Document:

FIRST
      AMENDMENT TO 

    FIRST
      AMENDED AND RESTATED CREDIT AGREEMENT

     

    THIS
      FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this
      "First
      Amendment"),
      dated
      as of January 28, 2008, is entered into among TEXAS INDUSTRIES, INC., a
      Delaware corporation (the "Borrower"),
      the
      lenders listed on the signature pages hereof as Lenders (the "Lenders"),
      and
      BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C
      Issuer.

     

    BACKGROUND

     

    A. The
      Borrower, the Lenders, the Administrative Agent, the Swing Line Lender and
      the
      L/C Issuer are parties to that certain First Amended and Restated Credit
      Agreement, dated as of August 15, 2007, ("Credit
      Agreement").
      The
      terms defined in the Credit Agreement and not otherwise defined herein shall
      be
      used herein as defined in the Credit Agreement.

     

    B. The
      Borrower has requested certain amendments to the Credit Agreement.

     

    C. The
      Lenders, the Administrative Agent, the Swing Line Lender and the L/C Issuer
      hereby agree to amend the Credit Agreement, subject to the terms and conditions
      set forth herein.

     

    NOW,
      THEREFORE, in consideration of the covenants, conditions and agreements
      hereafter set forth, and for other good and valuable consideration, the receipt
      and adequacy of which are all hereby acknowledged, the Borrower, the Lenders,
      the Swing Line Lender, the L/C Issuer and the Administrative Agent covenant
      and
      agree as follows:

     

    1. AMENDMENT.
      The
      defined term "Senior Notes" set forth in Section
      1.01
      of the
      Credit Agreement is hereby amended to read as follows:

     

    "Senior
      Notes"
      means
      unsecured senior notes of the Borrower due 2013 or thereafter, issued pursuant
      to terms, covenants and provisions satisfactory to the Administrative
      Agent.

     

    2. REPRESENTATIONS
      AND WARRANTIES TRUE; NO EVENT OF DEFAULT.
      By its
      execution and delivery hereof, the Borrower represents and warrants that, as
      of
      the date hereof:

     

    (a) the
      representations and warranties contained in the Credit Agreement and the other
      Loan Documents are true and correct on and as of the date hereof as if made
      on
      and as of such date, except to the extent that such representations and
      warranties specifically refer to an earlier date, in which case they shall
      be
      true and correct as of such earlier date;

     

    (b) no
      event
      has occurred and is continuing which constitutes a Default or an Event of
      Default;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    (c) (i) the
      Borrower has full power and authority to execute and deliver this First
      Amendment, (ii) this First Amendment has been duly executed and delivered
      by the Borrower, and (iii) this First Amendment and the Credit Agreement,
      as amended hereby, constitute the legal, valid and binding obligations of the
      Borrower, enforceable in accordance with their respective terms, except as
      enforceability may be limited by applicable Debtor Relief Laws and by general
      principles of equity (regardless of whether enforcement is sought in a
      proceeding in equity or at law) and except as rights to indemnity may be limited
      by federal or state securities laws;

     

    (d) neither
      the execution, delivery and performance of this First Amendment or the Credit
      Agreement, as amended hereby, nor the consummation of any transactions
      contemplated herein or therein, will conflict with any Law or Organization
      Documents of the Borrower, or any indenture, agreement or other instrument
      to
      which the Borrower or any of its properties are subject; and

     

    (e) no
      authorization, approval, consent, or other action by, notice to, or filing
      with,
      any governmental authority or other Person not previously obtained is required
      for (i) the execution, delivery or performance by the Borrower of this
      First Amendment, or (ii) the acknowledgement by each Guarantor of this
      First Amendment. 

     

    3. CONDITIONS
      TO EFFECTIVENESS.
      This
      First Amendment shall be effective upon satisfaction or completion of the
      following:

     

    (a) the
      Administrative Agent shall have received counterparts of this First Amendment
      executed by the Required Lenders;

     

    (b) the
      Administrative Agent shall have received counterparts of this First Amendment
      executed by the Borrower and acknowledged by each Guarantor; and

     

    (c) the
      Administrative Agent shall have received, in form and substance satisfactory
      to
      the Administrative Agent and its counsel, such other documents, certificates
      and
      instruments as the Administrative Agent shall require.

     

    4. REFERENCE
      TO THE CREDIT AGREEMENT.

     

    (a) Upon
      the
      effectiveness of this First Amendment, each reference in the Credit Agreement
      to
      "this Agreement", "hereunder", or words of like import shall mean and be a
      reference to the Credit Agreement, as affected and amended hereby.

     

    (b) The
      Credit Agreement, as amended by the amendment referred to above, shall remain
      in
      full force and effect and is hereby ratified and confirmed.

     

    5. COSTS,
      EXPENSES AND TAXES.
      The
      Borrower agrees to pay on demand all costs and expenses of the Administrative
      Agent in connection with the preparation, reproduction, execution and delivery
      of this First Amendment and the other instruments and documents to be delivered
      hereunder (including the reasonable fees and out-of-pocket expenses of counsel
      for the Administrative Agent with respect thereto).

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

     

    6. GUARANTOR'S
      ACKNOWLEDGMENT.
      By
      signing below, each Guarantor (a) acknowledges, consents and agrees to the
      execution, delivery and performance by the Borrower of this First Amendment,
      (b) acknowledges and agrees that its obligations in respect of its Guaranty
      (i) are not released, diminished, waived, modified, impaired or affected in
      any manner by this First Amendment or any of the provisions contemplated herein,
      (c) ratifies and confirms its obligations under its Guaranty, and
      (d) acknowledges and agrees that it has no claims or offsets against, or
      defenses or counterclaims to, its Guaranty.

     

    7. EXECUTION
      IN COUNTERPARTS.
      This
      First Amendment may be executed in any number of counterparts and by different
      parties hereto in separate counterparts, each of which when so executed and
      delivered shall be deemed to be an original and all of which when taken together
      shall constitute but one and the same instrument. For purposes of this First
      Amendment, a counterpart hereof (or signature page thereto) signed and
      transmitted by any Person party hereto to the Administrative Agent (or its
      counsel) by facsimile machine, telecopier or electronic mail is to be treated
      as
      an original. The signature of such Person thereon, for purposes hereof, is
      to be
      considered as an original signature, and the counterpart (or signature page
      thereto) so transmitted is to be considered to have the same binding effect
      as
      an original signature on an original document.

     

    8. GOVERNING
      LAW; BINDING EFFECT.
      This
      First Amendment shall be governed by and construed in accordance with the laws
      of the State of Texas applicable to agreements made and to be performed entirely
      within such state, and shall be binding upon the parties hereto and their
      respective successors and assigns.

     

    9. HEADINGS.
      Section
      headings in this First Amendment are included herein for convenience of
      reference only and shall not constitute a part of this First Amendment for
      any
      other purpose.

     

    10. ENTIRE
      AGREEMENT.
      THE
      CREDIT AGREEMENT, AS AMENDED BY THIS FIRST AMENDMENT, AND THE OTHER LOAN
      DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
      CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
      AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
      THE PARTIES.

     

    
      	
              REMAINDER
                OF PAGE LEFT INTENTIONALLY BLANK

            

    

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

     

    IN
      WITNESS WHEREOF, this First Amendment is executed as of the date first set
      forth
      above.

     

    
      	 	
              TEXAS
                INDUSTRIES, INC.

            
	 	 	    

	 	 	    

	 	 	    

	 	
              By:

            	
              /s/
                Kenneth R. Allen

            
	 	 	
              Kenneth
                R. Allen

            
	 	 	
              Vice
                President and Treasurer

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              BANK
                OF AMERICA, N.A.,
                as Administrative Agent

            
	 	 	     
	 	 	     
	 	 	     
	 	
              By: 

            	
              /s/
                Michael Brashler

            
	 	 	
              Name:Michael
                Brashler            
                

            
	 	 	
              Title:
                Vice
                President                   
                

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              BANK
                OF AMERICA, N.A.,
                as a Lender, L/C Issuer and Swing Line Lender

            
	 	 	   
	 	 	  
	 	 	     
	 	
              By:

            	
              /s/
                David McCauley

            
	 	 	
              Name:
                David
                McCauley           
                

            
	 	 	
              Title:
                Principal          
                

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	     	
              UBS
                SECURITIES LLC,
                as Syndication Agent

            
	     	 	     
	 	 	     
	 	 	     
	 	
              By:

            	
              /s/
                Richard L. Tavrow

            
	 	 	
              Name:
                Richard
                L. Tavrow          
                

            
	 	 	
              Title:
                Director                              
                

            
	 	 	     
	 	 	     
	 	 	     
	 	
              By:

            	
              /s/
                Mary E. Evans

            
	 	 	
              Name:
                Mary
                E.
                Evans                   
                

            
	 	 	
              Title:
                Associate
                Director              
                

            

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              UBS
                LOAN FINANCE,
                as a Lender

            
	 	 	 
	 	 	 
	 	 	   
	 	
              By:

            	
              /s/
                Richard L. Tavrow

            
	 	 	
              Name:
                Richard
                L.
                Tavrow               
                

            
	 	 	
              Title:
                Director                                   
                

            
	 	 	   
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Irja R. Otsa

            
	 	 	
              Name:
                Irja
                R.
                Otsa                          
                

            
	 	 	
              Title:
                Associate
                Director               
                

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              WELLS
                FARGO BANK, NATIONAL ASSOCIATION,
                as Co-Documentation Agent and

              as
                a Lender

            
	 	 	     
	 	 	     
	 	 	     
	 	
               By:

            	
              /s/
                Terry Dallas

            
	 	 	
              Name:
                Terry
                Dallas                                   
                

            
	 	 	
              Title:
                Executive
                Vice
                President               
                

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              COMERICA
                BANK,
                as Co-Documentation Agent and as a Lender

            
	 	 	  
	 	 	  
	 	 	 
	 	
              By:

            	
              /s/
                William B. Dridge

            
	 	 	
              Name: 
                William
                B.
                Dridge                       
                

            
	 	 	
              Title: 
                Vice
                President                               
                

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              WACHOVIA
                BANK, NATIONAL ASSOCIATION,
                as Co-Documentation Agent and as a Lender

            
	 	 	     
	 	 	     
	 	 	     
	 	
              By:

            	
              /s/
                Jennifer L. Norris

            
	 	 	
              Name: 
                Jennifer
                L.
                Norris                  
                

            
	 	 	
              Title: 
                Senior
                Vice
                President             
                

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              SUNTRUST
                BANK,
                as a Lender

            
	 	 	     
	 	 	     
	 	 	     
	 	
              By:

            	
              /s/
                Robert Maddox

            
	 	 	
              Name: 
                Robert
                Maddox             
                

            
	 	 	
              Title: 
                Director                            
                

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              U.S.
                BANK NATIONAL ASSOCIATION,
                as a Lender

            
	 	 	   
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Derek S. Roudebush

            
	 	 	
              Name: 
                Derek
                S.
                Roudebush                  
                

            
	 	 	
              Title: 
                Vice
                President                               
                

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	     	 	     
	 	
              CAPITAL
                ONE, N.A.,
                as a Lender

            
	 	 	     
	 	 	     
	 	 	     
	 	
              By:

            	
              /s/
                Mary Jo Hoch

            
	 	 	
              Name: 
                Mary
                Jo
                Hoch                          
                

            
	 	 	
              Title: 
                Senior
                Vice
                President                 
                

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              GENERAL
                ELECTRIC CAPITAL CORPORATION,
                as a Lender

            
	 	 	     
	 	 	     
	 	 	     
	 	
              By:

            	
              /s/
                Dwayne Coker

            
	 	 	
              Name: 
                Dwayne
                Coker                                   
                

            
	 	 	
              Title: 
                Duly
                Authorized
                Signatory                
                

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              ACKNOWLEDGED
                AND AGREED AS OF THE FIRST DAY ABOVE WRITTEN:

            
	 	 	 
	 	
              BROOKHOLLOW
                CORPORATION

            
	 	
              BROOKHOLLOW
                PROPERTIES, INC.

