[logo.jpg]
 
EXHIBIT 10.98
 
[*] = 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.

HOKU CHANGE ORDER 3.0

February 19, 2009

STONE & WEBSTER, INC.
Attn:  Mel Barnett
One Main Street
Cambridge, MA 02142

Dear Mel:

Pursuant to Article 8.2 of the Engineering, Procurement & Construction
Management Agreement (the “Agreement”) dated August 7, 2007, by and between Hoku
Materials, Inc. (“Owner”) and Stone & Webster, Inc. (“Contractor”), Owner and
Contractor hereby agree to the following Change Order (as defined in the
Agreement).  Capitalized terms not otherwise defined in this Change Order are
defined in the Agreement.

 
1.
The title of the Agreement is hereby changed from “ENGINEERING, PROCUREMENT &
CONSTRUCTION MANAGEMENT AGREEMENT” to “ENGINEERING AND PROCUREMENT
AGREEMENT”.  Also, in line 1 of the Agreement, replace “Engineering, Procurement
and Construction Management” with “Engineering and Procurement”.

 
2.
Section 1.1 AGREEMENT. In line 1 and 2, replace “Engineering, Procurement and
Construction Management” with “Engineering and Procurement.”

 
 
3.
Section 1.6 of the Agreement, which defines “CONSTRUCTION MANAGEMENT” is hereby
deleted in its entirety and replaced with the following:

 
 
 
3.6
CONSTRUCTION MANAGEMENT.  Construction Management shall mean services related to
coordinating, monitoring, status assessment and reporting on construction
progress, schedule, and budget, which services will be provided by Owner or
Owner’s designated representative.

 
 
 
4.
Section 1.10 OWNER AND CONTRACTOR.  In line 2, of Section 1.10, delete the
phrase “and its Construction Management Services.”

 
 
 
One Hoku Way · Pocatello, Idaho 83204 · Tel 808-682-7800 · Fax 808-440-0357 ·
www.hokumaterials.com
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 2 of 13
 

 
 
 
5.
Section 1.16 of the Agreement, which defines “Substantial Completion” is hereby
deleted in its entirety and replaced with the following:

 
1.16. SUBSTANTIAL COMPLETION.  Substantial Completion shall be by Milestone as
specified in Exhibit B (Contract Time Schedule).  Actual Substantial Completion
for an applicable Milestone shall be deemed achieved at the time when  the
plans, drawings, designs, and other deliverables that are required for
commencing construction of the portion of the Project associated with a
corresponding Milestone and which are included in Contractor’s Engineering
Services, have been issued for construction (“IFC”) to Owner or Owner’s
designated construction contractor.  Substantial Completion of a
 
Milestone shall not be withheld or deemed unachieved by reason of minor
immaterial items/portions of incomplete Work, which items/portions of Work are
not necessary for commencement of construction in an orderly and efficient
manner.  The terms “substantially complete” and “substantially completed” as
applied to all or part of the Project or Milestone refer to Substantial
Completion thereof.
 
 
6.
Section 1.9 of the Agreement, which defines “Milestone” is hereby deleted in its
entirety and replaced with the following:

 
1.9 MILESTONE.  The term Milestone shall mean the “Final IFC Date” listed by
design discipline for each major Project system listed in Exhibit B.
 
 
7.
Section 1.20 of  the Agreement, which defines “Work” is hereby deleted in its
entirety and replaced with the following:

 
 
1.20
WORK.  The term “Work” shall mean Engineering Services and procurement services
of the Project to be performed by Contractor under this Agreement and includes
all services, labor, and tests provided or to be provided to fulfill
Contractor’s obligations under this Agreement, as described on Exhibit A
attached hereto.

 
 
8.
Section 2.11. AGREEMENT.  In line 1 of Section 2.11, replace “Engineering,
Procurement and Construction Management” with “Engineering and Procurement.”

 
9.
Section 3.1.9. SAFETY.  Starting in line 3 of Section 3.1.9 delete, “Contractor
shall implement a Site safety program based . . . to Owner upon request.”  Also,
in line 12, delete, “and to comply with all . . . hazards at the job site.”

