of this Agreement
thereafter, SOLARFUN agrees to purchase from HOKU, and HOKU agrees to sell
to
SOLARFUN, the Minimum Annual Quantity of Product at the prices set forth
on
Appendix 1 to this Agreement (the “Pricing
Schedule”).
This
Agreement constitutes a firm order from SOLARFUN for [*] metric tons of Product
that cannot be cancelled during the term of this Agreement, except as set
forth
in Section 9
below.
3. Supply
Obligations.
3.1. HOKU
shall deliver each Year pursuant to this Agreement starting on the First
Shipment Date at least the Minimum Annual Quantity of Product in approximately
equal monthly shipments pursuant to Section 4.1 below; provided however,
that if
HOKU fails to deliver a monthly shipment, then HOKU may deliver any deficiency
within [*] days without breaching this section or incurring any purchase
price
adjustment (pursuant to Section 3.3
below).
At any time during the term of this Agreement, HOKU may ship to SOLARFUN
any
additional amount up to the full cumulative balance of Minimum Annual Quantity
of Product to be shipped through the end of this Contract (an “Excess
Shipment”)
subject
to SOLARFUN’s written consent. This shipment will be credited against each
subsequent Minimum Annual Quantity of Product. For example, if the Minimum
Annual Quantity of Product for a given Year is [*] metric tons, and if HOKU
delivers [*] metric tons in January, then the next shipment of [*] metric
tons
is not required until the following Year.
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3.2. HOKU
intends to manufacture the Products at its Facility; however, notwithstanding
anything to the contrary herein, HOKU may deliver to SOLARFUN Products
that are
manufactured by a third party other than HOKU, where HOKU is acting only
as a
reseller or distributor of such Products; and provided that the Products
meet
the Product Specifications and price set forth in this Agreement.
3.3. Except
in
the case of a force majeure pursuant to Section 12
below,
if at any time after [*], HOKU does not supply any Products pursuant to
Section
3.1
or
3.2
within
[*] days of the scheduled delivery date, HOKU will provide SOLARFUN with
a
purchase price adjustment. Such purchase price adjustment shall be [*]
percent
([*]%) of the value of the respective delayed Products for each week or
part
thereof that the Product shipment (or part thereof) is delayed beyond the
[*]
day grace period. Any
purchase price adjustment as a result of this Section 3.3
will be
paid by HOKU at the end of the term of the applicable calendar quarter.
In lieu of making a cash payment to SOLARFUN pursuant to this Section
3.3,
HOKU
may,
at its option, pay for such purchase price adjustment in the form of a
credit
issued for future shipments of Products.
Notwithstanding anything to the contrary, the maximum amount of such purchase
price adjustment shall not exceed [*] percent ([*]%) of the value of the
respective delayed Products. Monthly shipments which are delayed beyond
one
hundred fifty (150) days shall be deemed to constitute a material breach
of this
Agreement pursuant to Section 9.2.1
below.
Notwithstanding the foregoing, if SOLARFUN fails to make a payment to HOKU
for
Products actually shipped by HOKU within the 30-day period set forth in
Section
5.4
below,
HOKU shall not be required to supply any additional Product to SOLARFUN
until
HOKU has received the past due amount including any interest payable thereon
pursuant to this Agreement. For the avoidance of doubt, SOLARFUN’s right to
reduce the purchase price pursuant to this Section 3.3
shall
not apply if HOKU is not fulfilling its supply obligations for this
reason.
3.4. If
HOKU
delivers any Products to SOLARFUN prior to [*], then SOLARFUN shall pay
HOKU a
premium equal to [*]% of the applicable purchase price for the Products
shipped
prior to October 1, 2009.
4. Shipping
& Delivery.
4.1. Except
as
provided in Section 3.2
above,
shipments shall be made from the Facility on a monthly basis in accordance
with
a shipment schedule that will be provided by HOKU each Year under this
Agreement
(the “Shipment
Schedule”)
no
later than sixty (60) days prior to the applicable year. The Shipment Schedule
shall provide for approximately equal monthly shipments that add up to
the
Minimum Annual Quantity of Products.
4.2. HOKU
agrees that it will not enter into any additional supply contract with,
or make
any supply commitment to, any third party (not including the long term
supply
contracts that have been signed prior to the Effective Date (the “Pre-existing
Commitments”))
if
the aggregate of HOKU’s delivery obligations under all of its supply contracts
(including those with SOLARFUN and its Pre-existing Commitments) and such
additional supply contract/commitment during any month would exceed the
rated
monthly production capacity of all polysilicon reactors at all HOKU Facilities,
as certified by the manufacturer thereof. Subject to the foregoing, this
Section
4.2
shall
not preclude HOKU from (A) entering into supply contracts for additional
capacity from Facility expansion, including pre-sales of potential Facility
expansions, or from increased productivity of the Reactors, or (B) selling
on
the spot market or entering into long-term contracts for the sale of polysilicon
that does not meet the Product Specifications at any time during the term
of
this Agreement, provided that HOKU uses commercially reasonable efforts
to meet
the Product Specifications with respect to such polysilicon and that HOKU
does
not manufacture polysilicon for the purpose of making such spot market
sales or
fulfilling such long term contracts
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4.3. HOKU
will
use commercially reasonable efforts to make its first shipment of Products
to
SOLARFUN on or before July 1, 2009.
5. Payments
& Advances.
5.1. HOKU
acknowledges that as of the date of this Agreement, SOLARFUN has provided
HOKU
with a deposit of Eleven Million U.S. Dollars (US$11,000,000) via wire
transfer
of immediately available funds (the “First
Deposit”)
as
advance payment for Products to be delivered under this Agreement.
5.2. SOLARFUN
shall pay in cash to HOKU the additional sum of Forty-Four Million U.S.
