EQUIPMENT PURCHASE & SALE AGREEMENT
Exhibit
10.68
[*]
= 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.
EQUIPMENT
PURCHASE & SALE AGREEMENT
This
Equipment Purchase & Sale Agreement (this “Agreement”),
entered into as of March 4, 2008 (the “Effective
Date”),
by
and between SAFT POWER SYSTEMS USA INC., a Delaware corporation, having its
principal place of business at 000 Xxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxx 00000
(hereinafter “SELLER”),
and
HOKU MATERIALS, INC., a corporation organized and existing under the laws of
the
State of Delaware, having its principal place of business at Xxx Xxxx Xxx,
Xxxxxxxxx, Xxxxx 00000 (hereinafter “BUYER”).
SELLER
and BUYER are each a “Party”
and
together, the “Parties.”
Recitals
WHEREAS,
SELLER is a manufacturer and provider of equipment and related services for
the
polycrystalline silicon industry;
WHEREAS,
BUYER is building a manufacturing facility for the production of polycrystalline
silicon in Idaho, USA; and
WHEREAS,
subject to the terms and conditions set forth in this Agreement, BUYER intends
to purchase from SELLER and SELLER intends to sell to BUYER, the equipment
and
other Deliverables (as defined below) for use in BUYER’s polycrystalline silicon
production plant;
NOW,
THEREFORE, pursuant to the terms and conditions and the mutual consideration
set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged hereby, BUYER and SELLER agree as
follows:
Agreement
1. Definitions.
The
following capitalized terms used in this Agreement shall have the meanings
set
forth below:
1.1. “Certificate
of Commissioning”
shall mean the certificate, in substantially the form of Appendix
8attached
to this Agreement, to be signed by an officer of BUYER and an officer of SELLER
after the successful completion of the Commissioning Test.
1.2. “Commissioning
Test”
shall mean the test to be completed by SELLER in the presence of BUYER
at the Work Site that follows the procedures described in Appendix
6
to
confirm that all Equipment meets the Technical Specifications.
1.3. “Deliverables”
shall mean, collectively, all Equipment, Technical Documentation and
Technical Services to be provided by SELLER to BUYER pursuant to this
Agreement.
1.4. “Equipment”
shall mean the following items of equipment as more fully described
in
Appendix
1:
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SELLER
Initials & Date XX
Xxxxx 0, 0000
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XXXXX
Initials & Date DS
March 19, 2008
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Item
1: [*]
Thyroboxes VSC for reactors as described in Appendix
1
(each, a
“Reactor”),
priced at [*] per each Reactor (the “Reactor
Unit Price”),
for
an aggregate purchase price of [*] for all of the [*] Reactors.
Item
2:
[*] earth fault detection systems as described on Appendix 1 (each, an
“Earth
Fault Detection System”)
priced
at [*] per each Earth Fault Detection System, for an aggregate purchase price
of
[*] for all of the [*] Earth Fault Detection Systems.
Item
3:
[*] year spare parts, which shall include those parts listed on Appendix
1 (the
“Spare Parts”). The aggregate purchase price for the Spare Parts is
[*].
Item
4:
Seaworthy Packing of all Equipment, for an aggregate purchase price of
[*].
1.5. “Factory
Acceptance Certificate”
shall
mean the certificate, in substantially the form of Appendix
6
attached
to this Agreement, to be signed by an officer of BUYER and an officer of
SELLER
after the successful completion of the Factory Acceptance Test.
1.6. “Factory
Acceptance Test”
shall
mean the test to be completed by SELLER in the presence of BUYER at the SELLER
Facility that follows the procedures described in Appendix
4
to
confirm that all Equipment meets the Technical Specifications.
1.7. “Port
of Shipment”
shall
mean Hamburg, Germany.
1.8. “Port
of Unloading”
shall
mean a port to be designated by BUYER in the USA.
1.9. “SELLER
Facility”
shall
mean the facility where SELLER is manufacturing the Equipment, located at
Belecke, Germany.
1.10. “Technical
Documentation”
shall
mean the documentation (in English language) that includes the technical
data,
specifications, drawings, inspection, erection, commissioning, performance
testing, operating and maintenance of Equipment, as specified in Appendix
3.
1.11. “Technical
Services”
shall
have the meaning set forth in Section 5.5
below.
1.12. “Technical
Specifications”
means
the operating and other specifications of the Equipment set forth on
Appendices
1 and 2
attached
hereto.
1.13. “Warranty
Period”
shall
mean the period beginning on the Effective Date and ending on the earlier
of (A)
twelve (12) months after the Certificate of Commissioning has been signed
by
BUYER and SELLER, and (B) eighteen (18) months after the applicable Shipment
Date.
1.14. “Work
Site”
shall
mean the BUYER’s polysilicon plant located in Pocatello, Idaho USA.
2. Purchase
& Sale Commitment
2.1. Subject
to the terms and conditions set forth herein, BUYER agrees to buy from SELLER,
and SELLER agrees to sell to BUYER, the Deliverables.
3. Payment
Terms
3.1. BUYER
shall pay to SELLER an aggregate of Thirteen Million One Hundred Eighteen
Thousand Six Hundred Forty and 00/100 U.S. Dollars ($13,118,640.00) as the
total
payment for all Deliverables under this Agreement, excluding SELLER’s
Commissioning expenses that will be paid separately
pursuant to Section 5.5
below,
(the “Agreement
Price”)
in
accordance with the following schedule:
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SELLER
Initials & Date XX
Xxxxx 0, 0000
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XXXXX
Initials & Date DS
March 19, 2008
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3.1.1. Within
Thirty (30) days after invoicing from Accepted Purchase Order Date, BUYER shall
pay to SELLER ten percent (10%) of the Agreement Price (the “Initial
Payment”).
3.1.2. Within
Thirty (30) days after invoicing on the two-month anniversary of the Effective
Date, and provided that this Agreement has not been terminated or cancelled
by
BUYER pursuant to Section 3.2
below,
or terminated by BUYER or SELLER pursuant to Section 9
below,
and
subject to receipt by BUYER of a progress report from SELLER describing in
reasonable detail the progress that is being made in the construction and
delivery of the Equipment, and provided that SELLER certifies to BUYER that
it
is on-track to meet the delivery schedule set forth in Section 4.1
below,
BUYER shall pay to SELLER ten percent (10%) of the Agreement Price as a progress
payment (the “Second Payment”).
3.1.3. Within
Thirty (30) days after invoicing on the three-month anniversary of the Effective
Date, and provided that this Agreement has not been terminated or cancelled
by
BUYER pursuant to Section 3.2
below,
or terminated by BUYER or SELLER pursuant to Section 9
below,
and
subject to receipt by BUYER of a progress report from SELLER describing in
reasonable detail the progress that is being made in the construction of the
Equipment, and provided that SELLER certifies to BUYER that it is on-track
to
meet the delivery schedule set forth in Section 4.1
below,
BUYER shall pay to SELLER fifteen percent (15%) of the Agreement Price as a
second progress payment (the “Third
Payment”).
