Unassociated Document


    
      Exhibit
        10.71

       

      [*]
        =
        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.

       

      EQUIPMENT
        PURCHASE & SALE AGREEMENT

       

      This
        Equipment Purchase & Sale Agreement (this “Agreement”),
        entered into as of April 8, 2008 (the “Effective
        Date”),
        by
        and between PVA TEPLA DANMARK, a corporation organized and existing under
        the
        laws of the Kingdom of Denmark (hereinafter “SELLER”),
        and
        HOKU MATERIALS, INC., a corporation organized and existing under the laws
        of the
        State of Delaware (hereinafter “BUYER”).
        SELLER
        and BUYER are each a “Party”
and
        together, the “Parties.”

       

      Recitals

       

      WHEREAS,
        SELLER is a manufacturer and provider of equipment and related services for
        the
        polycrystalline silicon industry; 

       

      WHEREAS,
        BUYER is building a manufacturing facility for the production of polycrystalline
        silicon in Idaho, USA; and 

       

      WHEREAS,
        subject to the terms and conditions set forth in this Agreement, BUYER intends
        to purchase from SELLER and SELLER intends to sell to BUYER, the equipment
        and
        other Deliverables (as defined below) for use in BUYER’s polycrystalline silicon
        production plant; 

       

      NOW,
        THEREFORE, pursuant to the terms and conditions and the mutual consideration
        set
        forth herein, and for other good and valuable consideration, the receipt
        and
        sufficiency of which are acknowledged hereby, BUYER and SELLER agree as
        follows:

       

      Agreement

       

      1. Definitions.
        The
        following capitalized terms used in this Agreement shall have the meanings
        set
        forth below: 

       

      1.1. “Certificate
        of Commissioning”
shall
        mean the certificate, in substantially the form of Appendix
        7
        attached
        to this Agreement, to be signed by an officer of BUYER and an officer of
        SELLER
        after the successful completion of the Commissioning Test.

       

      1.2. “Commissioning
        Test”
shall
        mean the test to be completed by SELLER in the presence of BUYER at the Work
        Site that follows the procedures described in Appendix
        5
        to
        confirm that all Equipment meets the Technical Specifications.

       

      1.3. “Deliverables”
shall
        mean, collectively, all Equipment, Technical Documentation and Technical
        Services to be provided by SELLER to BUYER pursuant to this
        Agreement.

       

      1.4. “Equipment”
shall
        mean the following items of equipment as more fully described in Appendices
        1-2:

       

      
        
          
            	
                    SELLER
                      Initials & Date        
                      25/3-08
                      JB                                  
                      

                  	 	
                    BUYER
                      Initials & Date   DN
                      4/8/08                                  

                  


          

        

      

    

     

    
      
        
        

      

      
        Page
          1 of
          21

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Item

              	 	
                Quantity

              	 	
                Price
                  Each

              	 	
                Total

              	 
	
                SR-110
                  Slim rod pullers, as described in Appendix
                  1

              	 	 	
                
                  [*]

                

              	
                 

              	 	
                
                  [*]

                

              	
                 

              	 	
                
                  [*]

                

              	
                 

              
	
                FZ-14M
                  analytic Float zone crystal puller, as described in Appendix
                  2

              	 	 	
                
                  [*]

                

              	
                 

              	 	
                [*]

              	
                 

              	 	
                
                  [*]

                

              	
                 

              
	
                 

              	 	 	 	 	 	
                Total 

              	 	
                $

              	
                6,359,995.00

              	 


      

       

      SELLER
        will utilize its best efforts to acquire slim rods on behalf of
        BUYER.

       

      1.5. “Factory
        Acceptance Certificate”
shall
        mean the certificate, in substantially the form of Appendix
        6
        attached
        to this Agreement, to be signed by an officer of BUYER and an officer of
        SELLER
        after the successful completion of the Factory Acceptance Test. 

       

      1.6. “Factory
        Acceptance Test”
shall
        mean the test to be completed by SELLER in the presence of BUYER at the SELLER
        Facility that follows the procedures described in Appendix
        4
        to
        confirm that all Equipment meets the Technical Specifications.

       

      1.7. “Port
        of Shipment”
shall
        mean Copenhagen, Denmark. 

       

      1.8. “Port
        of Unloading”
shall
        mean a port in the USA to be determined by the BUYER.

       

      1.9. “SELLER
        Facility”
shall
        mean the facility where SELLER is manufacturing the Equipment, located at
        Smedetoften 4, DK-3600 Frederikssund, Denmark.

       

      1.10. “Technical
        Documentation”
shall
        mean the documentation (in English language) that includes the technical
        data,
        specifications, drawings, inspection, erection, commissioning, performance
        testing, operating and maintenance of Equipment, as specified in Appendix
        3.

       

      1.11. “Technical
        Services”
shall
        have the meaning set forth in Section 6
        below.

       

      1.12. “Technical
        Specifications”
means
        the operating and other specifications of the Equipment set forth on
Appendices
        1 and 2 attached
        hereto.

       

      1.13. “Warranty
        Period”
shall
        mean the period beginning on the Effective Date and ending twelve (12) months
        after the Certificate of Commissioning has been signed by BUYER and
        SELLER. 

       

      1.14. “Work
        Site”
shall
        mean the BUYER’s polysilicon plant located in Pocatello, Idaho USA.

       

      2. Purchase
        & Sale Commitment

       

      2.1. Subject
        to the terms and conditions set forth herein, BUYER agrees to buy from SELLER,
        and SELLER agrees to sell to BUYER, the Deliverables.

       

      3. Payment
        Terms

       

      3.1. BUYER
        shall pay to SELLER the aggregate purchase price for the Equipment ordered
        pursuant to this Agreement at the per-unit price set forth in
        Section 1.4
        above as
        the total payment for all Deliverables under this Agreement (the “Agreement
        Price”)
        in
        accordance with the following schedule: 

       

      
        
          
            
              	
                      SELLER
                        Initials & Date        
                        25/3-08
                        JB                                  
                        

                    	 	
                      BUYER
                        Initials & Date   DN
                        4/8/08                                  

                    


            

          

        

      

       

    

    
      
        
        

      

      
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          21

        
          

        

      

      
        
        

      

    

     

    
        
        3.1.1. Within
        one hundred and twenty (120) days after the Effective Date, BUYER shall pay
        to
        SELLER 30% of the Agreement Price as an initial payment (the “Initial
        Payment”).
        Notwithstanding anything to the contrary in this Agreement, BUYER may terminate
        this Agreement at any time prior to making the Initial Payment, and shall
        thereupon have no liability or further obligation to SELLER pursuant to this
        Agreement.