Dollars
(USD $44,000,000.00) (the “Main
Deposit”) as
an
advance payment for Products to be delivered under this Agreement in accordance
with the payment schedule set forth below.
5.2.1. Nineteen
Million U.S. Dollars ($19,000,000) of the Main Deposit (the “Second
Deposit”)
shall
be paid to HOKU on September 30, 2008 (the “Second
Deposit Date”);
provided, however, that the Second Deposit Date shall be extended until
such
time as HOKU has completed the Financing.
5.2.2. Provided
that this Agreement has not been terminated pursuant to Section 9.3,
Twenty
Million U.S. Dollars (USD $20,000,000) of the Main Deposit (the “Third
Deposit”)
shall
be paid to HOKU on March 31, 2009 (the “Third
Deposit Date”);
provided, however, that the Third Deposit Date shall be extended until
such time
as HOKU has completed the Financing (unless this Agreement has been terminated
pursuant to Section 9.3).
5.2.3. Provided
that this Agreement has not been terminated pursuant to Section 9.3, Five
Million U.S. Dollars (USD $5,000,000.00) of the Main Deposit (the “Fourth
Deposit”)
shall
be paid to HOKU on March 31, 2010 (the “Fourth
Deposit Date”);
provided, however, that the Fourth Deposit Date shall be extended until
such
time as HOKU has completed the Financing (unless this Agreement has been
terminated pursuant to Section 9.3).
5.3. Letter
of Credit.
5.3.1. HOKU
acknowledges receipt of the irrevocable stand-by letter of credit attached
hereto as Appendix
3
(the
“Citibank
Letter of Credit”)
in the
amount of the Main Deposit.
Within
ten (10) days after the Effective Date, SOLARFUN shall provide an amended
Citibank Letter of Credit in substantially the form of Appendix
4
attached
hereto (the “Amended
Letter of Credit”).
Payment to HOKU of the Second Deposit, Third Deposit and Fourth Deposit
shall be
made under the Amended Letter of Credit upon its receipt of (A) written
notice
from HOKU that SOLARFUN has failed to make such payment on the Second Deposit
Date, the Third Deposit Date or the Fourth Deposit Date, as applicable;
and (B)
written confirmation from HOKU that HOKU has completed its Financing. The
Amended Letter of Credit shall expire on the later of the date when (i)
the Main
Deposit has been paid in full to HOKU by SOLARFUN, or (ii) the Main Deposit
has
been paid in full to HOKU from the Amended Letter of Credit.
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5.4. HOKU
shall invoice SOLARFUN at or after the time of each shipment of Products
to
SOLARFUN. Taxes, customs and duties, if any, will be identified as separate
items on HOKU invoices. All invoices shall be sent to SOLARFUN’s address as
provided herein. Payment terms for all invoiced amounts shall be [*]
days from
date of shipment. All payments shall be made in U.S. Dollars. Unless
HOKU is
entitled to retain the Total Deposit as liquidated damages pursuant to
Section
11
below,
shipments
to SOLARFUN shall be credited against the Total Deposit beginning
in the second Year, as set forth in Appendix
1
(Pricing
Schedule).
5.5. The
prices for the Products do not include any excise, sales, use, import,
export or
other similar taxes, such taxes will not include income taxes or similar
taxes,
which taxes will be invoiced to and paid by SOLARFUN, provided that SOLARFUN
is
legally or contractually obliged to pay such taxes. SOLARFUN shall be
responsible for all transportation charges, duties or charges, liabilities
and
risks for shipping and handling (and hereby indemnifies HOKU for such
costs,
liabilities and risks); thus, the price for the Products shall not include
any
such charges.
5.6. Late
payments and outstanding balances shall accrue interest at the lesser
of [*]%
per annum or the maximum allowed by law.
6. Security
Interest.
6.1. Subject
to receipt of the Initial Deposit and or payment of any portion of the
Main
Deposit HOKU hereby grants to SOLARFUN a security interest to secure
the
repayment by HOKU to SOLARFUN of the Total Deposit following any of the
events
set forth in Section 9.6
below,
which shall be subordinated in accordance with Section 6.2
below,
in all of the tangible and intangible assets related to HOKU’s polysilicon
business (the “Collateral”).
6.2. SOLARFUN
acknowledges and agrees that the security interests and liens in the
Collateral
will not be first priority security interests, will only be subordinated
to
HOKU’s third-party lenders (the “Senior
Lenders”)
that
provide debt financing for the construction of any HOKU Facility, and
may be
subordinated as a matter of law to other security interests, and to security
interests that are created and perfected prior to the security interest
granted
to SOLARFUN hereby. SOLARFUN shall enter into subordination agreements
with the
Senior Lenders on terms and conditions reasonably acceptable to the Senior
Lenders.
6.3. In
addition, SOLARFUN shall enter into collateral, intercreditor and other
agreements (the “Collateral
Agreements”)
with
HOKU’s Senior Lenders, and with SANYO Electric Co., Ltd., Suntech Power Holding
Co., Ltd., Global Expertise Wafer Division, Ltd., and HOKU’s other customers who
provide prepayments for Products (collectively, “HOKU’s
Other Customers”),
as
may be reasonably necessary to ensure that the security interest granted
hereby
is pari passu with the security interests that may be granted to HOKU’s Other
Customers. SOLARFUN may not unreasonably refuse to sign any such Collateral
Agreement, provided that such Collateral Agreement grants SOLARFUN a
pari passu
priority with respect to HOKU’s Other Customers, and is expressly subordinated
to the Senior Lenders.