3.1.4. Within
the earlier of (A) thirty (30) days after BUYER and SELLER sign the Factory
Acceptance Certificate for each article of Equipment, or (B) thirty (30) days
after the date notified to the BUYER for the Factory Acceptance Test for each
article of Equipment, and receipt by BUYER of a Factory Acceptance Certificate
that is signed by SELLER, if the BUYER does not come to SELLER’s premises on the
notified date for the Factory Acceptance Test, and upon receipt of an invoice
from SELLER, and provided that this Agreement has not been terminated by BUYER
or SELLER pursuant to Section 9
below,
BUYER
shall pay to SELLER Sixty percent (60%) of the Agreement Price, minus any
liquidated damages that are owing to BUYER for late delivery pursuant to Section
4.4
(the
“FAT
Payment”).
BUYER
acknowledges and agrees that SELLER shall have no obligation to ship the
Deliverables until BUYER pays in full the amount in the previous sentence.
3.1.5. On
or
before the earlier of (A) twelve (12) months after the successful completion
of
the Commissioning Test (as defined below) for the Equipment, or (B) eighteen
(18) months after shipment of the Equipment, BUYER shall pay to SELLER five
percent (5%) of the Agreement Price, Net 30 Days.
3.2. Notwithstanding
anything to the contrary in this Agreement, BUYER may terminate this Agreement
at any time prior to making the Second
Payment, and shall thereupon have no liability or further obligation to SELLER
pursuant to this Agreement.
In case
of termination by the BUYER under this Article 3.2, SELLER shall be entitled
to
retain the Initial Payment as liquidated damages in full and final settlement
of
all claims with the BUYER.
3.3. The
Agreement Price includes all excise, sales, use, import, export or other
similar
taxes (collectively “Taxes”)
levied
by any government authority.
3.4. SELLER
shall provide BUYER with five (5) copies of each invoice for the applicable
payment pursuant to Section 3.1
above.
Shipping costs and expenses, Taxes, customs and duties, if any, will be
identified as separate items on SELLER’s invoices. All invoices shall be sent to
BUYER’s address specified
in Section 13.4
below,
unless an alternate address is provided. All payments shall be made in U.S.
Dollars.
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SELLER
Initials & Date XX
Xxxxx 0, 0000
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Initials & Date DS
March 19, 2008
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3.5. Buyer
shall have the option during the term of this Agreement to purchase insurance
for the shipping of the equipment, in the amount of One Hundred Thirty One
Thousand Six Hunded U.S. Dollars ($131,600.00), which shall be paid in pro
rata
increments upon each shipment of the Equipment to the Work Site.
3.6. All
payments to SELLER shall be effected by wire transfer to SELLER’s bank pursuant
to the following account information:
Bank
of
America
000
Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx, Xxxxx
ACH
Routing # 000000000
Bank
Account # 004798681520
4. Shipment;
Documentation & Packing.
4.1. Timing
of Shipment.
Provided that BUYER has made all payments required to have been made to SELLER
pursuant to Section 3.1
above,
the Equipment shall be delivered Ex Works SELLER’s factory, according to the
following schedule, with each scheduled shipping date being referred to herein
as a “Shipment
Date”.
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Shipment
Date
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Units
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September
1, 2008
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1-2
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October
1, 2008
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3-7
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November
1, 2008
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8-12
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December
1, 2008
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13-17
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January
1, 2009
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18-22
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February
1, 2009
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23-28
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Notwithstanding
the foregoing scheduled Shipment Dates, SELLER shall work with BUYER to expedite
delivery and accelerate each Shipment Date to the extent possible.
4.2. Shipping
Documentation.
Prior
to shipment, SELLER shall remit to BUYER the following
documentation:
4.2.1. At
least
fourteen (14) days prior to shipment of the Equipment, SELLER shall notify
BUYER
by Fax of the following information:
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(a)
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Total
volume
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(b)
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Total
gross weight of packages
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(c)
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Total
number of packages
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(d)
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Port
of Shipment
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(e)
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Port
of Unloading
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(f)
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Name,
weight, IMCO No. (as per International Maritime Dangerous Goods
Code) of
the dangerous and/or inflammable
goods
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4.2.2. At
least
fourteen (14) days prior to shipment of the Equipment, SELLER shall send
to
BUYER via international courier at least six (6) copies of the
following:
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SELLER
Initials & Date XX
Xxxxx 0, 0000
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XXXXX
Initials & Date DS
March 19, 2008
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(a)
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Detailed
packing list describing with specificity all Equipment included
with the
applicable shipment, including Equipment specification, type, quantity,
unit/total price, unit weight, unit/total volume, the overall dimensions
of each package (length x width x height), and the total number
of
packages
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(b)
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Description
of any dangerous and/or inflammable goods indicating names, properties,
special protective measures and handling methods in case of
accident
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(c)
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Description
of the special precautions for the Equipment that requires special
storage
and transportation.
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4.3. Risk
of Loss.
Title
and risk of loss shall pass to BUYER Ex Works SELLER’s factory.
4.4. Penalties
for Late Delivery; Liquidated Damages.
SELLER
shall pay to BUYER liquidated damages (the “Liquidated
Damages”)
if the
Equipment has not been delivered Ex Works SELLER’s factory on or before the
Shipment Date. The Liquidated Damages shall be calculated as
follows:
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a)
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If
the Equipment is delivered within two weeks after the Shipment
Date, the
liquidated damages shall be one percent (1.0%) of the Agreement
Price per
week beyond the Shipment Date.
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b)
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If
the Equipment is delivered after the second week, then, in addition
to the
Liquidated Damages pursuant to sub-paragraph (a) above, the Liquidated
Damages shall be two percent (2%) of the Agreement Price for each
week
after the second week from the Shipment
Date.
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c)
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Less
than one week shall not be counted as a complete week for calculation
of
the Liquidated Damages.
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d)
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The
total amount of the Liquidated Damages shall not exceed ten percent
(10%)
of the Agreement Price.
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Notwithstanding
anything to the contrary in this Agreement: (A) the payment of Liquidated
Damages shall not release SELLER from its obligation to deliver the
Deliverables; and (B) any delay beyond sixty (60) days from the Shipment
Date
shall constitute a material breach of this Agreement by SELLER.
4.5. Packing
and Marking
4.5.1. Unless
otherwise specified in the Agreement, the Equipment shall be packed by SELLER
in
new wooden cases, and all packing expenses shall be for SELLER’s account.
Necessary measures shall be taken to protect the Equipment from damages caused
by moisture, rain, rust, corrosion, and, shock and to ensure the Equipment
will
withstand handling, loading and unloading as well as long distance ocean
and
inland transportation for the safe arrival of the Equipment at the Work
Site.