       

      3.1.2. Within
        thirty (30) days after BUYER and SELLER sign the Factory Acceptance Certificate,
        and upon receipt of an invoice from SELLER, BUYER shall pay to SELLER 50%
        of the
        Agreement Price. SELLER shall not be required to ship the Equipment until
        such
        payment has been received by SELLER.

       

      3.1.3. Within
        thirty (30) days after BUYER and SELLER sign the Certificate of Commissioning,
        and upon receipt of an invoice from SELLER, BUYER shall pay to SELLER 15%
        of the
        Agreement Price Following receipt of such payment, title to the Equipment
        shall
        pass to BUYER, free and clear of all liens, third party claims and
        encumbrances.

       

      3.1.4. Within
        thirty (30) days after the later of (A) the expiration of the Warranty Period
        (as defined in Section 1.13
        above),
        and (B) the final settlement or adjudication of all outstanding warranty
        claims
        pursuant to Section 7.3
        below,
        BUYER shall pay to SELLER a final payment of 5% of the Agreement Price less
        all
        amounts that have been validly deducted to satisfy warranty claims pursuant
        to
        Section 7.3
        below.

       

      3.2. The
        Agreement Price includes all excise, sales, use, import, export or other
        similar
        taxes (collectively “Taxes”)
        levied
        by Germany, Denmark, the European Union, or any other authority in Europe,
        which
        shall be for SELLER’s account; provided that the Agreement Price does not
        include Taxes levied by the United States, the State of Idaho, or any other
        authority in the United States, which shall be for BUYER’s account.


       

      3.3. BUYER
        shall provide SELLER with five (5) copies of each invoice for the applicable
        payment pursuant to Section 3.1
        above.
        Shipping costs and expenses, Taxes, customs and duties, if any, will be
        identified as separate items on SELLER’s invoices. All invoices shall be sent to
        BUYER’s address specified in Section 15.4
        below,
        unless an alternate address is provided. All payments shall be made in U.S.
        Dollars. 

       

      3.4. BUYER
        shall be responsible for all transportation charges, duties or other charges
        for
        shipping and handling; thus, the price for the Deliverables shall not include
        any such charges; provided, however, that the Equipment shall be in one lot
        suitably packed for sea transport to the Work Site, FOB Port of Shipment,
        according to Incoterms 2000; and provided, further, that SELLER shall pay
        for
        all shipping, insurance, and related costs and expenses incurred in transporting
        the Equipment from the SELLER Facility to the Port of Shipment until the
        Equipment is transferred FOB to the common carrier. 

       

      3.5. All
        payments to SELLER shall be effected by wire transfer to SELLER’s bank pursuant
        to the following account information: 

       

      Danske
        Bank

      Holmens
        Kanal 2-12

      DK-1092
        Copenhagen K

      Denmark

      Telex
        27000-SWIFT-BIC: DABAKKK

      IBAN
        No.
        DK 1530003430288997

      Account
        no. 3430 288997

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

    

     

    
      
        
        

      

      
        Page
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    PVA
      TePla
      Danmark

     

    4. Shipment;
      Documentation & Packing

     

    4.1. Timing
      of Shipment.
      Provided that SELLER has been paid in the aggregate 80% of the Agreement Price,
      all Equipment shall be delivered FOB to the Port of Shipment, within ten (10)
      months after BUYER pays to SELLER the Initial Payment (the “Shipment
      Date”);
      provided, however, that SELLER shall use its best efforts to deliver one (1)
      SR-110 Slim rod puller (as described in Appendix 1) FOB to the Port of Shipment
      within six (6) months after BUYER pays to SELLER the Initial Payment (and
      provided that, prior to shipment, SELLER has been paid in the aggregate 80%
      of
      the applicable purchase price for such one (1) Slim rod puller prior to
      shipment), except that SELLER shall not be liable for paying liquidated damages
      pursuant to Section 4.4
      below if
      SELLER is unable to meet this six-month delivery date.

     

    4.2. Shipping
      Documentation.
      Prior
      to shipment, SELLER shall remit to BUYER the following
      documentation:

     

    4.2.1. At
      least
      fourteen (14) days prior to shipment of the Equipment, SELLER shall notify
      BUYER
      by Fax of the following information:

     

    
      	 	
              (a)

            	
              Total
                volume

            


    

    
      	 	
              (b)

            	
              Total
                gross weight of packages

            


    

    
      	 	
              (c)

            	
              Total
                number of packages

            


    

    
      	 	
              (d)

            	
              Port
                of Shipment

            


    

    
      	 	
              (e)

            	
              Port
                of Unloading

            


    

    
      	 	
              (f)

            	
              Name,
                weight, IMCO No. (as per International Maritime Dangerous Goods Code)
                of
                the dangerous and/or inflammable
                goods

            


    

     

    4.2.2. At
      least
      fourteen (14) days prior to shipment of the Equipment, SELLER shall send to
      BUYER via international courier at least six (6) copies of the
      following:

     

    
      	 	
              (a)

            	
              Detailed
                packing list describing with specificity all Equipment included with
                the
                applicable shipment, including Equipment specification, type, quantity,
                unit/total price, unit weight, unit/total volume, the overall dimensions
                of each package (length x width x height), and the total number of
                packages

            


    

    
      	 	
              (b)

            	
              Description
                of any dangerous and/or inflammable goods indicating names, properties,
                special protective measures and handling methods in case of
                accident

            


    

    
      	 	
              (c)

            	
              Description
                of the special precautions for the Equipment that requires special
                storage
                and transportation.

            


    

     

    4.2.3. Within
      ten (10) calendar days before the expected departure date of the carrying vessel
      from the Port of Shipment, SELLER shall notify BUYER the nationality of the
      carrying vessel, estimated date of shipment, estimated date of arrival at the
      Port of Unloading, name of the Equipment, Equipment item no., quantity, weight,
      volume and other relevant matters.

     

    4.2.4. Within
      two (2) days after the loading of the Equipment on the ocean vessel, SELLER
      shall airmail one (1) duplicate copy of the Bill of Lading, signed commercial
      invoice, ex-works quality certificate of origin and packing list to
      BUYER.

     

    4.3. Risk
      of Loss.
      Risk of
      loss shall pass to BUYER FOB Port of Shipment; provided, however, that in the
      case of (A) the Equipment is shipped on deck or via transshipment; or (B) the
      Equipment is not insured in time by BUYER because SELLER has failed to provide
      the documentation required by Section 4.2
      above,
      then SELLER shall be liable for any and all damage to the Equipment.
      Notwithstanding anything to the contrary in this Agreement, if the Equipment
      is
      lost or damaged during ocean transportation, SELLER shall upon the request
      from
      BUYER, provide replacement Equipment and Technical Documentation for the same
      Agreement Price and pursuant to the same terms and conditions described in
      this
      Agreement.

