Document:

ex10-5.htm

Exhibit 10.5

 

[*] = 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.

 

Amendment No. 5 to

Second Amended & Restated Supply Agreement

 

This Amendment No. 5 to Second Amended & Restated Supply Agreement (this “Amendment”) is entered into as of the last date set forth on the signature page hereto, by and between Hoku Materials, Inc., a Delaware corporation (“HOKU”), and Solarfun Power Hong Kong Limited, a company registered in Hong Kong (“SOLARFUN”).  HOKU and SOLARFUN are each a “Party” and together the “Parties” to this Amendment.

 

Recitals

 

Whereas, HOKU and SOLARFUN are Parties to that certain Second Amended & Restated Supply Agreement dated as of May 13, 2008, (the “Supply Agreement”) as amended by that certain Amendment No. 1 to Second Amended & Restated Supply Agreement dated as of October 22, 2008, that certain Amendment No. 2 to Second Amended & Restated Supply Agreement dated as of March 26, 2009, that certain Amendment No. 3 to Second Amended & Restated Supply Agreement dated as of November 15, 2009, and that certain Amendment No. 4 to Second Amended & Restated Supply Agreement dated March 1, 2010 (collectively, the “Agreement”);

 

Whereas, SOLARFUN has paid $49 million to HOKU as a prepayment for future Product shipments pursuant to the Agreement;

 

Whereas, the Parties desire to make certain amendments to the Agreement as hereinafter set forth; and

 

Whereas, each Party derives a benefit from the amendments set forth herein.

 

Now therefore, in consideration of the foregoing, and for other good and valuable consideration, the receipt of which is hereby acknowledged by the Parties, the Parties agree to amend the Agreement as set forth below.

 

Agreement

 

 

1.           Definitions.  All capitalized terms not otherwise defined are defined in the Agreement.

 

2.           Amendment of Section 3.3.  The reference to September 30, 2010 in Section 3.3 of the Agreement (as amended by Amendment No. 4) is hereby changed to March 1, 2011

 

3.           Amendment of Section 4.3.  The reference to July 1, 2010 in Section 4.3 of the Agreement (as amended by Amendment No. 4) is hereby changed to January 1, 2011.

 

4.           Amendment of Appendix 1.  Appendix 1 to the Agreement (Pricing Schedule) is hereby amended and restated as follows:

 

	  	
Yr 1

	
Yr 2

	
Yr 3

	
Yr 4

	
Yr 5

	
Yr 6

	
Yr 7

	
Yr 8

	
Yr 9

	
Yr 10

	

Yr 11

	
Total

	
Tons per Year

	
[*]

	
[*]

	
[*]

	
[*]

	
[*]

	
[*]

	
[*]

	
[*]

	
[*]

	
[*]

	
[*]

	
7,330

	
Price per kg

	
$[*]

	
$[*]

	
$[*]

	
$[*]

	
$[*]

	
$[*]

	
$[*]

	
$[*]

	
$[*]

	
$[*]

	
$[*]

	  

 

*** CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

 

  

  

  

 

Quantity to be shipped in 2011 shall be [*] MT each month from March to June, [*] MT each month from July to September and [*] MT each month from October to December 2011.

Pricing for Yr [*] – Yr [*] shall be as determined according to the quarterly business reviews per Section 11 of the Agreement (as amended by Amendment No. 4).

In the event that SOLARFUN fails to make any payment when due pursuant to Section 5.2.3 (as amended by Amendment No. 4), in addition to the rights and remedies that HOKU may pursue pursuant to the Agreement, the pricing reduction as indicated in the amended and restated Appendix 1of this section of the Amendment shall not be effective, and the pricing on Appendix 1 of the Agreement shall continue to be in effect.

 

5.           Amendment of Section 9.1.  The reference to December 31, 2010 in Section 9.1 of the Agreement (as amended by Amendment No. 4) is hereby changed to June 30, 2011.

 

6.           Amendment of Section 9.2.5.  The reference to December 31, 2010 in Section 9.2.5 of the Agreement (as amended by Amendment No. 4) is hereby changed to June 30, 2011.