4.5.2. The
loose
accessories in all packages and bundles shall be labeled by SELLER indicating
the name of the Equipment to which such accessories are related, the name
of the
accessories and their position number, and any accessory number marked on
assembly drawings. Spare parts and tools shall be marked with the word “Spare
parts or tools” in addition to the above mentioned particulars.
4.5.3. SELLER
shall, on four (4) adjacent sides of each crate, conspicuously xxxx the
following information in English with indelible paint:
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(a)
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Shipping
xxxx
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(b)
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Destination
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(c)
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Consignee
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(d)
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Name
of Equipment and item No.
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| (e) |
Case/bale
No.
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SELLER
Initials & Date XX
Xxxxx 0, 0000
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XXXXX
Initials & Date DS
March 19, 2008
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(f)
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Gross/net
weight
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(g)
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Measurement
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4.5.4. Should
the Equipment weigh more than 2 metric tons, the weight, gravity and hoisting
positions shall be marked in English with international trade transportation
marks on the four adjacent sides on each case so as to facilitate unloading
and
handling. In accordance with different requirements in loading, unloading
and
shipping, the package shall be conspicuously marked with “Handle with care,
right side up, keep dry” in English and with appropriate international trade
marks.
4.5.5. The
following documents shall be enclosed in each package of the
Equipment:
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(a)
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Two
(2) duplicate copies of detailed packing
list
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(b)
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Two
(2) duplicate copies of quality
certificate
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(c)
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Two
duplicate copies of Technical Documentation for relevant
Equipment
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4.5.6. Sufficient
shores or chocks shall be provided in order to prevent the Equipment from
moving
inside the containers. SELLER shall be liable for any damage to the Equipment
thus incurred due to the negligence of SELLER.
4.5.7. .If
the
Equipment is damaged or lost due to improper packing or inadequate protective
measure, SELLER shall be responsible for repair, replacement or compensation
in
accordance with the Agreement. If the Equipment is mis-transported due to
mistake or ambiguousness in package or shipping marks, SELLER shall bear
additional expenses thus incurred.
5. Standards
& Inspections
5.1. Standards.
SELLER
shall engineer, design and construct the Equipment according to the Appendices
attached hereto, using professional engineering, construction and procurement
practices. All Equipment shall be engineered and constructed to meet IEC
62103
(EN 50178) applicable standards.
5.2. Factory
Acceptance Test.
5.2.1. SELLER
shall inspect the Equipment to confirm that it meets the Technical
Specifications, and shall thereupon send the ex-works quality certificate
to
BUYER, with notification of the planned date for the Factory Acceptance Test.
The date for the Factory Acceptance Test must be no earlier than two (2)
weeks
from the date when the notification is received by BUYER.
5.2.2. BUYER
will send its technical representatives and inspectors to SELLER’s Facility to
complete the Factory Acceptance Test together with SELLER’s technical
representatives and inspectors. In addition to BUYER’s inspectors, BUYER’s
lenders and shareholders may also send their inspectors. The expenses of
sending
BUYER’s inspectors, or the inspectors of BUYER’s lenders and shareholders, shall
be for BUYER’s account.
5.2.3. Prior
to
commencement of the Factory Acceptance Test, SELLER shall provide BUYER with
technical instruction in the operation and maintenance of the Equipment as
described in Appendix
2.
After
completing the technical instruction, SELLER shall commence the Factory
Acceptance Test, and provided that the Equipment meets the Technical
Specifications, BUYER and SELLER shall sign the Factory Acceptance Certificate.
SELLER shall ship the Equipment to BUYER as soon as practicable after successful
completion of the Factory Acceptance Test, as evidenced by the Factory
Acceptance Certificate signed by SELLER and BUYER; provided, however, that
the
SELLER may not ship the Equipment until the Factory Acceptance Certificate
has
been signed by BUYER.
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SELLER
Initials & Date XX
Xxxxx 0, 0000
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XXXXX
Initials & Date DS
March 19, 2008
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5.2.4. In
addition to the foregoing, BUYER, its authorized representatives and its
lenders, shareholders and their respective authorized representatives, may
inspect the Equipment at any time prior to delivery of the Equipment FOB
to the
Port of Shipment. The expenses of any such inspection shall be for BUYER’s
account.
5.2.5. The
Factory Acceptance Test shall not be a substitute for the inspection of the
Equipment at the Port of Unloading or the Work Site, or as a substitute for
the
Commissioning Test, and the Factory Acceptance Test shall not release SELLER
from its warranty obligations as further specified in this
Agreement.
5.3. Installation
and Commissioning Test.
5.3.1. Equipment
installation and servicing shall be carried out by BUYER under the supervision
of SELLER at the Work Site, and SELLER’s qualified technical representatives
shall provide technical instruction to BUYER during installation and prior
to
completion of the Commissioning Test as described in Appendix
4
to this
Agreement (the “Commissioning”).
SELLER acknowledges that BUYER intends to commission each Reactor on a rolling
basis as they are delivered, which may require more than one visit to Work
Site
for Commissioning.
5.3.2. BUYER
and
SELLER shall conduct the Commissioning Test for each unit of Equipment to
confirm that the Equipment operates in accordance with the Technical
Specifications. Provided that all of the Technical Specifications for each
unit
of Equipment is satisfied, BUYER and SELLER shall each sign the Certificate
of
Commissioning for such unit of Equipment.
5.4. Notwithstanding
anything to the contrary in this Agreement, BUYER’s execution of the Factory
Acceptance Certificate or the Certificate of Commissioning shall not release
SELLER from its warranty for the Equipment as described in Section 6
below.
5.5. Technical
Services.
SELLER
agrees to provide technical information regarding the Equipment to BUYER,
and to
BUYER’s designated engineering and construction contractors (the “Contractors”),
and
to attend meetings in the USA with the Contractors, participate in telephone
conference calls with BUYER and the Contractors, and draft and respond to
written correspondence, including e-mail to and from BUYER and the Contractors,
and to provide Commissioning services at the Work Site when reasonably directed
by BUYER (collectively, the “Technical Services”).
The
scope of the technical information to be provided to the Contractors shall
be
limited to the information that is required for the Contractors to perform
the
engineering design work for the Work Site. BUYER will pay SELLER One Thousand
Two Hundred Dollars (Dollars 1,200) per person and per eight-hour working
day
that SELLER’s personnel are at the Work Site or at any Contractor’s site to
perform Technical Services at the express direction of BUYER, and BUYER shall
reimburse SELLER for all reasonable and pre-approved out-of-pocket travel
expenses incurred at the request of BUYER to perform the Technical
Services.
6. Representations
and Warranties.
