Document:

Exhibit 10.8

CONFIDENTIAL TREATMENT REQUESTED

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COMMISSION

LONG-TERM
POLYSILICON SUPPLY AGREEMENT

 

SUNPOWER CORPORATION, a
Delaware corporation with its principal place of business at 3939 North First
Street, San Jose, California 95134, USA (“SunPower”) and NorSun AS, a Norwegian
company with its principal place of business at Bankplassen 1, 0151 OSLO Norway
(“NorSun”) hereby enter into this Long-Term Polysilicon Supply Agreement (the “Agreement”)
effective as of August 9, 2007 (the “Effective Date”).

WHEREAS, SunPower
procures polycrystalline silicon from third parties for its manufacture of
solar cells and solar modules, including but not limited to pursuant to the
Long-Term Supply Agreement II entered into between SunPower and Hemlock
Semiconductor Corporation (“Hemlock”) on July 16, 2007 (the “Hemlock Agreement”);

WHEREAS, NorSun is active
in the field of manufacture and supply of monocrystalline silicon ingots (“Ingots”)
and wafers (“Wafers”) utilizing polycrystalline silicon; and

WHEREAS, on the terms and
conditions set forth herein, SunPower wishes to procure polycrystalline silicon
from one or more third parties and resell the same to NorSun in order to permit
NorSun to manufacture and supply Ingots and Wafers to SunPower and, to the
extent permitted hereunder, to other third parties pursuant to that certain
Long-Term Ingot and Wafer Supply Agreement entered into concurrently herewith (“Ingot/Wafer
Supply Agreement”).

NOW, THEREFORE, the
parties agree as follows:

1.                            Definitions.

“Annual Quantity” shall mean
annual volumes as set forth on Exhibit B.

“Fiscal Year” shall mean the period beginning on
January 1st and ending on December 31st of the same year.

“Polysilicon”
shall mean the polycrystalline silicon manufactured by third parties and sold
to SunPower.  The specifications for the
Polysilicon are set forth in Exhibit A, as such specifications may be amended from
time to time by mutual written agreement of the parties.  Unless otherwise consented to in writing by
SunPower, NorSun shall utilize the Polysilicon for its manufacturing purposes
exclusively to produce Ingots and Wafers for SunPower pursuant to the
Ingot/Wafer Agreement, and shall not re-sell the Polysilicon, or become a
re-seller or distributor of the Polysilicon. 
Notwithstanding the foregoing, NorSun may without such consent re-sell
or distribute the Polysilicon to wholly-owned or majority owned subsidiaries
(hereinafter together with NorSun referred to as the

 

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“NorSun
Group”) which are responsible for manufacturing Ingots or Wafers for SunPower.

“Wafer/Ingot
Agreement” shall mean the Long-Term Ingot and Wafer Supply Agreement of August
9, 2007, executed by and between SunPower and NorSun.

2.                            Advance
Payment.

2.1                       NorSun shall
make an advance payment for the Polysilicon to be purchased under this
Agreement for the period from 2010 through 2019. The advance payment shall be
in the amount of USD$*** (the “Advance Payment”).  *** (USD$***) of the Advance Payment shall
become immediately due as of the Effective Date, and *** (USD$***) of the
Advance Payment will be paid on or before July 1, 2008.  Notwithstanding anything herein to the
contrary, NorSun expressly acknowledges its understanding and agrees that, once
this Agreement is executed, there are no circumstances or occurrences that will
require SunPower to refund to NorSun all or any portion of the Advance Payment
other than a Repayment Event (as defined in Section 2.2).

2.2                       Commencing
January 1, 2010 and continuing through December 31, 2019, the Advance Payment
shall be applied as a credit against the price of the Polysilicon that NorSun
is required to purchase and SunPower is required to supply (in each case to the
extent provided in Sections 3.1 and 3.2 below) under this Agreement at the
times and in the amounts shown under the column “SunPower Poly Volume (MT)”on Exhibit B. Over this nine-year period NorSun shall receive a
$***/kg credit against each invoice until the remaining portion of the Advance
Payment is reduced to zero.  The Advance
Payment not credited against the price of Polysilicon shall be repaid from
SunPower to NorSun only in the following events (each a “Repayment Event”):

a)                          The termination of this Agreement by
NorSun in accordance with Section 10.2(a) as a result of SunPower’s material
breach of this Agreement;

b)                         With respect to any Fiscal Year, SunPower
supplies to NorSun less than five percent of the Annual Quantity of Polysilicon
required for such Fiscal Year and NorSun terminates this Agreement pursuant to
Section 10.2(c);

c)                          SunPower’s insolvency or bankruptcy;

d)                         The termination of this Agreement by
SunPower in accordance with Section 10.3(c) based upon SunPower’s termination
of the Wafer/Ingot Agreement pursuant to Section 21.4(a) or (b) thereof (this
clause (d) shall not limit  NorSun’s
right to repayment of the Advance Payment under any of the other Repayment
Events set forth in Section 2.2(a), (b), (c) or (e)); or

 

 

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e)                            The termination of this Agreement by
SunPower in accordance with Section 10.3(d).

