Exhibit 10.2
EXECUTION COPY
GUARANTEE AGREEMENT
DATED 18 May 2011
between
FIRST SOLAR INC.
as Guarantor
FIRST SOLAR MANUFACTURING GMBH
as Borrower
and
COMMERZBANK AKTIENGESELLSCHAFT, FILIALE LUXEMBURG
as Security Agent
(WHITE & CASE LLP LOGO) [c17854c1785404.gif]

 

 

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1. DEFINITIONS
    2  
 
       
2. GUARANTEE (Garantie) AND INDEMNITY (Ausfallhaftung)
    3  
 
       
3. NO DEFENCES
    4  
 
       
4. IMMEDIATE RECOURSE
    4  
 
       
5. ADDITIONAL SECURITY
    5  
 
       
6. APPROPRIATIONS
    5  
 
       
7. DEFERRAL OF GUARANTORS’ RIGHTS
    5  
 
       
8. SETTLEMENT CONDITIONAL
    6  
 
       
9. AMENDMENTS BINDING
    6  
 
       
10. ASSIGNMENT AND TRANSFER
    6  
 
       
11. REPRESENTATIONS AND WARRANTIES
    7  
 
       
12. POSITIVE UNDERTAKINGS
    7  
 
       
13. FINANCIAL COVENANTS
    8  
 
       
14. NEGATIVE UNDERTAKINGS
    8  
 
       
15. FURTHER ASSURANCE
    8  
 
       
16. LIABILITY FOR DAMAGES
    8  
 
       
17. WAIVER
    9  
 
       
18. AMENDMENTS
    9  
 
       
19. NOTICES AND LANGUAGE
    9  
 
       
20. LAW AND JURISDICTION
    10  

 

 

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THIS GUARANTEE AGREEMENT (the “Agreement”) is made on 18 May 2011 between the
following parties:

1.  
FIRST SOLAR INC., a stock corporation established and organized under the laws
of the State of Delaware, United States of America, having its registered seat
at 350 West Washington Street, Suite 600, Tempe, Arizona 85281, USA, registered
with the Secretary of State of the State of Delaware under number 3658676 (the
“Guarantor”)

2.  
FIRST SOLAR MANUFACTURING GMBH, a limited liability company established and
organized under the laws of the Federal Republic of Germany, having its
registered office at Marie-Curie-Str. 3, 15236 Frankfurt (Oder), registered with
the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of
Frankfurt/Oder under registration number HRB 11116 (the “Borrower”); and

3.  
COMMERZBANK AKTIENGESELLSCHAFT, FILIALE LUXEMBURG, a company organised under
German law, whose registered office is at Kaiserstrasse 16, 60311 Frankfurt am
Main, Germany, with registration number HRB 32000, acting through its Luxembourg
branch located at 25, rue Edward Steichen, L-2540 Luxemburg with registration
number B119317 and acting in its capacity as Security Agent (acting for itself
and for and on behalf of the Finance Parties) (the “Security Agent” which
expression includes its successors and assigns in title).

(A)  
WHEREAS, pursuant to a EUR 124,500,000 state guaranteed facilities agreement
(Kreditvertrag) dated 18 May 2011 between, inter alia, First Solar Manufacturing
GmbH as borrower (Kreditnehmer), Commerzbank Aktiengesellschaft as mandated lead
arranger (Arrangeur), Commerzbank Aktiengesellschaft, Filiale Luxemburg, as
facility agent (Konsortialagent) and security agent (Sicherheitenagent) and
others as original lenders (as amended, varied, supplemented, superseded,
increased or extended from time to time) (the “Facilities Agreement”), the
lenders have agreed to grant certain facilities to the Borrower.

(B)  
WHEREAS it is a condition precedent to extending credit to the Borrower under
the Facilities Agreement that the Guarantor shall enter into this Agreement.

(C)  
WHEREAS, pursuant to a USD 600,000,000 facilities agreement dated 15
October 2010 as amended on 6 May 2011, between inter alia JP Morgan Chase Bank
N. A. as Administrative Agent and the Guarantor as Borrower and others (the “US
Credit Agreement”) the lenders have agreed to grant certain facilities to the
Guarantor and certain of its Affiliates.