6.1. General.
SELLER
represents, warrants, and covenants that:
6.1.1. SELLER
will not, in the course of performing its obligations under this Agreement,
infringe or misappropriate, and neither the Deliverables nor any element
thereof
will infringe or misappropriate, any intellectual property right of any other
person or entity;
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SELLER
Initials & Date XX
Xxxxx 0, 0000
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XXXXX
Initials & Date DS
March 19, 2008
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6.1.2. neither
the Deliverables nor any element thereof will be subject to any restriction,
mortgage, lien, claim, pledge, security interest, or encumbrance when delivered
by SELLER to BUYER FOB Port of Shipment;
6.1.3. SELLER
will not grant, directly or indirectly, any right or interest in the
Deliverables to any other person;
6.1.4. SELLER
has full right, power, and authority to enter into and perform this Agreement
without the consent of any third party, including the right to grant all
licenses granted by SELLER (if any) in this Agreement;
6.1.5. All
individuals who contribute to or participate in the conception, creation,
or
development of the Deliverables will have unconditionally and irrevocably
assigned all of their right, title, and interest in and to the Deliverables
(and
all intellectual property rights thereto) to SELLER (or directly to BUYER)
before being allowed to begin performing work pursuant to this
Agreement;
6.1.6. SELLER
will comply with all laws, regulations, and ordinances applicable to SELLER’s
performance of its obligations under this Agreement, including export control
laws, and has obtained (or before performing its obligations under this
Agreement will obtain) all governmental permits and licenses required for
SELLER
to perform its obligations under this Agreement; and
6.1.7. SELLER
will take all necessary or reasonable precautions to prevent injury to any
person (including BUYER employees) or damage to any property (including BUYER
property) during the term of this Agreement.
6.2. Performance.
SELLER
further represents and warrants that: (A) during the Warranty Period, the
Deliverables will fully conform to the requirements, and other terms in the
Appendices and elsewhere in this Agreement, including, without limitation,
the
Technical Specifications; (B) the Technical Documentation shall be complete,
clear and correct so as to meet the requirements of design, inspection,
erection, commissioning, performance test, operation and maintenance of the
Equipment; and (C) the Equipment shall be completely brand new and comply
in
materials, workmanship in all respects with the quality and Technical
Specifications.
6.3. Warranty
Claims.
6.3.1. Notice
of Claim.
Claims
by BUYER for breach of any of SELLER’s warranties set forth in this Agreement
shall be made as soon as reasonably practicable after the discovery thereof,
and
in any event, the earlier of (A) 90 days after discovery; and (B) 90 days
after
the expiration of the Warranty Period.
6.3.2. SELLER’s
Responsibilities.
In the
event of SELLER’s breach of any warranty during the Warranty Period, without
limiting any other rights or remedies BUYER may have, and provided that BUYER
has provided notice pursuant to Section 6.3.1
above,
SELLER will promptly repair or replace the Deliverables at no additional
charge
to BUYER. In the event that the warranty claim applies to Equipment, BUYER
and
SELLER shall attempt to fix the problem through BUYER’s remote technical
assistance; provided, however, that if the Equipment cannot be fixed within
48
hours, then SELLER shall dispatch qualified technical representatives to
the
Work Site within 72 hours thereafter to provide on-site professional and
technical service. IF
SELLER DOES NOT ARRIVE AT BUYER’S WORK SITE WITHIN 72 HOURS AFTER CONFIRMATION
FROM SELLER OF SUCH A NOTIFICATION, THEN SELLER SHALL PAY BUYER $1,000 PER
DAY
FOR EACH DAY THAT THE EQUIPMENT IS NOT OPERATIONAL DUE TO THE BREACH OF
WARRANTY.
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SELLER
Initials & Date XX
Xxxxx 0, 0000
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XXXXX
Initials & Date DS
March 19, 2008
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7. Indemnification.
Each Party will indemnify and hold harmless the other Party and its affiliates,
employees, and agents from and against any and all liabilities, losses, damages,
costs, and other expenses (including reasonable attorneys’ and expert witnesses’
costs and fees) arising from or relating to any breach of any representation,
warranty, covenant, or obligation of the said Party in this Agreement or
any
intentional misconduct or negligence by the said Party or any of the said
Party’s agents or subcontractors in performing its obligations under this
Agreement. In the event of any third-party claim, demand, suit, or action
(a
“Claim”)
for
which a Party (or any of its affiliates, employees, or agents) is or may
be
entitled to indemnification hereunder, the Party may, at its option, require
the
breaching Party to defend such Claim at the breaching Party’s sole expense.
Neither Party may agree to settle any such Claim without the other Party’s
express prior written consent.
8. Non-solicitation.
During the term of this Agreement and for twelve (12) months thereafter,
each
Party will not directly or indirectly solicit, induce, or attempt to induce
any
employee or independent contractor to terminate or breach any employment,
contractual, or other relationship with the other Party.
9. Termination
& Cancellation
9.1. The
term
of this Agreement shall begin on the Effective Date and, unless previously
terminated as hereinafter set forth, shall remain in force until the expiration
of the Warranty Period.
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 one hundred
eighty (180) days after written notice thereof; provided, however, that such
cure period shall not modify or extend the sixty (60) day cure period for
SELLER’s delivery obligations pursuant to Section 4.4
above;
and provided, further that such one hundred eighty (180) day cure period
shall
not apply to BUYER’s failure to make any payment to SELLER pursuant to this
Agreement. In the event of BUYER’s failure to make payment on the 30-day payment
terms set forth in Section 3.1 hereof, termination by SELLER 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 10
below.
9.3. In
addition to BUYER’s termination rights pursuant to Sections 3.2
and
9.2
above,
BUYER may terminate this Agreement upon written notice to SELLER, and without
any further obligation or liability to SELLER, if at any time prior to delivery
of the Equipment, Ex Works SELLER’s factory, BUYER has a justifiable reason to
believe that SELLER will be more than sixty (60) days late in the delivery
of
the Equipment, BUYER may immediately cancel this agreement and shall, in
addition to all other rights and remedies available in law and equity, be
entitled to a refund of all payments that have been made as of such termination
date, plus the maximum amount of liquidated damages payable pursuant to Section
4.4
above.
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
9 of
30
9.4. Upon
the
expiration or termination of this Agreement howsoever arising, the following
Sections shall survive
such expiration or termination: 1
(Definitions); 6
(Representations and Warranties); 7
(Indemnification); 8
(Non-solicitation)9
(Termination & Cancellation); 11
(Limitations of Liability); and 13
(General
Provisions).
10. 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 performance of SELLER is delayed for Force Majeure
for a
cumulative period of thirty (30) days or more, SELLER will use commercially
reasonable efforts to transition its production of the Equipment for the
duration of the Force Majeure to an alternate source. 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 (and, only if SELLER is the affected Party, SELLER has not used
commercially reasonable efforts to transition its production of the Deliverables
as provided in the immediately preceding sentence), then the non-affected
Party
shall be entitled to terminate this Agreement by 30 days prior written notice
to
the other Party.
