Exhibit 10.11




CONFIDENTIAL TREATMENT REQUESTED


—


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





 


SUPPLY AGREEMENT


 


 


between                                                                                                   Wacker Chemie
AG


Hanns-Seidel-Platz 4 

81737 Munich 

Federal Republic of Germany


 


 


- hereinafter referred to as “WACKER” -


 


and                                                                                                                            SunPower
Corporation


3939
North First Street 

San Jose, CA 95134 

United States of America


 


 


- hereinafter referred to as “BUYER” -


 


 


 


Preamble


 


BUYER has requirements for polycrystalline
Silicon. WACKER is willing to supply BUYER with polycrystalline Silicon.


 


Now, therefore, in
consideration of the foregoing and the mutual premises hereinafter con­tained,
WACKER and BUYER agree as follows:


 


 


 


 


Supply Agreement 3 SunPower
Corporation/ Wacker Chemie AG Sept. 14th, 2007


 


 


 


 


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


 

















 


1.                                 Product


 


WACKER agrees to sell and deliver and BUYER agrees to purchase and take
the poly-crystalline Silicon manufactured by WACKER as defined per
specification set forth in Ap­pendix A (hereinafter
referred to as “PRODUCT”).


 


2.                                 Quantities


 


2.1                            The BUYER shall
make the agreed prepayment according to the payment schedule set forth in Appendix A.

WACKER shall sell and deliver to BUYER and BUYER will purchase and
take from WACKER the annual quantities of PRODUCT set forth in Appendix A.


 


3.                                 Prices
/ Payment Terms


 


3.1                            The prices for the PRODUCT are set forth in Appendix A .


 


3.2                            The prices under Section 3.1 above shall be firm
until 31.12.2011 and only subject to change,
if the relevant energy price index, defined in Appendix C, increases or decreases by more than *** %.
The agreed prices will be adjusted by the rate (Euro/kg) as specified in the
table in Appendix C.


 


3.3                            WACKER shall invoice BUYER with each shipment of
PRODUCT. BUYER shall pay such invoices net within *** days from the date of
such invoices.


 


4.                                 Delivery


 


4.1                            PRODUCT shall be delivered FCA German seaport
(Incoterms 2000).


 


4.2                            All deliveries of PRODUCT are subject to WACKER’s
General Conditions of Sale set forth in Appendix
B and hereby made part of this Agreement, provided, however, that if
there is any conflict between the terms of this Agreement and the said
Conditions of Sale the terms of this Agreement shall prevail.


 


4.3                            The agreed annual quantities for the years 2009,
2010 and 2011 be shipped in about equal monthly installments.


 


5.                                 Quality / Inspection and Testing


 


5.1                            The PRODUCT
supplied by WACKER shall conform to the specifications set forth in Appendix A.


 


Supply Agreement 3 SunPower
Corporation/ Wacker Chemie AG Sept. 14th, 2007


 


 


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


 


2

















 


5.2                          It is understood and expressly agreed that the
PRODUCT delivered by WACKER hereunder are PRODUCTS of technical quality only
and BUYER is exclusively responsible for fitness for purpose, handling, use and
application of the PRODUCT.


 


5.3                          Upon receipt of each shipment of PRODUCT BUYER shall
inspect the PRODUCT. Unless BUYER notifies WACKER within *** days after the
arrival of the shipment at Buyer ́s premises or warehouse, that it does not
conform to the quantity ordered or WACKER ́s certificate of quality does not
conform to the specifications set forth in Appendix
A, said shipment shall be deemed to have been delivered as ordered
and  WACKER ́s certificate of quality shall be deemed to conform to the
specifications.


 


6.                                 Warranty
/ Liability


 


6.1                            WACKER warrants
solely that the PRODUCT delivered shall conform to the specifications  set forth in Appendix A . Except for the warranty provided above, WACKER
disclaims any and all other express or implied warranties with respect to the
PRODUCT, and any warranty of merchantability or fitness for a particular
purpose is expressly disclaimed.


 


6.2                            BUYER’s
exclusive remedy and WACKER’s sole obligation for any claim or cause of ac­tion
arising under this Agreement because of defective PRODUCT is expressly limited
to either (i) the replacement of non-conforming PRODUCT or the repayment of the
purchase price of the respective quantity
of PRODUCT; OR (ii) payment not to exceed the purchase price of the
specific quantity of PRODUCT for which damages are claimed. Any remedy is
subject to BUYER giving WACKER notice as provided for in Section 5.3.