 

 

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1.  
DEFINITIONS

Capitalised terms used but not otherwise defined herein (including in the
recitals), shall have the meaning attributed thereto in the US Credit Agreement,
as the context may require.
In addition, in this Agreement:
“Accounting Changes” refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC, or any change in the application
thereof. Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to any election under Statement of Financial Accounting Standards
159 (or any other Financial Accounting Standard having a similar result or
effect) to value any Indebtedness or other liabilities of the Company or any
Subsidiary at “fair value,” as defined therein.
“Administrative Agent” means JPMorgan Chase Bank, N.A., together with its
affiliates, as the arranger of the Revolving Commitments and as the
administrative agent for the Lenders under the US Credit Agreement and the other
Loan Documents, together with any of its successors.
“Affiliate” means as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, “control” of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
“BGB” means the German Civil Code (Bürgerliches Gesetzbuch).
“Business Day” means a day defined as “Bankarbeitstag” in the Facilities
Agreement.
“Event of Default” means an event defined as “Kündigungsgrund” in the Facilities
Agreement.
“Finance Document” means a document defined as “Finanzierungsdokument” in the
Facilities Agreement.
“Financing Party” means a party defined as “Finanzierungspartei” in the
Facilities Agreement.
“GAAP” means generally accepted accounting principles in the United States as in
effect from time to time. In the event that any Accounting Change shall occur
and such change results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then, upon notice by the
Security Agent to the Guarantor or vice versa, the Guarantor and the Security
Agent agree to enter into negotiations in order to amend such provisions of this
Agreement so as to reflect equitably such Accounting Changes with the desired
result that the criteria for evaluating the Guarantor’s financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made. If any such notice is given with respect to any Accounting
Change then, until such time as such an amendment shall have been executed and
delivered by the Guarantor and the Security Agent, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred.

 

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“GmbHG” means the German Limited Liability Companies Act (Gesetz betreffend die
Gesellschaften mit beschränkter Haftung).
“Guarantee” means the guarantee granted by the Guarantor in Clauses 2 (Guarantee
(Garantie) and Indemnity (Ausfallhaftung)) to 8 (Settlement Conditional) hereof.
“HGB” means the German Commercial Code (Handelsgesetzbuch).
“InsO” means the German Insolvency Code (Insolvenzordnung).
“Obligor” means the Borrower or the Guarantor.
“Potential Event of Default” means an event defined as “Potentieller
Kündigungsgrund” in the Facilities Agreement.

2.  
GUARANTEE (Garantie) AND INDEMNITY (Ausfallhaftung)

The Guarantor irrevocably and unconditionally guarantees (garantiert) by way of
an independent payment obligation (selbständiges Zahlungsversprechen) to each
Financing Party:

a)  
to pay to that Financing Party within three (3) Business Days of receipt by it
of a written demand by a Financing Party (or the Security Agent on its behalf)
the amount of principal, interest, costs, expenses or other amount demanded in
that demand, which demand shall state that the sum demanded by that Financing
Party under or in connection with the Finance Documents is then due and owing
but has not been fully and irrevocably paid by the Borrower; and

b)  
to indemnify (schadloshalten) each Financing Party immediately within five
(5) Business Days of a written demand against any cost, loss or liability
suffered by that Financing Party if any obligation of the Borrower under or in
connection with any Finance Document or any obligation guaranteed by it
hereunder is or becomes unenforceable, invalid or illegal. The amount of the
cost, loss or liability shall be equal to the amount which that Financing Party
would otherwise have been entitled to recover (Ersatz des positiven Interesses).

 

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3.  
NO DEFENCES

a)  
The obligations of the Guarantor pursuant to this Agreement will not be affected
by an act, omission, matter or thing which relates to the principal obligation
(or purported obligation) of an Obligor and which would reduce, release or
prejudice any of its obligations pursuant to this Agreement, including any
personal defences of the Borrower (Einreden des Hauptschuldners) or any right of
revocation (Anfechtung) or set-off (Aufrechnung) of any Obligor.

b)  
The obligations of the Guarantor pursuant to this Agreement are independent from
any other security or guarantee which may have been or will be given to the
Financing Parties. In particular, the obligations of the Guarantor pursuant to
this Agreement will not be affected by any of the following:

  (i)  
the release of, or any time (Stundung), waiver or consent granted to, the
Borrower from or in respect of its obligations under or in connection with any
Finance Document;

  (ii)  
the taking, variation, compromise, exchange, renewal or release of, or refusal
or neglect to perfect, take up or enforce, any rights against, or security over
assets of, any Obligor or any other person or any failure to realise the full
value of any security;

  (iii)  
any incapacity or lack of power, authority or legal personality of or
dissolution or a deterioration of the financial condition of the Borrower; or

  (iv)  
any unenforceability, illegality or invalidity of any obligation of the Borrower
under any Finance Document.