6.4. The
security interest granted hereby shall continue so long as HOKU continues
to
maintain any amount of the Total Deposit, and only to the extent of such
remaining amount of the Total Deposit being held by HOKU, which has not
been
credited against the shipment of Products pursuant to this Agreement,
or
otherwise repaid to SOLARFUN. Notwithstanding anything to the contrary
contained
in this Agreement, the Collateral consisting of real property shall secure
only
the obligations of HOKU to refund any portion of the Total Deposit to
SOLARFUN
in accordance with the terms of this Agreement. When the Total Deposit
is no
longer held by HOKU, SOLARFUN will sign such documents as are necessary
to
release its security interests.
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6.5. HOKU
and
SOLARFUN each agree to act in good faith to execute and deliver any additional
document or documents that may be required in furtherance of the foregoing
provisions of this Section 6,
including the Collateral Agreements. Neither HOKU nor SOLARFUN may unreasonably
refuse to sign any such document.
7. Product
Quality Guarantee.
7.1. HOKU
warrants to SOLARFUN that the Products shall meet the Product Specifications.
For each shipment, this warranty shall survive for [*] days after the applicable
shipment date (the “Warranty
Period”).
Upon
release of the Products to a common carrier or freight forwarder, FOB origin,
HOKU warrants that the Products shall be free of all liens, mortgages,
encumbrances, security interests or other claims or rights. HOKU will, upon
prompt notification and compliance with HOKU’s instructions, refund or replace,
at SOLARFUN’s sole option, any Product which does not meet the Product
Specifications, and SOLARFUN shall comply with the inspection and return
goods
policy described in Section 8
below
with respect to such Products. No employee, agent or representative of HOKU
has
the authority to bind HOKU to any oral representation or warranty concerning
the
Products. Any oral representation or warranty made prior to the purchase
of any
Product and not set forth in writing and signed by a duly authorized officer
of
HOKU shall not be enforceable by SOLARFUN. HOKU makes no warranty and shall
have
no obligation with respect to damage caused by or resulting from accident,
misuse, neglect or unauthorized alterations to the Products.
7.2. HOKU
EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY,
INCLUDING THE WARRANTIES OF MERCHANTABILITY, AND FITNESS FOR A PARTICULAR
PURPOSE. HOKU’s sole responsibility and SOLARFUN’s exclusive remedy for any
claim arising out of the purchase of any Product is a refund or replacement,
as
described above. In no event shall HOKU’s liability exceed the purchase price
paid therefore; nor shall HOKU be liable for any claims, losses or damages
of
any individual or entity or for lost profits or any special, indirect,
incidental, consequential, or exemplary damages, howsoever arising, even
if HOKU
has been advised of the possibility of such damages.
7.3. HOKU
shall, at its own expense, indemnify and hold SOLARFUN and its Affiliates
harmless from and against any expense or loss resulting from any actual or
alleged infringement of any patent, trademark, trade secret, copyright, mask
work or other intellectual property related to the Products, and shall defend
at
its own expense, including attorneys fees, any suit brought against SOLARFUN
or
SOLARFUN’s Affiliates alleging any such infringement. SOLARFUN agrees that: (i)
SOLARFUN shall give HOKU prompt notice in writing of any such suit; (ii)
if HOKU
provides evidence reasonably satisfactory to SOLARFUN of HOKU’s financial
ability to defend the matter vigorously and pay any reasonably foreseeable
damages, SOLARFUN shall permit HOKU, through counsel of HOKU’s choice, to answer
the charge of infringement and defend such suit (but SOLARFUN, or SOLARFUN’s
Affiliate may be represented by counsel and participate in the defense at
its
own expense); and (iii) SOLARFUN shall give HOKU all needed information,
assistance, and authority, at HOKU’s expense, to enable HOKU to defend such
suit. In case of a final award of damages in any such suit HOKU shall pay
such
award, but shall not be responsible for any settlement made without its prior
consent. Except as otherwise expressly set forth herein, HOKU disclaims any
obligation to defend or indemnify SOLARFUN, its officers, agents, or employees,
from any losses, damages, liabilities, costs or expenses which may arise
out of
the acts of omissions of HOKU.
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8. Inspection
and Return Goods Policy.
8.1. An
inspection of appearance of each shipment of Product shall be made by SOLARFUN
in accordance with sound business practice upon the delivery of the Product,
and
in no case later than [*]
after
delivery at SOLARFUN’s factory. SOLARFUN shall inform HOKU promptly, and in no
case later than [*]
after
delivery of Product, in case of any obvious damages or other obvious defects
to
the Product which SOLARFUN discovers under the inspection of
appearance.
8.2. SOLARFUN
shall perform final inspection of the Product upon introducing the Product
into
SOLARFUN’s production process. Such inspection shall take place during the
Warranty Period. If the Product does not meet the Product Specifications,
SOLARFUN shall notify HOKU in writing without undue delay after the inspection
and, together with the notification, submit documentary evidence of the result
of the final inspection whereupon HOKU shall have the right to undertake
its own
inspection prior to any return of the Products pursuant to Section 8.3
below.
8.3. Products
may be returned to HOKU within the later of (a) [*] after discovery of a
defect
consistent with Sections 8.1
and
8.2
above;
and (b) [*] after HOKU completes its inspection and confirms the defect pursuant
to Section 8.2
above,
for replacement or a refund including all return shipment expenses. To assure
prompt handling, HOKU shall provide SOLARFUN a return goods authorization
number
within 48 hours of SOLARFUN’s request. Provided that HOKU communicates this
number to SOLARFUN within such timeframe, SOLARFUN will reference this number
on
return shipping documents. Returns made without the authorization number
provided by HOKU in accordance with the foregoing may be subject to HOKU’s
reasonable charges due to HOKU’s additional handling costs. HOKU reserves the
right to reverse any credit issued to SOLARFUN if, upon return, such Product
is
determined by a predetermined third party not to be defective.
9. Term
and Termination.
9.1. The
term
of this Agreement shall begin on the Effective Date and provided that the
first
delivery of the Product under this Agreement shall occur in 2009 or earlier,
and
unless previously terminated as hereinafter set forth, shall remain in force
for
a period of ten Years beginning with the First Shipment Date.