 


6.3                            The parties agree that the remedies provided in this
Agreement are adequate and that ex­cept as provided for above, neither party
shall be liable to the other, whether directly or by way of indemnity or
contribution for special, incidental, consequential or other damages arising
from the breach of any obligation hereunder or for any other reason whatsoever,
including actions for tort, strict or product liability, patent or trademark
infringement except as provided for herein.


 


7.                                 Confidentiality


 


7.1                            BUYER may use all the
information disclosed by WACKER under this Agreement only for the purposes
contemplated herein.


 


7.2                            BUYER agrees to keep secret
such information and to take the necessary measures     to prevent any disclosure to
third parties.


 


7.3                            BUYER is responsible for assuring that secrecy is
maintained by its employees and agents.


 


7.4                            The secrecy obligation does not apply to information


 


Supply
Agreement 3 SunPower Corporation/ Wacker Chemie AG Sept. 14th, 2007


 


 


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


 


3

















 


•              where BUYER can prove that is was known to BUYER
prior to its receipt;


•              which is or has become generally available to the
public prior to its receipt;


•              which is or has become
generally available to the public without being the result of a breach
of this Agreement;


•              which is in accordance with
information BUYER received or got access to from an entitled person
without any obligation of secrecy;


•              where WACKER approved the
disclosure in a particular case in writing.


 


7.5                            The secrecy obligation shall survive the term of
this Agreement.


 


8.                                 Security Interest


 


BUYER hereby grants WACKER a continuing security interest in any
PRODUCT and in the proceeds (including proceeds of sale or insurance) until the
entire purchase price for the PRODUCT currently or previously sold to BUYER is
paid and until all late payment interest, legal fees and expenses required to
enforce WACKER’s rights
and any costs, expenses, taxes or other charges required to be paid by BUYER to
WACKER have been paid in full. BUYER specifically agrees that WACKER may file
one or more financing statements or other documents and take all necessary or
appropriate in order to create, perfect,
preserve or enforce WACKER’s security interest in the PRODUCT pursuant to the Uniform
Commercial Code and other applicable law, and hereby grants to WACKER a power
of attorney to execute such statements or documents in BUYER’s name. WACKER’s
reasonable costs and expenses (including, but not limited to, attorney’s fees
and expenses for pursuing, searching for, receiving, taking, keeping, storing,
advertising and selling the PRODUCT shall be paid by BUYER who shall remain
liable for any defi­ciency resulting from a sale of the PRODUCT and shall pay
any deficiency forthwith on demand. The requirement of reasonable notice of
sale shall be met if such notice is mailed and addressed to BUYER at its last
address appearing on WACKER’s records at least 30 days prior to the date of
sale.


 


9.                                 Force Majeure


 


9.1                            If either party should be prevented or restricted
directly or indirectly by an event of Force Majeure as hereinafter defined from
performing all or any of its obligations under this Agreement, the party so
affected will be relieved of performance of its obligations hereunder during the period that such event and its
consequences will continue, but only to the extent so prevented, and
will not be liable for any delay or failure in the performance or any of its
obligations hereunder or loss or damage whether direct, general, special or con­sequential
which the other party may suffer due to or resulting from such delay or
failure, provided always that prompt notice is given by the affected party to
the unaffected party by facsimile or telephone of the occurrence of the event
constituting the Force Majeure, together
with details thereof and an estimate of the period of time for which it will
continue.


 


Supply
Agreement 3 SunPower Corporation/ Wacker Chemie AG Sept. 14th, 2007


 


 


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


 


4

















 


9.2                            The term Force
Majeure shall include without limitation strike, labour dispute, lock out,
fire, explosion, flood, war (accident), act of god or any other cause beyond
the reasonable control of the affected party, whether similar or dissimilar to
the causes enumerated above.


 


10.                          Assignment


 


This Agreement or any part thereof is not assignable by either party
without the prior writ­ten consent of the other party.


 


11.                          Entire Agreement


 


11.1                      This Agreement constitutes the whole agreement
between the parties as to the subject matter thereof and no agreements,
representations or warranties between the parties other than those set out
herein are binding on the parties.


 


11.2                      No waiver, alteration, or modification of this
Agreement shall be valid unless made in writing and signed by authorized
representatives of the parties.


 


12.                          Severability


 


In the event, any provision of this Agreement shall be declared
invalid, illegal or unen­forceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.


 


13.                          Headings


 


The headings of the articles of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part of this Agreement
or to affect the construction hereof.


 


14.                          Duration / Termination


 


14.1                      This Agreement will commence on the 01.10.2007 and
will endure for a defined period of 4 (four) years and 3 (three) month.