            
	 	
              BROOKHOLLOW
                OF ALEXANDRIA, INC.

            
	 	
              BROOKHOLLOW
                OF VIRGINIA, INC.

            
	 	
              SOUTHWESTERN
                FINANCIAL CORPORATION

            
	 	
              CREOLE
                CORPORATION

            
	 	
              PARTIN
                LIMESTONE PRODUCTS, INC.

            
	 	
              RIVERSIDE
                CEMENT HOLDINGS COMPANY

            
	 	
              TXI
                AVIATION, INC.

            
	 	
              TXI
                CEMENT COMPANY

            
	 	
              TXI
                RIVERSIDE INC.

            
	 	
              TXI
                TRANSPORTATION COMPANY

            
	 	
              TXI
                CALIFORNIA INC.

            
	 	
              PACIFIC
                CUSTOM MATERIALS, INC.

            
	 	
              TXI
                POWER COMPANY

            
	 	
              TEXAS
                INDUSTRIES HOLDINGS, LLC

            
	 	
              TEXAS
                INDUSTRIES TRUST

            
	 	
              TXI
                LLC

            
	 	
              TXI
                OPERATING TRUST

            
	 	 	    

	 	 	    

	 	
              By:

            	
                  
                /s/ Kenneth R. Allen

            
	 	 	
              Kenneth
                R. Allen

            
	 	 	
              Vice
                President and Treasurer

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              RIVERSIDE
                CEMENT COMPANY

            
	 	 	    

	 	 	    

	 	
              By:

            	
                  
                /s/ Kenneth R. Allen

            
	 	 	
              Kenneth
                R. Allen

            
	 	 	
              Assistant
                General Manager - TreasurerCONFIDENTIAL

     

    Exhibit
      10.58

    [*]
      =
      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.

     

    SUPPLY
      AGREEMENT

     

    This
      Agreement is made as of the last date set forth on the signature page hereto
      (the “Effective
      Date”)
      between SOLARFUN
      POWER HONG KONG LIMITED,
      a
      company registered in Hong Kong (hereinafter “SOLARFUN”)
      and
HOKU
      SCIENTIFIC, INC., a
      Delaware corporation (hereinafter “HOKU”).
      HOKU
      and SOLARFUN are sometimes referred to in the singular as a “Party”
or
      in
      the plural as the “Parties”.

     

    Recitals
      

     

    Whereas,
      HOKU desires to supply polysilicon to SOLARFUN for its general use beginning
      in
      calendar year 2009 for a continuous period of eight years from the date of
      the
      first shipment; 

     

    Whereas,
      in exchange for HOKU’s agreement to allocate the supply of polysilicon, SOLARFUN
      desires to provide HOKU with a firm order for polysilicon upon the terms and
      conditions provided herein; 

     

    NOW,
      THEREFORE, in furtherance of the foregoing Recitals and in consideration of
      the
      mutual covenants and obligations set forth in this Agreement, the Parties hereby
      agree as follows: 

     

    1. Definitions. 

    The
      following terms used in this Agreement shall have the meanings set forth below:
      

     

    1.1. “Affiliate”
shall
      mean, with respect to either Party to this Agreement, any entity that is
      controlled by or under common control with such Party.

     

    1.2. “Agreement”
shall
      mean this Supply Agreement and all appendices annexed to this Agreement as
      the
      same may be amended from time to time in accordance with the provisions hereof.
      

     

    1.3. “Escrow
      Account”
is
      the
      bank deposit account created with the Escrow Agent pursuant to the Escrow
      Agreement.

     

    1.4. “Escrow
      Agent”
shall
      mean (A) a bank that is domiciled in and organized under the laws of one of
      the
      fifty states of the United States of America, and which is reasonably acceptable
      to HOKU, or (B) a bank located in China whose obligations and responsibilities
      are guaranteed by a bank that is domiciled in and organized under the laws
      of
      one of the fifty states of the United States of America, and which is reasonably
      acceptable to HOKU, or (C) any other bank that is acceptable to HOKU in its
      sole
      discretion, or (D) any successor escrow agent appointed pursuant to the Escrow
      Agreement.

     

    1.5. “Escrow
      Agreement”
has
      the
      meaning set forth in Section 5.4.1
      below.

     

    1.6. “First
      Shipment Date”
shall
      mean the first day of the calendar month in which HOKU commences deliveries
      to
      SOLARFUN of Products pursuant to this Agreement.

     

    
      
        
        

      

      
        Page
          1 of
          29

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

     

    1.7. “Facility”
shall
      mean any facility used by HOKU for the production of the Product.

     

    1.8. “Minimum
      Annual Quantity of Product”
means
      [*]
      metric
      tons ([*]
      kilograms) of Product during the first Year and [*]
      metric
      tons ([*]
      kilograms) during each of the second through eighth Year, inclusive.

     

    1.9. “Product”
shall
      mean the raw polysilicon in chunk form manufactured by HOKU and sold to SOLARFUN
      pursuant to this Agreement.

     

    1.10. “Product
      Specifications”
shall
      mean the quality and other specifications set forth on Appendix 2 to this
      Agreement. 

     

    1.11. “Term”
shall
      mean the period during which this Agreement is in effect, as more specifically
      set forth in Section 9
      of this
      Agreement.

     

    1.12. “Total
      Deposit”
shall
      mean all deposits or prepayments made by SOLARFUN to HOKU hereunder including
      without limitation the Initial Deposit and the Main Deposit. 

     

    1.13. “Year”
shall
      mean each of the eight (8) twelve-month periods commencing on the First Shipment
      Date.

     

    2. Ordering.
      Starting
      on the First Shipment Date and each Year during the term of this Agreement
      thereafter, SOLARFUN agrees to purchase from HOKU, and HOKU agrees to sell
      to
      SOLARFUN, the Minimum Annual Quantity of Product at the prices set forth on
      Appendix 1 to this Agreement (the “Pricing
      Schedule”).
      This
      Agreement constitutes a firm order from SOLARFUN for [*]
      metric
      tons of Product that cannot be cancelled during the term of this Agreement,
      except as set forth in Section 9
      below.

     

    3. Supply
      Obligations.
      

     

    3.1. HOKU
      shall deliver each Year pursuant to this Agreement starting on the First
      Shipment Date at least the Minimum Annual Quantity of Product in approximately
      equal monthly shipments pursuant to Section 4.1 below; provided however, that
      if
      HOKU fails to deliver a monthly shipment, then HOKU may deliver any deficiency
      within [*]
      days
      without breaching this section or incurring any purchase price adjustment
      (pursuant to Section 3.3
      below).
      At any time during the term of this Agreement, HOKU may ship to SOLARFUN up
      to
      the full cumulative balance of Minimum Annual Quantity of Product to be shipped
      through the end of this Contract (an “Excess
      Shipment”)
      with
      SOLARFUN’s written consent. This shipment will be credited against each
      subsequent Minimum Annual Quantity of Product. For example, if the Minimum
      Annual Quantity of Product for a given Year is [*]
      metric
      tons, and if HOKU delivers [*]
      metric
      tons in January, then the next shipment of [*]
      metric
      tons is not required until the following Year.

     

    3.2. HOKU
      intends to manufacture the Products at its Facility; however, notwithstanding
      anything to the contrary herein, HOKU may deliver to SOLARFUN Products that
      are
      manufactured by a third party other than HOKU, where HOKU is acting only as
      a
      reseller or distributor of such Products; and provided that the Products meet
      the Product Specifications and price set forth in this Agreement. 

     

    3.3. Except
      in
      the case of a force majeure pursuant to Section 12
      below,
      if at any time after [*],
      HOKU
      does not supply any Products pursuant to Section 3.1
      or
3.2
      within
[*]
      days
      of
      the scheduled delivery date, HOKU will provide SOLARFUN with a purchase price
      adjustment. Such purchase price adjustment shall be [*]
      percent
      ([*]%)
      of the
      value of the respective delayed Products for each week or part thereof that
      the
      Product shipment (or part thereof) is delayed beyond the [*]
      day
      grace
      period. Any
      purchase price adjustment as a result of this Section 3.3
      will be
      paid by HOKU at the end of the term of the applicable calendar quarter.
      In lieu of making a cash payment to SOLARFUN pursuant to this Section
3.3,
      HOKU
      may,
      at its option, pay for such purchase price adjustment in the form of a credit
      issued for future shipments of Products.
      Notwithstanding anything to the contrary, the maximum amount of such purchase
      price adjustment shall not exceed [*]
      percent
      ([*]%)
      of the
      value of the respective delayed Products. Monthly shipments which are delayed
      beyond one hundred fifty (150) days shall be deemed to constitute a material
      breach of this Agreement pursuant to Section 9.2.1
      below. 

     

    
      
        
        

      

      
        Page
          2 of
          29

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

     

    3.4. If
      HOKU
      delivers any Products to SOLARFUN prior to [*],
      then
      SOLARFUN shall pay HOKU a premium equal to [*]%
      of the
      applicable purchase price for the Products shipped. 

     

    4. Shipping
      & Delivery. 

     

    4.1. Except
      as
      provided in Section 3.2
      above,
      shipments shall be made from the Facility on a monthly basis in accordance
      with
      a shipment schedule that will be provided by HOKU each Year under this Agreement
      (the “Shipment
      Schedule”)
      no
      later than sixty (60) days prior to the applicable year. The Shipment Schedule
      shall provide for approximately equal monthly shipments that add up to the
      Minimum Annual Quantity of Products. 

     

    4.2. HOKU
      agrees that it will not enter into any additional supply contract with, or
      make
      any supply commitment to, any third party (not including the long term supply
      contracts that have been signed prior to the Effective Date (the “Pre-existing
      Commitments”))
      if
      the aggregate of HOKU’s delivery obligations under all of its supply contracts
      (including those with SOLARFUN and its Pre-existing Commitments) and such
      additional supply contract/commitment during any month would exceed the rated
      monthly production capacity of all polysilicon reactors at all HOKU Facilities,
      as certified by the manufacturer thereof. Subject to the foregoing, this Section
      4.2
      shall
      not preclude HOKU from (A) entering into supply contracts for additional
      capacity from Facility expansion, including pre-sales of potential Facility
      expansions, or from increased productivity of the Reactors, or (B) selling
      on
      the spot market or entering into long-term contracts for the sale of polysilicon
      that does not meet the Product Specifications at any time during the term of
      this Agreement, provided that HOKU uses commercially reasonable efforts to
      meet
      the Product Specifications with respect to such polysilicon and that HOKU does
      not manufacture polysilicon for the purpose of making such spot market sales
      or
      fulfilling such long term contracts.