 
 
10.
Insofar as Contractor is no longer responsible for construction management
within its scope of Work, Section 3.4 (inclusive of Sections 3.4.1 – 3.4.3) are
hereby deleted in their entirety and replaced with the following:

 
 
3.4           [RESERVED]
 
 
 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 3 of 13
 

 
 
3.4.1           [RESERVED]
 
3.4.2           [RESERVED]
 
3.4.3           [RESERVED]
 
 
11.
Insofar as Contractor is not responsible for commissioning or start-up of
equipment within its scope of Work, but is only responsible for providing the
Engineering Services, Section 6.2 of the Agreement is hereby deleted in its
entirety and replaced with the following:

 
6.2           [RESERVED]
 
 
12.
Section 6.3 of the Agreement, which relates to delays to the Contract Time
Schedule is hereby deleted in its entirety and replaced with the following:

 
  6.3.           DELAYS.  If Contractor is unable to meet any Milestone on the
Contract Time Schedule due to any actual delay in the progress of the Work that
is caused by: (1) any act or omission of Owner or by any separate contractor
employed by Owner, (2) changes ordered in the Project; (3) any act of force
majeure including, but not limited to, strikes, fire, acts of God, or any event
beyond the control of Contractor; or (4) by a delay authorized by Owner, then
Contractor shall be entitled to a Change Order extending the applicable
Milestone date and Target Price for the period of time and for such increase in
the Target Price as are directly caused by any of the foregoing circumstances of
such delay; provided, however, that Contractor shall use commercially reasonable
efforts to mitigate any delay caused by the foregoing circumstances; and,
provided, further that the Contract Time Schedule shall not be extended, and the
Target Price shall not be increased to the extent that the acts or omissions of
Contractor directly contributed to such delay.  If the Work is delayed due to
the fault of Contractor such that Contractor does not achieve Substantial
Completion on or before the applicable Milestone date set forth in the Contract
Time Schedule, then the Contract Time Schedule shall not be adjusted, the Target
Price shall not be increased, and Contractor shall pay Owner liquidated damages
(LD’s) pursuant to Addendum 1 to Exhibit D.  Such LD’s owed by Contractor to
Owner shall be limited to one million dollars ($1,000,000) in the
aggregate.   Such liquidated damages shall be Owner’s sole remedy against
Contractor for Contractor’s failure to achieve any applicable Milestone and
Contractor shall not otherwise be liable for any direct, indirect, incidental,
consequential or other damages which may be suffered or incurred by Owner or
others resulting from any interruption or delay in start-up or use of, or
production from, any of Owner’s existing facilities or those to be designed
hereunder.  LD’s shall be assessed upon Substantial Completion of the final
Milestone, and Owner may deduct or off-set the LD’s from payment of the
retainage pursuant to Section 10.1.1.2.
 
 
13.
Insofar as Contractor is not responsible for inspection of equipment within its
scope of Work, but is only responsible for providing the Engineering Services,
Section 6.5 of the Agreement is hereby deleted in its entirety and replaced with
the following:

 
 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 4 of 13
 

 
 
 
6.5
[RESERVED]

 
 
 
14.
Exhibit A to the Agreement is hereby amended and restated and replaced in its
entirety with Exhibit A to this Change Order 3.

 
 
15.
This confirms Owner’s January 16, 2009 direction for Contractor to suspend Work
on the TCS Functional Areas as such TCS scope of Work is further clarified in
Exhibit A to this Change Order 3 and by separate documentation between Owner and
Contractor.  Owner intends for Contractor to resume Work on the TCS Functional
Areas on or before April 1, 2009.  The Target Price shall remain at $50 Million.
Contractor, however, makes no representations that Contractor’s Work can be
completed within such Target Price.

 
 
16.
The third paragraph of Section 10.1.1 regarding payment of invoices is hereby
deleted in its entirety and replaced with the following:

 
Provided that an Application for Payment is received by the Owner not later than
the 1st day of a month, the Owner shall make payment to the Contractor not later
than the 15th day of the same month. If an Application for Payment is received
by the Owner after the application date fixed above, payment shall be made by
the Owner not later than fifteen (15) days after the date it receives the
Application for Payment; provided, however that Owner shall have a seven-day
grace period after such payment date in which to make the payment before any
interest or other penalty shall accrue.
 
 
17.
Sections 12.3 through 12.3.4 of the Agreement are hereby deleted in their
entirety and replaced with the following:

 
12.3. TERMINATION BY OWNER FOR CONVENIENCE.  Upon two days written notice to
Contractor, Owner may, without cause and without prejudice to any other right or
remedy of Owner, elect to terminate the Agreement.  In such case, Contractor
shall be paid for:
 
12.3.1. COMPLETED AND ACCEPTED WORK.  Completed and accepted Work executed in
accord with the Contract Documents prior to the effective date of termination at
the rates outlined in Exhibit D; and
 
12.3.2. EXPENSES.  Reasonable expenses sustained prior to the effective date of
termination in performing services and furnishing labor, materials, or equipment
as required by the Contract Documents in connection with uncompleted Work at the
rates outlined in Exhibit D.
 