 

7.           Integration & Survival.  Except for the amendments specifically set forth above, the terms of the Agreement shall continue in full force and effect mutatis mutandis.  This Amendment and the Agreement constitute the entire agreement between the Parties concerning the subject matter hereof.

 

8.           Miscellaneous.  Except where the terms of this Amendment conflict with the Agreement, the “General Provisions” set forth in Section 13 of the Agreement, including, without limitation, provisions concerning the choice of law and means for dispute resolution between HOKU and SOLARFUN, shall apply to this Amendment.  In the event of any conflict between the terms of this Amendment and the Agreement, the terms of this Amendment shall control.

 

IN WITNESS WHEREOF, the Parties have executed this Amendment No. 5 to Second Amended & Restated Supply Agreement as of the last date set forth below.

 

	SOLARFUN:	 	HOKU:	 
	 	 	 	 	 	 
	SOLARFUN POWER HONG KONG LIMITED	 	HOKU MATERIALS, INC.	 
	 	 	 	 	 	 
	By: 	
/s/ Ping Peter Xie 

	 	 	
/s/ Scott B. Paul     

	 
	Name: 	
Ping Peter Xie

	 	Name:	
Scott B. Paul

	 
	Title:  	
President & CEO

	 	Title:	
CEO

	 
	Date:   	November 23, 2010	 	Date:	November 22, 2010	 

 

*** CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSIONex10-7.htm

Exhibit 10.7

 

NOTE: Portions of this Exhibit are the subject of a Confidential Treatment Request by the Registrant to the Securities and Exchange Commission (the “Commission”).  Such portions have been redacted and are marked with a “[***]” in the place of the redacted language.  The redacted information has been filed separately with the Commission.

 

Change Order No. 5

 

December 6, 2010

Stone & Webster, Inc.

1430 Enclave Parkway

Houston, TX  77077

 

Pursuant to Article 8.2 of the original Engineering and Procurement Agreement dated August 7, 2007 (the “Agreement”), by and between Hoku Materials, Inc. (“Owner”) and Stone & Webster, Inc. (“Contractor”), as amended by Change Order No. 1, Change Order No. 2, and Change Order No. 3, and Change Order No. 4 (collectively, the “Prior Change Orders”), Owner and Contractor hereby agree to the following Change of the Hoku poly-silicon plant project (the “Project”) and the Agreement, which are effective as of the last date set forth on the signature page hereto:

 

	
(1)

	
Capitalized terms not otherwise defined in this Change Order are defined in the Agreement or the Prior Change Orders, as applicable.

 

	
(2)

	
Notwithstanding any prior notices from Owner to suspend Work, Owner on July 21, 2010 directed Contractor to resume all Work identified in the Exhibit A to the Agreement (“Contractor’s Scope Of Work) for all the Functional Areas, with the exception of Work directly related to the TCS Functional Areas, which Work shall remain suspended until further notice.

 

	
(3)

	
This Change Order 5 includes the Scope of Work and estimated costs identified in Contractor’s Change Notices thru CN 178. The Scope of Work as defined by Exhibit A of the Agreement and modified by previous Change Orders is hereby revised in accordance with Exhibit C to this Change Order 5.

 

	
(4)

	
Contractor agrees to allocate adequate resources to the Project and provide additional engineers/personnel as may be required, or as may be reasonably directed by Hoku to mitigate any impact that engineering activities may have on the overall Project schedule.

 

	
(5)

	
The date for completion of the design of “Partial Commercial Operation” (“PCO”) as described in Exhibit A to the amended Agreement (as further modified by Exhibit C to this Change Order 5) is now scheduled to be accomplished on or before the week of December 26, 2010. In connection therewith, both Contractor and Owner agree to the target delivery schedule shown in Exhibit A hereto and payment plan for “PCO” as illustrated in Exhibit B hereto.