11. Limitations
of Liability
11.1. IN
NO
EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR FOR EXEMPLARY OR PUNITIVE DAMAGES, EVEN IF BUYER
OR
SELLER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11.2. 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 AGREEMENT PRICE.
12. Financing.
SELLER acknowledges that BUYER will be financing the construction of its
polysilicon production plant, including the Work Site, through a combination
of
debt, equity and prepayments from BUYER’s customers. In connection with any debt
financing, the lenders and the collateral agent may request SELLER to execute
consents and provide a legal opinion. As such, SELLER agrees that on or prior
to
the date of financial closing on BUYER’s senior credit agreement providing for
the financing of the development and operation of the Work Site, SELLER shall
(and hereby agrees to) enter into a consent and agreement for the benefit
of the
collateral agent and secured parties substantially identical to the form
of
consent and agreement attached as Appendix
7
hereto
(the “Consent”),
and
(c) SELLER shall (and hereby agrees, and instructs its counsel, to) provide
an
opinion of legal counsel substantially in the form and scope of the form
of
legal opinion attached to the Consent as Exhibit A (the “Legal
Opinion”).
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
10
of 30
13. General
Provisions.
13.1. Governing
Law; Venue. This Agreement is governed by the laws of the State of New York
without reference to any conflict of laws principles that would require the
application of the laws of any other jurisdiction. The United Nations Convention
on Contracts for the International Sale of Goods does not apply to this
Agreement. Any dispute arising from or in connection with this Contract between
the Parties shall be settled through friendly consultations. In case no
agreement can be reached through consultations, the Parties shall submit
to the
International Chamber of Commerce. The arbitration tribunal shall be composed
of
three (3) arbitrators with each Party appointing one arbitrator and the third
one mutually agreed by the Parties. The arbitration award is final and binding
upon both Parties. The place of arbitration shall be New York, New York,
and the
arbitration proceedings shall be conducted in English.
13.2. Severability.
If any
provision of this Agreement is, for any reason, held to be invalid or
unenforceable, the other provisions of this Agreement will be unimpaired
and the
invalid or unenforceable provision will be deemed modified so that it is
valid
and enforceable to the maximum extent permitted by law.
13.3. No
Assignment.
This
Agreement and SELLER’s rights and obligations under this Agreement may not be
assigned, delegated, or otherwise transferred, in whole or in part, by operation
of law or otherwise, by SELLER without BUYER’s express prior written consent.
Any attempted assignment, delegation, or transfer in violation of the foregoing
will be null and void. BUYER may assign this Agreement, or any of its rights
under this Agreement to any third party with or without SELLER’s
consent.
13.4. Notices.
Each
Party must deliver all notices, consents, and approvals required or permitted
under this Agreement in writing to the other Party at the address listed
below
by courier, by certified or registered mail (postage prepaid and return receipt
requested), or by a nationally-recognized overnight carrier. Notice will
be
effective upon receipt or refusal of delivery. Each Party may change such
Party’s address for receipt of notice by giving notice of such change to the
other Party.
BUYER:
HOKU
MATERIALS, INC.
Xxx
Xxxx
Xxx
Xxxxxxxxx,
Xxxxx 00000 XXX
Attn:
Xx.
Xxxx Xxxx, CTO
E-mail:
[*]
Facsimile:
x0-000-000-0000
With
a
copy to:
HOKU
SCIENTIFIC, INC.
0000
Xxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxx 00000, XXX
Attn:
Xx.
Xxxxxx Xxxxxx, CEO
E-mail:
[*]
Facsimile:
x0 (000) 000-0000
SELLER:
Saft
Power Systems USA Inc
000
Xxxxx
Xxxx, Xxxxx 000
Xxxxx,
XX
00000
000-000-0000
Fax:
469:000-0000
Contact:
Xxxx Xxxxxx
[*]
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
11
of 30
13.5. Legal
Fees.
The
prevailing Party in any litigation between the Parties relating to this
Agreement will be entitled to recover such Party’s reasonable attorneys’ fees
and court costs, in addition to any other relief that such Party may be
awarded.
13.6. 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 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 technical information
set
forth in this Agreement.
13.7. Remedies.
The
rights and remedies provided to each Party in this Agreement are cumulative
and
in addition to any other rights and remedies available to such Party at law
or
in equity.
13.8. Construction.
Section
headings are included in this Agreement merely for convenience of reference;
they are not to be considered part of this Agreement or used in the
interpretation of this Agreement. When used in this Agreement, “including” means
“including without limitation.” Whenever BUYER’s consent or approval is required
under this Agreement, BUYER may grant or deny its consent or approval in
its
sole and absolute discretion. No rule of strict construction will be applied
in
the interpretation or construction of this Agreement.
13.9. Waiver.
All
waivers must be in writing and signed by the Party to be charged. Any waiver
or
failure to enforce any provision of this Agreement on one occasion will not
be
deemed a waiver of any other provision or of such provision on any other
occasion.
13.10. Entire
Agreement; Amendments.
This
Agreement is the final, complete, and exclusive agreement of the Parties
with
respect to the subject matter hereof and supersedes and merges all prior
or
contemporaneous communications and understandings between the Parties. No
modification of or amendment to this Agreement will be effective unless in
writing and signed by the Party to be charged.
[This
space intentionally left blank.]
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
12
of 30
IN
WITNESS WHEREOF, the parties have executed this Equipment Purchase & Sale
Agreement as of the date first set forth above.
|
SELLER:
|
BUYER:
|
|||
|
SAFT
POWER SYSTEMS USA INC
|
HOKU
MATERIALS, INC.
|
|||
|
By:
|
/s/
XXXXXX X. XXXXXXXXX
|
By:
|
/s/
XXXXXX XXXXXX
|
|
|
Name:
|
Xxxxxx
X. Xxxxxxxxx
|
Name:
|
Xxxxxx
Xxxxxx
|
|
|
Title:
|
Vice
President
|
Title:
|
Chairman
& CEO
|
|
|
Authorized
Signatory
|
Authorized
Signatory
|
|||
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
13
of 30
APPENDIX
1
Technical
Specifications for Thyrobox VSC For Reactors with Earth Fault Detection Set
[*]
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
14
of 30
Specification
of Technical Documentation
The
manuals for the Thyrobox VSC will be available in English language.