If a Repayment Event has
occurred, NorSun shall submit to SunPower a written notice explaining the
Repayment Event and identifying the date on which the Repayment Event occurred.
The repayment of the applicable portion of the Advance Payment is due ninety
(90) days after the Repayment Event.  Any
payment after the due date shall be charged with a penalty interest of 10% per
annum.

2.3                       SunPower shall
provide to NorSun security covering the full Advance Payment set forth in
section 2.1 which remains outstanding at any time (the “Security”).  SunPower shall, provide such Security by one
or more of the following methods:

(i)                                     a bank guarantee, a letter
of credit from a reputable international bank or financial institution or a
collateralized cash reserve account or a combination thereof, covering no less
than 50% of the Advanced Payment which remains outstanding at any time;
provided that SunPower may elect to have up to 50% of the amount of the
Security provided under this clause (i) to take the form of a letter of credit,
and

(ii)                                  the collateralization of an
adequate amount of SunPower’s assets covering the value of the Advanced Payment
at any time outstanding and not secured under the prior clause (i).  SunPower shall be entitled to substitute the
form of security permitted under this clause (ii) for the form of security
permitted under the prior clause (i) from time to time, subject to the
commercially reasonable acceptance of NorSun.

The
Security shall be effective at all times during which the Advance Payment is
outstanding and be valid until SunPower’s potential obligation to repay the
Advance Payment has ceased. The documented cost of providing all Security under
this Section 2.3 shall be borne by NorSun. SunPower’s assets that are provided
as collateral to satisfy SunPower’s Security obligations under clause (ii) of
this Section 2.3 shall include only assets owned solely by SunPower which,
subject to the laws and regulations of the country in which the assets are
located, will provide satisfactory legal protection of first priority for the
full amount of the Advanced Payment to be secured in accordance with (ii)
above. Such assets shall be valued at book value as reported in SunPower’s
audited financial statements.. The  book
value of all assets collateralized pursuant to clause (ii) of this Section 2.3
shall exceed the amount of Security that SunPower is required to provide, less
an amount equal to the value of Security provided by SunPower in accordance
with clause (i) of this Section 2.3.

 

 

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3.                            Obligations
to supply and purchase Polysilicon, forecasts and delivery schedule

3.1                   For the period from the Effective Date
through 31 December 2019, the parties’ obligations with respect to the supply
and purchase of Polysilicon shall be as follows:

a)              For the period from the Effective Date through 31
December 2009, SunPower shall be obligated to supply and NorSun shall be
obligated to purchase such Annual Quantities of Polysilicon as set forth on Exhibit B; provided, however, that NorSun’s
obligation to purchase the stated Annual Quantity for 2007 shall be on a best
efforts basis;

b)             For the period from 1 January 2010 and until 31
December 2019, SunPower shall be obligated to supply and NorSun shall be obligated to purchase
such Annual Quantities of Polysilicon as set forth on Exhibit B;
provided however, that SunPower’s obligation to supply such Annual Quantities
shall apply if and only to the extent SunPower receives an adequate supply of
Polysilicon from its suppliers to fulfill such obligation.

Notwithstanding
the foregoing (but subject to NorSun’s right to terminate this Agreement
pursuant to Section 10.2(c) in the event that the Repayment Event described in
Section 2.2(b) or (c) has occurred), SunPower shall be entitled to roll forward
Polysilicon quantities into the next Fiscal Year, to the extent its Polysilicon
suppliers rolls forward corresponding quantities into such Fiscal Years.

3.2                   This Agreement is a “take or pay
agreement” such that, to the extent described in Section 3.1(a) and (b) above,
NorSun is absolutely and irrevocably required to accept and pay for the
contracted volume set forth in the third column of Exhibit B
per year indicated over the Term of this Agreement at the prices in Exhibit B, subject to the adjustments described set forth in
this Agreement.  In the event that NorSun
fails to order and take delivery of its contracted volume in a given year,
SunPower shall invoice NorSun for the differential at full contract price and
NorSun will pay the same within 30 days of invoice date.  NorSun specifically acknowledges and accepts
that it will be liable for the full purchase price of volume differential
between the quantity ordered and the contracted volume.  SunPower is similarly required to provide the
agreed quantities of Polysilicon under this Agreement to the extent required in
Section 3.1(a) and (b) above.