    
       

      
        
          
            
              
                	
                        SELLER
                          Initials & Date        
                          25/3-08
                          JB                                  
                          

                      	 	
                        BUYER
                          Initials & Date   DN
                          4/8/08                                  

                      


              

            

          

        

      

    

     

    
      
        
          
          

        

        
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    4.4. Damages
      for Late Delivery; Liquidated Damages.
      SELLER
      shall pay to BUYER liquidated damages (the “Liquidated
      Damages”)
      if (A)
      the Factory Acceptance Certificate has not been signed by SELLER and BUYER,
      or
      (B) the Equipment has not been delivered FOB to the Port of Shipment on or
      before the Shipment Date. The Liquidated Damages shall be calculated as
      follows:

     

    
      	 	
              a)

            	
              If
                the Equipment is delivered within four weeks after the Shipment Date,
                the
                liquidated damages shall be zero point 5 percent (0.5%) of the Agreement
                Price per week beyond the Shipment
                Date.

            


    

    
      	 	
              b)

            	
              If
                the Equipment is delivered after the fourth week, then, in addition
                to the
                Liquidated Damages pursuant to sub-paragraph (a) above, the Liquidated
                Damages shall be one percent (1%) of the Agreement Price for each
                week
                after the fourth week from the Shipment
                Date.

            


    

    
      	 	
              c)

            	
              Less
                than one week shall not be counted as a complete week for calculation
                of
                the Liquidated Damages.

            


    

    
      	 	
              d)

            	
              The
                total amount of the Liquidated Damages shall not exceed five percent
                (5.0%) of the Agreement Price.

            


    

    


    Notwithstanding
      anything to the contrary in this Agreement: (A) the payment of Liquidated
      Damages shall not release SELLER from its obligation to deliver the
      Deliverables; and (B) any delay beyond sixty (60) days from the Shipment Date
      shall constitute a material breach of this Agreement by SELLER.

     

    4.5. Packing
      and Marking

     

    4.5.1. Unless
      otherwise specified in the Agreement, the Equipment shall be packed by SELLER
      in
      new wooden cases, and all packing expenses shall be for SELLER’s account.
      Necessary measures shall be taken to protect the Equipment from damages caused
      by moisture, rain, rust, corrosion, shock and to ensure the Equipment will
      withstand handling, loading and unloading as well as long distance ocean and
      inland transportation for the safe arrival of the Equipment at the Work
      Site.

     

    4.5.2. The
      loose
      accessories in all packages and bundles shall be labeled by SELLER indicating
      the name of the Equipment to which such accessories are related, the name of
      the
      accessories and their position number, and any accessory number marked on
      assembly drawings. Spare parts and tools shall be marked with the word “Spare
      parts or tools” in addition to the above mentioned particulars.

     

    4.5.3. SELLER
      shall, on four (4) adjacent sides of each crate, conspicuously mark the
      following information in English with indelible paint:

     

    
      	 	
              (a)

            	
              Shipping
                mark

            


    

    
      	 	
              (b)

            	
              Destination

            


    

    
      	 	
              (c)

            	
              Consignee

            


    

    
      	 	
              (d)

            	
              Name
                of Equipment and item No.

            


    

    
      	 	
              (e)

            	
              Case/bale
                No.

            


    

    
      	 	
              (f)

            	
              Gross/net
                weight

            


    

    
      	 	
              (g)

            	
              Measurement

            


    

     

    
      
        
          
            
              
                	
                        SELLER
                          Initials & Date        
                          25/3-08
                          JB                                  
                          

                      	 	
                        BUYER
                          Initials & Date   DN
                          4/8/08                                  

                      


              

            

          

        

      

    

    


    
      
        
          
          

        

        
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        4.5.4.
          Should
          the Equipment weigh more than 2 metric tons, the weight, gravity and hoisting
          positions shall be marked in English with international trade transportation
          marks on the four adjacent sides on each case so as to facilitate unloading
          and
          handling. In accordance with different requirements in loading, unloading
          and
          shipping, the package shall be conspicuously marked with “Handle with care,
          right side up, keep dry” in English and with appropriate international trade
          marks.

      

    

     

    4.5.5. The
      following documents shall be enclosed in each package of the
      Equipment:

     

    
      	 	
              (a)

            	
              Two
                (2) duplicate copies of detailed packing
                list

            


    

    
      	 	
              (b)

            	
              Two
                (2) duplicate copies of quality
                certificate

            


    

    
      	 	
              (c)

            	
              Two
                duplicate copies of Technical Documentation for relevant
                Equipment

            


    

     

    4.5.6. Sufficient
      shores or chocks shall be provided in order to prevent the Equipment from moving
      inside the containers. SELLER shall be liable for any damage to the Equipment
      thus incurred due to the negligence of SELLER.

     

    4.5.7. In
      case
      of container transportation, SELLER shall examine the condition of the
      containers, so that only those in good condition shall be used for delivery
      of
      the Equipment. SELLER shall use wooden crates free from any insect infestation.
      Should insect infestation be found in quarantine inspection, SELLER shall bear
      the cost incurred in fumigation or replacement of the creates at the Port of
      Unloading, and the liquidated damages provision of Section 4.4
      above
      shall apply to any delay in shipment caused by such quarantine
      inspection.

     

    4.5.8. If
      the
      Equipment is damaged or lost due to improper packing or inadequate protective
      measure, SELLER shall be responsible for repair, replacement or compensation
      in
      accordance with the Agreement. If the Equipment is mis-transported due to
      mistake or ambiguousness in package or shipping marks, SELLER shall bear
      additional expenses thus incurred.

     

    5. Standards
      & Inspections

     

    5.1. Standards.
      SELLER
      shall engineer, design and construct the Equipment according to the Appendices
      attached hereto, using professional engineering, construction and procurement
      practices. All Equipment shall be engineered and constructed to meet all
      applicable standards for operation in Idaho, USA, including, without limitation,
      ASME, NEC, UL, and any others required to meet standards in Pocatello, Idaho
      and
      the United States as determined by the BUYER. 

     

    5.2. Factory
      Acceptance Test.
      

     

    5.2.1. SELLER
      shall inspect the Equipment to confirm that it meets the Technical
      Specifications, and shall thereupon send the ex-works quality certificate to
      BUYER, with notification of the planned date for the Factory Acceptance Test.
      The date for the Factory Acceptance Test must be no earlier than two (2) weeks
      from the date when the notification is received by BUYER, and shall be no later
      than nine (9) months after BUYER pays the Initial Payment to
      SELLER.