12.3.3. [RESERVED]
 
12.3.4. TERMINATION EXPENSES.  Other reasonable and documented costs and
expenses that are directly attributable to the termination incurred by
Contractor after the effective date of termination, which amounts shall not to
exceed one percent (1%) of the Target Price, inclusive of any demobilization and
winding down costs.
 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 5 of 13
 

 
 
18. 
Effective upon submission of the next Application for Payment following the
execution of this Change Order 3, Owner shall no longer withhold any retainage
pursuant to Section 10.1.1.2 of the Agreement from any future Application for
Payment; and, provided, further, that all retainage amounts previously withheld
shall be paid to Contractor in three equal monthly payments beginning with
payment of the invoice for Work in April, 2009, through and including the
invoice for Work in June, 2009.

 
 
19.
The Scope of Work as defined in pages 26 thru 29 of Exhibit A of the Agreement
is hereby deleted in its entirety and replaced by the amended and restated
Contractor’s Scope of Work as set forth on Exhibit A to this Change Order
3.  Schedule 1 and Appendix 1 to the original Exhibit A to the Agreement remain
in effect as part of the Agreement.

 
 
20.
Exhibit B of the Agreement (as amended by Change Order 2) is hereby deleted in
its entirety and replaced with the amended and restated Contract Time Schedule
as set forth on Exhibit B to this Change Order 3.

 
 
21.
Exhibit D of the Agreement is hereby amended to delete Section 2 (regarding
incentives) of Exhibit D of the Agreement in its entirety.

 
 
22.
Addendum 1 to Exhibit D (as amended by Change Order 2) is hereby deleted in its
entirety and replaced with the amended and restated Addendum 1 to Exhibit D
attached to this Change Order 3.

 
 
23.
Pursuant to Section 15.9 of the Agreement (Notice), Owner hereby updates its
notice addresses as follows:

 
 
If to Owner, to:
 
HOKU MATERIALS, INC.
Attn: Karl Taft
One Hoku Way
Pocatello, Idaho 83204
Tel:  808-682-7800
Fax:  808-440-0357
 
With a copy to:
 
HOKU SCIENTIFIC, INC.
Attn: Dustin Shindo
1288 Ala Moana Blvd, Suite 220
Honolulu, Hawaii 96814
Fax:  (808) 440-0357
Tel:  (808) 682-7800
 
24.           The Change Order 3 includes the Scope of Work and costs identified
in Contractor’s Change Notices 1 thru 45 and 47 thru 50.  Costs and impacts for
Change Notices 46, and 51 and above are not included in this Change Order 3.
 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 6 of 13
 

 
 
Owner and Contractor agree that this Change Order 3 is a complete and final
settlement and shall serve as an accord and satisfaction for all change notices,
Change Orders, Modifications, and representations made and submitted by
Contractor prior to the effective date with the exception of Change Notice 46
and Change Notices above 50, which the Parties agree to hold open and include
such scope, costs, and impact in a later Change Order.  Except for the matters
specifically set forth above, this Change Order does not amend the
Agreement.  In the event of any disagreement between the terms of this Change
Order, the

Agreement, Change Order No. 1 and Change Order No. 2, the terms of this Change
Order shall be controlling.

Please sign below to acknowledge your agreement with this Change Order 3.

Sincerely yours,

HOKU MATERIALS, INC.

By:  /s/ Scott B. Paul

--------------------------------------------------------------------------------

Name:  Scott B. Paul
Title:  Chief Operating Officer
 
 
Acknowledged and agreed as of February 19, 2009.
 
 
STONE & WEBSTER, INC.

By:  /s/ R.D. Sorbo

--------------------------------------------------------------------------------

Name:  R.D. Sorbo
Title:  Sr. VP, Ethylene
 
Cc:  Ric Sorbo, Stone & Webster, Inc., 1430 Enclave Parkway, Houston, TX 77077
 
 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 7 of 13
 

 
 
Exhibit A

CONTRACTOR’S SCOPE OF WORK

This Scope of Work (the “Scope of Work”) further defines the Work to be
performed by CONTRACTOR pursuant to the Engineering, Procurement and
Construction Management Agreement dated as of August 7, 2007, between HOKU
MATERIALS, INC. and STONE & WEBSTER, INC., as amended from time to time pursuant
to a Change Order  (the “Agreement”).  Capitalized terms not otherwise defined
herein are defined in the Agreement.