 

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3.3                            The
parties agree that, in order to satisfy NorSun’s supply obligations under the
Ingot/Wafer Supply Agreement, in addition to the Polysilicon it shall purchase
from SunPower under this Agreement in the quantities set forth in the third
column of Exhibit B, NorSun shall be required to
procure from other third parties additional polysilicon in the quantities set
forth in the fourth column of Exhibit B under
the heading “NorSun Poly Volume (MT), provided, however, that for the years
2008 through 2009 NorSun’s obligation to procure additional Polysilicon apply
only to the extent and for the quantum of Polysilicon that are made available
to NorSun (using its best efforts) from Polysilicon manufacturers in which
NorSun has an equity interest. The parties further acknowledge that any
shortfall in deliveries of Polysilicon from SunPower may cause a corresponding
reduction of NorSun’s deliveries of Wafers and Ingots under the Wafer/Ingot
Agreement.

4.                                 Price and quantity

4.1                            The price and quantity
of Polysilicon to be purchased by NorSun from SunPower for the specific years
is as set forth in the first three columns of Exhibit B.
From the Effective Date through December 31, 2009, unit prices for shipment of
Polysilicon are FCA Wacker Germany or FCA Hemlock, Michigan USA (Incoterms
2000); commencing January 1, 2010, unit prices for shipment of Polysilicon are
FCA Hemlock, Michigan USA (Incoterms 2000). 
Subject only to the price adjustments set forth in Section 4.2, prices
listed in Exhibit B are fixed for the Term of
this Agreement.

4.2                            SunPower
shall adjust the prices on Polysilicon equal to the adjustment in prices to be
paid by SunPower to third party Polysilicon manufacturers providing SunPower
with Polysilicon resold to NorSun in accordance with this Agreement. Any
adjustment shall take force as from the same date as the price adjustment on
the supply from such third party manufacturers.

5                                    Purchase Orders

5.1                            NorSun shall no later than 30 days prior to
each Fiscal Year issue purchase orders (“Purchase Orders”) for a total of the
Annual Quantity for such Fiscal Year.

5.2                            Each month SunPower shall issue a release
identifying the monthly quantities of Polysilicon to be delivered.  Such release shall be consistent with the
delivery schedule of Polysilicon received by SunPower from its suppliers and
the Annual Quantities set forth in Exhibit B.

5.3                            The Purchase Orders shall, unless otherwise
agreed in writing between the parties, shall at a minimum contain the following
information: (i) reference to this Agreement, (ii) identification of the
Polysilicon by proper name, price, and Annual Quantity, (iii) delivery
instruction and delivery place, and (iv) issue date.  The Purchase Orders shall be sent by ordinary
mail, and a copy shall be forwarded

 

 

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to
SunPower on the issue date either by e-mail or telefax.

5.4                            Without limiting NorSun’s obligations under
Section 3.2, a Purchase Order shall be binding for NorSun only after it is
received and its conditions have been confirmed by SunPower.  A Purchase Order shall be sent by e-mail, or
alternatively telefax, and regular mail. If no objection to the Purchase Order
has been raised by SunPower within 15 days after NorSun’s issue date, then such
Purchase Order shall be deemed accepted by SunPower.

5.5                            In the event of a discrepancy between the terms
and conditions of this Agreement and the individual Purchase Order, the terms
and conditions of this Agreement shall prevail unless the parties in writing
agree otherwise.

6                                     Payment.

Payment terms are net 30 days from the date
of the invoice.  Finance charges of ***%
per month (***% per annum) may be assessed on payment past due from the payment
due date to the date payment is received. 
Failure to pay invoices when due or finance charges when assessed may
result in delayed or cancelled shipments. 
No unauthorized deductions from invoices are permitted.

7                                     Title and
Risk of Loss.

From the Effective Date through December 31, 2009,
NorSun shall purchase the Polysilicon from SunPower FCA Wacker Germany or FCA
Hemlock, Michigan USA (Incoterms 2000); commencing January 1, 2010, NorSun
shall purchase the Polysilicon from SunPower FCA Hemlock, Michigan USA
(Incoterms 2000).  Title and risk of loss
with respect to all Polysilicon shall pass to NorSun when the goods have been
delivered to the carrier at the foregoing locations.

8                                     Term.

The term of this Agreement shall be from the Effective Date through
December 31, 2019 (the “Term”).  The
Agreement may not be terminated during the Term, except as expressly set forth
in Section 9.