 

	
(6)

	
The date for completion of the design of “Added Scope” (“AS”) as described in Exhibit A and the last page of Exhibit C hereto is now scheduled to be accomplished on or before the week of January 16, 2011 (except 26 Process Diagrams for Unit 65 FCO which are due by January 30, 2011). In connection therewith, both Contractor and Owner agree to the target delivery schedule shown in Exhibit A hereto and payment plan for “AS” as illustrated in Exhibit B.

 

	
(7)

	
Contractor will provide weekly billings based on the payment schedule contained in Exhibit B to this Change Order 5. The weekly billings will be paid by Owner via wire transfer within five (5) days after the issue of the invoice by Contractor. In connection therewith, once Contractor has issued a weekly invoice, it shall provide written notice to Owner of the engineering drawings and/or deliverables associated with such invoice. Owner agrees to review the invoice and the notice within forty-eight (48) hours of receipt of the invoice and shall advise Contractor within the same forty  eight (48) hour period of any concerns or errors in such invoice that could delay payment. Contractor shall hold the drawings associated with the scheduled payment until actual payment is received by Contractor. Then, within one business day after receipt of the aforementioned payment, Contractor shall deliver to Owner the drawings/deliverables that correspond to the payment.

 

  

  

  

 

	
(8)

	
It is understood that the payment schedule contained in Exhibit B hereto will not necessarily correspond to the actual man-hours expended to complete the “PCO” and “AS” Work. Accordingly, within thirty (30) days after the last scheduled payment listed on Exhibit B hereto, Contractor shall submit to Owner an invoice to reconcile the scheduled payment amounts against the actual amounts due Contractor based on the actual man hours expended and the rates contained in the amended Agreement. In the event that payments made by Owner under the Exhibit B payment schedule exceed the amounts owed to Contractor based on the actual man hours expended and the rates contained in the amended Agreement, then Contractor shall reimburse/payback to Owner the amount of any overpayment within fifteen (15) days of such reconciliation. Likewise, in the event that payments made by Owner under the Exhibit B payment schedule are less than amounts owed to Contractor based on the actual man hours expended and the rates contained in the amended Agreement, then Owner shall make an additional payment to Contractor for the amount of any under payment within fifteen (15) days of such reconciliation. Any Work performed by the Contractor for Owner after the last scheduled payment contained in Exhibit B hereto shall be paid in accordance with the terms of the amended Agreement.

 

	
(9)

	
The parties agree that the estimated cost to Owner for the remaining Contractor’s Work to achieve “PCO” should be approximately the budget defined in Exhibit B and the cost to Owner to complete the “AS” Work should be approximately the total budget defined in Exhibit B; provided, however, that nothing herein shall (a) fix the Contract amount or guarantee that “PCO” and/or “AS” will be obtained for the above referenced budgets or (b) in any way alter or diminish the provisions of the Agreement or Prior Change Orders.

 

	
(10)

	
Any additional requests from Owner to Contractor in the future will be managed by a separate change order agreement.

 

	
(11)

	
Except for the Modifications specifically set forth above, this Change Order No. 5 does not amend the Agreement or Prior Change Orders, and all such terms and conditions shall remain in full force and effect.

 

[Signature Page Follows]

 

  

  

  

 

Please sign below to acknowledge your agreement with this Change Order No. 5.

 

Sincerely yours,

 

	 	
HOKU MATERIALS, INC.

	 	 
	 	 	 	 
	By: 	/s/ (Mike) Tao Zhang	 	 
	Name: 	
(Mike) Tao Zhang 

	 	 
	Title: 	President, Hoku Materials  	 	 
	 	 	 	 
	 	
Acknowledged and agreed as of December  06, 2010.

	 	 
	 	 	 	 
	 	 
STONE & WEBSTER, INC.

	 	 
	 	 	 	 
	By:	/s/ Jose Montalvo	 	 
	Name:	Jose Montalvo 	 	 
	Title:	Sr. VP Petrochemicals	 	 

 

  

  

  

 

EXHIBIT A

 

[***]

 

*** CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

 

  

  

  

 

EXHIBIT B

 

[***]

 

*** CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

 

  

  

  

 

EXHIBIT C

 

[***]

 

*** CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

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