 


Supply Agreement 3 SunPower
Corporation/ Wacker Chemie AG Sept. 14th, 2007


 


 


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


 


5

















 


15.                          Applicable Law / Jurisdiction


 


This
Agreement shall be construed and the legal relations between the parties hereto
shall be determined in accordance with the laws of Germany; the application of
the 1980 United Nations Convention on Contracts for the International Sale of
Goods is expressly excluded.


 


Exclusive
place of jurisdiction shall be Munich.


 


	
  Wacker
  Chemie AG

  	
  SunPower
  Corporation

  
	
  WACKER
  POLYSILICON

  	
   

  
	
   

  	
   

  
	
  Date:
  20 September 2007

  	
  Date:

  



 


	
  /s/ DR. KONRAD BACHHUBER

  	
   

  	
  /s/ MATHIAS BREMER

  	
   

  	
  /s/ PETER ASCHENBRENNER

  
	
  Dr. Konrad Bachhuber

  	
   

  	
  Mathias Bremer

  	
   

  	
   

  
	
  Vice President

  	
   

  	
  Director Asia

  	
   

  	
   

  
	
  Production Polysilicon

  	
   

  	
  Sales Polysilicon

  	
   

  	
   

  



 


 


Supply Agreement 3 SunPower
Corporation/ Wacker Chemie AG Sept. 14th, 2007


 


 


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


 


6

















 


Appendix A


 


Solargrade Polysilicon


 


Specification PCL-NCS (B)


 


	
  Calendar year

  	
   

  	
  Annual quantity

  	
   

  	
  Price Euro/kg

  
	
   

  	
   

  	
  in kg

  	
   

  	
  FOB German Seaport

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  2010

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  2011

  	
   

  	
  ***

  	
   

  	
  ***

  



 


Prepayment schedule


 


The BUYER will prepay the
amount of *** for the total above
agreed contract quantity. The invoices,
regarding deliveries up to the annual agreed quantity, will be reduced by ***
with each shipment. So WACKER ́s invoice will state the above agreed prices on the
invoice, but will make note,
that the BUYER has only to pay the invoice amount reduced by ***.


 


Regarding to the agreed
annual quantities the total prepayment amount of Euro *** has to be paid according to the following schedule on the
account of Wacker Chemie AG :


 


January
15th, 2008    Euro ***


 


In case the BUYER does fail to take the full amount of
the agreed annual quantity in one re­spective calendar year, WACKER does not
have to repay the not absorbed outstanding pre­payment (regarding the
respective calendar year), BUYER also doesn’t have the right to set this
prepayment against deliveries of the following year.


 


 


Supply Agreement 3 SunPower
Corporation/ Wacker Chemie AG Sept. 14th, 2007


 


 


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


 


7

















 


Appendix B


General Conditions of Sale


 


1.  Generally:


 


All
our supplies and services as well as all contracts concluded with us are
exclusively subject to the following conditions of sale. Terms of the Purchaser
which contradict or which deviate from our sales terms and which are not
expressly recognised by us are not valid even if we do not expressly object to
them. Where a continuing business relationship exists, all future contracts,
supplies and services are also subject to our conditions’ of sale


 


2.  Offer, Conclusion of Contract:


 


Our offers are subject to
change and non-binding Orders are only valid if confirmed by us in writing or
if recognised by us through the act of delivery. Any additional verbal
agreements, supplements and modifications are also only valid if confirmed in
writing.


 


3.  Delivery, Default:


 


3.1  Unless otherwise agreed, any dates quoted for
delivery are non-binding.


 


3.2  We are entitled
to make partial deliveries as far as the Purchaser must reasonably accept this
in the circumstances of an individual case. The corresponding invoices issued
are payable without regard to whether complete delivery has been made.


 


3.3
 In the event delivery is delayed, the
Purchaser may set us a reasonable grace period with the notice that he rejects
the acceptance of the delivery item after expiry of the grace period. After the
expiry of the grace period the Purchaser is entitled to cancel the contract of
sale through written notice or to request damages instead of performance. At
our request the Purchaser is obligated to state within a reasonable period
whether he cancels the contract due to delay in delivery, seeks damages instead
of performance or insists on performance.


 


3.4
 Our liability is set forth in para. 9.
Furthermore in the event of slight negligence, our liability is limited to the
invoice value of the respective delivery item.


 


4.  Return of loan packaging:


 


In
the event of delayed return (meaning in the event normal unloading times are
exceeded) of loading equipment, loading tanks and other loan packaging we
reserve the right to charge the Purchaser for the costs incurred by us.


 


5.  Prices:


 


5.1
 Unless otherwise expressly agreed,
prices are quoted “ex works#, excluding packaging and plus delivery and
shipping costs as well as plus any applicable Value Added Tax.