9                                     Manufacturing Facility.

NorSun
acknowledges that  pursuant to the
Hemlock Agreement Hemlock will be expanding its manufacturing facility (the “Expanded
Manufacturing Facility”) in order to produce the Polysilicon to be supplied
under this Agreement.  The estimated
completion date for 50% of the Expanded Manufacturing Facility capacity is
January 1, 2010, with estimated capacity of 75% completed on January 1, 2011,
and 100% of estimated capacity completed on January 1, 2012.  NorSun acknowledges the possibility of delays
or failures in Hemlock completing the Expanded Manufacturing Facility and
expressly agrees that notwithstanding anything in this Agreement to the
contrary, SunPower SHALL HAVE NO LIABILITY TO NORSUN FOR ANY

 

 

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SUCH DELAY OR FAILURE, including for any shortfalls in
delivery of Polysilicon resulting therefrom.

 

10                               Termination.

10.1                      NorSun understands and
acknowledges that SunPower is making substantial payments to expand its
supplier’s manufacturing capabilities in contemplation of this Agreement.
Further, SunPower understands and acknowledges that NorSun is making
substantial investments expanding its manufacturing capacities to comply with
its obligations under this Agreement. Thus, the parties acknowledge that NorSun
is obligated to purchase, and SunPower is obligated to supply, the contracted
volumes over the Term of this Agreement, in each case to the extent described
in Sections 3.1 and 3.2.  Accordingly,
the basis and circumstances under which the parties can terminate this
Agreement prior to the expiration of the Term of this Agreement is expressly
limited to the terms of this Section 10.

10.2                      Termination
by NorSun.  NorSun may, at
its option, terminate this Agreement only upon one of the following events:

(a)                                  Upon the event of a material
breach by SunPower of its obligations under this Agreement (other than a
material breach triggered by a Force Majeure Event, which shall be solely
addressed in Section 18), provided that (i) NorSun submits a written notice of
such breach to SunPower, and (ii) SunPower fails to cure such breach within
ninety (90) days of receipt of the written notice of breach.  If SunPower rectifies any such breach within
such period, then SunPower’s breach shall be deemed cured and NorSun shall not
be entitled to terminate this Agreement;

(b)                                 In the event of a
termination of the Wafer/Ingot Agreement (other than termination by SunPower
pursuant to Sections 21.4(a) or (c) of the Wafer/Ingot Agreement), and SunPower
is unable to secure Hemlock’s consent to permit NorSun to manufacture Wafers or
Ingots using the Polysilicon sold hereunder for the benefit of third parties;
or

(c)                                  Upon a Repayment Event (as
defined in Section 2.2).

10.3                      Termination
by SunPower. SunPower may, at its option, terminate this
Agreement upon one of the following events:

 

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a)                                      Upon the event
of a material breach by NorSun of its obligations under this Agreement (other
than a material breach triggered by a Force Majeure Event, which shall be
solely addressed in Section 18), provided that (i) SunPower submits a written
notice of such breach to NorSun, and (ii) NorSun fails to cure such breach
within ninety (90) days of receipt of the written notice of breach.  If NorSun rectifies any such breach within
such period, then NorSun’s breach shall be deemed cured and SunPower shall not
be entitled to terminate this Agreement;

b)                                     in the event
that NorSun, due to reasons not deemed as Force Majeure in accordance with
Section 18,  resolves to cease its Ingot or
Wafer manufacturing for SunPower’s benefit permanently or for a period exceeding
ninety (90) days;

c)                                      in the event of
a termination of the Wafer/Ingot Agreement (other than termination by NorSun
pursuant to Section 21.3 thereof); or

d)                                     SunPower’s
third party suppliers fail to supply Polysilicon to SunPower for any reason or
any agreements providing for such supply terminate for any reason.

10.4                          Sections 1, 6
(to the extent of any due and unpaid invoices), 7, 10 through  23, and 25 through 27 shall survive any
termination of this Agreement.

11            Confidentiality.

The parties acknowledge and
agree that the terms of this Agreement and certain information exchanged
between them pertaining to this Agreement, including information regarding
research, technology, product developments, marketing plans or conditions,
products, business strategies, and the like, constitute “Confidential
Information” of the party disclosing the information.  The purpose of the exchange of the
Confidential Information” is to allow the parties to meet their obligations and
responsibilities under this Agreement. 
During the term of this Agreement, and for a period of 15 years
following its termination or expiration, except as required by applicable law,
regulation or rules of any securities exchange, the party receiving any
Confidential Information, and its employees, attorneys, financial advisors,
officers, directors and shareholders who shall receive such Confidential
Information shall not, except with the prior written consent of the disclosing
party, use, divulge, disclose or communicate, to any person, firm, corporation
or entity, in any manner whatsoever, the terms of this Agreement or any
Confidential Information of the disclosing party; provided, however, that each
party may use, divulge, disclose or communicate the terms of this Agreement or
Confidential Information of the disclosing party to wholly-owned or majority
owned subsidiaries if such subsidiaries undertake to keep such information
strictly confidential in accordance with this Section 11 and each subsidiary
has a “need to know”.  The parties will
be liable for any breach of this Section 11 by any of their respective
wholly-owned or majority owned subsidiaries. 
Each party further agrees to use the same degree of care to avoid
publication or dissemination of the Confidential Information disclosed to such
party under this