9.2. Each
Party may, at its discretion, upon written notice to the other Party, and
in
addition to its rights and remedies provided under this Agreement or any
other
agreement executed in connection with this Agreement and at law or in equity,
terminate this Agreement in the event of any of the following:
9.2.1. Upon
a
material breach of the other Party of any material provision in this Agreement,
and failure of the other Party to cure such material breach within sixty
(60)
days after written notice thereof;
provided, however, that such cure period shall not modify or extend the 150-day
cure period for HOKU’s delivery obligations pursuant to Section 3.3
above;
and provided, further that such sixty (60) day cure period shall not apply
to
SOLARFUN’s failure to make any payment to HOKU pursuant to this Agreement. In
the event of SOLARFUN’s failure to make payment on the 30-day payment terms set
forth in Section 5.4
hereof,
termination by HOKU shall require the issuance of a written notice of default
containing the threat of immediate termination if payment is not made within
an
additional grace period of not less than ten (10) business days.
Notwithstanding the foregoing, HOKU is not required to produce Products for
SOLARFUN while a payment default by SOLARFUN on an invoice for products actually
shipped by HOKU has occurred and is continuing. For purposes of this Section
9.2.1,
a
“material breach” means a monthly shipment which is delayed beyond one hundred
fifty (150) days, a payment default or any other material breach of this
Agreement which materially and adversely affects a Party or which occurs
on
multiple occasions.
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9.2.2. Upon
the
voluntary or involuntary initiation of bankruptcy or insolvency proceedings
against the other Party; provided, that for an involuntary bankruptcy or
insolvency proceeding, the Party subject to the proceeding shall have sixty
(60)
working days within which to dissolve the proceeding or demonstrate to the
terminating Party’s satisfaction the lack of grounds for the initiation of such
proceeding;
9.2.3. If
the
other Party (i) becomes unable, or admits in writing its inability, to pay
its
debts generally as they mature, (ii) becomes insolvent (as such term may be
defined or interpreted under any applicable statute); or
9.2.4. In
accordance with the provisions of Section 12
(Force
Majeure) below.
9.2.5. Without
limiting the foregoing, SOLARFUN shall have the right to terminate this
Agreement if the First Shipment Date does not occur on or before December
31,
2009.
9.3. HOKU
and
SOLARFUN shall each have the right to terminate this Agreement if HOKU
has
not completed the Financing on or before December 31, 2008.
9.4. In
the
event that SOLARFUN does not provide the Amended Letter of Credit within
ten
(10) days after the Effective Date, then this Agreement shall be null and
void,
and the Supply Agreement shall survive in accordance with its
terms.
9.5. Upon
the
expiration or termination of this Agreement howsoever arising, the following
Sections shall survive such expiration or termination: Sections 1
(Definitions); Section 7
(Product
Quality Guarantee), Section 8
(Inspection and Return Goods Policy); Section 9
(Term
and Termination); Section 10
(Liability); Section 11
(Liquidated Damages); and Section 13
(General
Provisions).
9.6. If
SOLARFUN terminates this Agreement pursuant to Section 9.2.1,
9.2.2,
9.2.3,
9.2.4,
9.2.5,
9.3,
or 12
then any funds remaining on the Total Deposit on such date of termination
(including, without limitation, the First Deposit and any portion of the
Main
Deposit that has been paid to HOKU against the Amended Letter of Credit)
shall
be returned to SOLARFUN, and to the extent that the Amended Letter of Credit
has
not expired, HOKU shall return the original of the Amended Letter of Credit
to
SOLARFUN for cancellation; provided however that if SOLARFUN is in material
breach of this Agreement at the time it terminates this Agreement, then HOKU
shall not be required to repay any remaining amount of the Total Deposit
or
return the Amended Letter of Credit up to the amounts of HOKU’s direct loss from
such material breach (unless SOLARFUN cures such breach within the applicable
cure period) or SOLARFUN’s other outstanding and unpaid obligations hereunder
(including, without limitation, obligations under Section 11).
If
HOKU
terminates this Agreement pursuant to Sections 9.2.1,
9.2.2,
9.2.3,
9.2.4,
or
12,
then
HOKU shall be entitled to retain the Total Deposit and the Amended Letter
of
Credit including any funds remaining on the Total Deposit on such date of
termination in accordance with Section 11.
“Funds
remaining”
on
the
Total Deposit are funds not applied against SOLARFUN’s purchase of Product,
pursuant to Section 5.4
above,
for Product actually shipped to SOLARFUN hereunder.
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Page
8 of
21
10. Liability.
10.1. IN
NO
EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR FOR EXEMPLARY OR PUNITIVE DAMAGES, EVEN IF SOLARFUN
OR
HOKU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
10.2. NEITHER
PARTY’S TOTAL LIABILITY TO THE OTHER FOR ANY KIND OF LOSS, DAMAGE OR LIABILITY
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT, UNDER ANY THEORY OF
LIABILITY, SHALL EXCEED IN THE AGGREGATE THE TOTAL DEPOSIT, EXCEPT WITH RESPECT
TO SOLARFUN’S CONTINUING OBLIGATION TO PURCHASE THE PRODUCTS AS SET FORTH
HEREIN.
11. Liquidated
Damages.
