EXHIBIT 10.1

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

 

AMENDMENT NO. 1 TO THE SUPPLY AGREEMENT

THIS AMENDMENT NO. 1 TO THE SUPPLY AGREEMENT (this “Amendment”), dated as of
September 22, 2006, by and between DC Chemical Co., Ltd., a corporation
organized under the laws of Korea, having its registered office at Oriental
Chemical Building, 50, Sogong-Dong, Jung-Gu, Seoul, 100-718, Korea (“DCC”), and
SunPower Philippines Manufacturing, Ltd., a company organized under the laws of
the Philippines, having its registered office at #100 East Main Street, Special
Export Processing Zone, Laguna Techno Park, Binan Laguna, Philippines
(“SunPower”).  DCC and SunPower may be referred to herein individually as a
“Party” or collectively as the “Parties.”
RECITAL

WHEREAS, the Parties have entered into that certain Supply Agreement, dated as
of June 30, 2006 (“Agreement”); and

WHEREAS, the Parties have agreed to amend certain terms and conditions of the
Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Parties hereto agree as follows:

1.
All capitalized terms used herein but not defined shall have the same meaning
attributable to such terms as defined in the Agreement.

2.           Following provisions of the Agreement shall be amended by this
Amendment:

a.  
Section 3.1 is hereby deleted in its entirety and replaced as follows:

“3.1           Quantity and Price of Product.  Subject to Sections 3.3 and 4.2,
DCC hereby agrees to sell and deliver to SunPower, and SunPower hereby agrees to
purchase and receive from DCC, the Product under the following terms and
conditions:

Calendar Year
Product Type
“Agreed Quantity”
Price
2008
Chunk
Lower of (a) *** metric tons; or (b) ***% of the volume of the Product
manufactured by DCC in calendar year 2008
US$ ***/kg
2009
Chunk
Lower of (a) *** metric tons; or (b) ***% of the volume of the Product
manufactured by DCC in calendar year 2009
US$ ***/kg
2010
Chunk
Lower of (a) *** metric tons; or (b) ***% of the volume of the Product
manufactured by DCC in calendar year 2010
 
US$ ***/kg
2011
Chunk
Lower of (a) *** metric tons; or (b) ***% of the volume of the
US$ ***/kg

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

 
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Product manufactured by DCC in calendar year 2011
 
         

The price for the Product as set forth in the above chart is based on the
premise that price for metallurgical silicon is US$*** per metric ton (delivered
price) and electricity is US$***/MWH (based on US$1 = *** Won).  If these price
basis change from the date hereof and triggers Price Change as described in
Section 4.2.1, the parties shall adjust the price commencing from ***, applying
the formula set forth in Section 4.2.1.  For clarification, the Price Change
shall be aggregated and carried-over when determining the price for the Product
each year.

***

b.  
Section 3.3 is hereby deleted in its entirety and replaced as follows:

“3.3           Surplus Product.  During the calendar years between 2009 and
2012, if DCC manufactures in three (3) consecutive months *** metric tons of the
Product per month (the “Surplus Threshold”), then the Parties shall deem that
the Facility will have the an annual capacity to manufacture *** metric tons of
the Product.  Once the Surplus Threshold has occurred, then SunPower shall have
the right to purchase the     Product that exceeds *** metric tons in such three
month period (the “Surplus”) in the immediately proceeding month at ***.  DCC
shall provide SunPower with written notice of any Surplus, and SunPower shall
have five (5) days from the receipt of such notice to notify DCC in writing
whether or not it will purchase the Surplus.  If SunPower elects to purchase
such Surplus in accordance with this Section 3.3, it shall include such Surplus
in the Orders issued immediately after making such election.”

c.  
Section 4.1.1 is hereby deleted in its entirety and replaced

“4.1.1           Payment.  SunPower shall remit, as advance payment (the
“Advance Payment”) for the Product, US$*** to DCC’s designated bank account as
follows:

Date
Amount
October 1, 2006
US$***
November 1, 2006
US$***
January 2, 2007
US$***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
 
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April 1, 2007
US$***
July 1, 2007
US$***
Total
US$***

Unless otherwise agreed by the Parties herein, the Parties agree that no
interest will be charged on the Advance Payment.  SunPower shall make payment of
the Advance Payment per above schedule.  Notwithstanding the foregoing, SunPower
shall not be obligated to remit the first installment of the Advance Payment
unless and until DCC has executed the *** Supply Agreement and SunPower’s
obligation to remit each subsequent Advance Payment installment shall be
conditioned upon such order remaining in effect (until delivery of the
reactors).”

d.  
Section 4.1.1 is hereby deleted in its entirety and replaced as follows:

“Section 4.1.2                                Deduction.  The Parties agree that
the Advance Payment shall be credited against the Product Deliveries as follows
(the “Annual Credit Ceiling”):