 

 

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Agreement as it employs with
respect to its own Confidential Information, but at all times shall use at
least reasonable care to protect against disclosure.  Confidential Information does not and shall
not include information that:

11.1                                       was already
known to the receiving party at the time such information is disclosed by the
other party;

11.2                                       was or became
publicly known through no wrongful act of the receiving party;

11.3                                       was rightfully
received from a third party without restriction;

11.4                                       was
independently developed by the receiving party;

11.5                                       was approved
for release by written authorization of the party disclosing such information
under this Agreement; or

11.6                                       was required by
legal or financial reporting purposes to be disclosed; provided, however, that
the party being required to disclose shall, if circumstances permit, provide
advanced notice to the other party.

12            Pass-Through
Warranty.

12.1                          NorSun’s
warranty claims against SunPower shall be limited in scope to the corresponding
warranty claims brought by SunPower against the third party providers of the
Polysilicon, provided that SunPower complies with the provisions of this
Section 12 below.

12.2                          SunPower shall,
upon NorSun’s reasonable and documented request, pursue any warranty claims
against the third party Polysilicon providers. SunPower shall pursue such
claims in accordance with NorSun’s instructions and at NorSun’s cost. SunPower
may, at its option, obtain the consent from the applicable third party
Polysilicon provider that the claim may be transferred to NorSun and pursued
directly by NorSun against such third party; provided, however, that SunPower
shall as part of any such transfer disclose to NorSun the terms of the
transferred warranty.

12.3                          SunPower shall
identify to NorSun the third party manufacturer and, if there are several third
party manufacturers, identify the origin of the Polysilicon at each delivery.

13                Warranty
Disclaimer.

THE
WARRANTIES, IF ANY, DESCRIBED ABOVE ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, SAID WARRANTIES BEING
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14                Limited
Remedy.

SunPower
and/or the third party warranty providers (as applicable) shall be given
reasonable and prompt opportunity to examine any claim of defect by
NorSun.  NorSun agrees that its sole and
exclusive remedy against such parties shall be limited to either, at SunPower’s
and/or the third party’s sole discretion, (i) the revision, repair or
replacement of non-conforming or defective Polysilicon or (ii) payment
not to exceed the purchase price of the specific Polysilicon for which damages
are claimed.  This exclusive remedy shall
not be deemed to have failed of its essential purpose so long as SunPower
and/or the third party (as applicable) is willing to revise, repair or replace
the defective Polysilicon, or make the payment described in this Section 14.

15                Damages
Limitation.

EXCEPT
FOR FAILURE TO DELIVER POLYSILICON TO WHICH THE ADVANCE PAYMENTS RELATE,
SUNPOWER SHALL NOT BE LIABLE FOR ANY LOSS, DAMAGE, OR INJURY RESULTING FROM
DELAY IN DELIVERY OF THE POLYSILICON, OR FOR ANY FAILURE TO PERFORM WHICH IS
DUE TO A FORCE MAJEURE EVENT (AS DEFINED IN SECTION 18).  EXCEPT FOR
EITHER PARTY’S BREACH OF SECTION 11, THE MAXIMUM AGGREGATE LIABILITY OVER THE
TERM OF THIS AGREEMENT, IF ANY, FOR ALL DAMAGES, INCLUDING WITHOUT LIMITATION
CONTRACT DAMAGES AND DAMAGES FOR INJURIES TO PERSONS OR PROPERTY, WHETHER
ARISING FROM A PARTY’S BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE,
STRICT LIABILITY, OR OTHER TORT, IS LIMITED TO, IN THE CASE OF SUNPOWER, THE
THEN REMAINING NET BALANCE OF THE ADVANCED PAYMENT AS SET FORTH IN SECTION 2
AND, IN THE CASE OF NORSUN, THE AGGREGATE PRICE FOR THE POLYSILICON COMMITTED
TO BE PURCHASED BY NORSUN DURING THE TERM AS SET FORTH IN SECTION 2.1.  IN
NO EVENT SHALL SUNPOWER BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL,
CONSEQUENTIAL, OR SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST REVENUES
AND PROFITS, EVEN IF EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.  THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF
ESSENTIAL PURPOSE OF THE LIMITED REMEDY SET FORTH ABOVE.

16                Patents.

In
no case shall SunPower be liable to defend or pay any award of damages assessed
against NorSun in any suit or cause of action alleging that the use of the
Polysilicon infringes any patent or other intellectual property right of any
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17                Taxes.