 


5.2
 The prices valid on the day of dispatch
shall apply. Should the latter be higher than the contractual price, the
Purchaser is entitled to cancel the contract with regard to the quantities
still to be delivered. Cancellation shall be made within 14 days after
notification of said price increase


 


6.  Payment;


 


6.1
 The payment shall be made in Euro to one
of our bank accounts indicated on the reverse side.


 


6.2
 Should Purchaser be in arrears with
payment, interest for default shall be due and payable at *** %, but at least *** % above
the respective base interest rate. We reserve the right to claim further
damages. If the interest we claim is higher than the statutory interest for
delayed payment, the Purchaser has the
right to demonstrate lower damages just
as we have the right to show that greater damages were incurred.


 


6.3  Should Purchaser be in arrears with payment or
should there be reasonable doubts as to Purchaser’s solvency or credit rating,
we are -without prejudice to our other rights - entitled to require payment in
advance for deliveries not yet made, and to require immediate payment of all
our claims arising from the business relation.


 


6.4
 Bills of exchange and cheques shall be
accepted upon separate agreement and only by way of payment. All expenses
incurred in this regard shall be borne by the Purchaser.


 


6.5
 Only uncontested or legally proved
claims shall entitle the Purchaser to set-off or withhold payment.


 


7.  Force Majeure:


 


Events
of Force Majeure, in particular strikes, lock outs, operator or transport
interruptions, including at our suppliers, shall suspend the contractual
obligations of each party for the period of the disturbance and to the extent of
its effects. Should the delays caused exceed a period of 6 weeks, both parties
shall be entitled to cancel the contract with respect to the contractual
performance affected by such delays. No other claims exist.


 


8.  Quality:


 


8.1
 All our data, especially data relating
to product suitability, processing and use, as well as to technical support,
have been compiled to the best of our knowledge.  The Purchaser, however, must still perform
his own inspections and preliminary trials.


 


8.2
 The Purchaser undertakes to examine the
goods immediately after delivery with respect to any defects concerning quality
and suitability of purpose and object to ascertainable defects. Sample testing
shall also be performed if this can be reasonably expected of the Purchaser.
Failure to proceed in aforesaid manner shall result in the goods being regarded
as accepted.


 


8.3
 Complaints must be made within 8 days
after receipt of the goods. In case of hidden faults, however, complaints are
to be made immediately on discovery, within one year after receipt at the very
latest. Said claims shall only be taken into consideration if and when made in
writing and with the relevant documentation attached. To comply with the time
limit it shall be sufficient if the complaint is sent in good time.


 


8.4
 We are not liable on the basis of public
statements by us, the manufacturer or his agents, if we were not aware of the
statement or were not required to have knowledge thereof, the statement was
already corrected at the time of the purchase decision or the Purchaser cannot
show that the statement influenced his purchase decision.


 


8.5
 We are not liable for defects which only
marginally reduce the value or the suitability of the object. A marginal defect
exists in particular if the defect can be removed by the Purchaser himself with
insignificant effort.


 


8.6
 If the Purchaser requests replacement
performance due to a defect, we may choose whether we remove the defect
ourselves or deliver a defect-free 
object as a replacement. The right
to reduce the price or cancel the contract in the event of unsuccessful
replacement performance shall remain unaffected.


 


8.7
 Where complaints are justified, the
goods may only be returned to us at our expense if after we receive notice of
the defect we do not offer to collect or dispose of the goods.


 


8.8
 If increased costs arise because the
Purchaser has transferred the goods to a place other than his commercial place
of business, we shall charge the Purchaser for the increased costs in
connection with the remedying of the defect, unless the transfer corresponds to
the designated use of the object.


 


8.9
 Damage and claims for reimbursement of
expenses shall remain unaffected as far as not excluded by para. 9.


 


8.10
 All claims due to a defect are subject
to a limitation period of one year after delivery of the object. No warranty is
made for used objects. The statutory limitation period for objects which are
used for a building structure in accordance with their usual manner of use, and
which cause the defectiveness thereof, shall remain unaffected.


 


8.11  The rights of the Purchaser
under §§ 478, 479 German Civil Code
remain unaffected.


 


9. 
Liability:


 


Our
liability is excluded, regardless of the legal grounds. This shall not apply in
the event of intentional actions or gross negligence by us or our legal
representatives or agents or in the event of breach of material contractual
duties.


 


In
the event of a slightly negligent breach of material contractual duties our
liability is limited to twice the invoice value of the respective delivery
item. For damages due to delayed performance para 3.4 shall also apply. Our
liability for damages due to injury to life, the body or health, the liability
based on a guarantee and under mandatory statutory provisions, in particular
the Product Liability Act, remain unaffected.