THE
PARTIES ACKNOWLEDGE AND AGREE THAT ANY BREACH OF THIS AGREEMENT BY SOLARFUN
MAY
CAUSE IRREPARABLE AND IMMEASURABLE DAMAGE TO HOKU. BECAUSE IT IS DIFFICULT
TO
MEASURE THESE DAMAGES, IN THE EVENT THAT THIS AGREEMENT IS TERMINATED BY
HOKU
PURSUANT TO SECTION 9.2.1,
9.2.2,
9.2.3,
9.2.4,
or
12,
THEN
HOKU SHALL BE ENTITLED TO RETAIN AS LIQUIDATED DAMAGES, THE TOTAL DEPOSIT
(INCLUDING ANY REMAINING PORTION THEREOF NOT CREDITED AGAINST PRODUCT
SHIPMENTS). ANY AMOUNTS DUE FOR UNDELIVERED PRODUCT UNDER THIS AGREEMENT
ARE
STILL DUE, UNLESS OTHERWISE AGREED BY BOTH PARTIES IN WRITING.
12. Force
Majeure.
Neither
Party shall be liable to the other Party for failure of or delay in performance
of any obligation under this Agreement, directly, or indirectly, owing to
acts
of God, war, war-like condition, embargoes, riots, strike, lock-out and other
events beyond its reasonable control which were not reasonably foreseeable
and
whose effects are not capable of being overcome without unreasonable expense
and/or loss of time to the affected Party (i.e., the Party that is unable
to
perform). If such failure or delay occurs, the affected Party shall notify
the
other Party of the occurrence thereof as soon as possible, and the Parties
shall
discuss the best way to resolve the event of force majeure. If the conditions
of
Force Majeure continue to materially impede performance of any material
obligation under this Agreement for a period of more than three (3) consecutive
calendar months, then the non-affected Party shall be entitled to terminate
this
Agreement by 30 days’ prior written notice to the other Party.
13. General
Provisions.
13.1. This
Agreement shall be construed under and governed by the laws of the State
of
California, U.S.A.
13.2. Upon
notice from one Party to the other of a dispute hereunder, the Parties agree
to
hold a meeting within thirty (30) days of receipt of such notice with at
least
one (1) representative from each Party who has decision-making authority
for
such company. At this meeting, the Parties will attempt to resolve the dispute
in good faith. If, after the meeting, the dispute has not been resolved,
only
then may a Party resort to litigation. Any proceeding to enforce or to resolve
disputes relating to this Agreement shall be brought in California, USA.
In any
such proceeding, neither Party shall assert that such a court lacks jurisdiction
over it or the subject matter of the proceeding.
13.3. HOKU
may
assign this Agreement to any of its Affiliates, and may assign its rights
under
this Agreement to any collateral agent as collateral security for HOKU’s secured
obligations in connection with the financing a HOKU Facility, without the
consent of SOLARFUN. Except as stated in the previous sentence, neither HOKU
nor
SOLARFUN may assign this Agreement to a third party without the prior written
consent of the other Party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, an assignment of this Agreement by either
Party
in connection with a merger, acquisition, or sale of all or substantially
all of
the assets or capital stock of such Party shall not require the consent of
the
other Party. If this Agreement is assigned effectively to a third party,
this
Agreement shall bind upon successors and assigns of the Parties
hereto.
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Page
9 of
21
13.4. Except
as
provided elsewhere in this Agreement, a notice is effective only if the Party
giving or making the notice has complied with this Section 13.4
and if
the addressee has received the notice. A notice is deemed to have been received
as follows:
|
(a)
|
If
a notice is delivered in person, or sent by registered or certified
mail,
or nationally or internationally recognized overnight courier,
upon
receipt as indicated by the date on the signed receipt;
or
|
|
(b)
|
If
a notice is sent by facsimile, upon receipt by the Party giving
the notice
of an acknowledgment or transmission report generated by the machine
from
which the facsimile was sent indicating that the facsimile was
sent in its
entirety to the addressee’s facsimile number.
|
Each
Party giving a notice shall address the notice to the appropriate person
at the
receiving Party at the address listed below or to a changed address as the
Party
shall have specified by prior written notice:
SOLARFUN:
SOLARFUN
POWER HONG KONG LIMITED
In
care
of: JIANGSU LINYANG SOLARFUN CO., LTD.
▇▇.
▇▇▇
▇▇▇▇▇▇▇ ▇▇.,
▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
People’s
Republic of China
Tel:
▇▇▇-▇▇-▇▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇-▇▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇, VP of Business Development
E-Mail:
[*]
HOKU:
HOKU
MATERIALS, INC.
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, CEO
E-mail:
[*]
Facsimile:
▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
13.5. The
waiver by either Party of the remedy for the other Party’s breach of or its
right under this Agreement will not constitute a waiver of the remedy for
any
other similar or subsequent breach or right.
13.6. If
any
provision of this Agreement is or becomes, at any time or for any reason,
unenforceable or invalid, no other provision of this Agreement shall be affected
thereby, and the remaining provisions of this Agreement shall continue with
the
same force and effect as if such unenforceable or invalid provisions had
not
been inserted in this Agreement.
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Page
10
of 21
13.7. No
changes, modifications or alterations to this Agreement shall be valid unless
reduced to writing and duly signed by respective authorized representatives
of
the Parties.
13.8. No
employment, agency, trust, partnership or joint venture is created by, or
shall
be founded upon, this Agreement. Each Party further acknowledges that neither
it
nor any Party acting on its behalf shall have any right, power or authority,
implied or express, to obligate the other Party in any way.
13.9. Neither
Party shall make any announcement or press release regarding this Agreement
or
any terms thereof without the other Party’s prior written consent; provided,
however, that the Parties will work together to issue a joint press release
within two (2) days after execution of this Agreement. Notwithstanding the
foregoing, either Party may publicly disclose the material terms of this
Agreement pursuant to the United States Securities Act of 1933, as amended,
the
United States Securities Exchange Act of 1934, as amended, or other applicable
law; provided, however, that the Party being required to disclose the material
terms of this Agreement shall provide reasonable advance notice to the other
Party, and shall use commercially reasonable efforts to obtain confidential
treatment from the applicable governing entity for all pricing and technical
information set forth in this Agreement.