Calendar Year
Annual Credit Ceiling
2008
US$***
2009
US$***
Total
US$***

If the Annual Credit Ceiling is not deducted in full in any calendar year, DCC
shall repay the remaining balance of the Annual Credit Ceiling for that calendar
year with the Penalty Interest as set forth in Section 9.5.2; provided, however,
that for calendar year 2008, any balance remaining for the Annual Credit Ceiling
shall be rolled-over to calendar year 2009.”

e.  
Section 4.1.3 is hereby deleted in its entirety and replaced as follows:

“Section 4.1.3                                Security.  Concurrently with the
receipt of the first installment of the Advance Payment in accordance with
Section 4.1.1, to secure such amount and DCC’s obligation to deliver the Product
under this Agreement, DCC shall provide SunPower with an advance payment bond in
form and substance as set forth in Exhibit A of the Agreement (the “Security
Document”).  Thereafter, within three   (3) days of receiving subsequent
installments of the Advance Payment in   accordance with Section 4.1.1, DCC
shall provide an additional Security     Document reflecting such increased
amount of Advance Payment.  On the start of each calendar quarter, the amount of
the Security Document shall be decreased to reflect the balance of the Advance
Payment on such date; provided, however, that   the Security Document shall
expire altogether upon the Successful Run.  For the purpose of this Section
4.1.3, “Successful Run” shall mean the production of      three (3) consecutive
months *** metric tons of the Product per month at the Facility from the date on
which at least twenty-six (26) reactors are installed and operated therein.”

f.  
Section 10.1 is hereby deleted in its entirety and replaced as follows:

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
 
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“10.1           Term.  This Agreement shall commence upon the Effective Date and
shall remain in full force until December 31, 2011, unless earlier terminated
pursuant to Section 10.2 below.  The period of time from the Effective Date
until the expiration shall be the “Initial Term”.  The Initial Term, upon
expiration, shall automatically be renewed for an additional *** year period
(the “Renewal Term”), subject to the Parties’ agreement on new quantity which
will be *** metric tons of Product per annum (unless DCC decides to increase the
quantity), price and other material terms and conditions of the Agreement.  The
Parties shall commence good faith negotiations of the new terms and conditions
of the Renewal Term and shall attempt to agree on the  terms and conditions of
the Renewal Term at least twelve (12) months prior to the expiration of the
Initial Term.”

g.  
Schedule 1, “Popcorn contents : less than 15% in an package” is hereby deleted
in its entirety and replaced as follows:

“DCC shall exert its commercially reasonable efforts to ensure the morphology of
the Product will be similar to that of the polysilicon which SunPower purchases
from the world’s first, second or third largest manufacturers of polysilicon as
of the date hereof.  The final specification on morphology, however, will be
agreed upon by the Parties after the initial production of the Product by DCC.”

 
3.
Miscellaneous.

 
a.
This Amendment shall be deemed effective as of the date first set forth
above.  Except as amended hereby, the Agreement shall remain in full force and
effect and shall otherwise be unaffected hereby.

 
b.
This Amendment shall be governed by and construed and enforced in accordance
with the laws of England, without giving effect to the rules respecting its
conflicts of law principles.

 
c.
All disputes, controversies, claims or difference arising out of, or in
connection with this Amendment, or a breach hereof, shall be finally settled by
arbitration in Hong Kong in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce.  The arbitration shall be
conducted by an arbitration board consisting of three arbitrators.  Each Party
shall appoint one arbitrator and the two appointed arbitrators shall appoint a
third arbitrator who shall serve as the chairman of the arbitration board.  The
award rendered by the arbitrators shall be final and binding upon the
Parties.  Each Party consents to service of process with respect to any such
dispute by any method of notice specified in Section 11.3 of the Agreement.  The
United Nations Convention on Contracts for the International Sale of Goods shall
not apply to this Amendment and is expressly excluded.

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

 
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d.
This Amendment may be executed in two counterparts, each of such counterparts
shall for all purposes be deemed to be an original, and both such counterparts
shall together constitute but one and the same instrument.  If any term,
provision, covenant or restriction of this Amendment is held by a court of
competent jurisdiction or other authority to be invalid, illegal, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full and effect and shall in no
way be affected, impaired or invalidated.

 
      [Signature page follows]

 
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed
by their respective duly authorized officers as of the date set forth above.

 

  DC Chemical Co., Ltd.          
 
By:
/s/ ***     Name  ***     Title  ***          

 

  SunPower Philippines Manufacturing, Ltd.          
 
By:
/s/Tom Werner     Name   Tom Werner     Title   CEO          

             
 
By:
/s/ P.M. Pai     Name P.M. Pai     Title Chief Operating Officer          

             
 
By:
/s/ Jon Whiteman     Name Jon Whiteman     Title VicePresident, Strategic Supply
         

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