Any
tax or other government charge now or in the future levied upon the production,
sale, use or shipment of the Polysilicon may, at SunPower’s option, be added to
the purchase price.

18                Force
Majeure.

Neither
of the parties shall be liable for delays or failures in performance of their
obligations under this Agreement arising out of or resulting from causes beyond
its control.  Such causes include, but
are not limited to, acts of God, acts of the other party, acts of the
government or the public enemy, fire, flood, epidemics, quarantine
restrictions, strikes, freight embargoes, severe weather, or default or failure
of suppliers  (including any failure of
SunPower’s suppliers to deliver Polysilicon relevant to this Agreement,
provided, however, that such non-delivery is beyond SunPower’s reasonable
control). In the event of any such delay of SunPower’s performance, NorSun
shall honor its obligations hereunder as soon as SunPower is able to perform.

19                Choice
of Law.

The
Agreement is made in, and shall be governed and controlled in all respects by
the laws of the State of Michigan, USA (specifically disclaiming the U.N.
Convention Contracts for the International Sale of Goods) and all disputes,
including interpretation, enforceability, validity, and construction, shall be
determined under the law of the State of Michigan, without regard to any
conflict of law provisions.

20                Choice
of Forum.

The parties submit to the
exclusive jurisdiction and venue of the U.S. District Court for the Eastern
District of Michigan for all disputes arising, directly or indirectly, under
this Agreement.

21                Waiver.

Either
party’s failure to exercise a right or remedy or such party’s acceptance of a
partial or delinquent payment or delivery shall not operate as a waiver of any
of such party’s rights or the other party’s obligations under the Agreement and
shall not constitute a waiver of such party’s right to declare an immediate or
a subsequent default.

22                Severability.

If
one or more of the provisions of this Agreement shall be found, by a court with
jurisdiction, to be illegal, invalid or unenforceable, it shall not affect the
legality, validity or enforceability of any of the remaining provisions of this
Agreement.  The parties agree to attempt
to substitute for any illegal, invalid or unenforceable

 

 

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provision
a legal, valid or enforceable provision that achieves to the greatest extent
possible the economic objectives of the illegal, invalid or unenforceable
provision.

23                Integration.

The Agreement constitutes the entire understanding between the parties
with respect to the subject matter of the Agreement and supersedes any prior
discussions, negotiations, agreements, memoranda of understanding and the
like.  Modifications to the Agreement may
be made only in writing and signed by each party.

24                Ingot-Wafer
Supply Agreement.

The parties acknowledge that this Agreement is entered in reliance upon
the execution and continuing effectiveness of the Ingot/Wafer Supply
Agreement.  Accordingly, to the extent
any modifications are made to the provisions of the Ingot/Wafer Supply
Agreement, the parties will in good faith consider appropriate modifications to
the provisions of this Agreement.

25                Assignment.

No
assignment of the Agreement or of any right or obligation under the Agreement
shall be made by NorSun without the prior written consent of SunPower, said
consent shall not be unreasonably withheld. 
In the event of a proper assignment, the Agreement shall be binding upon
and inure to the benefit of the 
assigning party’s successors and assigns.

26                Attorney
Fees and Costs.

The
parties shall bear their own expenses incurred in connection with the
negotiation and execution of this Agreement.

27                Dollars.

All
references to monetary amounts shall be in U.S. Dollars.

28                Agreement
Preparation.

This
Agreement shall be considered for all purposes as prepared through the joint
efforts of the parties and shall not be construed against one party or the
other as a result of the manner in which this Agreement was negotiated,
prepared, drafted or executed.

 

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  NORSUN AS:  

  	
  SUNPOWER CORPORATION  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ GRETE SONSTEBY 

  	
   

  	
  By:

  	
  /s/ THOMAS WERNER

  	
   

  
	
  Print Name: Grete Sonsteby
  

  	
  Print Name: Thomas
  Werner 

  
	
  Title: Chairman of the
  Board 

  	
  Title: Chief Executive
  Officer 

  
	
  Date: August 9, 2007

  	
  Date: August 9, 2007

  
						

 

 

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

 

13

 

EXHIBIT
A

POLYSILICON
SPECIFICATIONS

HSC
PRODUCT SPECIFICATIONS

***

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

14

 

 

EXHIBIT
B

 

PRICES, PAYMENT, and DELIVERY VOLUME

 

	
  Year

  	
   

  	
  Price*

  	
   

  	
  SunPower

  Supplied Poly

  Volume

  (Metric Tons,

  or “MT”)

  	
   

  	
  NorSun Poly

  Volume (MT)

  from Third

  Parties

  	
   

  	
  Total Poly

  Volume**

  	
   

  	
  Comment

  	
   

  
	
  2007

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2010

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  Beginning of Credit for Advance
  Payment

  	
   

  
	
  2011

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2012

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2013

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2014

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2015

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2016

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2017

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2018

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  2019

  	
   

  	
  $

  	
  ***/kg

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
   

  	
   

  

 

*                                         The prices listed
apply to the SunPower Poly Volume column and are gross (i.e. before credit of
the Advance Payment).  NorSun shall
receive a $***/kg credit per
shipment against each invoice until the remaining portion of the Advance
Payment is reduced to zero.