13.10. This
Agreement constitutes the entire agreement between the Parties and supersedes
all prior proposal(s), discussions and agreements, including, without
limitation, the Supply Agreement, relative to the subject matter of this
Agreement and neither of the Parties shall be bound by any conditions,
definitions, warranties, understandings or representations with respect to
such
subject matter other than as expressly provided herein. No oral explanation
or
oral information by either Party hereto shall alter the meaning or
interpretation of this Agreement. Notwithstanding the foregoing, if SOLARFUN
fails to provide the Amended Letter of Credit within ten (10) days after
the
Effective Date, then this Agreement shall be null and void, and the Supply
Agreement shall continue to be binding on the Parties as the final agreement
between the Parties regarding the purchase and sale of Products.
13.11. The
headings are inserted for convenience of reference and shall not affect the
interpretation and or construction of this Agreement.
13.12. Words
expressed in the singular include the plural and vice-versa.
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Page
11
of 21
IN
WITNESS WHEREOF, the Parties have executed this Second Amended & Restated
Supply Agreement as of the date last set forth below.
|
SOLARFUN:
|
HOKU:
|
|||
|
SOLARFUN
POWER HONG KONG LIMITED
|
HOKU
MATERIALS, INC.
|
|||
|
By:
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇
|
By:
|
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇▇▇
▇▇▇▇
|
Name:
|
▇▇▇▇▇▇
▇▇▇▇▇▇
|
|
|
Title:
|
VP
of Business Development
|
Title:
|
Chairman
& CEO
|
|
|
Authorized
Signatory
|
Authorized
Signatory
|
|||
|
Date:
|
May
13, 2008
|
Date:
|
May
13, 2008
|
|
CORPORATE
GUARANTY
As
an
inducement for HOKU to enter into this Agreement with SOLARFUN, it is hereby
agreed that the undersigned does hereby guaranty to HOKU the prompt, punctual
and full payment of all monies now or hereinafter due HOKU from SOLARFUN, and
agrees to the following:
|
a)
|
Until
termination, this guaranty is unlimited as to amount or duration
and shall
remain in full force and effect notwithstanding any extension, compromise,
adjustment, forbearance, waiver, release or discharge of any party
obligor
or guarantor.
|
|
b)
|
The
obligations of the undersigned shall be at the election of HOKU,
shall be
primary and not necessarily secondary, and HOKU shall not be required
to
exhaust its remedies as against SOLARFUN prior to enforcing its rights
under this guaranty against the
undersigned.
|
|
c)
|
The
guaranty hereunder shall be unconditional and absolute and the undersigned
waives all rights of subrogation and set-off until all sums under
this
guaranty are fully paid. The undersigned further waives all suretyship
defenses or defenses in the nature thereof,
generally.
|
|
d)
|
The
guaranty shall be valid and continuing during the term of this Agreement.
|
|
e)
|
The
undersigned warrants and represents it has full authority to enter
into
this guaranty.
|
|
f)
|
This
guaranty shall be binding upon and inure to the benefit of the parties,
their successors, assigns and personal
representatives.
|
|
g)
|
This
guaranty shall be construed and enforced under the laws of the State
of
California, USA
|
JIANGSU
LINYANG SOLARFUN CO., LTD.
|
By:
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇
|
Date:
|
May
13, 2008
|
|
|
Name:
|
▇▇▇▇▇▇▇
▇▇▇▇
|
|||
|
Title:
|
VP
of Business Development
|
|||
|
Authorized
Signatory
|
||||
Signature
Page to Second Amended & Restated Supply Agreement
Page
12
of 21
Appendix
1
Pricing
Schedule
[*]
If
there
is uncertainty in price between the delivery period and the total quantity
for
that period based on the table above, the price assigned to the quantity shall
prevail. For example, the first [*] MT shall be invoiced at $[*].
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Appendix
1 to Second Amended & Restated Supply Agreement
Page
13
of 21
Appendix
2
Product
Specifications
[*]
The
size
distribution of the Products shipped shall be as follows:
[*]
Product
Specifications shall be tested in accordance with the following procedures:
graphite furnace atomic absorption spectroscopy, inductively coupled plasma-mass
spectroscopy and Fourier transform infrared absorption
spectroscopy.
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Appendix
2 to Second Amended & Restated Supply Agreement
Page
14
of 21
APPENDIX
3
Citibank
Letter of Credit
(See
attached)
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Appendix
3 to Second Amended & Restated Supply Agreement
Page
15
of 21
APPENDIX
4
Amended
Letter of Credit
AT
THE
REQUEST CITIBANK (CHINA) CO., LTD. SHANGHAI BRANCH AND FOR THE ACCOUNT OF
JIANGSU LINYANG SOLARFUN CO., LTD. (“APPLICANT”) WITH ▇▇▇▇▇▇▇ ▇▇ ▇▇. ▇▇▇ ▇▇▇▇▇▇▇
▇▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, THE PEOPLE’S REPUBLIC OF CHINA, WE ISSUE
OUR IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER…… IN FAVOR OF : HOKU SCIENTIFIC,
INC. AND/OR HOKU MATERIALS INC. (“BENEFICIARY”), ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ATTN: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, CEO FOR AN AMOUNT NOT TO EXCEED
IN
THE AGGREGATE USD44,000,000.00 (FORTY FOUR MILLION UNITED STATES DOLLARS AND
00/100 CENTS), EFFECTIVE IMMEDIATELY AND EXPIRING AT CITIBANK, N.A., C/O ITS
SERVICER CITICORP NORTH AMERICA, INC., 3800 CITIBANK CENTER, GLOBAL TRADE
SERVICE CENTER, BUILDING B, 3RD
FLOOR, ,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ON APRIL 15, 2010 .
.