CONTRACTOR’s Procurement services shall be performed pursuant to the Procurement
Execution Plan which is attached to the Agreement as Appendix 1 to Exhibit A.

This Scope of Work is intended to totally define the Work required to design and
procure a completed polysilicon plant capable of producing 4,000 metric tons per
year of polysilicon (the “Project”), which includes the following key areas (the
“Functional Areas”):

[*]
 
The following additional areas (the “TCS Functional Areas”) are included in the
Scope of Work, and except as set forth in the following clause, are included in
the definition of Functional Areas; provided, however, that as of the date of
Change Order No. 3, all Work related to the TCS Functional Areas is suspended
pursuant to that certain written notice of suspension from Owner to Contractor
dated January 16, 2009.

[*]
 
The Contractor’s Scope of Work includes integrating the Owner’s licensors for
the Functional Areas, ensuring that all proper steps have been taken to properly
integrate all energy and utilities for acceptable performance under all
scenarios including, but not limited to normal operation, emergency situations,
and unforeseen system glitches, and working with Owner’s general construction
contractor towards the successful construction of the Functional Areas, which
includes, without limitation, responding to requests for information, supporting
the permitting process, and working on design changes during
construction.  Design criteria will be in accordance to site specific
characteristics and Contractor does not guarantee the quantity or purity of the
polysilicon that the plant will ultimately produce.  Contractor will however
ensure that the integration of the Functional Areas, and utilities and safety
systems will allow for each Functional Area to operate as designed pursuant to
licensor deliverables.
 
IT IS EXPRESSLY UNDERSTOOD AND ACKNOWLEDGED BY CONTRACTOR THAT OWNER INTENDS TO
COMMENCE COMMISSIONING AND START-UP OF THE PLANT PRIOR TO FINAL COMPLETION, AND
THAT CONSTRUCTION WILL PROCEED DURING OPERATION OF THE PLANT.  IT IS FURTHER
ACKNOWLEDGED BY CONTRACTOR THAT OWNER INTENDS TO FIRST OPERATE THE PLANT USING
TRICHLOROSILANE THAT IS PURCHASED FROM A THIRD PARTY SUPPLIER, PRIOR TO
COMPLETION OF ON-SITE TRICHLOROSILANE PRODUCTION; HOWEVER, THE FUNCTIONAL AREAS
ARE TO BE DESIGNED TO ALLOW A SWITCH-OVER FROM THIRD PARTY TRICHLOROSILANE TO
TRICHLOROSILANE THAT IS GENERATED ON-SITE.
 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 8 of 13
 

 
 
PROJECT DEVELOPMENT
The Work to be performed includes the preparation of the design basis (System
Design Specification, SDS) site plan and layout drawings, preliminary P&ID’s,
scope definition, preliminary specifications, equipment list, and preliminary
mechanical and electrical specifications for each of the Functional Areas, as
more fully described below.

Throughout the project development, Contractor will maintain an up-to-date
schedule of the Engineering Services and procurement will be maintained. This
schedule will be detailed enough as to allow the monitoring of all activities,
especially those on the critical path, and the detection of potential delays.

PROJECT APPROACH

A.
Contractor will provide Engineering Services and procurement services (in
accordance with the Procurement Plant) for complete design of the Functional
Areas with exceptions as noted herein.

 
B.
Contractor will provide the mechanical and control systems design for the
Functional Areas and provide electrical and mechanical systems and
civil/structural/architectural design as required by the State professional
regulating agencies.

 
C.
Contractor will provide equipment procurement for equipment and materials as
shown on the final P&IDs for the Functional Areas and in accordance with the
Procurement Plan.  Owner will also select and retain vendors for specialty
services.

 
D.
Engineering Services – Contractor will provide all Engineering Services required
for construction and integration of the Functional Areas (excluding services
provided by Owner as noted herein), including civil/architectural, structural,
piping, equipment, electrical, heating, ventilation and air conditioning (HVAC),
process design, and instruments and controls (I&C) (each of the foregoing eight
discrete services is a “Engineering Discipline”), as more fully detailed below:

 
 
1.
Process and mechanical design, to include:

 
 
a.
Process and instrumentation diagrams (P&IDs)

 
 
b.
Plant and equipment arrangements drawings

 
 
c.
Piping and equipment installation specifications

 
 
d.
Piping layout drawings, as necessary, to facilitate piping installation

 
 
e.
Equipment and component procurement specifications

 
 