For the avoidance of doubt this guarantee does not constitute a guarantee upon
first demand (Garantie auf erstes Anfordern) and therefore nothing in this
Agreement shall preclude any defences that the Guarantor (in its capacity as
Guarantor only) may have against a Financing Party that the guarantee and
indemnity does not constitute its legal, valid, binding or enforceable
obligations.
For the further avoidance of doubt, the Guarantor shall have no remaining
obligations under this Agreement after the obligations secured by it have been
fully and permanently discharged.

4.  
IMMEDIATE RECOURSE

No Financing Party will be required to proceed against or enforce any other
rights or security or claim payment from any person before claiming from the
Guarantor pursuant to this Agreement. This applies irrespective of any provision
of a Finance Document to the contrary.

 

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5.  
ADDITIONAL SECURITY

The obligations of the Guarantor contained herein shall be in addition to and
independent of every other Security or guarantee which any Financing Party may
at any time hold in respect of any Obligor’s obligations under the Finance
Documents.

6.  
APPROPRIATIONS

Until all amounts which may be or become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in full, each
Financing Party may:

a)  
refrain from applying or enforcing any other moneys, security or rights held or
received by that Financing Party in respect of those amounts, or apply and
enforce the same in such manner and order as it sees fit (whether against those
amounts or otherwise) and the Guarantor shall not be entitled to the benefit of
the same; and

b)  
hold in an interest-bearing suspense account any moneys received from the
Guarantor or on account of the Guarantor’s liability pursuant to this Agreement.

7.  
DEFERRAL OF GUARANTORS’ RIGHTS

Until all amounts which may be or become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in full and
unless the Security Agent otherwise directs, the Guarantor will not exercise any
rights which it may have by reason of performance by it of its obligations under
the Finance Documents:

a)  
to be indemnified by an Obligor;

b)  
to claim any contribution from any other guarantor of any Obligor’s obligations
under the Finance Documents; and/or

c)  
to take the benefit (in whole or in part and whether by way of legal subrogation
or otherwise) of any rights of the Financing Parties under the Finance Documents
or of any other guarantee or security taken pursuant to, or in connection with,
the Finance Documents by any Financing Party.

If the Guarantor receives any benefit, payment or distribution in relation to
such rights it shall hold that benefit, payment or distribution to the extent
necessary to enable all amounts which may be or become payable to the Financing
Parties by the Obligors under or in connection with the Finance Documents to be
repaid in full on trust for the Financing Parties and shall promptly pay or
transfer the same to the Security Agent or as the Security Agent may direct for
application in accordance with the Facilities Agreement.

 

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8.  
SETTLEMENT CONDITIONAL

Any settlement or discharge between the Guarantor and any Financing Party shall
be conditional upon no Security or payment to such Financing Party by the
Guarantor or any other entity on behalf of the Guarantor being avoided or
reduced by virtue of any laws relating to bankruptcy, insolvency, liquidation or
similar laws of general application and, if any such Security or payment is so
avoided or reduced, each Financing Party shall be entitled to recover the value
or amount of such Security or payment from the Guarantor subsequently as if such
settlement or discharge had not occurred.

9.  
AMENDMENTS BINDING

Without prejudice to the other provisions of this Agreement, the Guarantor
hereby confirms that if the Borrower and any Financing Party enter into any
agreement or other arrangement, including (without limitation) any amendment or
supplement to or restatement of any Finance Documents, howsoever fundamental,
then the Borrower’s execution of any such agreement or other arrangement,
whether or not expressly made or purportedly made on behalf of the Guarantor,
shall bind the Guarantor and the guarantee contained in this Agreement shall
continue in full force and effect without the need to obtain any confirmation or
acknowledgement from the Guarantor that its guarantee continues in full force
and effect and applies to the Guarantor’s liabilities under the Finance
Documents as amended, supplemented or restated in accordance with the agreement
of the Borrower.