THIS
STANDBY LETTER OF CREDIT IS ISSUED RELATIVE TO A CONTRACT (“SUPPLY AGREEMENT”)
PLACED IN _________________ 2008 BETWEEN HOKU SCIENTIFIC, INC. (“SUPPLIER”) AND
SOLARFUN POWER HONG KONG LTD. (“BUYER”) FOR THE DELIVERY OF POLYCRYSTALLINE
SILICON PRODUCTS (“GOODS”) TO JIANGSU LINYANG SOLARFUN CO., LTD.
FUNDS
UNDER THIS STANDBY LETTER OF CREDIT ARE AVAILABLE TO THE BENEFICIARY BY SIGHT
PAYMENT WITH CITIBANK, N.A., NEW YORK AGAINST PRESENTATION OF A WRITTEN
STATEMENT SIGNED BY THE BENEFICIARY MENTIONING THEREON OUR STANDBY LETTER OF
CREDIT NUMBER……….. AND CERTIFYING THAT “APPLICANT HAS FAILED TO PERFORM ITS
CONTRACTUAL OBLIGATION UNDER THE POLYCRYSTALLINE SILICON CONTRACT. WE CERTIFY
THAT WE HAVE COMPLIED FULLY WITH THE TERMS AND CONDITIONS OF THE UNDERLYING
AGREEMENT.”
WE
HEREBY
UNDERTAKE WITH BENEFICIARY TO HONOR EACH PRESENTATION MADE IN COMPLIANCE WITH
THE TERMS AND CONDITIONS OF THIS STANDBY LETTER OF CREDIT ON OR BEFORE THE
STATED EXPIRATION DATE, WHEN DULY PRESENTED TO US BY FACSIMILE TRANSMISSION
OR
EXPRESS COURIER, AT OUR ADDRESS STATED ABOVE.
IF
PRESENTATION OF SUCH DRAFT AND CERTIFICATE IS MADE BY FAX TRANSMISSION, IT
SHALL
BE FAXED TO FAX NO. ▇▇▇-▇▇▇-▇▇▇▇ OR SUCH OTHER FAX NUMBER IDENTIFIED BY CITIBANK
IN A WRITTEN NOTICE TO YOU. TO THE EXTENT A PRESENTATION IS MADE BY FAX
TRANSMISSION, YOU MUST (I) PROVIDE TELEPHONE NOTIFICATION THEREOF TO CITIBANK
(PHONE NO. ▇▇▇-▇▇▇-▇▇▇▇) PRIOR TO OR SIMULTANEOUSLY WITH THE SENDING OF SUCH
FAX
TRANSMISSION AND (II) SEND THE ORIGINAL OF SUCH DRAFT AND CERTIFICATE TO
CITIBANK BY OVERNIGHT COURIER, AT THE ADDRESS PROVIDED ABOVE FOR PRESENTATION
OF
DOCUMENTS, PROVIDED HOWEVER, THAT CITIBANK'S RECEIPT OF SUCH TELEPHONE NOTICE
OR
ORIGINAL DOCUMENTS SHALL NOT BE A CONDITION TO PAYMENT HEREUNDER.
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Appendix
4 to Second Amended & Restated Supply Agreement
Page
16
of 21
PAYMENT
WILL BE MADE BY US FOUR (4) BANKING DAYS FOLLOWING OUR DETERMINATION THAT
DOCUMENTS PRESENTED ARE IN FULL COMPLIANCE WITH THE TERMS AND CONDITIONS OF
THE
LETTER OF CREDIT.
ALL
PAYMENTS UNDER THIS STANDBY LETTER OF CREDIT SHALL BE MADE IN UNITED STATES
DOLLARS, FOR VALUE, IN IMMEDIATELY AVAILABLE FUNDS BY WIRE TRANSFER TO SUCH
ACCOUNT AS MAY BE DESIGNATED BY THE BENEFICIARY IN THE APPLICABLE DEMAND.
IN
THE
EVENT THAT A DEMAND FAILS TO COMPLY WITH THE TERMS OF THIS STANDBY LETTER OF
CREDIT, WE SHALL PROVIDE THE BENEFICIARY PROMPT NOTICE OF THE SAME STATING
THE
REASONS THEREFOR AND SHALL UPON INSTRUCTIONS FROM BENEFICIARY HOLD ANY
NON-CONFORMING DEMAND AND OTHER DOCUMENTS AT BENEFICIARY’S DISPOSAL OR RETURN
THE NON-CONFORMING DEMAND AND OTHER DOCUMENTS TO THE BENEFICIARY AT THE ADDRESS
SET FORTH ABOVE BY OVERNIGHT COURIER. UPON BEING NOTIFIED THAT THE DEMAND WAS
NOT EFFECTED IN COMPLIANCE WITH THIS STANDBY LETTER OF CREDIT, THE BENEFICIARY
MAY ATTEMPT TO CORRECT SUCH NON-COMPLYING DEMAND IN ACCORDANCE WITH THIS STANDBY
LETTER OF CREDIT.
PARTIAL
DRAWINGS ARE ALLOWED UNDER THIS LETTER OF CREDIT. EACH PRESENTATION HONORED
BY
US SHALL IMMEDIATELY REDUCE THE AMOUNT AVAILABLE TO BE DRAWN HEREUNDER BY THE
AMOUNT OF THE PAYMENT MADE IN RESPECT OF SUCH PRESENTATION.
THIS
LETTER OF CREDIT SHALL AUTOMATICALLY BECOME NULL AND VOID UPON THE EXPIRY DATE,
WHETHER IT IS RETURNED TO US OR NOT; PROVIDED, HOWEVER, THAT IN THE EVENT OF
AN
ACT OF GOD, RIOT, CIVIL COMMOTION, INSURRECTION, WAR OR ANY OTHER CAUSE BEYOND
OUR CONTROL THAT INTERRUPTS OUR BUSINESS AND CAUSES THE PLACE FOR PRESENTATION
OF THIS STANDBY LETTER OF CREDIT TO BE CLOSED FOR BUSINESS ON THE LAST DAY
FOR
PRESENTATION, THE EXPIRY DATE WILL BE AUTOMATICALLY EXTENDED WITHOUT AMENDMENT
TO A DATE FIFTEEN CALENDAR DAYS AFTER THE PLACE FOR PRESENTATION REOPENS FOR
BUSINESS.