2.
Civil and structural design drawings and specifications, for:

 
 
3.
HVAC design drawings and specifications

 
 
4.
Electrical design including but not limited to:

 
 
a.
One line power distribution diagrams

 
 
b.
Motor control elementaries

 
 
c.
MCC room equipment location plans

 
 
d.
Lighting plans

 
 
e.
Power and lighting plans

 
 
f.
Grounding and lightning protection plans

 
 
g.
Electrical equipment procurement specifications

 
 
5.
Instrumentation and control design, to include:

 
 
a.
Instrumentation procurement specifications

 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 9 of 13
 

 
 
 
b.
Instrumentation wiring diagrams

 
 
c.
Control system hardware and software design

 
SCOPE OF SUPPLY (DELIVERABLES)

A.
Engineering Services.  All calculations, plans, lists, procedures, necessary for
the design, and construction of the Functional Areas are included in this
section.

 
 
1.
Basic Engineering

 
 
a.
General plot plant of the plant:

 
i.
Plant layout

 
ii.
Section and elevation plans

 
iii.
General arrangement drawings

 
 
b.
Process

 
i.
Energy and mass balance

 
ii.
Block, process flow and process and instrumentation diagrams

 
iii.
Equipment list

 
iv.
Equipment data sheets

 
v.
Process description

 
vi.
Nutrient and chemical data consumption sheet

 
vii.
Utilities data consumption sheet

 
viii.
Electric one-line diagram

 
ix.
Architecture of the control system

 
 
c.
Purchase specifications of the main equipment

 
 
2.
Detail Engineering

 
 
a.
Mechanical and Piping

 
i.
Orthographic

 
ii.
Pipe isometrics

 
iii.
“Hot lines” stress calculation

 
iv.
Elements and components piping list

 
v.
Drawing, design and/or design criteria for piping insulation and heat tracing,
freeze protection

 
vi.
Specifications for pumps, valves, pipes, fittings and line elements, insulation

 
vii.
Pipe rack, others steel structures and platforms layout and typical details and
design loadings

 
 
b.
Electrical

 
i.
Lightning protection and grounding plans

 
ii.
List of electric equipment

 
iii.
Layout of electric equipment and cable trays routing

 
iv.
Layout of MV switchgear, LV general panel boards and MCC

 
v.
Technical specification of transformers, MV switchgear, LV general panel boards
and MCC

 
vi.
Technical specification of electric components, cables, trays, and conduits

 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 10 of 13
 

 
 
 
c.
Instrumentation and control

 
i.
Control system specification

 
ii.
Specification of control wires and instrumentation

 
iii.
List of control valves and data sheets

 
iv.
List of instruments and data sheets

 
v.
Location of instrumentation termination points will be provided in the
Instrumentation Design Package

 
 
d.
Civil Works and miscellaneous

 
i.
Buildings plans, foundations, roads

 
ii.
Drainages, storm water collection and waste water systems

 
iii.
Fire protection system plans and specification

 
 
e.
Record Drawings - Contractor will provide record drawings for the following:

 
i.
Equipment general arrangement drawings

 
ii.
Utilities drawings

 
iii.
P&IDs

 
iv.
Manufacturer’s shop drawings

 
v.
Electrical single lines

 
vi.
Electrical panel drawings

 
vii.
As-Built Drawings shall be the responsibility of Owner or Owner’s construction
contractor.

 
3.
Construction Engineering.  During construction of the plant, Contractor shall
respond to requests for information from Owner, Owner’s construction contractor,
and any other third party that is designated by Owner, to support the on-going
design and engineering of the Project during construction, and until final
completion of the Project.

 
4.
Operation and Maintenance Handbooks.  Operating and maintenance manuals for
equipment procured by Contractor will be provided after commissioning.  All
drawings, vendor data, programming, operating procedures and training manuals
will be provided in electronic and hard copy format wherever possible.  Five
copies will be provided.  The vendor Maintenance Manuals will provide detailed
information, descriptions and procedures for maintaining all equipment
throughout the plant as procured by Contractor.  It will include such things as
equipment lists, drawings, product data, warranties, maintenance and repair
schedules, calibration procedures, and trouble shooting techniques.  Five copies
will be provided.