     

    4.3. HOKU
      will
      use commercially reasonable efforts to make its first shipment of Products
      to
      SOLARFUN on or before July 1, 2009. 

     

    5. Payments
      & Advances.

     

    5.1. Immediately
      upon signing this Agreement, SOLARFUN shall provide HOKU with a deposit of
      One
      Million U.S. Dollars (US$1,000,000) via wire transfer of immediately available
      funds (the “First
      Deposit”)
      as
      advance payment for Products to be delivered under this Agreement.

     

    5.2. On
      or
      before December 28, 2007, SOLARFUN shall provide HOKU a second cash deposit
      of
      Nine Million U.S. Dollars (US$9,000,000.00) (the “Second
      Deposit,
      and
      together with the First Deposit, the “Initial
      Deposit”)
      as
      advance payment for Products to be delivered under this Agreement.

     

    5.3. SOLARFUN
      shall pay in cash to HOKU the additional sum of Forty-Five Million U.S. Dollars
      (USD $45,000,000.00) (the “Main
      Deposit”)
      as an
      advance payment for Products to be delivered under this Agreement in accordance
      with the payment schedule set forth below. 

     

    
      
        
        

      

      
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    5.3.1. Forty-Four
      and one-half percent (44.5%) of the Main Deposit (USD $20,000,000.00) (the
      “Third
      Deposit”)
      shall
      be paid to HOKU on September 30, 2008 (the “Third
      Deposit Date”).

     

    5.3.2. Forty-Four
      and one-half percent (44.5%) of the Main Deposit (USD $20,000,000) (the
“Fourth
      Deposit”)
      shall
      be paid to HOKU on March 31, 2009 (the “Fourth
      Deposit Date”).
      

     

    5.3.3. Eleven
      percent (11%) of the Main Deposit (USD $5,000,000.00) (the “Fifth
      Deposit”)
      shall
      be paid to HOKU on March 31, 2010 (the “Fifth
      Deposit Date”).

     

    5.4. Escrow
      Agreement; Letter of Credit.
      

     

    5.4.1. On
      or
      before January 10, 2008, either (A) SOLARFUN shall provide to HOKU an
      irrevocable stand-by letter of credit in substantially the form of Appendix
      3
      attached
      hereto (the “Letter
      of Credit”)
      in the
      amount of the Main Deposit, or (B) SOLARFUN, HOKU and the Escrow Agent shall
      sign an escrow agreement in substantially the form of Appendix
      4
      (the
“Escrow
      Agreement”),
      and
      SOLARFUN shall deposit into the Escrow Account the amount of the Main
      Deposit. 

     

    5.4.1(a) If
      the
      Letter of Credit is provided pursuant to Section 5.4.1(A)
      above, then such Letter of Credit shall be issued to HOKU by a bank domiciled
      in
      and organized under the laws of one of the fifty states of the United States
      of
      America, and which is reasonably acceptable to HOKU (the “Issuing
      Bank”).
      The
      Letter of Credit shall be issued in US Dollars for the full amount of the Main
      Deposit, and shall be freely assignable by HOKU in connection with any
      assignment of this Agreement by HOKU pursuant to Section 13.3
      below.
      Payment to HOKU of the Third Deposit, Fourth Deposit and Fifth Deposit shall
      be
      made by the Issuing Bank upon its receipt of written notice that SOLARFUN has
      failed to make such payment on the Third Deposit Date, the Fourth Deposit Date
      or the Fifth Deposit Date, as applicable. The Letter of Credit shall expire
      on
      the later of the date when (A) the Main Deposit has been paid in full to HOKU
      by
      SOLARFUN, or (B) the Main Deposit has been paid in full to HOKU by the Issuing
      Bank.

     

    5.4.1(b) If
      the
      Escrow Agreement is entered into pursuant to Section 5.4.1(B)
      above, then the Main Deposit may be deposited into the Escrow Account in US
      Dollars or Chinese RMB; provided, however, that all payments to HOKU pursuant
      to
      this Agreement shall be in US Dollars. Payment of the Third Deposit, Fourth
      Deposit and Fifth Deposit shall automatically be made to HOKU from the Escrow
      Account pursuant to the Escrow Agreement on the Third Deposit Date, Fourth
      Deposit Date and Fifth Deposit Date, as applicable. Notwithstanding anything
      to
      the contrary, all payments from the Escrow Account to HOKU shall be made in
      US
      Dollars, unless HOKU and SOLARFUN otherwise agree in writing. In the event
      that
      the amount of any payment from the Escrow Account to HOKU in US Dollars is
      less
      than the Third Deposit, Fourth Deposit, or Fifth Deposit, as applicable, due
      to
      currency exchange rates from Chinese RMB to US Dollars, then SOLARFUN shall
      be
      obligated to immediately pay HOKU in US Dollars the difference between the
      actual payment from the Escrow Account and the Third Deposit, Fourth Deposit
      or
      Fifth Deposit, as applicable. The final form of the Escrow Agreement may be
      different from the form attached as Appendix 4, acceptance of which by the
      Parties shall be evidenced by HOKU and SOLARFUN’s execution thereof.

     

    5.5. HOKU
      shall invoice SOLARFUN at or after the time of each shipment of Products to
      SOLARFUN. Taxes, customs and duties, if any, will be identified as separate
      items on HOKU invoices. All invoices shall be sent to SOLARFUN’s address as
      provided herein. Payment terms for all invoiced amounts shall be [*]
      days
      from date of shipment. All payments shall be made in U.S. Dollars. Unless HOKU
      is entitled to retain the Total Deposit as liquidated damages pursuant to
      Section 11
      below,
shipments
      to SOLARFUN shall be credited against the Total Deposit beginning
      in the second Year, as set forth in Appendix
      1
      (Pricing
      Schedule).

     

    
      
        
        

      

      
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    5.6. The
      prices for the Products do not include any excise, sales, use, import, export
      or
      other similar taxes, such taxes will not include income taxes or similar taxes,
      which taxes will be invoiced to and paid by SOLARFUN, provided that SOLARFUN
      is
      legally or contractually obliged to pay such taxes. SOLARFUN shall be
      responsible for all transportation charges, duties or charges for shipping
      and
      handling; thus, the price for the Products shall not include any such
      charges.

     

    5.7. Late
      payments and outstanding balances shall accrue interest at the lesser of
[*]%
      per
      annum or the maximum allowed by law. 

    

      6. Security
        Interest.

       

      6.1. Subject
        to receipt of the Initial Deposit and or payment of any portion of the Main
        Deposit HOKU hereby grants to SOLARFUN a security interest to secure the
        repayment by HOKU to SOLARFUN of the Total Deposit following any of the events
        set forth in Section 9.6
        below,
        which shall be subordinated in accordance with Section 6.2
        below,
        in all of the tangible and intangible assets related to HOKU’s polysilicon
        business (the “Collateral”).
        

       

      6.2. SOLARFUN
        acknowledges and agrees that the security interests and liens in the Collateral
        will not be first priority security interests, will be expressly subordinated
        to
        HOKU’s third-party lenders (the “Senior
        Lenders”)
        that
        provide debt financing for the construction of any HOKU Facility, and may
        be
        subordinated as a matter of law to other security interests, and to security
        interests that are created and perfected prior to the security interest granted
        to SOLARFUN hereby. SOLARFUN shall enter into subordination agreements with
        the
        Senior Lenders on terms and conditions reasonably acceptable to the Senior
        Lenders. 

       

      6.3. In
        addition, SOLARFUN shall enter into collateral, intercreditor and other
        agreements (the “Collateral
        Agreements”)
        with
        HOKU’s Senior Lenders, and with SANYO Electric Co., Ltd., Suntech Power Holding
        Co., Ltd., Global Expertise Wafer Division, Ltd., and HOKU’s other customers who
        provide prepayments for Products (collectively, “HOKU’s
        Other Customers”),
        as
        may be reasonably necessary to ensure that the security interest granted
        hereby
        is pari passu with the security interests that may be granted to HOKU’s Other
        Customers. SOLARFUN may not unreasonably refuse to sign any such Collateral
        Agreement, provided that such Collateral Agreement grants SOLARFUN a pari
        passu
        priority with respect to HOKU’s Other Customers, and is expressly subordinated
        to the Senior Lenders. 

       

      6.4. The
        security interest granted hereby shall continue so long as HOKU continues
        to
        maintain any amount of the Total Deposit, and only to the extent of such
        remaining amount of the Total Deposit being held by HOKU, which has not been
        credited against the shipment of Products pursuant to this Agreement, or
        otherwise repaid to SOLARFUN. Notwithstanding anything to the contrary contained
        in this Agreement, the Collateral consisting of real property shall secure
        only
        the obligations of HOKU to refund any portion of the Total Deposit to SOLARFUN
        in accordance with the terms of this Agreement.

       

      6.5. HOKU
        and
        SOLARFUN each agree to act in good faith to execute and deliver any additional
        document or documents that may be required in furtherance of the foregoing
        provisions of this Section 6,
        including the Collateral Agreements. Neither HOKU nor SOLARFUN may unreasonably
        refuse to sign any such document.

       

      
        
          
          

        

        
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      7. Product
        Quality Guarantee. 

       

      7.1. HOKU
        warrants to SOLARFUN that the Products shall meet the Product Specifications.
        For each shipment, this warranty shall survive for [*]
        days
        after the applicable shipment date (the “Warranty
        Period”).
        Upon
        release of the Products to a common carrier or freight forwarder, FOB origin,
        HOKU warrants that the Products shall be free of all liens, mortgages,
        encumbrances, security interests or other claims or rights. HOKU will, upon
        prompt notification and compliance with HOKU’s instructions, refund or replace,
        at SOLARFUN’s sole option, any Product which does not meet the Product
        Specifications, and SOLARFUN shall comply with the inspection and return
        goods
        policy described in Section 8
        below
        with respect to such Products. No employee, agent or representative of HOKU
        has
        the authority to bind HOKU to any oral representation or warranty concerning
        the
        Products. Any oral representation or warranty made prior to the purchase
        of any
        Product and not set forth in writing and signed by a duly authorized officer
        of
        HOKU shall not be enforceable by SOLARFUN. HOKU makes no warranty and shall
        have
        no obligation with respect to damage caused by or resulting from accident,
        misuse, neglect or unauthorized alterations to the Products.

       

      7.2. HOKU
        EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY,
        INCLUDING THE WARRANTIES OF MERCHANTABILITY, AND FITNESS FOR A PARTICULAR
        PURPOSE. HOKU’s sole responsibility and SOLARFUN’s exclusive remedy for any
        claim arising out of the purchase of any Product is a refund or replacement,
        as
        described above. In no event shall HOKU’s liability exceed the purchase price
        paid therefore; nor shall HOKU be liable for any claims, losses or damages
        of
        any individual or entity or for lost profits or any special, indirect,
        incidental, consequential, or exemplary damages, howsoever arising, even
        if HOKU
        has been advised of the possibility of such damages.