     

    5.2.2. BUYER
      will send its technical representatives and inspectors to SELLER’s Facility to
      complete the Factory Acceptance Test together with SELLER’s technical
      representatives and inspectors. In addition to BUYER’s inspectors, BUYER’s
      lenders and shareholders may also send their inspectors. The expenses of sending
      BUYER’s inspectors, or the inspectors of BUYER’s lenders and shareholders, shall
      be for BUYER’s account. 

     

    
      
        
          
            
              
                	
                        SELLER
                          Initials & Date        
                          25/3-08
                          JB                                  
                          

                      	 	
                        BUYER
                          Initials & Date   DN
                          4/8/08                                  

                      


              

            

          

        

      

    

     

    
      
        
          
          

        

        
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    5.2.3. Prior
      to
      commencement of the Factory Acceptance Test, SELLER shall provide BUYER with
      technical instruction in the operation and maintenance of the Equipment as
      described in Appendix
      4.
      After
      completing the technical instruction, SELLER shall commence the Factory
      Acceptance Test, and provided that the Equipment meets the Technical
      Specifications, BUYER and SELLER shall sign the Factory Acceptance Certificate.
      SELLER shall ship the Equipment to BUYER as soon as practicable after successful
      completion of the Factory Acceptance Test, as evidenced by the Factory
      Acceptance Certificate signed by SELLER and BUYER; provided, however, that
      the
      SELLER may not ship the Equipment until the Factory Acceptance Certificate
      has
      been signed by BUYER; provided, however, that if BUYER does not attend the
      Factory Acceptance Test after having been given notification in accordance
      with
      Section 5.2.1
      above,
      and if SELLER conducts the Factory Acceptance Test in BUYER’s absence, and
      confirms that the Equipment meets the Technical Specifications, then SELLER
      may
      sign the Factory Acceptance Certificate and the Factory Acceptance Test shall
      have been deemed completed without the Factory Acceptance Certificate being
      signed by BUYER.

     

    5.2.4. In
      addition to the foregoing, BUYER, its authorized representatives and its
      lenders, shareholders and their respective authorized representatives, may
      inspect the Equipment at any time prior to delivery of the Equipment FOB to
      the
      Port of Shipment. The expenses of any such inspection shall be for BUYER’s
      account. 

     

    5.2.5. The
      Factory Acceptance Test shall not be a substitute for the inspection of the
      Equipment at the Port of Unloading or the Work Site, or as a substitute for
      the
      Commissioning Test, and the Factory Acceptance Test shall not release SELLER
      from its warranty obligations as further specified in this
      Agreement.

     

    5.3. Installation
      and Commissioning Test.

     

    5.3.1. Equipment
      installation and servicing shall be carried out by BUYER under the supervision
      of SELLER at the Work Site, and SELLER’s qualified technical representatives
      shall provide technical instruction to BUYER during installation and prior
      to
      completion of the Commissioning Test as described in Appendix
      5
      to this
      Agreement. 

     

    5.3.2. BUYER
      and
      SELLER shall conduct the Commissioning Test to confirm that the Equipment
      operates in accordance with the Technical Specifications. Provided that all
      of
      the Technical Specifications for the Equipment are satisfied, BUYER and SELLER
      shall each sign the Certificate of Commissioning; provided, however, that if
      BUYER does not attend the Commissioning Test, and if SELLER conducts the
      Commissioning Test in BUYER’s absence, and confirms that the Equipment meets the
      Technical Specifications, then SELLER may sign the Certificate of Commissioning
      and the Commissioning Test shall have been deemed completed without the
      Certificate of Commissioning being signed by BUYER. 

     

    5.4. Notwithstanding
      anything to the contrary in this Agreement, BUYER or SELLER’s execution of the
      Factory Acceptance Certificate or the Certificate of Commissioning shall not
      release SELLER from its warranty for the Equipment as described in
      Section 7
      below.

     

    6. Technical
      Services. SELLER agrees to provide technical information regarding the
      Equipment to BUYER, and to BUYER’s designated engineering and construction
      contractors (the “Contractors”),
      and
      to attend meetings in the USA with the Contractors, participate in telephone
      conference calls with BUYER and the Contractors, and draft and respond to
      written correspondence, including e-mail to and from BUYER and the Contractors
      (collectively, the “Technical Services”).
      The
      scope of the technical information to be provided to the Contractors shall
      be
      limited to the information that is required for the Contractors to perform
      the
      engineering design work for the Work Site. The
      cost
      and expense of the Technical Services is included in the Agreement
      Price.

    
       

      
        
          
            
              
                	
                        SELLER
                          Initials & Date        
                          25/3-08
                          JB                                  
                          

                      	 	
                        BUYER
                          Initials & Date   DN
                          4/8/08                                  

                      


              

            

          

        

      

    

     

    
      
        
          
          

        

        
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    7. Representations
      and Warranties. 

     

    7.1. General.
      SELLER
      represents, warrants, and covenants that: 

     

    7.1.1. SELLER
      will not, in the course of performing its obligations under this Agreement,
      infringe or misappropriate, and neither the Deliverables nor any element thereof
      will infringe or misappropriate, any intellectual property right of any other
      person or entity;

     

    7.1.2. neither
      the Deliverables nor any element thereof will be subject to any restriction,
      mortgage, lien, claim, pledge, security interest, or encumbrance when delivered
      by SELLER to BUYER FOB Port of Shipment;

     

    7.1.3. SELLER
      will not grant, directly or indirectly, any right or interest in the
      Deliverables to any other person;

     

    7.1.4. SELLER
      has full right, power, and authority to enter into and perform this Agreement
      without the consent of any third party, including the right to grant all
      licenses granted by SELLER (if any) in this Agreement;

     

    7.1.5. All
      individuals who contribute to or participate in the conception, creation, or
      development of the Deliverables will have unconditionally and irrevocably
      assigned all of their right, title, and interest in and to the Deliverables
      (and
      all intellectual property rights thereto) to SELLER (or directly to BUYER)
      before being allowed to begin performing work pursuant to this
      Agreement;

     

    7.1.6. SELLER
      will comply with all laws, regulations, and ordinances applicable to SELLER’s
      performance of its obligations under this Agreement, including export control
      laws, and has obtained (or before performing its obligations under this
      Agreement will obtain) all governmental permits and licenses required for SELLER
      to perform its obligations under this Agreement; and

     

    7.1.7. SELLER
      will take all necessary or reasonable precautions to prevent injury to any
      person (including BUYER employees) or damage to any property (including BUYER
      property) during the term of this Agreement.

