exhibit10-1.htm


    
EXHIBIT 10.1

    


     

    
      	
              
                CONFIDENTIAL
      TREATMENT REQUESTED

                --

              

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

              

            


    

     

    
      
      

    

    


    AMENDMENT
NO. 1 TO THE SUPPLY AGREEMENT

    


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

    RECITAL

    


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

    


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

    


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

    


    
      	
              1.

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

            


    

    


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

    


    
      	
              a.  

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

            


    

    


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

    


    
      	
              Calendar Year

            	
              Product Type

            	
              “Agreed Quantity”

            	
              Price

            
	
              2008

            	
              Chunk

            	
              Lower
      of (a) *** metric tons; or (b) ***% of the volume of the Product
      manufactured by DCC in calendar year 2008

            	
              US$
      ***/kg

            
	
              2009

            	
              Chunk

            	
              Lower
      of (a) *** metric tons; or (b) ***% of the volume of the Product
      manufactured by DCC in calendar year 2009

            	
              US$
      ***/kg

            
	
              2010

            	
              Chunk

            	
              Lower
      of (a) *** metric tons; or (b) ***% of the volume of the Product
      manufactured by DCC in calendar year 2010

               

            	
              US$
      ***/kg

            
	
              2011

            	
              Chunk

            	
              Lower
      of (a) *** metric tons; or (b) ***% of the volume of the 

            	
              US$
      ***/kg

            


    

    


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

    


    
      
        
           


        

        
          1

          
            

          

        

        
           


        

      

    

    


    


    
      	 
      	 
      	
              Product
      manufactured by DCC in calendar year 2011

               

            	 
      
	 
      	 
      	 
      	 
      


    

    


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

    


    ***

    


    


    


    
      	
              b.  

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

            


    

    


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

    


    
      	
              c.  

            	
              Section
      4.1.1 is hereby deleted in its entirety and
  replaced

            


    

    


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

    


    
      	
              Date

            	
              Amount

            
	
              October
      1, 2006

            	
              US$***

            
	
              November
      1, 2006

            	
              US$***

            
	
              January
      2, 2007

            	
              US$***

            


    

    


    


    


    


    


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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    


    
      	
              April
      1, 2007

            	
              US$***

            
	
              July
      1, 2007

            	
              US$***

            
	
              Total

            	
              US$***

            


    

    


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

    


    
      	
              d.  

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

            


    

    


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

    


    
      	
              Calendar
      Year

            	
              Annual
      Credit Ceiling

            
	
              2008

            	
              US$***

            
	
              2009

            	
              US$***

            
	
              Total

            	
              US$***

            


    

    


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

    


    
      	
              e.  

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

            


    

    


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

    


    
      	
              f.  

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

            


    

    


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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

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

    


    
      	
              g.  

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

            


    

    


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

    


    


    
      	
               
      

            	
              3.

            	
              Miscellaneous.

            


    

    


    
      	
               
      

            	
              a.

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

            


    

    


    
      	
               
      

            	
              b.

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

            


    

    


    
      	
               
      

            	
              c.

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

            


    

    


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

    


    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

    


    


    
      	
               
      

            	
              d.

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

            


    

    


    


    


    


    


    


    
      	
               
      

            	
                    [Signature page
      follows]

            


    

    


    


    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

    


    


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

    


    


    


     

    
      
        	 	DC Chemical Co.,
      Ltd.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ ***	 
	 	Name 	***	 
	 	Title	 ***	 
	 	 	 	 


      



     

    
      
        	 	SunPower Philippines
      Manufacturing, Ltd.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/Tom
      Werner	 
	 	Name 	 Tom
      Werner	 
	 	Title 	 CEO	 
	 	 	 	 


      

      
        	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

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


      

      
        	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

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


      



    


    


    


    


    


    


    


    


    


    


    6


    


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