10.  
ASSIGNMENT AND TRANSFER

a)  
The Financing Parties shall have the right to assign, transfer or dispose of all
or any part of its rights and/or obligations under this Agreement but only
together with their underlying rights and/or obligations under the Facilities
Agreement and only to the extent such assignment, transfer or disposal is
permitted under the Facilities Agreement. The Guarantor shall execute all such
documents and do all such acts and things which the Financing Parties may
reasonably require in order to validly effect such assignment, transfer, or
disposal.

b)  
The Guarantor shall not be entitled to assign, transfer, or dispose of all or
any part of its rights and/ or obligations hereunder.

 

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11.  
REPRESENTATIONS AND WARRANTIES

The Guarantor represents and warrants to the Financing Parties, such
representation and warranty being an independent guarantee (selbständiges
Garantieversprechen) pursuant to sections 241 and 311 BGB, that it has full
knowledge of the entire contents of the Facilities Agreements (including,
without limitation, all exhibits and schedules thereto), all necessary corporate
action has been taken to authorise the execution of this Agreement and the
performance of its obligations hereunder and the exercise of its rights and
performance of its obligations hereunder will not violate any provision of any
existing law or any indenture or other material agreement or instrument to which
the Guarantor is a party or which is binding on the Guarantor or any of its
assets and the choice of German law of this Agreement will be recognised and
enforced in its jurisdiction of incorporation and any judgment obtained in
relation to a Finance Document in Germany will be recognised and enforced in its
jurisdiction of incorporation and this Agreement creates, subject to any
reservations contained in any legal opinion delivered to any Finance Party in
connection with the Facilities Agreement, legal, valid and binding obligations
of the Guarantor which are enforceable in accordance with their terms subject to
applicable bankruptcy, insolvency, reorganisation, moratorium or other laws
affecting Financing Parties’ rights generally and subject to general principles
of equity, regardless of whether considered in a proceeding in equity or law.

12.  
POSITIVE UNDERTAKINGS

The Guarantor covenants with the Security Agent that it shall:

a)  
in relation to the Borrower, not allow the Borrower to take any action described
in clause 21.12 (Dividenden, Ausschüttungen und Rückruf von Anteilen) of the
Facilities Agreement unless it is permitted thereunder and ensure that all
financial statements, which the Borrower in relation to the Guarantor is
required to deliver pursuant to Clause 19.1 (Abschlüsse und Berichte) of the
Facilities Agreement, were prepared in accordance with the GAAP and using the
accounting practices and financial reference periods consistent with those
applied, unless the Guarantor informs the Security Agent about any changes and
delivers an accurate comparison between the financial position indicated in
those financial statements and the latest financial statements of the Guarantor
applying the accounting practices and financial reference periods applied as at
the date hereof.

b)  
in relation to the Borrower, not (and will ensure that no other member of the
Group will) decide upon the distribution of or allow the Borrower to take any
action described in Clause 21.12 (Dividenden, Ausschüttungen und Rückruf von
Anteilen) of the Facilities Agreement unless it is explicitly permitted under
such Clause.

c)  
inform the Security Agent promptly of all events which may adversely affect the
Guarantee; and

d)  
take or participate in any action, the failure of which could impair the
enforceability, legality or validity of the Guarantee.

 

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13.  
FINANCIAL COVENANTS

The Guarantor acknowledges that the Borrower is obliged to fulfil the financial
covenants (Finanzkennzahlen) relating to the Guarantor as set out in the
Facilities Agreement.

14.  
NEGATIVE UNDERTAKINGS

The Guarantor covenants with the Security Agent that it shall:

a)  
not defeat, impair or circumvent in any way the rights of the Financing Parties
hereunder; or

b)  
not take or participate in any action which could impair the enforceability,
legality or validity of the Guarantee.

15.  
FURTHER ASSURANCE

The Guarantor shall at its own expense do all such things as the Security Agent
may reasonably require:

a)  
to perfect or protect the Guarantee intended to be created hereby or any part
thereof; or

b)  
to facilitate the exercise by the Security Agent of any of the rights, powers,
authorities and discretions vested in it.

16.  
LIABILITY FOR DAMAGES

The Security Agent shall not be liable for any loss or damage suffered by the
Guarantor save in respect of such loss or damage which is suffered as a result
of the wilful misconduct or gross negligence of the Security Agent.