       

      7.3. HOKU
        shall, at its own expense, indemnify and hold SOLARFUN and its Affiliates
        harmless from and against any expense or loss resulting from any actual or
        alleged infringement of any patent, trademark, trade secret, copyright, mask
        work or other intellectual property related to the Products, and shall defend
        at
        its own expense, including attorneys fees, any suit brought against SOLARFUN
        or
        SOLARFUN’s Affiliates alleging any such infringement. SOLARFUN agrees that: (i)
        SOLARFUN shall give HOKU prompt notice in writing of any such suit; (ii)
        if HOKU
        provides evidence reasonably satisfactory to SOLARFUN of HOKU’s financial
        ability to defend the matter vigorously and pay any reasonably foreseeable
        damages, SOLARFUN shall permit HOKU, through counsel of HOKU’s choice, to answer
        the charge of infringement and defend such suit (but SOLARFUN, or SOLARFUN’s
        Affiliate may be represented by counsel and participate in the defense at
        its
        own expense); and (iii) SOLARFUN shall give HOKU all needed information,
        assistance, and authority, at HOKU’s expense, to enable HOKU to defend such
        suit. In case of a final award of damages in any such suit HOKU shall pay
        such
        award, but shall not be responsible for any settlement made without its prior
        consent. Except as otherwise expressly set forth herein, HOKU disclaims any
        obligation to defend or indemnify SOLARFUN, its officers, agents, or employees,
        from any losses, damages, liabilities, costs or expenses which may arise
        out of
        the acts of omissions of HOKU.

       

      8. Inspection
        and Return Goods Policy.

       

      8.1. An
        inspection of appearance of each shipment of Product shall be made by SOLARFUN
        in accordance with sound business practice upon the delivery of the Product,
        and
        in no case later than [*]
        after
        delivery at SOLARFUN’s factory. SOLARFUN shall inform HOKU promptly, and in no
        case later than [*]
        after
        delivery of Product, in case of any obvious damages or other obvious defects
        to
        the Product which SOLARFUN discovers under the inspection of
        appearance. 

       

      8.2. SOLARFUN
        shall perform final inspection of the Product upon introducing the Product
        into
        SOLARFUN’s production process. Such inspection shall take place during the
        Warranty Period. If the Product does not meet the Product Specifications,
        SOLARFUN shall notify HOKU in writing without undue delay after the inspection
        and, together with the notification, submit documentary evidence of the result
        of the final inspection whereupon HOKU shall have the right to undertake
        its own
        inspection prior to any return of the Products pursuant to Section 8.3
        below.

       

      
        
          
          

        

        
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      8.3. Products
        may be returned to HOKU within the later of (a) [*]
        after
        discovery of a defect consistent with Sections 8.1
        and
8.2
        above;
        and (b) [*]
        after
        HOKU completes its inspection and confirms the defect pursuant to Section
        8.2
        above,
        for replacement or a refund including all return shipment expenses. To assure
        prompt handling, HOKU shall provide SOLARFUN a return goods authorization
        number
        within 48 hours of SOLARFUN’s request. Provided that HOKU communicates this
        number to SOLARFUN within such timeframe, SOLARFUN will reference this number
        on
        return shipping documents. Returns made without the authorization number
        provided by HOKU in accordance with the foregoing may be subject to HOKU’s
        reasonable charges due to HOKU’s additional handling costs. HOKU reserves the
        right to reverse any credit issued to SOLARFUN if, upon return, such Product
        is
        determined by a predetermined third party not to be defective. 

       

      9. Term
        and Termination. 

       

      9.1. The
        term
        of this Agreement shall begin on the Effective Date and provided that the
        first
        delivery of the Product under this Agreement shall occur in 2009 or earlier,
        and
        unless previously terminated as hereinafter set forth, shall remain in force
        for
        a period of eight Years beginning with the First Shipment Date. 

       

      9.2. 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: 

       

      9.2.1. 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 sixty
        (60)
        days after written notice thereof;
        provided, however, that such cure period shall not modify or extend the 150-day
        cure period for HOKU’s delivery obligations pursuant to Section 3.3
        above;
        and provided, further that such sixty (60) day cure period shall not apply
        to
        SOLARFUN’s failure to make any payment to HOKU pursuant to this Agreement. In
        the event of SOLARFUN’s failure to make payment on the 30-day payment terms set
        forth in Section 5.5
        hereof,
        termination by HOKU 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.

       

      9.2.2. 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; 

       

      9.2.3. 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 

       

      9.2.4. In
        accordance with the provisions of Section 12
        (Force
        Majeure) below. 

       

      9.2.5. Without
        limiting the foregoing, SOLARFUN shall have the right to terminate this
        Agreement if the First Shipment Date does not occur on or before December
        31,
        2009.

       

      
        
          
          

        

        
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      9.3. HOKU
        shall have the right to terminate this Agreement if SOLARFUN fails to pay
        HOKU
        the Second Deposit on or before December 28, 2007, in which case HOKU shall
        be
        entitled to retain the First Deposit as liquidated damages. 

       

      9.4. HOKU
        shall have the right to terminate this Agreement if on or before January
        10,
        2008 SOLARFUN has failed to either (A) enter into the Escrow Agreement with
        HOKU
        and the Escrow Agent and deposit the Main Deposit into the Escrow Account
        pursuant to Section 5.4.1
        above,
        or (B) deliver the Letter of Credit pursuant to Section 5.4.1
        above,
        in which case, HOKU shall be entitled to retain the Initial Deposit as
        liquidated damages. 

       

      9.5. Upon
        the
        expiration or termination of this Agreement howsoever arising, the following
        Sections shall survive such expiration or termination: Sections 1
        (Definitions); Section 7
        (Product
        Quality Guarantee), Section 8
        (Inspection and Return Goods Policy); Section 9
        (Term
        and Termination); Section 10
        (Liability); Section 11
        (Liquidated Damages); and Section 13
        (General
        Provisions). 

       

      9.6. If
        SOLARFUN terminates this Agreement pursuant to Section 9.2.1,
        9.2.2,
        9.2.3,
        9.2.4,
        9.2.5
        or 12
        then any funds remaining on the Total Deposit on such date of termination
        shall
        be returned to SOLARFUN; provided however that if SOLARFUN is in material
        breach
        of this Agreement at the time it terminates this Agreement, then HOKU shall
        not
        be required to repay any remaining amount of the Total Deposit up to the
        amounts
        of HOKU’s direct loss from such material breach (unless SOLARFUN cures such
        breach within the applicable cure period) or SOLARFUN’s other outstanding and
        unpaid obligations hereunder (including, without limitation, obligations
        under
        Section 11).
        “Funds
        remaining”
on
        the
        Total Deposit are funds not applied against SOLARFUN’s purchase of Product,
        pursuant to Section 5.5
        above,
        for Product actually shipped to SOLARFUN hereunder.

       

      10. Liability.
        

       

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

       

      10.2. 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 THE TOTAL DEPOSIT, EXCEPT WITH RESPECT
        TO SOLARFUN’S CONTINUING OBLIGATION TO PURCHASE THE PRODUCTS AS SET FORTH
        HEREIN. 

       

      11. Liquidated
        Damages.
        THE
        PARTIES ACKNOWLEDGE AND AGREE THAT ANY BREACH OF THIS AGREEMENT BY SOLARFUN
        MAY
        CAUSE IRREPARABLE AND IMMEASURABLE DAMAGE TO HOKU. BECAUSE IT IS DIFFICULT
        TO
        MEASURE THESE DAMAGES, IN THE EVENT THAT THIS AGREEMENT IS TERMINATED BY
        HOKU
        PURSUANT TO SECTION 9.2.1,
        9.2.2,
        9.2.3,
        9.2.4,
        or
9.4,
        THEN
        HOKU SHALL BE ENTITLED TO RETAIN AS LIQUIDATED DAMAGES, THE TOTAL DEPOSIT
        (OR
        ANY REMAINING PORTION THEREOF NOT CREDITED AGAINST PRODUCT SHIPMENTS). ANY
        AMOUNTS DUE FOR UNDELIVERED PRODUCT UNDER THIS AGREEMENT ARE STILL DUE, UNLESS
        OTHERWISE AGREED BY BOTH PARTIES IN WRITING. 

       

      12. 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 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, then the non-affected Party shall be entitled to terminate
        this
        Agreement by 30 days’ prior written notice to the other Party. 

       

      
        
          
          

        

        
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      13. General
        Provisions.
        

       

      13.1. This
        Agreement shall be construed under and governed by the laws of the State
        of
        California, U.S.A. 

       

      13.2. Upon
        notice from one Party to the other of a dispute hereunder, the Parties agree
        to
        hold a meeting within thirty (30) days of receipt of such notice with at
        least
        one (1) representative from each Party who has decision-making authority
        for
        such company. At this meeting, the Parties will attempt to resolve the dispute
        in good faith. If, after the meeting, the dispute has not been resolved,
        only
        then may a Party resort to litigation. Any proceeding to enforce or to resolve
        disputes relating to this Agreement shall be brought in California, USA.
        In any
        such proceeding, neither Party shall assert that such a court lacks jurisdiction
        over it or the subject matter of the proceeding. 

       

      13.3. HOKU
        may
        assign this Agreement to any of its Affiliates, and may assign its rights
        under
        this Agreement to any collateral agent as collateral security for HOKU’s secured
        obligations in connection with the financing a HOKU Facility, without the
        consent of SOLARFUN. Except as stated in the previous sentence, neither HOKU
        nor
        SOLARFUN may assign this Agreement to a third party without the prior written
        consent of the other Party, which consent shall not be unreasonably withheld.
        Notwithstanding the foregoing, an assignment of this Agreement by either
        Party
        in connection with a merger, acquisition, or sale of all or substantially
        all of
        the assets or capital stock of such Party shall not require the consent of
        the
        other Party. If this Agreement is assigned effectively to a third party,
        this
        Agreement shall bind upon successors and assigns of the Parties
        hereto. 

       

      13.4. Except
        as
        provided elsewhere in this Agreement, a notice is effective only if the Party
        giving or making the notice has complied with this Section 13.4
        and if
        the addressee has received the notice. A notice is deemed to have been received
        as follows: 

       

      
        	 	
                (a)

              	
                If
                  a notice is delivered in person, or sent by registered or certified
                  mail,
                  or nationally or internationally recognized overnight courier,
                  upon
                  receipt as indicated by the date on the signed receipt;
                  or

              

      

       

      
        	 	
                (b)

              	
                If
                  a notice is sent by facsimile, upon receipt by the Party giving
                  the notice
                  of an acknowledgment or transmission report generated by the machine
                  from
                  which the facsimile was sent indicating that the facsimile was
                  sent in its
                  entirety to the addressee’s facsimile number.