 

**                                  Total Polysilicon
volumes to be converted into SunPower Ingots or Wafers. Conversion weights to
be agreed to in Ingot/Wafer Supply Agreement.

 

 

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

 

15Exhibit
10.9

 

FIRST AMENDMENT TO
CREDIT AGREEMENT

 

THIS AMENDMENT TO CREDIT
AGREEMENT (this “Amendment”) is entered into as of August 20, 2007, by and
between SUNPOWER CORPORATION, a Delaware corporation (“Borrower”), and WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

WHEREAS, Borrower is
currently indebted to Bank pursuant to the terms and conditions of that certain
Credit Agreement between Borrower and Bank dated as of July 13, 2007, as
amended from time to time (“Credit Agreement”).

 

WHEREAS, Bank and
Borrower have agreed to certain changes in the terms and conditions set forth
in the Credit Agreement and have agreed to amend the Credit Agreement to
reflect said changes.

 

NOW, THEREFORE, for
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Credit Agreement shall be
amended as follows:

 

1.             Section 1.1 is hereby deleted in its entirety, and
the following substituted therefor:

 

“SECTION
1.1.      LINE OF CREDIT.

 

(a)           Line of Credit. Subject to the
terms and conditions of this Agreement, Bank hereby agrees to make advances to
Borrower from time to time up to and including July 31, 2008, not to exceed at
any time the aggregate principal amount of Fifty Million Dollars
($50,000,000.00) (“Line of Credit”), the proceeds of which shall be used for
working capital and other corporate requirements. Borrower’s obligation to
repay advances under the Line of Credit shall be evidenced by a promissory note
dated as of July 13, 2007 (“Line of Credit Note”), all terms of which are
incorporated herein by this reference.

 

(b)           Letter of Credit Subfeature. As
a subfeature under the Line of Credit, Bank agrees from time to time during the
term thereof to issue or cause an affiliate to issue standby letters of credit
for the account of Borrower (each, a “Subfeature Letter of Credit” and
collectively, “ Subfeature Letters of Credit”); provided however, that the
aggregate undrawn amount of all outstanding Subfeature Letters of Credit shall
not at any time exceed Forty Million Dollars ($40,000,000.00). The form and
substance of each Subfeature Letter of Credit shall be subject to approval by
Bank, in its sole discretion. Each Subfeature Letter of Credit shall be issued
for an initial term not to exceed three hundred sixty-five (365) days, as
designated by Borrower; provided however, that if Borrower requests that Bank
issue a Subfeature Letter of Credit hereunder with a final expiration
subsequent to the maturity date of the Line of Credit, such Subfeature Letter
of Credit shall provide

 

1

 

for automatic renewals of
the expiration date thereof (up to the final expiration date thereof, to be
agreed upon by Bank and Borrower) subject to Bank’s right to prevent any such
renewal from occurring by sending notice to that effect to the beneficiary not
less than 60 days prior to the initial (or any extended) expiration date (the “Auto-Renewal
Provision”). The undrawn amount of all Subfeature Letters of Credit shall be
reserved under the Line of Credit and shall not be available for borrowings
thereunder. Each Subfeature Letter of Credit shall be subject to the additional
terms and conditions of the Standby Letter of Credit Agreement previously
executed by Borrower and of applications and any related documents required by
Bank in connection with the issuance thereof. Each drawing paid under a Subfeature
Letter of Credit shall be deemed an advance under the Line of Credit and shall
be repaid by Borrower in accordance with the terms and conditions of this
Agreement applicable to such advances; provided however, that if advances under
the Line of Credit are not available, for any reason, at the time any drawing
is paid, then Borrower shall immediately pay to Bank the full amount drawn,
together with interest thereon from the date such drawing is paid to the date
such amount is fully repaid by Borrower, at the rate of interest applicable to
advances under the Line of Credit. In such event Borrower agrees that Bank, in
its sole discretion, may debit any account maintained by Borrower with Bank for
the amount of any such drawing. In the event that any Subfeature Letters of
Credit remain outstanding on the maturity date of the Line of Credit (and the
Line of Credit has not been renewed or extended), Borrower shall on demand by
Bank deliver to Bank cash or cash equivalents acceptable to Bank, to be
maintained in an account at Bank, in the aggregate amount then available to be
drawn under such outstanding Subfeature Letter of Credit (plus the amount drawn
and not yet reimbursed under Subfeature Letters of Credit) in which Bank is
granted a possessory security interest of first priority.