 

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17.  
WAIVER

No failure to exercise, nor any delay in exercising, on the part of the
Financing Parties, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy prevent
any further or other exercise thereof or the exercise of any other right or
remedy. The rights and remedies provided hereunder are cumulative and not
exclusive of any rights or remedies provided by law.

18.  
AMENDMENTS

Changes and amendments to and waivers of this Agreement including this Clause 18
shall be made in writing (and in notarial form if required by law) and in
accordance with the terms of the Facilities Agreements.

19.  
NOTICES AND LANGUAGE

19.1 Notices
Any notice or communication under or in connection with this Agreement shall be
in writing and shall be delivered personally, by post or facsimile to the
address or facsimile number of the party and for the attention of the individual
or department set out in the Schedule (Addresses for Notices) hereto or such
other substitute address or facsimile number and addressed to such other
individual or department as shall have been provided in writing by not less than
5 Business Days prior notice to the Security Agent by that party for this
purpose.

19.2  
Language

a)  
This Agreement is written in the English Language. In the event of any conflict
between the English text and a German term which has been inserted in the
English text such German term shall prevail.

b)  
Any notice or other communication under or in connection with this Agreement
shall be in the English language or, if in any other language, accompanied by a
translation into English. In the event of any conflict between the English text
and the text in any other language, the English text shall prevail provided that
if a German term has been inserted in the English text such German term shall
prevail.

 

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20.  
LAW AND JURISDICTION

20.1  
Law

This Agreement shall be governed by and construed in accordance with the laws of
the Federal Republic of Germany.

20.2  
Jurisdiction

The place of jurisdiction for the parties hereto shall be Frankfurt am Main,
Federal Republic of Germany. The Security Agent shall, however, also be entitled
to take legal action against the Guarantor before any other competent court of
law having jurisdiction over the Guarantor or any of its assets.
THIS AGREEMENT has been entered into on the date stated at the beginning of this
Agreement.

 

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SCHEDULE

ADDRESSES FOR NOTICES

         
1.
  The Guarantor   FIRST SOLAR INC.
 
       
 
  Address:   350 West Washington Street
Suite 600
Tempe, Arizona 85281
 
       
 
  Tel:   +1 602 414-9362
 
       
 
  Fax:   +1 602 414-9462
 
       
 
  Attention:   Mr. David Brady
 
       
 
  With a copy to:   FIRST SOLAR INC.
350 West Washington Street
Suite 600
Tempe, Arizona 85281
Tel: (602) 414-9323
Fax: (602) 414-9423
Attention: Mr. Peter Bartolino, Esq.
 
       
2.
  The Borrower   FIRST SOLAR MANUFACTURING GMBH
 
       
 
  Address:   Marie-Curie-Straße 3
15236 Frankfurt (Oder)
 
       
 
  Tel:   +49 (0)335 52102-103
 
       
 
  Fax:   +49 (0)335 52102-199
 
       
 
  Attention:   Mr. Burghard von Westerholt
 
       
 
  With a copy to:   First Solar GmbH
Rheinstr. 4B;
55116 Mainz
Attention: Ms. Anja Lange

 

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  With a copy to:   FIRST SOLAR INC.
350 West Washington Street
Suite 600
Tempe, Arizona 85281
Tel: (602) 414-9362
Fax: (602) 414-9462
Attention: Mr. David Brady
 
       
3.
  The Security Agent   COMMERZBANK AKTIENGESELLSCHAFT, FILIALE LUXEMBURG
 
       
 
  Address:   25, Rue Edward Steichen, L-2540 Luxemburg
 
       
 
  Tel:   +352 477 911-3108/3110/3112
 
       
 
  Fax:   +352 477 911-3903
 
       
 
  Attention:   Mr. Joern Tschentscher

 

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SIGNATURES
As Guarantor
FIRST SOLAR INC.

             
/s/ David Brady
 
       
 
   

As Borrower
FIRST SOLAR MANUFACTURING GMBH

             
/s/ David Brady
 
       
 
   

As Security Agent acting for itself and for and on behalf of the Finance Parties
COMMERZBANK AKTIENGESELLSCHAFT, FILIALE LUXEMBURG

             
/s/ Marcus Goegler
 
      /s/ Jörn Tschentscher