              

      

       

      Each
        Party giving a notice shall address the notice to the appropriate person
        at the
        receiving Party at the address listed below or to a changed address as the
        Party
        shall have specified by prior written notice: 

    

    

      SOLARFUN:
        

      

      SOLARFUN
        POWER HONG KONG LIMITED 

      In
        care
        of: JIANGSU LINYANG SOLARFUN CO., LTD.

      No.
        666
        Linyang Rd.,

      Qidong
        Jiangsu Province 226200

      People’s
        Republic of China

      Tel:
        +86-21-6393-8326

      Fax:
        +86-21-6393-3099

      Attn:
        William Sien, VP of Business Development

      E-Mail:
        [*]

      

      HOKU:
        

      

      HOKU
        SCIENTIFIC, INC.

      1075
        Opakapaka Street

      Kapolei,
        HI 96707

      Attn:
        Mr.
        Dustin Shindo, CEO

      E-mail:
        [*]

      Facsimile:
        +1 (808) 682-7807

       

      
        
          
          

        

        
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      13.5. The
        waiver by either Party of the remedy for the other Party’s breach of or its
        right under this Agreement will not constitute a waiver of the remedy for
        any
        other similar or subsequent breach or right. 

       

      13.6. If
        any
        provision of this Agreement is or becomes, at any time or for any reason,
        unenforceable or invalid, no other provision of this Agreement shall be affected
        thereby, and the remaining provisions of this Agreement shall continue with
        the
        same force and effect as if such unenforceable or invalid provisions had
        not
        been inserted in this Agreement. 

       

      13.7. No
        changes, modifications or alterations to this Agreement shall be valid unless
        reduced to writing and duly signed by respective authorized representatives
        of
        the Parties. 

       

      13.8. No
        employment, agency, trust, partnership or joint venture is created by, or
        shall
        be founded upon, this Agreement. Each Party further acknowledges that neither
        it
        nor any Party acting on its behalf shall have any right, power or authority,
        implied or express, to obligate the other Party in any way. 

       

      13.9. 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 the Parties will work together to issue a joint press release
        within two (2) days after execution of this Agreement. Notwithstanding the
        foregoing, 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, 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 pricing and technical
        information set forth in this Agreement.

       

      13.10. This
        Agreement constitutes the entire agreement between the Parties and supersedes
        all prior proposal(s) and discussions, relative to the subject matter of
        this
        Agreement and neither of the Parties shall be bound by any conditions,
        definitions, warranties, understandings or representations with respect to
        such
        subject matter other than as expressly provided herein. No oral explanation
        or
        oral information by either Party hereto shall alter the meaning or
        interpretation of this Agreement. 

       

      13.11. The
        headings are inserted for convenience of reference and shall not affect the
        interpretation and or construction of this Agreement. 

       

      13.12. Words
        expressed in the singular include the plural and vice-versa. 

       

      
        
          
          

        

        
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          CONFIDENTIAL

        

      

    

     

    IN
      WITNESS WHEREOF, the Parties have executed this Supply Agreement as of the
      date
      first set forth above.

    

      
        	
                SOLARFUN:

              	 	
                HOKU:

              
	 	 	 	 	 
	
                SOLARFUN
                  POWER HONG KONG LIMITED 

              	 	
                HOKU
                  SCIENTIFIC, INC.

              
	 	 	 	 	 
	
                By:

              	
                /s/
                  William Sien

              	 	
                By:

              	
                /s/
                  Dustin Shindo

              
	 	 	 	 	 
	
                Name:

              	
                William
                  Sien

              	 	
                Name:

              	
                Dustin
                  Shindo

              
	 	 	 	 	 
	
                Title:

              	
                VP
                  of Business Development

              	 	
                Title:

              	
                Chairman
                  & CEO

              
	
                Authorized
                  Signatory

              	 	
                Authorized
                  Signatory

              
	 	 	 	 	 
	
                Date:

              	
                Nov.
                  15, 2007

              	 	
                Date:

              	
                Nov.
                  19, 2007

              

      

    

     

     

    CORPORATE
      GUARANTY

     

    As
      an
      inducement for HOKU to enter into this Agreement with SOLARFUN, it is hereby
      agreed that the undersigned does hereby guaranty to HOKU the prompt, punctual
      and full payment of all monies now or hereinafter due HOKU from SOLARFUN, and
      agrees to the following:

     

    
      	 	
              a)

            	
              Until
                termination, this guaranty is unlimited as to amount or duration
                and shall
                remain in full force and effect notwithstanding any extension, compromise,
                adjustment, forbearance, waiver, release or discharge of any party
                obligor
                or guarantor.

            

    

    

    
      	 	
              b)

            	
              The
                obligations of the undersigned shall be at the election of HOKU,
                shall be
                primary and not necessarily secondary, and HOKU shall not be required
                to
                exhaust its remedies as against SOLARFUN prior to enforcing its rights
                under this guaranty against the
                undersigned.

            

    

    

    
      	 	
              c)

            	
              The
                guaranty hereunder shall be unconditional and absolute and the undersigned
                waives all rights of subrogation and set-off until all sums under
                this
                guaranty are fully paid. The undersigned further waives all suretyship
                defenses or defenses in the nature thereof,
                generally.

            

    

    

    
      	 	
              d)

            	
              The
                guaranty shall be valid and continuing during the term of this Agreement.
                

            

    

    

    
      	 	
              e)

            	
              The
                undersigned warrants and represents it has full authority to enter
                into
                this guaranty.

            

    

    

    
      	 	
              f)

            	
              This
                guaranty shall be binding upon and inure to the benefit of the parties,
                their successors, assigns and personal
                representatives.

            

    

    

    
      	 	
              g)

            	
              This
                guaranty shall be construed and enforced under the laws of the State
                of
                California, USA.

            

    

     

    
      
        	
                JIANGSU
                  LINYANG SOLARFUN CO., LTD. 

              	 	 	 
	 	 	 	 	 
	
                By:

              	
                /s/
                  William Sien

              	 	
                Date:

              	
                Nov.
                  15, 2007

              
	 	 	 	 	 
	
                Name:

              	
                William
                  Sien

              	 	 	 
	 	 	 	 	 
	
                Title:

              	
                VP
                  of Business Development

              	 	 	 
	
                Authorized
                  Signatory

              	 	 	 

      

    

     

    
      
        
        

      

      
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        CONFIDENTIAL

      

    

    
       

      Appendix
        1

      Pricing
        Schedule

      
 

      [*]

       

      If
        there
        is uncertainty in price between the delivery period and the total quantity
        for
        that period based on the table above, the price assigned to the quantity
        shall
        prevail. For example, the first [*] MT shall be invoiced at $[*]. 

      

      
        
          
          

        

        
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          CONFIDENTIAL

        

      

      

      Appendix
        2

      Product
        Specifications

       

       

      [*]

       

      The
        size
        distribution of the Products shipped shall be as follows:

       

      [*]

      

      Product
        Specifications shall be tested in accordance with the following procedures:
        graphite furnace atomic absorption spectroscopy, inductively coupled plasma-mass
        spectroscopy and Fourier transform infrared absorption
        spectroscopy.

       

      
        
          
          

        

        
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          CONFIDENTIAL

        

      

       

      APPENDIX
        3

      Form
        of
        Letter of Credit

       

      [This
        Letter of Credit may be replaced by a Letter of Credit that is mutually
        acceptable to HOKU and the Issuing Bank.]

       

      IRREVOCABLE
        Standby Letter of Credit

      

      STANDBY
        L/C FOR PAYMENT

      TO:
        HOKU
        SCIENTIFIC, INC., a Delaware corporation (“Beneficiary”)

      1075
        Opakapaka Street

      Kapolei,
        Hawaii 96707 USA

      Attn:
        Mr.
        Dustin Shindo, CEO

      E-mail:
        [*]

      

      DEAR
        SIRS,

      

      We
        refer
        to that certain Supply Agreement dated as of November __, 2007, (hereinafter
        referred to as the “Hoku Supply Agreement”) signed between you and SOLARFUN
        POWER HONG KONG LIMITED, located at No. 666 Linyang Rd., Qidong Jiangsu Province
        226200, People’s Republic of China (hereinafter referred to as
“Solarfun”).

      

      Subject
        to the terms and conditions set forth herein, we, [Bank Name] (“we” or “XXXX”),
        hereby unconditionally and irrevocably issue this Irrevocable Standby Letter
        of
        Credit no.ø ÷
        (the
“Standby Letter of Credit”) in your favor for the account of Solarfun in the
        amount of USD45000000.00 (Forty-Five Million U.S. Dollars) (hereinafter referred
        to as the “Total L/C Amount”).

      

      Capitalized
        terms used herein without definition shall have the respective meanings set
        forth in Annex A.

      

      We
        hereby
        agree as follows:

      

      (a) The
        Beneficiary may draw under this Standby Letter of Credit at any time on or
        prior
        to the then applicable Expiry Date (as such term is hereinafter defined)
        by
        presenting XXXX with an appropriately completed 1st Demand, 2nd Demand or
        3rd
        Demand (each hereinafter referred to as a “Demand”) in the applicable form
        attached hereto. 

      

      (b) XXXX
        will
        not be obliged to make payment under this Standby Letter of Credit if, after
        giving effect to any such payment, the aggregate of all payments made by
        it
        under this Standby Letter of Credit would exceed the Total L/C
        Amount.

      

      Documents
        required:

      

      (a) Each
        of
        the 1st Demand, the 2nd Demand and the 3rd Demand shall be made by letter
        in
        substantially the form attached hereto as Annex B, Annex C and Annex D,
        respectively, and must be received by XXXX, by delivery in person or by
        facsimile transmission, at its address and by the particular department or
        officer (if any) as follows, provided that the original of any such Demand
        shall
        be sent to XXXX by overnight courier for receipt by XXXX within two Business
        Days of the date of any such facsimile transmission:

      

      [Insert
        XXXX address/information]

       

      
        
          
          

        

        
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          CONFIDENTIAL

        

      

      

      All
        payments under this Standby Letter of Credit shall be made in United States
        Dollars, for value, in immediately available funds by wire transfer to such
        account as may be designated by the Beneficiary in the applicable Demand.
        If a
        Demand is presented in compliance with the terms of this Standby Letter of
        Credit to XXXX by 12:00 p.m. New York City time on any Business Day, payment
        will be made on the same Business Day and if such Demand is so presented
        to XXXX
        after 12:00 p.m. New York City time on any Business Day, payment will be
        made by
        12:00 p.m. New York City time on the following Business Day.

      

      This
        Standby Letter of Credit is effective as of the date hereof and shall remain
        in
        effect until the first anniversary of the date hereof; provided that this
        Standby Letter of Credit shall be automatically extended without amendment
        for
        successive one-year periods from the present or any future scheduled expiration
        date hereof, until the earlier of (A) the date when XXXX is notified in writing
        by the Beneficiary that Solarfun is no longer obligated to pay the Main Deposit
        pursuant to the Hoku Supply Agreement, or (B) the date when XXXX has paid
        the
        Total L/C Amount to the Beneficiary (the present or any future expiration
        date
        as aforesaid is referred to herein as the “Expiry Date”).