 

(c)           Borrowing and Repayment. Borrower
may from time to time during the term of the Line of Credit borrow, partially
or wholly repay its outstanding borrowings, and reborrow, subject to all of the
limitations, terms and conditions contained herein or in the Line of Credit
Note; provided however, that the total outstanding borrowings under the Line of
Credit shall not at any time exceed the maximum principal amount available thereunder,
as set forth above.”

 

2.             Section 1.2 is hereby deleted in its entirety, and
the following substituted therefor:

 

“SECTION
1.2.      LETTER OF CREDIT LINE.

 

(a)           Letter of Credit Line. Subject
to the terms and conditions of this Agreement, Bank hereby agrees to establish
a letter of credit line (“Letter of Credit Line”) under which Bank shall

 

2

 

issue or cause an
affiliate to issue commercial and standby letters of credit for the account of
Borrower to finance working capital and other corporate requirements (each, a “Letter
of Credit” and collectively, “Letters of Credit”) from time to time up to and
including July 31, 2012; provided however, that the aggregate of all undrawn
amounts, and all amounts drawn and unreimbursed, under any Letters of Credit
issued under the Letter of Credit Line shall not at any time exceed the
principal amount of Fifty Million Dollars ($50,000,000.00). The form and
substance of each Letter of Credit shall be subject to approval by Bank, in its
sole discretion. Each Letter of Credit shall be issued for an initial term not
to exceed 365 days, as designated by Borrower; provided however, that no Letter
of Credit shall have a final expiration date subsequent to the maturity date of
the Letter of Credit Line, and if any Letter of Credit is issued for a term in
excess of one year, it shall contain the Auto-Renewal Provision. Each Letter of
Credit shall be subject to the additional terms of the Commercial and Standby
Letter of Credit Agreements, as applicable, to be dated as of the date of their
respective execution, applications thereunder, and any related documents
required by Bank in connection with the issuance thereof (each, a “Letter of
Credit Agreement”).

 

(b)           Repayment of Drafts. Each
drawing paid under any Letter of Credit shall be repaid by Borrower in
accordance with the provisions of the applicable “Letter of Credit Agreement.”

 

3.                                       Section
1.3(c) is hereby amended to read as follows:

 

“(c)         Letter of Credit Fees. Borrower
shall pay to Bank (i) fees upon the issuance of each Letter of Credit
equal to fifteen-hundredths percent (0.15%) per annum (computed on the basis of
a 360-day year, actual days elapsed) of the face amount thereof, (ii) fees upon
the issuance of each Subfeature Letter of Credit equal to one percent (1.00%)
per annum (computed on the basis of a 360-day year, actual days elapsed) of the
face amount thereof, and (iii) fees upon the payment or negotiation of
each drawing under any Letter of Credit or Subfeature Letter of Credit and fees
upon the occurrence of any other activity with respect to any Letter of Credit
or Subfeature Letter of Credit (including without limitation, the transfer,
amendment or cancellation of any Letter of Credit or Subfeature Letter of
Credit) determined in accordance with Bank’s standard fees and charges then in
effect for such activity. The standard fees and charges in effect as of the
date hereof are set forth in Schedule 1.3 hereto.”

 

4.                                       Except
as specifically provided herein, all terms and conditions of the Credit
Agreement remain in full force and effect, without waiver or modification. All
terms defined in the Credit Agreement shall have the same meaning when used in
this Amendment. This Amendment and the Credit Agreement shall be read together,
as one document.

 

5.                                       Borrower
hereby remakes all representations and warranties contained in the Credit
Agreement and reaffirms all covenants set forth therein. Borrower further certifies
that as of the date of this Amendment there exists no Event of Default as
defined in the Credit

 

3

 

Agreement, nor any condition, act or event which with the giving of
notice or the passage of time or both would constitute any such Event of
Default.

 

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

 

	
   

  	
  WELLS FARGO BANK,

  
	
  SUNPOWER CORPORATION

  	
    NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
  By:

  	
  /s/ EMMANUEL T.
  HERNANDEZ

  	
   

  	
  By:

  	
  /s/ MATTHEW A.
  SERVATIUS

  	
   

  
	
   

  	
  Emmanuel T. Hernandez

  	
   

  	
  Matthew A. Servatius

  
	
   

  	
  Chief Financial Officer

  	
   

  	
  Vice President

  
						

 

4

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