 


10.  Reservation
of Ownership:


 


10.1  The goods that
have been sold remain our sole property until all outstanding debts arising
from the business connection with the Purchaser have been paid in full. The
Purchaser has power of disposal of the purchased goods in the ordinary course
of business, or he may process the goods until revocation by us.


 


10.2  Reservation of
ownership and power of disposal, as laid down in clause 10.1, also apply to the
full value of the manufactured goods produced by processing, mixing and
blending or combining our goods. In each case we qualify as the manufacturer.
In cases where the goods are processed, mixed and blended or combined with
those of a third party, and where the reservation of the latter continues to
apply then we acquire joint ownership in proportion to the invoice value of
those processed goods. If security rights of a third party are in fact or in
law below that share, the difference will be to our benefit.


 


10.3  If the Purchaser
resells our goods to third parties he hereby assigns the entire resulting
payment claim - or in the amount of our joint share therein (see para. 10.2) -
to us. In the event the parties agree on a current account, the respective
balance amounts shall be assigned. However, the Purchaser shall be entitled to
collect such payment claim on our behalf until we revoke such right or until
his payments are discontinued. The Purchaser is only authorized to make
assignment of these claims - even only for the purpose of collection by way of
factoring - with our express written consent.


 


10.4  The Purchaser
shall immediately give notice to us if any third party raises any claim with
respect to such goods or claims which are owned by us.


 


10.5  It the value of
the collateral exceeds our accounts receivable by more than 20% then we will
release collateral on demand and at our discretion.


 


10.6  We are also entitled to take back goods on
the basis of the reservation of title, even if we have not previously cancelled
the contract. If products are taken back by way of the exercise of the
reservation of ownership, this shall not constitute cancellation of the
contract.


 


10.7  If the laws of the country in which the goods
are located after delivery do not permit the Vendor to retain the title to said
goods, but allow the retention of other similar rights to the delivery item,
the Purchaser shall provide us with such other equivalent right. The Purchaser
undertakes to assist us in the fulfilment of any form requirements necessary
for such purpose.


 


11.  Place of Fulfilment, Applicable Law and
Jurisdiction:


 


11.1  The originating point of the goods shall, in
each case, be the place of fulfillment for the delivery. Munich shall be the
place of fulfillment for payment.


 


11.2  Exclusively the
laws of the Federal Republic of Germany shall apply between the parties. The
application of the 1980 United Nations Convention on Contracts for the
International Sale of Goods is expressly excluded.


 


11.3   If the Purchaser is a merchant
or does not have a general place of jurisdiction in Germany, the place of
jurisdiction is Munich. We shall, however, have the right to also bring a claim
against the Purchaser at his general place of jurisdiction.


 


Munich,
15th May 2002


 


 


Supply Agreement 3 SunPower
Corporation/ Wacker Chemie AG Sept. 14th, 2007


 


 


 


 


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


 


8

















 


Appendix C , page 1 of 2


 


Relevant
Energy Price index:


 


„BAFA
Grenzübergangspreis” for natural gas


 


Source:


http://www.bmwi.de/BMWi/Navigation/Energie/Energiestatistiken/energiesta-
tistiken,did=53736.html


 


Evaluation
periods:


• Arithmetic mean value out of 6
months


• April
to September for price adjustment of 1st half of the following year


• October to March for price
adjustment of 2nd half of year


• Basis evaluation period: April
2006 — September 2006


 


 


Price
Adjustment Table:


 


CB ... Index value of Basis evaluation period


CN ... Index value of New evaluation
period


 


	
  CN/CB (%)

  	
   

  	
  Price Adjustment

  EURO /
  kg

  
	
   

  	
   

  	
   

  
	
  < - 60

  	
  %

  	
   

  	
  ***

  
	
  < - 40

  	
  %

  	
   

  	
  ***

  
	
  < - 20

  	
  %

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  
	
  > + 20

  	
  %

  	
   

  	
  ***

  
	
  > + 40

  	
  %

  	
   

  	
  ***

  
	
  > + 60

  	
  %

  	
   

  	
  ***

  
	
  > + 80

  	
  %

  	
   

  	
  ***

  
	
  etc.

  	
   

  	
   

  	
  etc.

  



 


 


On
the following example for the calculation of the price adjustment the procedure
is ex­plained in more detail.


 


 


Supply
Agreement 3 SunPower Corporation/ Wacker Chemie AG Sept. 14th, 2007


 


 


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


 


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