Technical
Documentation
The
Technical Documentation includes
Operating
instructions
Mechanical
drawings, incl. dimensional drawings
Mechanical
connection plans
Overview
circuit diagram
Operation
circuit diagram
Information
for transformer
Thyrobox
VSC test certificate
Project
Documentation
Accompanying
to the project a MANUFACTURING SCHEDULE AND PROGRESS REPORT will inform about
the status of the project progress. Contents of the REPORT (approx. 5 pages)
are
|
·
|
General
project information (overview)
|
|
·
|
Current
project schedule
|
|
·
|
Current
project status related to delivery batches, incl.
topics
|
|
o
|
design
and construction
|
|
o
|
Purchasing
of time-critical material
|
|
o
|
Purchasing
of Material (Material with normal delivery
periods)
|
|
o
|
Availability
of time-critical Material (Material with long delivery
periods)
|
|
o
|
Availability
of Material (Material with normal delivery
periods)
|
|
o
|
Premanufaturing
(of sub-components)
|
|
o
|
Final
Assembly (Cabinets)
|
|
o
|
Pre-Testing
|
|
o
|
Final
Test (Cabinets)
|
|
o
|
Seaworth
packing (Cabinets)
|
|
o
|
Ready
for shipment
|
Delivery
time of documentation
Product
documentation will be available within 120 days after BUYER’s payment to SELLER
of the Initial Payment.
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
15
of 30
APPENDIX
3
Procedure
for Factory Acceptance Test
[*]
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
16
of 30
Appendix
4
Procedures
for Commissioning Test
[*]
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
17
of 30
Appendix
5
Factory
Acceptance Certificate
This
Factory Acceptance Certificate is being signed pursuant to Section 5.2.2
of the
Equipment Purchase & Sale Agreement (the “Agreement”)
dated
_______________, 2007, by and between HOKU MATERIALS, INC., and SAFT POWER
SYSTEMS USA INC. Capitalized terms not otherwise defined herein have the meaning
set forth in the Agreement.
By
signing below, each party hereby certifies to the successful completion of
the
Factory Acceptance Test and confirms the following:
[*]
|
SAFT
POWER SYSTEMS USA INC
|
HOKU
MATERIALS, INC.
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
|||
|
Authorized
Signatory
|
Authorized
Signatory
|
|||
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
18
of 30
Appendix
7
Certificate
of Commissioning
This
Certificate of Commissioning is being signed pursuant to Section 5.3.2
of the
Equipment Purchase & Sale Agreement (the “Agreement”)
dated
_______________, 2007, by and between HOKU MATERIALS, INC., and SAFT POWER
SYSTEMS USA INC. Capitalized terms not otherwise defined herein have the meaning
set forth in the Agreement.
By
signing below, each party hereby certifies to the successful completion of
the
Commissioning Test and confirms the following:
[*]
|
SAFT
POWER SYSTEMS USA INC
|
HOKU
MATERIALS, INC.
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
|||
|
Authorized
Signatory
|
Authorized
Signatory
|
|||
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
19
of 30
Appendix
7
Consent
[See
Attached]
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
20
of 30
This
CONSENT AND AGREEMENT, dated as of [__________], 2007 (as amended, restated,
supplemented or otherwise modified from time to time, this “Consent”), is
entered into by and among [_____________], a [_______________] (together with
its successors and assigns, the “Contracting Party”), HOKU MATERIALS, INC., a
Delaware corporation (together with its successors and assigns, the “Borrower”),
and [___________], in its capacity as Collateral Agent for the Secured Parties
(as defined below) (together with its successors, designees and assigns in
such
capacity, the “Agent”) under the Intercreditor Agreement (as defined
below).
RECITALS
A. The
Borrower has entered into a Credit Agreement, dated as of [_______], 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among the Borrower, the financial institutions from
time to time parties thereto as lenders, and [___________________], as
administrative agent (the “Administrative Agent”).
B. The
Contracting Party has entered into [______________], dated as of [__________],
2007, (as amended, restated, supplemented or otherwise modified from time to
time, the “Contract”), with the Borrower.
C. The
Borrower intends to finance certain costs in connection with the development,
construction, operation, maintenance and ownership of a polysilicon producing
processing plant with a nominal capacity of 2,000 metric tons per year, located
in Pocatello, Idaho (the “Project”), with funds borrowed by the Borrower
pursuant to the terms of the Credit Agreement.
E. As
collateral security for all obligations of the Borrower to the Secured Parties
(as defined below), the Borrower has, inter alia, assigned all of its rights,
title and interest (the “Assigned Interests”) in, to and under the Contract to
the Agent pursuant to a Security Agreement, dated as of [_______], 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Security Agreement”), made by the Borrower in favor of the Agent for the
benefit of certain secured parties described therein (the “Secured Parties”) and
in that certain Collateral Agency and Intercreditor Agreement, dated as of
[_______], 2007 (as amended, restated, supplemented or otherwise modified from
time to time, the “Intercreditor Agreement”), among the Borrower, Hoku Materials
Holdings, Inc., the Agent, the Administrative Agent, the Contracting Party
and
the other Secured Parties party thereto.
F. Pursuant
to the terms of the Intercreditor Agreement, the Secured Parties have appointed
the Agent as collateral agent on their behalf and authorized the Agent to take
certain actions and exercise such powers under the Secured Obligation Documents
(as defined in the Intercreditor Agreement) as are provided for
therein.
G. The
Borrower has requested that the Contracting Party and the other parties hereto
execute and deliver this Consent in fulfillment of certain obligations of the
Borrower under the Credit Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing premises and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
and
intending to be legally bound, the parties hereto agree as follows:
(a) Subject
to the terms and conditions of this Consent, the Contracting Party acknowledges
and consents to the assignment as collateral security to the Agent, for the
benefit of the Secured Parties, of the Assigned Interests. The Contracting
Party
further acknowledges the right of Agent or any designee of Agent, in exercise
of
Agent’s rights and remedies as a secured creditor of Borrower, to make all
demands, give all notices, take all actions and exercise all rights of Borrower
under the Contract.
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
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of 30
(b) The
Agent
shall be entitled (but not obligated) to cure any defaults of the Borrower
under
the Contract in accordance with the provisions hereof. Upon receipt by the
Contracting Party of written notice from the Agent, the Contracting Party agrees
to (i) accept such cure by the Agent and, subject to the terms and conditions
of
the Contract and cure of such defaults, to render to the Secured Parties all
performance due by it under the Contract and this Consent, and (ii) act solely
on the instructions of the Agent, not the Borrower, with respect to the exercise
of the Borrower’s rights under the relevant Contract. The Contracting Party
agrees to make all payments to be made by it under the Contract directly to
the
Agent for the benefit of the Secured Parties upon receipt of the Agent’s written
instructions to do so and any such payments made to the Agent by the Contracting
Party shall be deemed to have been made by the Contracting Party in fulfillment
of the Contracting Party’s obligations to the Borrower under the Contract.
(c) In
all
cases except as provided in the Contract or required by law, and in accordance
with Section 1(e) hereof, the Contracting Party will not, without the prior
written consent of the Agent (such consent not to be unreasonably withheld),
(i)
cancel or terminate the Contract or suspend performance of its services
thereunder, or consent to or accept any cancellation, termination or suspension
thereof by the Borrower, (ii) amend the Contract [NOTE: Exceptions will be
limited to Change Orders otherwise permitted under the Credit Agreement], or
(iii) sell, assign or otherwise dispose (by operation of law or otherwise)
of
any part of its rights, title or interest in the Contract. The Contracting
Party
agrees to deliver copies of all notices of default, notices of the suspension
of
performance by Contracting Party, notices of force majeure or requests for
change orders delivered by Contracting Party to Borrower under or pursuant
to
the Contract to the Agent promptly upon delivery thereof.