      

      This
        Standby Letter of Credit will be maintained in the Total L/C Amount until
        the
        Expiry Date; provided, however, that the Total L/C Amount may be reduced
        by the
        amount paid to Beneficiary after any drawing hereunder by the Beneficiary.
        Partial drawings under this Letter of Credit are permitted.

      

      All
        banking charges of this Standby Letter of Credit, including any transfer
        fees,
        advising bank charges and negotiating bank charges, are for the account of
        Solarfun.

      

      Except
        as
        expressly stated herein, this undertaking is not subjected to any contract,
        agreement, condition or qualification. The obligation and liabilities of
        us
        under this Standby Letter of Credit shall be independent.

      

      This
        Standby Letter of Credit sets forth the full terms of our undertaking and
        such
        undertaking shall not in any way be modified, amended or amplified by reference
        to any document or instrument referred to herein or to which this Standby
        Letter
        of Credit relates and shall not be deemed to incorporate by reference any
        such
        document or instrument.

      

      This
        Standby Letter of Credit is governed by the laws of the State of New York.
        The
        courts of the State of New York in the County of New York or of the United
        States of America in the Southern District of New York shall have exclusive
        jurisdiction to settle any dispute arising out of or in connection with this
        Standby Letter of Credit. 

      

      This
        Standby Letter of Credit may be transferred upon presentation to us of a
        signed
        transfer certificate in the form of Annex E hereto accompanied by this Standby
        Letter of Credit, in which you irrevocably transfer to the relevant transferee
        all of your rights hereunder, whereupon we agree to either issue a substitute
        letter of credit to such transferee or endorse such transfer on the reverse
        of
        this Standby Letter of Credit. This Standby Letter of Credit may not otherwise
        be transferred without our consent.

      

      Any
        Demand should reach our counter at least two Business Days before the Expiry
        Date. This Standby Letter of Credit shall automatically become null and void
        upon the Expiry Date, whether it is returned to us or not; provided, however,
        that in the event of an act of God, riot, civil commotion, insurrection,
        war or
        any other cause beyond XXXX’s control that interrupts XXXX’s business and causes
        the place for presentation of this Standby Letter of Credit to be closed
        for
        business on the last day for presentation, the Expiry Date will be automatically
        extended without amendment to a date fifteen calendar days after the place
        for
        presentation reopens for business.

       

      
        
          
          

        

        
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          CONFIDENTIAL

        

      

       

      In
        the
        event that a Demand fails to comply with the terms of this Standby Letter
        of
        Credit, we shall provide the Beneficiary prompt notice of the same stating
        the
        reasons therefor and shall upon your instructions hold any non-conforming
        Demand
        and other documents at your disposal or return the non-conforming Demand
        and
        other documents to the Beneficiary at the address set forth above by delivery
        in
        person or facsimile transmission (with originals thereof sent by overnight
        courier for receipt within two Business Days). Upon being notified that the
        Demand was not effected in compliance with this Standby Letter of Credit,
        the
        Beneficiary may attempt to correct such non-complying Demand in accordance
        with
        this Standby Letter of Credit.

      

      All
        notices to the Beneficiary shall be delivered to its representatives at the
        address set forth above (or to any other representative(s)/address(es) which
        may
        be designated by written notice from the Beneficiary delivered to us from
        time
        to time prior to termination hereof).

      

      Except
        so
        far as otherwise expressly stated, this Standby Letter of Credit is subject
        to
        the Uniform Rules and Customs for Documentary Letters of Credit (Publication
        of
        the International Chamber of Commerce #500, 1993 revision) or as most recently
        published by the International Chamber of Commerce.

      

      
        
          
          

        

        
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          CONFIDENTIAL

        

      

      

      Annex
        A

      Definitions

      

      “Business
        Day” means a day (other than a Saturday or Sunday) on which banks are open for
        general business in the United States.

      

      “1st
        Demand” means a demand for payment in an amount not to exceed $20,000,000
        (Twenty Million US Dollars) in the form of Annex B to this Standby Letter
        of
        Credit.

      

      “2nd
        Demand” means a demand for payment in an amount not to exceed $20,000,000
        (Twenty Million US Dollars) in the form of Annex C to this Standby Letter
        of
        Credit.

      

      “3rd
        Demand” means a demand for payment in an amount not to exceed $5,000,000 (Five
        Million US Dollars) in the form of Annex D to this Standby Letter of
        Credit.

      

      “HOKU”
        means Hoku Scientific, Inc., a Delaware corporation.

      

      “HOKU
        Supply Agreement” is the Supply Agreement which has been entered into by HOKU
        and SOLARFUN on ___________, 2007 and is the underlying agreement of this
        Stand-by Letter of Credit.

      

      “Main
        Deposit” has the meaning set forth in the Hoku Supply Agreement.

      

      “Subsequent
        Transferee” means a purchaser, successor, assignee and/or designee of Hoku's
        rights, title and interest in, to and under this Standby Letter of
        Credit.

      

      “Total
        L/C Amount” means Forty-five Million U.S. Dollars ($45,000,000).

      

      
        
          
          

        

        
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          CONFIDENTIAL

        

      

      

      ANNEX
        B

       

      1st
        Demand

      

      To: [ISSUING
        BANK]

      

      [Date]

      

      Standby
        Letter of Credit No. [__________] (the “Standby Letter of Credit”)

      

      1st
        Demand

      

      Dear
        Sirs,

      

      We
        refer
        to the Standby Letter of Credit. Terms defined in the Standby Letter of Credit
        have the same meaning when used in this Demand.

      

      1. We
        certify that the sum of Twenty Million U.S. Dollars ($20,000,000) is due
        under
        the Hoku Supply Agreement and Solarfun has breached its payment obligations
        and
        failed to pay the Third Deposit on the Third Deposit Date pursuant to Section
        5.3.1 of the Hoku Supply Agreement. We therefore demand payment of the above
        sum.

      

      2. Payment
        should be made to the following account:

      

      Name:

      Account
        Number:

      Bank:

      

      3. The
        date
        of this Demand is not earlier than September 30, 2008, or later than the
        Expiry
        Date.

      

      Yours
        faithfully

      

      (Authorized
        Signatory) 

      For

      [BENEFICIARY]

    

    
      

      
        
          
          

        

        
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          CONFIDENTIAL

        

      

       

      ANNEX
        C

       

      2nd
        Demand

      

      

      To: [ISSUING
        BANK]

      

      [Date]

      

      Standby
        Letter of Credit No. [__________] (the “Standby Letter of Credit”)

      

      2nd
        Demand

      

      Dear
        Sirs,

      

      We
        refer
        to the Standby Letter of Credit. Terms defined in the Standby Letter of Credit
        have the same meaning when used in this Demand.

      

      1. We
        certify that the sum of Twenty Million U.S. Dollars ($20,000,000) is due
        under
        the Hoku Supply Agreement and Solarfun has breached its payment obligations
        and
        failed to pay the Fourth Deposit on the Fourth Deposit Date pursuant to Section
        5.3.2 of the Hoku Supply Agreement. We therefore demand payment of the above
        sum.

      

      2. Payment
        should be made to the following account:

      

      Name:

      Account
        Number:

      Bank:

      

      3. The
        date
        of this Demand is not earlier than March 31, 2009, or later than the Expiry
        Date.

      

      Yours
        faithfully

      

      (Authorized
        Signatory) 

      For

      [BENEFICIARY]

       

      
        
          
          

        

        
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          CONFIDENTIAL

        

      

      

        ANNEX
          D

        

        3rd
          Demand

        

        To: [ISSUING
          BANK]

        

        [Date]

        

        Standby
          Letter of Credit No. [__________] (the “Standby Letter of Credit”)

        

        3rd
          Demand

        

        Dear
          Sirs,

        

        We
          refer
          to the Standby Letter of Credit. Terms defined in the Standby Letter of
          Credit
          have the same meaning when used in this Demand.

        

        1. We
          certify that the sum of Five Million U.S. Dollars ($5,000,000) is due under
          the
          Hoku Supply Agreement and Solarfun has breached its payment obligations
          and
          failed to pay the Fifth Deposit on the Fifth Deposit Date pursuant to Section
          5.3.3 of the Hoku Supply Agreement. We therefore demand payment of the
          above
          sum.

        

        2. Payment
          should be made to the following account:

        

        Name:

        Account
          Number:

        Bank:

        

        3. The
          date
          of this Demand is not earlier than March 31, 2010, or later than the Expiry
          Date.

        

        Yours
          faithfully

        

        (Authorized
          Signatory)     

        For

        [BENEFICIARY]

         

        
          
            
            

          

          
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            CONFIDENTIAL

          

        

        

        ANNEX
          E

        

        Transfer
          of Letter of Credit

        

        [Date]

        

        Delivered
          under [insert Bank name],

        Irrevocable
          Standby Letter of Credit No. [_____],

        dated
          [__________].

        

        [_______________]

        [_______________]
          

        [_______________]

        Attention:
          [_______________]

        

        Ladies
          and Gentlemen:

        

        Reference
          is made to [insert Bank name], Irrevocable Standby Letter of Credit No.
          [_____]
          dated [_______](the “Letter of Credit”), issued by you in favor of us. Any
          capitalized terms used, but not defined, herein shall have its respective
          meaning as set forth in the Letter of Credit.

        

        For
          value
          received, the undersigned, as Beneficiary under the Letter of Credit, hereby
          irrevocably assigns and transfers to [__________] (the “Transferee”) all rights
          of the undersigned to draw under the Letter of Credit in their
          entirety.

        

        By
          this
          transfer, all rights of the undersigned, as Beneficiary under the Letter
          of
          Credit, are transferred to the Transferee, and the Transferee shall have
          the
          sole rights with respect to the Letter of Credit relating to any amendments
          thereof and any notices thereunder. All amendments to the Letter of Credit
          are
          to be consented to by the Transferee without necessity of any consent of
          or
          notice to the undersigned.

        

        Simultaneously
          with the delivery of this notice to you, copies of this notice are being
          transmitted to the Transferee.

        

        The
          Letter of Credit is returned herewith, and we ask you to either issue a
          substitute letter of credit for the benefit of the Transferee or endorse
          the
          transfer on the reverse thereof, and forward it directly to the Transferee
          with
          your customary notice of transfer.

        

        Yours
          faithfully

        

        (Authorized
          Signatory)

        

        For  

        [BENEFICIARY]

        

        ACKNOWLEDGED:

        (Authorized
          Signatory)

        

        For

        [SUCCESSOR
          BENEFICIARY]

        

        
          
            
            

          

          
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            CONFIDENTIAL

          

        

        APPENDIX
          4

        Form
          of
          Escrow Agreement

         

        [This
          Escrow Agreement may be replaced by an Escrow Agreement that is mutually
          acceptable to HOKU and SOLARFUN, acceptance of which shall be evidenced
          by their
          execution thereof.]

         

        This
          ESCROW AGREEMENT (this “Agreement”)
          is
          entered into as of _______________, 2007 (the “Effective
          Date”),
          by
          and among HOKU SCIENTIFIC, INC., a Delaware corporation (hereinafter
“HOKU”),
          SOLARFUN
          POWER HONG KONG LIMITED, a
          company
          registered in Hong Kong (hereinafter
          “SOLARFUN”),
          and
          [_____________________], as Escrow Agent (the “Escrow
          Agent”),
          (collectively, the “Parties”).