ALL
BANK
CHARGES ARE FOR ACCOUNT OF THE APPLICANT.
ALL
PARTIES TO THIS STANDBY LETTER OF CREDIT ARE ADVISED THAT THE U.S.GOVERNMENT
HAS
IN PLACE SANCTIONS AGAINST CERTAIN COUNTRIES, RELATED ENTITIES AND INDIVIDUALS.
UNDER THESE SANCTIONS CITIBANK ▇.▇.▇▇/▇▇▇▇ BE PROHIBITED FROM ENGAGING IN
TRANSACTIONS THAT MAY FALL WITHIN THE GUIDELINES OF SUCH SANCTIONS.
ANY
ONE
BENEFICIARY OR COMBINATION OF BENEFICIARIES, ACTING INDIVIDUALLY OR
COLLECTIVELY, MAY DRAW ON THIS LETTER OF CREDIT IN FULL OR IN PART, AND ANY
ACTION TAKEN BY ANY OR ALL BENEFICIARIES HEREUNDER SHALL BIND EACH OF THEM
EXCEPT THE REQUEST FOR THE TRANSFER OF THE LETTER OF CREDIT WHICH MUST BE
JOINTLY SIGNED BY BOTH BENEFICIARIES.
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Appendix
4 to Second Amended & Restated Supply Agreement
Page
17
of 21
IT
IS
CONDITION OF THIS LETTER OF CREDIT THAT IT IS TRANSFERABLE AND MAY BE
TRANSFERRED IN ITS ENTIRETY, BUT NOT IN PART, AND MAY BE SUCCESSIVELY
TRANSFERRED BY YOU OR ANY TRANSFEREE HEREUNDER TO A SUCCESSOR TRANSFEREE(S).
TRANSFER UNDER THIS LETTER OF CREDIT TO SUCH TRANSFEREE MUST BE JOINTLY SIGNED
BY BOTH BENEFICIARIES AND SHALL BE EFFECTED UPON PRESENTATION TO US OF THE
ORIGINAL OF THIS LETTER OF CREDIT AND ANY AMENDMENTS HERETO ACCOMPANIED BY
A
REQUEST DESIGNATING THE TRANSFEREE IN THE FORM OF ANNEX _A__, ATTACHED HERETO,
APPROPRIATELY COMPLETED
THIS
STANDBY LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES
1998,
ICC PUBLICATION NO. 590 (“ISP98”), AND AS TO MATTERS NOT ADDRESSED BY ISP98,
SHALL BE GOVERNED BY THE LAWS OF NEW YORK STATE AND APPLICABLE UNITED STATES
FEDERAL LAWS.
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Appendix
4 to Second Amended & Restated Supply Agreement
Page
18
of 21
Annex
A
Request
for Full Transfer
Relinquishing
all Rights as Beneficiaries
(
This form is to be used when the Letter of Credit is to be Transferred in its
entirety and , no substitution of invoices is involved and, no rights are to
be
retained by the undersigned Beneficiary.)
|
Citicorp
North America Inc.,
|
Date:
|
As
Servicer for Citibank, N.A.
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. ▇, ▇▇▇
▇▇.
▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Re:
L/C No. _________
Issued
by: CITIBANK, N.A.
Gentlemen:
Receipt
is acknowledged of the original instrument which you forwarded to us relative
to
the issuance of a Letter of Credit ( herein called the “Credit” ) bearing your
reference number as above in favor of ourselves and/or Transferees and we hereby
request you to transfer the said Letter of Credit, in its entirety,
to:
whose
address
|
is
|
(
Optional ) Please advise Beneficiary through the below indicated Advising
Bank:
We
are returning the original instrument to you herewith in order that you may
deliver it to the Transferees together with your customary letter of
transfer.
It
is understood that any amendments to the Letter of Credit which you may receive
are to be advised by you directly to the Transferees and that the drafts and
documents of the Transferees, if issued in accordance with the conditions of
the
Letter of Credit, are to be forwarded by you directly to the party for whose
account the credit was opened (or any intermediary) without our
intervention. (
continued on page 2 )
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Appendix
4 to Second Amended & Restated Supply Agreement
Page
19
of 21
Page
2 Request
for Full Transfer Relinquishing all Rights as
Beneficiaries
Citibank,
N.A.
reference _________________________
|
SIGNATURE
GUARANTEED
|
Sincerely
yours,
|
|||
|
The
Beneficiaries signatures with
|
||||
|
titles
conforms with that on file
|
||||
|
with
us and such is/are authorized
|
||||
|
for
the execution of this instrument.
|
||||
|
(Name
of Bank)
|
HOKU
SCIENTIFIC, INC
|
|||
|
(Bank
Address)
|
(Telephone
Number)
|
|||
|
(City,
State, Zip Code)
|
(Authorized
Name and Title)
|
|||
|
(Telephone
Number)
|
(Authorized
Signature)
|
|||
|
(Authorized
Name and Title)
|
HOKU
MATERIALS INC.
|
|||
|
(Authorized
Signature)
|
(Telephone
Number)
|
|||
|
|
||||
|
(Authorized
Name and Title)
|
||||
|
|
||||
|
(Authorized
Signature)
|
||||
|
SOLARFUN Initials & Date
WS May 13, 2008
|
HOKU Initials & Date
DS May 13, 2008
|
Appendix
4 to Second Amended & Restated Supply Agreement
Page
20
of 21