(d) The
Contracting Party will not terminate or suspend performance of the Contract
on
account of any default or breach of the Borrower thereunder without written
notice to the Agent and first providing to the Agent (i) 30 days from the date
notice of default or breach is delivered to the Agent to cure such default
if
such default is the failure to pay amounts to the Contracting Party which are
due and payable under the Contract, or (ii) a reasonable period, but not fewer
than 60 days, to cure such breach or default if the breach or default cannot
be
cured by the payment of money to the Contracting Party so long as the Agent,
the
Borrower or their respective designee shall have commenced to cure the breach
or
default promptly following such notice and in any case within such 60-day period
and thereafter diligently pursues such cure to completion (but in any event
within not more than 120 days) and during such cure period performs all monetary
obligations under the Contract and all other obligations under the Contract
are
performed by the Borrower or the Agent or their respective designees. For the
avoidance of doubt and solely for the purposes of the preceding sentence,
amounts not paid and subject to a dispute in good faith by the Borrower shall
not be deemed to be a payment default. The Contracting Party shall not hinder
the Agent’s or its designees’ efforts, and shall provide reasonable cooperation
to the Agent and its designees, in effecting any cure of any default or breach
of the Borrower under the Contract. Except in the event of a payment default
under the Contract, if possession of the Project is necessary to cure such
breach or default, and the Agent or its designees or assignees declares the
Borrower in default under the Credit Agreement and within the 60-day period
described above commences foreclosure proceedings, the Agent or its designees
or
assignees shall be allowed a reasonable period to complete such proceedings
so
long as (A) the Agent proceeds diligently and in good faith to do so and during
such period performs all monetary obligations under the Contract, and (B) all
other obligations under the relevant Contract are performed by the Borrower
or
the Agent or their respective designees. If the Agent or its designees or
assignees are prohibited by any court order or bankruptcy or insolvency
proceedings from curing the default or from commencing or prosecuting
foreclosure proceedings, the foregoing time periods shall be extended by the
period of such prohibition so long as (1) the Agent proceeds diligently and
in
good faith to address such impediments and during such period performs all
monetary obligations under the Contract, and (2) all other obligations under
the
Contract are performed by the Borrower or the Agent or their respective
designees. The Contracting Party consents to the transfer of the Borrower’s
interest under each Contract to the Agent or any purchaser, successor, assignee
and/or designee (a “Subsequent Transferee”) of the Assigned Interests at a
foreclosure sale by judicial or nonjudicial foreclosure and sale or by a
conveyance by the Borrower in lieu of foreclosure and agrees that,
notwithstanding any provision of the Contract to the contrary, upon such
foreclosure, sale or conveyance, the Agent or such Subsequent Transferee shall
be substituted for the Borrower under the Contract and the Contracting Party
(a)
shall recognize the Agent or the Subsequent Transferee, as the case may be,
as
its counter-party under the Contract, and (b) perform its obligations under
the
Contract in favor of the Agent or the Subsequent Transferee, as the case may
be;
provided that the Agent or such Subsequent Transferee (i) has elected to assume
the rights and obligations of the Borrower (including the obligation to cure
any
then existing payment and performance defaults, but excluding any obligation
to
cure any then existing performance defaults which by their nature are incapable
of being cured and which default that is incapable of being cured does not
materially and adversely affect the rights of the Contracting Party under the
Contract) under the Contract, and (ii) would reasonably be expected to have
the
capability to perform the Borrower’s obligations under the
Contract.
|
SELLER
Initials & Date XX
Xxxxx 0, 0000
|
XXXXX
Initials & Date DS
March 19, 2008
|
Page
22
of 30
(e) Subject
to payment of all amounts due and unpaid to the Contracting Party and cure
of
all then existing payment and performance defaults, but excluding any obligation
to cure any then existing performance defaults which by their nature are
incapable of being cured and which default that is incapable of being cured
does
not materially and adversely affect the rights of the Contracting Party under
the Contract, in the event the Contract is rejected or terminated by a trustee
or debtor in possession in any bankruptcy or insolvency proceeding, or if the
Contract is terminated for any reason other than a default which could have
been
but was not cured by the Agent as provided in Section 1(e) hereof, and if,
within 45 days after such rejection or termination, the Agent shall so request,
the Contracting Party shall execute and deliver to the Agent a new Contract
having substantially identical terms to the Contract (subject to any conforming
changes necessitated by the substitution of parties and such changes as may
be
necessary to compensate the Contracting Party for schedule and cost adjustments
resulting from the passage of time).
(f) In
the
event the Agent or its designees or assignees elect to perform the Borrower’s
obligations under a Contract or a new Contract is entered into as provided
above
in Sections 1(e) or (f), respectively, the liability of the Agent, or its
designees or assignees, as the case may be, to the Contracting Party for the
performance of obligations under such Contract, and the sole recourse of the
Contracting Party in seeking the enforcement of such obligations, shall be
limited to such parties’ rights, title and interest in the Project.
(g) Except
as
provided in Sections 1(e), (f) and (g) above, neither the Agent, its designees
or assignees shall have any obligation or liability under the Contract, nor
shall the Agent, its designees or assignees be obligated to perform any of
the
obligations or duties of the Borrower under the Contract or to take any action
or collect or enforce any claim for payment or performance of the Assigned
Interests. Within 30 or 60 days, as the case may be pursuant to Section 1(e),
of
being notified by the Contracting Party that a Borrower default or breach has
occurred under the Contract, the Agent shall notify the Contracting Party of
its
intent whether or not to cure any such Borrower default or breach. In the event
the Agent fails to notify the Contracting Party within the time period described
in the foregoing sentence that the Agent will cure such default or breach,
the
Contracting Party shall be entitled to assume that the Agent has elected not
to
cure such default or breach and the Contracting Party may then exercise all
rights that the Contracting Party would have under the Contract, without regard
to the provisions of this Consent. In the absence of such notice, no performance
by the Agent, its designees or assignees under or pursuant to this Consent
or
otherwise (whether to cure a Borrower default or exercise rights under any
provision hereof or otherwise) shall be construed as an assumption by the Agent,
its designees or assignees of the obligations and duties of the Borrower under
the Contract, unless otherwise expressly agreed in writing by the Agent, its
assignees or designees, as the case may be. The Agent shall have the right
to
assign all or a pro rata interest in a Contract or a new Contract entered into
pursuant to Section 1(f) to a person or entity to whom the Project is
transferred, provided such transferee (i) assumes the obligations of the
Borrower (or the Secured Parties) under such Contract and cure of any material
defaults under such Contract has been effected as provided herein, and (ii)
would reasonably be expected to have the capability to perform the Borrower’s
obligations under such Contract. Upon such assignment, the Agent and the Secured
Parties (including their agents and employees) shall be released from any
further liability thereunder to the extent of the interest assigned.