         

        BACKGROUND

         

        On
          _______________, 2007, the Parties hereto entered into a Supply Agreement
          (“Supply
          Agreement”),
          pursuant to which HOKU has agreed to sell Product (as defined in the Supply
          Agreement) to SOLARFUN over a fixed period of time. Pursuant to the terms
          of the
          Supply Agreement, SOLARFUN is obligated to make advance deposits to HOKU.
          

         

        The
          execution and delivery of this Agreement by the Parties is required as
          a
          condition to HOKU’s completing the transactions contemplated by the Supply
          Agreement. Each term utilized but not otherwise defined herein shall have
          the
          meaning given to such term in the Supply Agreement.

         

        Escrow
          Agent is not a party to the Supply Agreement. Therefore, Escrow Agent has
          no
          duties or obligations under said Supply Agreement.

         

        TERMS

         

        NOW,
          THEREFORE, in consideration of the mutual covenants contained herein and
          intending to be legally bound, the parties hereto agree as follows:

         

        1. Escrow
          Account.

         

        1.1. Escrow
          Funds.

         

        1.1.1. The
          Escrow Funds, initially in an amount equal to Forty-Five Million U.S. Dollars
          (US$45,000,000) (the “Escrow
          Funds”),
          shall
          be deposited on the date hereof with, and shall be held from and after
          the date
          hereof by, the Escrow Agent in a separate account located in the United
          States
          (the “Escrow
          Account”)
          for
          the benefit of HOKU and SOLARFUN, as provided in this Agreement. The Escrow
          Agent shall not make any payment or distribution from the Escrow Account
          except
          as, and in the manner, expressly provided in this Agreement; provided,
          however,
          that the Escrow Funds shall remain the property of SOLARFUN until such
          time as
          such funds are required under the terms of this Agreement to be delivered
          to
          HOKU, at which time the portion of such Escrow Funds required to be delivered
          to
          HOKU shall become the property of HOKU. 

         

        1.1.2. Concurrently
          with the execution of this Agreement, SOLARFUN has delivered the Escrow
          Funds to
          the Escrow Agent pursuant to Section 5.3.1 of the Supply Agreement.

         

        1.1.3. The
          Escrow Agent shall maintain the Escrow Account reflecting (i) the amount
          of the
          Escrow Funds deposited with Escrow Agent as of the date of this Agreement,
          plus
          (ii) all amounts earned or realized on any cash or Permitted Investments
          (as
          defined below), minus (iii) all amounts distributed pursuant to Section
          1.3 of
          this Agreement.

         

        
          
            
            

          

          
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            CONFIDENTIAL

          

        

         

        1.1.4. Except
          as
          expressly provided in Section 1.1.1 or elsewhere herein, none of the Parties
          shall have any right, title or interest in or possession of the Escrow
          Funds.
          Therefore, (i) none of the Parties shall have the ability to pledge, convey,
          hypothecate or grant a security interest in any portion of the Escrow Funds
          unless and until such funds have been disbursed to such party in accordance
          with
          this Agreement and (ii) until disbursed pursuant to this Agreement, the
          Escrow
          Agent shall be in sole possession of the Escrow Funds and agrees not to
          acknowledge requests that it act as, and nothing contained in this Agreement
          shall be deemed to constitute the Escrow Agent as, custodian for any party
          for
          purposes of perfecting a security interest therein. Accordingly, the Parties
          agree that no person or entity shall have any right to have or to hold
          any of
          the Escrow Funds as collateral for any obligation and shall not be able
          to
          obtain a security interest in any assets (tangible or intangible) contained
          in
          or relating to the Escrow Account.

         

        1.2. Investments.

         

        1.2.1. Any
          cash
          held in the Escrow Account shall, pending disbursement, be invested in
          Permitted
          Investments. For purposes of this Agreement, “Permitted
          Investments”
shall
          mean (i) U.S. Treasuries in accordance with written instructions of HOKU
          and
          SOLARFUN; (ii) U.S. Federal Agencies in accordance with written instructions
          of
          HOKU and SOLARFUN; and (iii) Money Market Funds in accordance with written
          instructions of HOKU and SOLARFUN (a “Joint
          Direction”).
          

         

        1.2.2. The
          Escrow Agent may purchase or sell to itself or any affiliate, as principal
          or
          agent. Such investment, if registerable, shall be registered in the name
          of the
          Escrow Agent for the benefit of the Parties and held by the Escrow Agent.
          The
          Escrow Agent shall be entitled to sell or redeem any such investments as
          necessary to make any payments or distributions required under this Agreement.
          The Escrow Agent may act as purchaser or agent in the making or disposing
          of any
          investments. The Escrow Agent shall have no responsibility or liability
          for any
          diminution of the Funds held in the Escrow Account which may result from
          any
          investment made pursuant to this Agreement, including any losses on any
          investment required to be liquidated prior to maturity in order to make
          a
          payment or distribution required hereunder. 

         

        1.2.3. Such
          investments will be made as soon as possible following the availability
          of such
          funds to the Escrow Agent for investment, taking into consideration the
          regulations and requirements (including cut-off times) of the Federal Reserve
          wire system, the investment provider and the Escrow Agent, and compliance
          with
          standard operating procedures of such parties.

         

        1.2.4. Investments
          designation may be changed through written instructions jointly by HOKU
          and
          SOLARFUN to the Escrow Agent, substantially in the form of a letter specifying
          other Permitted Investments meeting the requirements of the Agreement.
          Such
          change in the designation will become effective upon receipt by the Escrow
          Agent.

         

        1.2.5. As
          and
          when any cash is needed for a payment under this Agreement, the Escrow
          Agent
          shall cause a sufficient amount of the Permitted Investments to be converted
          into cash. Escrow Agent shall convert such Permitted Investments as specified
          by
          HOKU and SOLARFUN or, if HOKU and SOLARFUN shall fail to so specify within
          five
          Business Days of a request therefore, as determined by Escrow Agent in
          its sole
          discretion. 

         

        1.2.6. Any
          and
          all interest, dividends and other income (including capital gains)
          (“Income”)
          earned
          on the Escrow Funds shall not be included as part of the Escrow Funds and
          shall
          remain as the sole property of SOLARFUN. The Escrow Agent shall distribute
          to
          SOLARFUN such income or gains quarterly during the term of this Agreement.
          Any
          losses from the Permitted Investments shall first be offset from Income
          and then
          deducted from the Escrow Funds. All Parties hereto shall file all tax returns
          consistent with such treatment. Escrow Agent shall not be responsible for
          any
          tax reporting hereunder. 

         

        
          
            
            

          

          
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            CONFIDENTIAL

          

        

         

        1.3. Claim
          Procedure.

         

        1.3.1. Forty-Four
          and one-half percent (44.5%) of the Escrow Funds (USD $20,000,000.00) shall
          be
          paid to HOKU from the Escrow Account on September 30, 2008.

         

        1.3.2. Forty-Four
          and one-half percent (44.5%) of the Escrow Funds (USD $20,000,000) shall
          be paid
          to HOKU from the Escrow Account on March 31, 2009. 

         

        1.3.3. Eleven
          percent (11%) of the Escrow Funds (USD $5,000,000.00) shall be paid to
          HOKU from
          the Escrow Account on March 31, 2010.

         

        1.3.4. Distributions
          of the Escrow Funds shall be made in cash to the extent available in the
          Escrow
          Account, including cash derived from the liquidation of Permitted Investments
          in
          accordance with Section 1.2 hereof. 

         

        1.3.5. Joint
          Direction.
          Notwithstanding any other provision of this Agreement, the Escrow Agent
          shall
          promptly deliver all or any part of the Escrow Funds in accordance with
          the
          terms of a Joint Direction, unless a final order of a court of competent
          jurisdiction prohibits the Escrow Agent from complying with the terms thereof.
          Any amount distributed pursuant to this Section 1.3.4 shall be deducted
          from the
          Escrow Account.

         

        1.3.6. Release
          to SOLARFUN.
          The
          Escrow Agent shall release the entire amount of the Escrow Funds then being
          held
          by the Escrow Agent to SOLARFUN within fifteen (15) Business Days after
          SOLARFUN’s delivery to the Escrow Agent of the written confirmation of each of
          HOKU and SOLARFUN that the Escrow Funds are to be released to SOLARFUN
          pursuant
          to Section 8.6 of the Supply Agreement. In the event that HOKU fails to
          provide
          written confirmation of the release of the Escrow Funds to SOLARFUN pursuant
          to
          Section 8.6 of the Supply Agreement, then SOLARFUN may elect (by providing
          written notice to the Escrow Agent and HOKU) to resolve the controversy
          pursuant
          to the dispute resolution provisions of Section 12.2 of the Supply Agreement.
          If
          such a dispute resolution results in a finding that Section 8.6 requires
          the
          Escrow Funds to be released to SOLARFUN, then the Escrow Agent shall immediately
          deliver to SOLARFUN such Escrow Funds. 

         

        1.4. Distributions
          and Termination of Escrow.

         

        1.4.1. This
          Agreement shall terminate on the earlier to occur of (i) the disbursement
          to
          HOKU or SOLARFUN of all Escrow Funds pursuant to Section 1.3 above; or
          (ii) upon
          receipt of a Joint Direction ordering such distribution. The date when
          this
          Agreement terminates shall be the “Termination
          Date”.
          

         

        1.4.2. On
          the
          Termination Date, this Agreement shall terminate and the Escrow Agent shall
          distribute to SOLARFUN the then remaining balance of the Escrow Account.
          

         

        2. The
          Escrow Agent.

         

        2.1. Acceptance
          of Appointment as Escrow Agent.
          The
          Escrow Agent, by signing this Agreement, accepts the appointment as Escrow
          Agent
          and agrees to hold and distribute all Escrow Funds in accordance with the
          terms
          of this Agreement.

         

        
          
            
            

          

          
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            CONFIDENTIAL

          

        

         

        2.2. Liability
          of Agent.
          The
          Escrow Agent shall be obligated to perform only the duties described in
          this
          Agreement. The Escrow Agent may rely on any instrument or signature believed
          by
          it to be genuine and to have been signed or presented by the proper party
          or
          parties duly authorized to do so. The Escrow Agent shall not be liable
          for any
          action taken or omitted by it in good faith and believed by it to be authorized,
          nor for any action taken or omitted by it in accordance with advice of
          counsel,
          and shall not be liable for any mistake of fact or error of judgment or
          for any
          acts or omissions of any kind unless caused by its willful misconduct or
          gross
          negligence. Each party (other than the Escrow Agent) agrees jointly and
          severally, to indemnify the Escrow Agent and to hold it harmless against
          any and
          all liabilities, including reasonable attorneys’ fees, incurred by it as a
          consequence of that party’s action, and the parties (other than the Escrow
          Agent) agree jointly and severally to indemnify the Escrow Agent and to
          hold it
          harmless against any and all liabilities, including reasonable attorneys’ fees,
          incurred by it which are not a consequence of any party’s action, except in
          either case for the Escrow Agent’s own willful misconduct or gross negligence.
          The indemnity contained in this Section 2.2 shall survive the termination
          of
          this Agreement and the resignation or removal of the Escrow Agent.