     

    7.2. Performance.
      SELLER
      further represents and warrants that: (A) during the Warranty Period, the
      Deliverables will fully conform to the requirements, and other terms in the
      Appendices and elsewhere in this Agreement, including, without limitation,
      the
      Technical Specifications; (B) the Technical Documentation shall be to its best
      knowledge, complete, clear and correct so as to meet the requirements of design,
      inspection, erection, commissioning, performance test, operation and maintenance
      of the Equipment; and (C) the Equipment shall be completely brand new and comply
      in materials, workmanship in all respects with the quality and Technical
      Specifications. 

     

    7.3. Warranty
      Claims. 

     

    7.3.1. Notice
      of Claim.
      Claims
      by BUYER for breach of any of SELLER’s warranties set forth in this Agreement
      shall be made without undue delay after the discovery thereof. 

     

    7.3.2. SELLER’s
      Responsibilities.
      In the
      event of SELLER’s breach of any warranty during the Warranty Period, without
      limiting any other rights or remedies BUYER may have, and provided that BUYER
      has provided notice pursuant to Section 7.3.1
      above,
      SELLER will at its discretion promptly repair or replace the Deliverables at
      no
      additional charge to BUYER. In the event that the warranty claim applies to
      Equipment, BUYER and SELLER shall attempt to fix the problem through BUYER’s
      remote technical assistance; provided, however, that if the Equipment cannot
      be
      fixed within 48 hours, then SELLER shall dispatch qualified technical
      representatives to the Work Site within 48 hours thereafter to provide on-site
      professional and technical service. IF
      SELLER DOES NOT ARRIVE AT BUYER’S WORK SITE WITHIN ONE WEEK AFTER CONFIRMATION
      FROM SELLER OF SUCH A NOTIFICATION, THEN SELLER SHALL PAY BUYER $5,000 PER
      DAY
      FOR EACH DAY THAT THE EQUIPMENT IS NOT OPERATIONAL DUE TO THE BREACH OF
      WARRANTY.

     

    
      
        
          
            
              
                	
                        SELLER
                          Initials & Date        
                          25/3-08
                          JB                                  
                          

                      	 	
                        BUYER
                          Initials & Date   DN
                          4/8/08                                  

                      


              

            

          

        

      

    

     

    
      
        
        

      

      
        Page
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      8. Indemnification.
        Notwithstanding Section 12
        hereof,
        SELLER will indemnify and hold harmless BUYER and its affiliates, employees,
        and
        agents from and against any and all liabilities, losses, damages, costs,
        and
        other expenses (including attorneys’ and expert witnesses’ costs and fees)
        arising from or relating to any breach of any representation, warranty,
        covenant, or obligation of SELLER in this Agreement or any intentional
        misconduct or negligence by SELLER or any of SELLER’s agents or subcontractors
        in performing its obligations under this Agreement. In the event of any
        third-party claim, demand, suit, or action (a “Claim”)
        for
        which BUYER (or any of its affiliates, employees, or agents) is or may be
        entitled to indemnification hereunder, BUYER may, at its option, require
        SELLER
        to defend such Claim at SELLER’s sole expense. SELLER may not agree to settle
        any such Claim without BUYER’s express prior written consent.

       

      9. Non-solicitation.
        During the term of this Agreement and for twelve (12) months thereafter,
        SELLER
        will not directly or indirectly solicit, induce, or attempt to induce any
        employee or independent contractor to terminate or breach any employment,
        contractual, or other relationship with BUYER.

       

      10. Termination
        & Cancellation

       

      10.1. The
        term
        of this Agreement shall begin on the Effective Date and, unless previously
        terminated as hereinafter set forth, shall remain in force until the expiration
        of the Warranty Period. 

       

      10.2. 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: 

       

      10.2.1. 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 one hundred
        eighty (180) days after written notice thereof; provided, however, that such
        cure period shall not modify or extend the sixty (60) day cure period for
        SELLER’s delivery obligations pursuant to Section 4.4
        above;
        and provided, further that such one hundred eighty (180) day cure period
        shall
        not apply to BUYER’s failure to make any payment to SELLER pursuant to this
        Agreement. In the event of BUYER’s failure to make payment on the 30-day payment
        terms set forth in Section 3.1 hereof, termination by SELLER 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.

       

      10.2.2. 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; 

      
         

        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

       

      
        
          
          

        

        
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      10.2.3. 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 

       

      10.2.4. In
        accordance with the provisions of Section 11
        below.


       

      10.3. In
        addition to BUYER’s termination rights pursuant to Section 10.2
        above,
        BUYER may terminate this Agreement upon written notice to SELLER, and without
        any further obligation or liability to SELLER, for any of the following
        reasons:

       

      10.3.1. For
        BUYER’s convenience at any time prior to payment of the Initial Payment to
        SELLER;

       

      10.3.2. If
        SELLER
        does not sign the Consent or provide the Legal Opinion pursuant to
        Section 13
        below;


       

      10.3.3. If
        at any
        time prior to delivery of the Equipment, FOB Port of Shipment, BUYER has
        a
        justifiable reason to believe that SELLER will be more than sixty (60) days
        late
        in the delivery of the Equipment, BUYER may immediately cancel this agreement
        and shall, in addition to all other rights and remedies available in law
        and
        equity, be entitled to a refund of the Initial Payment plus the maximum amount
        of liquidated damages payable pursuant to Section 4.4
        above.


       

      10.4. SELLER
        may terminate this Agreement without any further obligation or liability
        to
        BUYER if BUYER has not paid the Initial Payment within one hundred eighty
        (180)
        days after the Effective Date. Upon such termination, each of BUYER and SELLER
        shall be released from any further obligations or liability to the other
        Party
        under this Agreement.

       

      10.5. Upon
        the
        expiration or termination of this Agreement howsoever arising, the following
        Sections shall survive such expiration or termination:
        Sections 1
        (Definitions), 7.3
        (Warranty Claims), 8
        (Indemnification), 9
        (Non-solicitation), 10
        (Termination & Cancellation), 11
        (Force
        Majeure), 12
        (Limitations of Liability), and 14
        (General
        Provisions).

       

      11. 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 performance of SELLER is delayed for Force Majeure
        for a
        cumulative period of thirty (30) days or more, SELLER will use commercially
        reasonable efforts to transition its production of the Equipment for the
        duration of the Force Majeure to an alternate source. 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 (and, only if SELLER is the affected Party, SELLER has not used
        commercially reasonable efforts to transition its production of the Deliverables
        as provided in the immediately preceding sentence), then the non-affected Party
        shall be entitled to terminate this Agreement by 30 days prior written notice
        to
        the other Party. 