 
 
5.
Final documentation will be provided to Owner, in the form of hard copy and
electronic files wherever possible.  This will include, but not be limited to:

 
 
·
Drawing/Specifications (including electronic files)

 
·
DCS Logic

 
·
HMI Screen Work

 
·
Training Manuals for Contractor supplied Equipment

 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 11 of 13
 

 
Exhibit B

CONTRACT TIME SCHEDULE

The following Contract Time Schedule is attached as Exhibit B to the Engineering
and Procurement Agreement dated as of August 7, 2007, as amended by Change Order
3, between HOKU MATERIALS, INC. and STONE & WEBSTER, INC. (the
“Agreement”).  Capitalized terms not otherwise defined herein are defined in the
Agreement.

[*]
 
 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 12 of 13
 

 
 
Exhibit B Clarifications

 
1.
The dates shown in Exhibit B exclude the impact of modifying the design of the
plant to incorporate the changes required to achieve safe and practical
operation of the plant in Partial Commercial Operation (PCO) mode as the
interface points and related scope has not been fully defined.

 
2.
Civil, structural, and electrical drawings require the approval of local
authorities.  In Exhibit B, 14 calendar days have been allowed from the IFC
(Issued For Construction) date to the IFC approval date.  If the approval of the
drawings is delayed by the local authorities or there are minor comments that
require Shaw response, the milestone is considered to have been met.  Shaw will
respond to all comments from the local authorities in a timely manner.

 
3.
The dates shown for the civil and structural disciplines are the dates to
complete the major structures and foundations.  The dates exclude the drawings
required for such items as miscellaneous pipe supports, which are to be issued
later in the design cycle.

 
4.
The I&C dates include the drawings required for construction and the loop
drawings that are required for plant checkout.

 
5.
The Piping dates shown are for the issue of piping isometrics.

 
6.
The dates shown for all disciplines include the release of any holds that impact
construction.

 
7.
The dates shown in Exhibit B represent the time to complete the Shaw scope of
work for PCO as the scope was defined on 16-January-09, which scope is subject
to further clarification per item #1.

 
8.
Delays caused by lack of, or changes in, vendor or licensor information are
excluded from the LD dates shown in Exhibit B.  When Shaw recognizes a delay
caused by Hoku, vendors or licensors, Shaw will immediately notify Hoku with the
nature of the delay and any related schedule impact.  [*].

 
9.
Shaw shall issue a letter to Hoku declaring the date when each milestone has
been achieved.

 
 
 
 

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 [logo2.jpg]
Mr. Mel Barnett
Stone & Webster, Inc.
February 19, 2009
Page 13 of 13
 

 
 
Addendum 1 to Exhibit D
 
This Addendum 1 to Exhibit D of the Agreement replaces in its entirety the
Addendum 1 to the Engineering, Procurement and Construction Management Agreement
dated as of August 7, 2007, as modified by Change Order 3. Capitalized terms not
otherwise defined herein are defined in the Agreement.

Except as otherwise set forth in Section 6.3 of the Agreement, in the event that
the Milestones set forth on the Contract Time Schedule are not achieved by the
applicable dates, then Contractor shall pay Owner liquidated damages (“LD’s”)
pursuant to Section 6.3 of the Agreement in accordance with the following
formula:

 
1.
Each of the Engineering Disciplines (as defined on Exhibit A) that are
identified on the table below shall be liable for the maximum amount of
liquidated damages described in the following table (the “LD Cap”):

 

 
Engineering Discipline:
 
Civil/Arch
   
Structural
   
Piping
   
Electrical
   
I&C
   
LD’s:
  $ 125,000     $ 125,000     $ 250,000     $ 250,000     $ 250,000  

 
 
2.
Each Milestone shall have a five-day grace period (the “Grace Period”) before
any LD’s accrue, up to a combined aggregate total grace period of fifteen (15)
days of delays for all Milestones within each Engineering Discipline.  Once
there have been an aggregate of fifteen (15) days of delays for one or more
Milestones in any given Engineering Discipline, there shall be no further Grace
Period for any Milestone within that Engineering Discipline.  After expiration
of the Grace Period, LD’s shall accrue according to the following table up to
the LD Cap for each Engineering Discipline.

 
No. of calendar days after
expiration of Grace Period
 
LD amount per calendar day
       
Civil/Arch
   
Structural
   
Piping
   
Electrical
   
I&C
   
1-5
  $ 2,500     $ 2,500     $ 5,000     $ 5,000     $ 5,000    
6-10
  $ 5,000     $ 5,000     $ 10,000     $ 10,000     $ 10,000    
11-15
  $ 10,000     $ 10,000     $ 20,000     $ 20,000     $ 20,000    
16+
  $ 12,500     $ 12,500     $ 25,000     $ 25,000     $ 25,000  

 
 

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