         

        2.3. Advice
          of Counsel.
          The
          Escrow Agent shall be entitled to consult with counsel of its choice with
          respect to the interpretation of the provisions hereof, and any other legal
          matters relating hereto, and shall be fully protected in taking any action
          or
          omitting to take any action in good faith in accordance with the advice
          of such
          counsel.

         

        2.4. Fees
          of Escrow Agent.
          The
          Escrow Agent shall serve hereunder in consideration of the fees described
          on
          Schedule A attached hereto and the reimbursement of any expenses and other
          charges reasonably incurred by the Escrow Agent in connection with the
          performance of its duties hereunder. Except as provided in Sections 2.2
          and 2.7,
          all such fees, expenses and other charges of the Escrow Agent (the “Escrow
          Agent Fees and Expenses”)
          shall
          be paid by SOLARFUN
          and deducted from the Income prior to distribution of Income to SOLARFUN.
          This
          Section 2.4 shall survive the termination of this Agreement and the resignation
          or removal of the Escrow Agent. Legal fees incurred by the Escrow Agent
          to
          establish this Agreement shall be paid by the Escrow Agent.

         

        2.5. Statements.
          The
          Escrow Agent shall mail to HOKU and SOLARFUN a written accounting of all
          transactions relating to the Escrow Account not less frequently than
          quarterly.

         

        2.6. Successor.
          If the
          Escrow Agent at any time resigns, refuses to act or is removed pursuant
          to a
          Joint Direction, then a successor Escrow Agent shall be jointly selected
          by HOKU
          and SOLARFUN, or if HOKU and SOLARFUN cannot agree, the successor Escrow
          Agent
          shall be selected by SOLARFUN. Any successor Escrow Agent shall be a national
          banking association which has a net worth in excess of $1,000,000,000 and
          has a
          principal place of business located in the United States of
          America.

         

        2.7. Conflict.
          In the
          event of any conflicting or inconsistent claims or demands being made in
          connection with the subject matter of this Agreement, or in the event that
          the
          Escrow Agent is in doubt as to what action it should take hereunder, the
          Escrow
          Agent may, at its option, refuse to comply with any claims or demands on
          it, or
          refuse to take any other action hereunder so long as such disagreement
          continues
          or such doubt exists, and in any such event, the Escrow Agent shall not
          be or
          become liable in any way or to any person for its failure or refusal to
          act, and
          the Escrow Agent shall be entitled to continue to refrain from acting until
          (i)
          the rights of all parties have been fully and finally adjudicated by a
          court of
          competent jurisdiction and the Escrow Agent has received a copy of such
          adjudication, or (ii) all differences shall have been settled and all doubt
          resolved by agreement among all of the parties, and the Escrow Agent shall
          have
          been notified thereof in writing signed by all such parties. In addition
          to the
          foregoing rights, in the event the Escrow Agent has any doubt as to the
          course
          of action it should take under this Agreement, the Escrow Agent is hereby
          authorized to petition any court of competent jurisdiction for instructions
          or
          to interplead the Escrow Funds into such court. The parties agree to the
          jurisdiction of the court selected by the Escrow Agent over their persons
          as
          well as the Escrow Funds, waive personal service of process, and agree
          that
          service of process by certified or registered mail, return receipt requested,
          to
          the addresses provided in or pursuant to Section 3.6 for each party shall
          constitute adequate service. The parties to the Agreement hereby agree,
          jointly
          and severally, to indemnify and hold the Escrow Agent harmless from any
          liability or losses occasioned thereby and to pay any and all of its fees,
          costs, expenses, and counsel fees and expenses incurred in any such action
          and
          agree that, on such petition or interpleader action, the Escrow Agent,
          its
          servants, agents employees or officers will be relieved of further
          liability.

         

        
          
            
            

          

          
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            CONFIDENTIAL

          

        

         

        2.8. Resignation
          of Escrow Agent.
          The
          Escrow Agent may resign for any reason, upon 30 days written notice to
          the HOKU
          and SOLARFUN. Upon expiration of such 30 day notice period, the Escrow
          Agent may
          deliver all cash and other property in its possession, after the payment
          of all
          fees and expenses of the Escrow Agent, under this Agreement to any successor
          Escrow Agent appointed jointly by HOKU and SOLARFUN, or if no successor
          Escrow
          Agent has been so appointed, to any court of competent jurisdiction in
          the State
          of California. SOLARFUN hereby agrees to pay any and all of the Escrow
          Agent’s
          fees, costs, expenses, and counsel fees and expenses incurred in any such
          petition or action required to be filed by Escrow Agent. Upon either such
          delivery, the Escrow Agent shall be released from any and all liability
          under
          this Agreement. A termination under this Section shall in no way affect
          reimbursement of expenses, indemnity and fees. The Escrow Agent shall have
          the
          right to deduct from the Escrow Funds to be transferred to any successor
          agent
          any unpaid fees and expenses.

         

        3. Miscellaneous.

         

        3.1. Successors;
          Heirs and Assigns.
          The
          provisions of this Agreement shall be binding upon and shall inure to the
          benefit of the parties hereto and their respective successors, heirs and
          assigns; provided, however, that, except for assignments by HOKU of its
          rights
          under this Agreement to the Collateral Agent (as defined in the Supply
          Agreement) as collateral security for the Secured Obligations (as defined
          in the
          Supply Agreement) as contemplated by the Intercreditor Agreement (as defined
          in
          the Supply Agreement) and the Consent (as defined in the Supply Agreement),
          no
          party may assign, delegate or otherwise transfer any of its rights or
          obligations under this Agreement without the consent of the other parties
          hereto. Notwithstanding the foregoing, an assignment of this Agreement
          by any of
          the parties hereto in connection with a merger, acquisition, or sale of
          all or
          substantially all of the assets or capital stock of such party shall not
          require
          the consent of any other party to this Agreement. 

         

        3.2. Survival.
          All
          agreements, representations and warranties made in this Agreement or in
          any
          document delivered pursuant to this Agreement shall survive the execution
          and
          delivery of this Agreement and the delivery of any such documents.

         

        3.3. Governing
          Law.
          This
          Agreement shall be governed by and construed in accordance with the laws
          of the
          State of California, without giving effect to principles of conflicts of
          laws.

         

        3.4. Counterparts;
          Headings.
          This
          Agreement may be executed in one or more counterparts, each of which shall
          be
          deemed an original, but such counterparts shall together constitute but
          one and
          the same agreement. The Article and Section headings in this Agreement
          are
          inserted for convenience of reference only and shall not constitute a part
          of
          this Agreement.

         

        3.5. Entire
          Agreement.
          This
          Agreement and the Supply Agreement and the schedules, exhibits and documents
          referred to herein and therein contain the entire understanding of the
          parties
          with respect to the subject matter hereof and supersede all prior negotiations,
          agreements and undertakings among
          the
          parties with respect to such subject matter. There are no restrictions,
          promises, warranties, covenants or undertakings other than those expressly
          set
          forth herein and therein.

         

        
          
            
            

          

          
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            CONFIDENTIAL

          

        

        
           

          3.6. Notices.
            All
            notices, requests, demands and other communications hereunder shall be
            in
            writing, and shall be deemed to have been duly given if delivered by
            overnight
            courier, sent by mail to the respective parties or personally delivered
            addressed as follows:

           

          

          If
            to
            SOLARFUN: 

          

          SOLARFUN
            POWER HONG KONG LIMITED 

          In
            care
            of: JIANGSU LINYANG SOLARFUN CO., LTD.

          No.
            666
            Linyang Rd.,

          Qidong
            Jiansu Province 226200

          People’s
            Republic of China

          Tel:
            

          Fax:
            

          Attn:
            

          E-Mail:
            

          

          If
            to
            HOKU: 

          

          HOKU
            SCIENTIFIC, INC.

          1075
            Opakapaka Street

          Kapolei,
            HI 96707

          Attn:
            Mr.
            Dustin Shindo, CEO

          E-mail:
            [*]

          Facsimile:
            +1 (808) 682-7807

          

          If
            to
            Escrow Agent:

          

          [__________________]

          [___________________]

          [___________________]

          Attn.:
            

          E-mail:
            

          Facsimile:
            

          

          or
            to
            such other address as such party may designate by written notice to the
            other
            parties hereto. Any such notices, requests, demands or other communications
            shall be deemed to have been duly given when received if delivered personally
            or, if mailed, on the date five (5) days after the date so deposited
            in the
            mails, postage prepaid, return receipt requested or on the day following
            the day
            sent if sent by prepaid overnight delivery service. Notices, requests
            and other
            communications hereunder may be delivered by electronic facsimile transmission
            (fax) if confirmation by sender is made within three (3) Business Days
            by mail
            or personal delivery. All periods of notice shall be measured from the
            date of
            deemed delivery thereof.

           

          3.7. Amendment
            or Modification of this Agreement.
            This
            Agreement may be amended or modified at any time with the written agreement
            of
            Escrow Agent, HOKU and SOLARFUN.

           

          3.8. Severability.
            Any
            provision of this Agreement which is prohibited or unenforceable in any
            jurisdiction shall, as to such jurisdiction, be ineffective to the extent
            of
            such prohibition or unenforceability without invalidating the remaining
            provisions of this Agreement or affecting the validity or enforceability
            of such
            provision in any other jurisdiction.

           

          [This
            space intentionally left blank.]

          

          
            
              
              

            

            
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              CONFIDENTIAL

            

          

          IN
            WITNESS WHEREOF, the parties hereto have caused this Agreement to be
            executed on
            the day and year first written above.

          

            
              	
                      SOLARFUN:
                        

                    	 	
                      HOKU:

                    
	 	 	 	 	 
	
                      SOLARFUN
                        POWER HONG KONG LIMITED

                    	 	
                      HOKU
                        SCIENTIFIC, INC.

                    
	 	 	 	 	 
	
                      By:

                    	 	 	By:	
                       

                    
	 	 	 	 	 
	
                      Name:

                    	 	 	Name:	
                       

                    
	 	 	 	 	 
	
                      Title:

                    	 	 	Title:	
                       

                    
	 	 	 	 	 
	
                      Authorized
                        Signatory

                    	 	
                      Authorized
                        Signatory

                    
	 	 	 	 	 
	 	 	 	 	 
	
                      ESCROW
                        AGENT:

                    	 	 	 
	 	 	 	 	 
	
                      [__________________]

                    	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	
                       

                    	 	 	 
	Name:	 	 	 	 
	 	 	 	 	 
	Title:	 	 	 	 
	
                       

                    	 	 	 
	
                      Authorized
                        Signatory

                    	 	 	 

            

          

           

          
            
              
              

            

            
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              CONFIDENTIAL

            

          

          Schedule
            A

          Escrow
            Fee Schedule

           

          

          [Schedule
            sent separately]

           

          
            
              
              

            

            
              Page
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              CONFIDENTIAL

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