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

    

     

    
      
        
          
          

        

        
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      12. Limitations
        of Liability

       

      12.1. IN
        NO
        EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL OR
        CONSEQUENTIAL DAMAGES OR FOR EXEMPLARY OR PUNITIVE DAMAGES, EVEN IF BUYER
        OR
        SELLER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

       

       

      12.2. EXCEPT
        FOR BUYER’S OBLIGATION TO PAY THE AGREEMENT PRICE, 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 FIFTY PERCENT (50%) OF THE AGREEMENT PRICE.


       

      13. Financing.
        SELLER acknowledges that BUYER will be financing the construction of its
        polysilicon production plant, including the Work Site, through a combination
        of
        debt, equity and prepayments from BUYER’s customers. SELLER hereby acknowledges
        and consents to BUYER’s assignment, in connection with BUYER’s financing of the
        construction, development and operation of improvements to the Work Site,
        as
        collateral security for its obligations relating thereto, of all of BUYER’s
        rights, title and interest in, to and under this Agreement (the “Assigned
        Interests”)
        to the
        financial institution named as Collateral Agent for the Secured Parties (as
        defined below) (together with its successors, designees and assigns in such
        capacity, the “Agent”)
        pursuant to a Security Agreement to be made by BUYER in connection with such
        financing in favor of the Agent for the benefit of certain secured parties
        described therein (the “Secured
        Parties”)
        and in
        that certain Collateral Agency and Intercreditor Agreement (as amended,
        restated, supplemented or otherwise modified from time to time, the
“Intercreditor
        Agreement”)
        to be
        made in connection with such financing among BUYER, Hoku Materials Holdings,
        Inc., the Agent, and the other Secured Parties party thereto. SELLER shall
        not
        unreasonably withhold consent to the transfer of BUYER’s interest under this
        Agreement to the Agent or any purchaser, successor, assignee and/or designee
        (a
“Subsequent
        Transferee”)
        of the
        Assigned Interests at a foreclosure sale or by a conveyance by BUYER in lieu
        of
        foreclosure and agrees that, notwithstanding any provision hereof to the
        contrary, upon such foreclosure, sale or conveyance, the Agent or such
        Subsequent Transferee shall be substituted for BUYER under this Agreement
        and
        SELLER shall perform its obligations hereunder in favor of the Agent or the
        Subsequent Transferee, as the case may be.

       

      14. SELLER’s
        Representations & Warranties. SELLER hereby represents and warrants to
        BUYER that the following are true and correct:

       

      14.1. SELLER
        is
        a corporation duly incorporated and validly existing in good standing under
        the
        laws of the Kingdom of Denmark. 

       

      14.2. This
        Agreement has been duly authorized by all requisite corporate action and
        duly
        executed and delivered by authorized officers of SELLER, and constitutes
        the
        valid obligations of SELLER, legally binding upon and enforceable against
        SELLER
        in accordance with its terms, except as such enforceability may be limited
        by
        (a) bankruptcy, insolvency, reorganization or other similar laws affecting
        the
        enforcement of creditors’ rights generally, and (b) general principles of equity
        (regardless of whether such enforceability is considered in a proceeding
        in
        equity or at law). 

       

      14.3. The
        execution and delivery of this Agreement, and fulfillment of and compliance
        with
        the respective provisions of this Agreement, does not conflict with, or result
        in a breach of the terms, conditions or provisions of, or constitute a default
        under, or result in any violation of, or result in the creation of any lien
        upon
        any of the properties or assets of SELLER pursuant to, or require any
        authorization, consent, approval, exemption, or other action by or notice
        to or
        filing with any court, administrative or governmental body or other person
        or
        entity pursuant to, the charter or by-laws of SELLER, any applicable law,
        statute,
        rule or
        regulation or (insofar as is known to us after having made due inquiry with
        respect thereto) any agreement, instrument, order, judgment or decree to
        which
        SELLER is a party or otherwise subject.

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

      
         

        
          
          

        

        
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      15. General
        Provisions.

       

      15.1. Governing
        Law; Venue.
        This
        Agreement is governed by the laws of the State of Idaho, USA, without reference
        to any conflict of laws principles that would require the application of
        the
        laws of any other jurisdiction. The United Nations Convention on Contracts
        for
        the International Sale of Goods does not apply to this Agreement. SELLER
        irrevocably consents to the personal jurisdiction of the state and federal
        courts located in the State of Idaho, USA, for any suit or action arising
        from
        or related to this Agreement, and waives any right SELLER may have to object
        to
        the venue of such courts. SELLER further agrees that these courts will have
        exclusive jurisdiction over any such suit or action initiated by SELLER against
        BUYER. SELLER also irrevocably waives any right SELLER may have to a jury
        trial.

       

      15.2. Severability.
        If any
        provision of this Agreement is, for any reason, held to be invalid or
        unenforceable, the other provisions of this Agreement will be unimpaired
        and the
        invalid or unenforceable provision will be deemed modified so that it is
        valid
        and enforceable to the maximum extent permitted by law.

       

      15.3. No
        Assignment.
        Except
        for assignment of payments due to SELLER pursuant to this Agreement, as
        collateral security for SELLER’s payment obligations to a third party financial
        lender, this Agreement and SELLER’s rights and obligations under this Agreement
        may not be assigned, delegated, or otherwise transferred, in whole or in
        part,
        by operation of law or otherwise, by SELLER without BUYER’s express prior
        written consent. Any attempted assignment, delegation, or transfer in violation
        of the foregoing will be null and void. BUYER may assign this Agreement,
        or any
        of its rights under this Agreement to any third party with or without SELLER’s
        consent.

       

      15.4. Notices.
        Each
        Party must deliver all notices, consents, and approvals required or permitted
        under this Agreement in writing to the other Party at the address listed
        below
        by courier, by certified or registered mail (postage prepaid and return receipt
        requested), or by a nationally-recognized overnight carrier. Notice will
        be
        effective upon receipt or refusal of delivery. Each Party may change such
        Party’s address for receipt of notice by giving notice of such change to the
        other Party.

       

      BUYER:
        

      HOKU
        MATERIALS, INC.

      One
        Hoku
        Way

      Pocatello,
        Idaho 83204 USA

      Attn:
        Mr.
        Karl Taft, CTO

      E-mail:
        [*]

      Facsimile:
        +1 (808) 682-7807

      


      With
        a
        copy to:

      


      HOKU
        SCIENTIFIC, INC.

      1075
        Opakapaka Street

      Kapolei,
        Hawaii 96707, USA

      Attn:
        Mr.
        Dustin Shindo, CEO

      E-mail:
        [*]

      Facsimile:
        +1 (808) 682-7807

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

       

      
        
          
          

        

        
          Page
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      SELLER:
        

      


      PVA
        TEPLA
        Danmark

      Smedetoften
        4

      DK-3600
        Frederikssund

      Denmark

      Attn:
        Jens Borregaard

      E-mail:
        [*]

      Facsimile:
        +45 4733 7099

       

      15.5. Legal
        Fees.
        The
        prevailing Party in any litigation between the Parties relating to this
        Agreement will be entitled to recover such Party’s reasonable attorneys’ fees
        and court costs, in addition to any other relief that such Party may be
        awarded.

       

      15.6. Publicity.
        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 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, any rules of the
        German Stock Exchange that are applicable to SELLER, 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 technical information set forth
        in
        this Agreement.

       

      15.7. Remedies.
        BUYER’s
        remedies for any breach of this Agreement by SELLER will include damages,
        injunctive relief, specific performance, and restitution. SELLER acknowledges
        that any breach of this Agreement by SELLER would cause irreparable injury
        to
        BUYER for which monetary damages would not be an adequate remedy and, therefore,
        BUYER will be entitled to injunctive relief (including specific performance).
        The rights and remedies provided to each Party in this Agreement are cumulative
        and in addition to any other rights and remedies available to such Party
        at law
        or in equity.

       

      15.8. Construction.
        Section
        headings are included in this Agreement merely for convenience of reference;
        they are not to be considered part of this Agreement or used in the
        interpretation of this Agreement. When used in this Agreement, “including” means
“including without limitation.” Whenever BUYER’s consent or approval is required
        under this Agreement, BUYER may grant or deny its consent or approval in
        its
        sole and absolute discretion. No rule of strict construction will be applied
        in
        the interpretation or construction of this Agreement.

       

      15.9. Waiver.
        All
        waivers must be in writing and signed by the Party to be charged. Any waiver
        or
        failure to enforce any provision of this Agreement on one occasion will not
        be
        deemed a waiver of any other provision or of such provision on any other
        occasion.

       

      15.10. Entire
        Agreement; Amendments.
        This
        Agreement is the final, complete, and exclusive agreement of the Parties
        with
        respect to the subject matter hereof and supersedes and merges all prior
        or
        contemporaneous communications and understandings between the Parties. No
        modification of or amendment to this Agreement will be effective unless in
        writing and signed by the Party to be charged.

       

      [This
        space intentionally left blank.]

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

      


      
        
          
            
            

          

          
            Page
              13
              of 21

            
              

            

          

          
            
            

          

        

      

       

      IN
        WITNESS WHEREOF, the parties have executed this Equipment Purchase & Sale
        Agreement as of the date first set forth above.

       

      
        	
                SELLER:

              	 	
                BUYER:

              
	 	 	 
	
                PVA
                  TEPLA AG

              	 	
                HOKU
                  MATERIALS, INC.

              
	 	 	 
	
                By:

              	
                /s/
                  JENS BORREGAARD

              	 	
                By:

              	
                /s/
                  DARRYL NAKAMOTO

              
	 	 	 
	
                Name:

              	
                Jens
                  Borregaard

              	 	
                Name:

              	
                Darryl
                  Nakamoto

              
	 	 	 
	
                Title:

              	
                Branch
                  Manager

              	 	
                Title:

              	
                CFO

              
	
                Authorized
                  Signatory

              	 	
                Authorized
                  Signatory

              


      

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

       

      
        
          
            
            

          

          
            Page
              14
              of 21

            
              

            

          

          
            
            

          

        

      

       

      APPENDIX
        1 

       

      Technical
        Specification for SR-110 Slim Rod Puller

       

      [*]

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

       

      
        
          
          

        

        
          Page
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      APPENDIX
        2

       

      Technical
        Specifications of FZ-14M analytical puller

       

      [*]

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

       

      
        
          
          

        

        
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      APPENDIX
        3

       

      Specification
        of Documents

       

      For
        the
        Equipment, detailed information will be given in the form of text, diagrams
        and
        drawings.

       

      In
        general the documents will contain:

       

      General
        Description

       

      Installation
        Instructions

       

      Operation
        Instructions

       

      Troubleshooting
        Instructions

       

      Maintenance
        Instructions

       

      Assembly
        Drawings

       

      Electrical
        Diagrams

       

      Hydraulic
        Diagrams

       

      Pneumatic
        Diagrams

       

      Gas
        Diagrams

       

      Complete
        Part Lists

       

      Especially
        for crystal growth, very detailed information will be given. Each process
        step
        will be explained with text and drawings, and guidelines for the proper setting
        of all adjustable growth parameters will be given for each set of diameter
        of
        input polysilicon and diameter of output Silicon single crystal.

       

      Furthermore
        general information on handling, preparation and cleaning of Silicon will
        be
        given.

       

      Schedule

       

      
        	
                Documentation
                  for preparation of installation sites:

              	
                4
                  weeks from effective date of Agreement

              
	 	 
	
                Final
                  documentation as mentioned above:

              	
                2
                  weeks after shipment

              


      

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

       

      
        
          
            
            

          

          
            Page
              17
              of 21

            
              

            

          

          
            
            

          

        

      

       

      APPENDIX
        4

       

      Procedure
        for Factory Acceptance Test

       

      1.
        Technical Training in Operation and Maintenance of
        Equipment.

       

      Prior
        to
        commencement of the Factory Acceptance Test at the SELLER Facility SELLER
        shall
        provide BUYER with the following training in the operation and maintenance
        of
        the Equipment:

       

      The
        training will fall in two parts: first in PVA TePla workshop in Denmark in
        relation to FAT (factory acceptance tests) and later in Hoku plant in relation
        to installation, commissioning and final acceptance. For each type of equipment
        the topics will be: Overall description of equipment, installation, operation,
        and maintenance. The total time spent during FAT for this purpose two week
        and
        the total at Hoku-site 6 weeks incl. time for installation supervision. The
        reason it is taken together is that the installation process is often quite
        practical also used for demonstration of certain aspects of the
        equipment.

       

      The
        FAT
        will include 2 weeks of training for the BUYER at the SELLER
        Facility.

       

      2.
        Factory Acceptance Test. 

       

      Phase
        I.
        In the first part of the test it will be shown that the Equipment complies
        with
        the Technical Specifications with respect to movement of spindles (precision
        and
        range of rotation and vertical movement), alignment and end vacuum.

       

      Phase
        II.
        In the second part of the tests, the operational performance will be proven
        as
        follows:

       

      [*]

       

      SELLER
        will for the purpose of these tests supply the following poly
        silicon:

       

      Two
        source rods Ø45 x 900 mm, two poly rods Ø 80 – 85 mm x 800 mm and 4 core
        rods Ø 20 x 100 mm.

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

      


      
        
          
            
            

          

          
            Page
              18
              of 21

            
              

            

          

          
            
            

          

        

      

       

      Appendix
        5

       

      Procedures
        for Commissioning Test

       

      1.
        Technical Training in Operation and Maintenance of
        Equipment.

       

      Prior
        to
        commencement of the Commissioning Test at the Work Site, SELLER shall provide
        BUYER with the following training in the operation and maintenance of the
        Equipment:

       

      [Describe
        amount of time for training, and topics to be covered with some specificity.]
        

       

      The
        training will fall in two parts: first in PVATePla workshop in Denmark in
        relation to FAT (factory acceptance tests) and later in Hoku plant in relation
        to installation, commissioning and final acceptance. For each type of equipment
        the topics will be: Overall description of equipment, installation, operation,
        and maintenance. The total time spent during FAT for this purpose is two
        weeks
        and the total at Hoku-site is 6 weeks incl. time for installation supervision.
        The reason it is taken together is that the installation process is often
        quite
        practical also used for demonstration of certain aspects of the
        equipment.

       

      The
        6
        weeks for commissioning shall include a minimum of 750 hours of Technical
        Services from qualified SELLER personnel.

       

      2.
        Commissioning Test Certificate. 

       

      Phase
        I.
        In the first part of the test it will be shown that the Equipment complies
        with
        the Technical Specifications with respect to movement of spindles (precision
        and
        range of rotation and vertical movement), alignment and end vacuum.

       

      Phase
        II.
        In the second part of the tests, the operational performance will be proven
        as
        follows:

       

      [*]

       

      SELLER
        will for the purpose of these tests supply the following poly
        silicon:

       

      Two
        source rods Ø45 x 900 mm, two poly rods Ø 80 – 85 mm x 800 mm and 4 core
        rods Ø 20 x 100 mm.

       

      Additional
        silicon for training of BUYER’s personnel will be supplied by BUYER

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

       

      
        
          
            
            

          

          
            Page
              19
              of 21

            
              

            

          

          
            
            

          

        

      

       

      Appendix
        6

       

      Factory
        Acceptance Certificate

       

      This
        Factory Acceptance Certificate is being signed pursuant to
        Section 5.2.2
        of the
        Equipment Purchase & Sale Agreement (the “Agreement”)
        dated
        _______________, 2007, by and between HOKU MATERIALS, INC., and PVA TEPLA
        AG.
        Capitalized terms not otherwise defined herein have the meaning set forth
        in the
        Agreement.

       

      By
        signing below, each party hereby certifies to the successful completion of
        the
        Factory Acceptance Test and confirms the following: 

       

      
        	
                1.

              	
                Each
                  of the seven (7) SR-110 Slim Rod Pullers with the serial numbers
                  listed
                  below meets the Technical Specifications set forth on Appendix
                  1 to the
                  Agreement. 

              


      

      


      Serial
        Number:                                         
    

      Serial
        Number:                                        
  

      Serial
        Number:                                        
  

      Serial
        Number:                                        
  

      Serial
        Number:                                          

      Serial
        Number:                                        
  

      Serial
        Number:                                        
  

      


      
        	
                2.

              	
                The
                  FZ-14M analytic float zone crystal puller with the serial number
                  listed
                  below meets the Technical Specifications set forth on Appendix
                  2 to the
                  Agreement.

              


      

       

      Serial
        Number:                                           

       

      
        	
                PVA
                  TEPLA AG

              	 	
                HOKU
                  MATERIALS, INC.

              
	 	 	 
	
                By:

              	    
 	 	
                By:

              	     

	 	 	 
	
                Name:

              	   
	 	
                Name:

              	     

	 	 	 
	
                Title:

              	  
	 	
                Title:

              	     

	
                Authorized
                  Signatory

              	 	
                Authorized
                  Signatory

              


      

       

      
        
          
            
              
                
                  
                    	
                            SELLER
                              Initials & Date        
                              25/3-08
                              JB                                  
                              

                          	 	
                            BUYER
                              Initials & Date   DN
                              4/8/08                                  

                          


                  

                

              

            

          

        

      

       

      
        
          
            
            

          

          
            Page
              20
              of 21

            
              

            

          

          
            
            

          

        

      

       

      Appendix
        7

       

      Certificate
        of Commissioning

       

      This
        Certificate of Commissioning is being signed pursuant to
        Section 5.3.2
        of the
        Equipment Purchase & Sale Agreement (the “Agreement”)
        dated
        _______________, 2007, by and between HOKU MATERIALS, INC., and PVA TEPLA
        AG.
        Capitalized terms not otherwise defined herein have the meaning set forth
        in the
        Agreement.

       

      By
        signing below, each party hereby certifies to the successful completion of
        the
        Commissioning Test and confirms the following: 

       

      
        	
                1.

              	
                Each
                  of the seven (7) SR-110 Slim Rod Pullers with the serial numbers
                  listed
                  below meets the Technical Specifications set forth on Appendix
                  1 to the
                  Agreement. 

              


      

      


      
        Serial
          Number:                                         
    

        Serial
          Number:                                        
  

        Serial
          Number:                                        
  

        Serial
          Number:                                        
  

        Serial
          Number:                                          

        Serial
          Number:                                        
  

        Serial
          Number:                                                                              
          

      

       

      
        	
                2.

              	
                The
                  FZ-14M analytic float zone crystal puller with the serial number
                  listed
                  below meets the Technical Specifications set forth on Appendix
                  2 to the
                  Agreement.

              


      

       

      Serial
        Number:                                          

       

      
        
          	
                  PVA
                    TEPLA AG

                	 	
                  HOKU
                    MATERIALS, INC.

                
	 	 	 
	
                  By:

                	    
 	 	
                  By:

                	     

	 	 	 
	
                  Name:

                	   
	 	
                  Name:

                	     

	 	 	 
	
                  Title:

                	  
	 	
                  Title:

                	     

	
                  Authorized
                    Signatory

                	 	
                  Authorized
                    Signatory

                


        

      

       

      
        
          
            
              
                
                  	
                          SELLER
                            Initials & Date        
                            25/3-08
                            JB                                  
                            

                        	 	
                          BUYER
                            Initials & Date   DN
                            4/8/08                                  

                        


                

              

            

          

        

      

      
         

        
          
            
            

          

          
            Page
              21
              of 21