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2. Borrower’s
Acknowledgment. The Borrower acknowledges and agrees that the Contracting Party
is authorized to act in accordance with the Agent’s exercise of the Borrower’s
rights in accordance with this Consent, and the Contracting Party may rely
on
any notice or instruction by the Agent in the purported exercise of the Agent’s
rights and remedies hereunder.
3. Legal
Opinion. The Contracting Party hereby agrees to deliver to the Agent a legal
opinion (which may be from a senior in-house counsel), dated as of the dated
hereof, substantially in form attached hereto as Exhibit A.
4. Payment
of Monies. The Contracting Party hereby agrees to make all payments to be made
by it to the Borrower under the Contract by wire transfer directly
to:
(a) for
all
payments not covered by clause (b) hereof:
[_______________]
ABA
[__________]
[_______________]
Account
Number: [_______]
FFC:
Account No. [_______]
REF:
[Hoku Materials] Revenue Account; or
(b) for
all
payments of liquidated damages and insurance proceeds:
[_______________]
ABA
[__________]
[_______________]
Account
Number: [_______]
FFC:
Account No. [_______]
REF:
[Hoku Materials] Loss Proceeds Account,
and
any
notices to [Depositary Bank] may be given to the following address:
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[_______________]
[_______________]
[_______________]
[_______________]
Attn:
[_______________]
Telephone:
[_______________]
Facsimile:
[_______________]
Notwithstanding
the foregoing, (i) if the Agent shall notify the Contracting Party in writing
that an Event of Default under the Credit Agreement has occurred and is
continuing, the Contracting Party shall make all payments to be made by it
to
the Borrower under the Contract directly to the Agent, for the benefit of the
Secured Parties, to an account designated by the Agent in such written notice,
and (ii) if any person has elected to become a Subsequent Transferee, then
the
Contracting Party shall make all payments to be made by it to the Borrower
under
the Contract directly to such Subsequent Transferee. Any payments made by the
Contracting Party as provided under this Section 4 shall be deemed to have
been
made by the Contracting Party in fulfillment of the Contracting Party’s
obligations under the Contract.
5. Representations
and Warranties. The Contracting Party hereby represents and warrants, for the
benefit of the Agent and the Secured Parties, as of the date hereof,
that:
(a) it
(i) is
duly organized, validly existing and in good standing under the laws of
[__________], and (ii) has all requisite organizational power and authority
necessary to execute, deliver and perform its obligations under this Consent
and
the Contract;
(b) the
execution, delivery and performance by the Contracting Party of the Contract
and
this Consent have been duly authorized by all necessary corporate action, and
do
not and will not require any further consents or approvals which have not been
obtained, or violate any provision of any law, regulation, order, judgment,
injunction or similar matters or breach any agreement presently in effect with
respect to or binding on the Contracting Party, except for such breaches,
defaults, or violations as will not, either individually or in the aggregate,
result in a material adverse effect on the ability of the Contracting Party
to
perform its obligations under this Consent or the Contract;
(c) each
of
this Consent and the Contract constitutes legal, valid and binding obligations
of the Contracting Party, enforceable against the Contracting Party in
accordance with their respective terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, reorganization
or other similar laws affecting the enforcement of creditors’ rights or by the
effect of general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(d) no
authorizations, approvals or consents of any governmental or regulatory
authority or agency or any other person, and no filings or registrations with
any governmental authority or agency, are necessary for the execution, delivery
or performance by the Contracting Party of this Consent, or for the validity
or
enforceability thereof, except for any authorizations, approvals, consents
or
filings which (i) have been made or obtained prior to the date hereof and are
in
full force and effect, or (ii) are obtainable in the ordinary course of business
and are set forth on Exhibit B to this Consent;
(e) except
pursuant to this Consent and as expressly set forth in the Contract, the
Contracting Party has not consented to any pledge, assignment or other transfer
of any interest in the Contract;
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(f) the
Contract is in full force and effect and has not been amended, supplemented
or
modified (except as otherwise disclosed in writing to the Agent);
and
(g) the
Borrower has fulfilled all of its material obligations which are currently
due
under the Contract, and there are no breaches or unsatisfied conditions
presently existing (or which would exist after the passage of time and/or giving
of notice) that would allow the Contracting Party to terminate the Contract.
6. Limitation
of Liability. The Contracting Party shall have no liability under this Consent
to the Borrower. With respect to any undertaking by the Contracting Party which
is susceptible to enforcement by specific enforcement as described in Section
7,
where the Agent would receive the full benefit of this Consent through such
specific performance, the Agent shall limit its remedy to specific performance.
With respect to any other undertaking, acknowledgment, representation and
warranty or other provision of this Consent, the Agent’s remedies shall not be
so limited, provided that the Agent and the Borrower agree that the Contracting
Party’s aggregate liability for monetary damages under this Consent and the
Contract shall be limited as provided in the Contract. Under no circumstances
shall the Contracting Party have any liability for any punitive, exemplary,
consequential, indirect, incidental, or special damages (including by way of
example, but not by way of limitation, loss of profits, nonpayment of principal
or interest on loans, and cost of capital under the Credit
Agreement).
7. Specific
Performance. The Contracting Party acknowledges and agrees that the Borrower,
the Agent, the Secured Parties and any Subsequent Transferee may be damaged
irreparably in the event any of the provisions set forth in Sections 1 and
4 of
this Consent (the “Applicable Provisions”) are not performed in accordance with
their specific terms or are otherwise breached. Accordingly, the Contracting
Party agrees that the Borrower, the Agent and/or any Subsequent Transferee
may
seek to enforce specifically this Consent and the Applicable Provisions in
any
action instituted in any court of the United States or any state thereof having
jurisdiction over the parties hereto and the matter hereof (subject to the
provisions set forth in Section 9), in addition to any other remedy to which
it
may be entitled, at law or in equity.
8. Governing
Law. This Consent shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, United States of America,
excluding its conflicts of law provisions (other than Sections 5-1401 and 5-1402
of the General Obligations Law of the State of New York).
9. Submission
to Jurisdiction. The parties hereto submit to the nonexclusive jurisdiction
of
the United States District Court for the Southern District of New York and
of
any New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Consent or the transactions
contemplated hereby. Each of the parties hereto irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
10. Counterparts.
This Consent and any amendments, waivers, consents or supplements hereto or
in
connection herewith 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 an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages
may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
11. Severability.
In case any one or more of the provisions contained in this Consent should
be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or
impaired thereby.
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12. Amendment,
Waiver. Neither this Consent nor any of the terms hereof may be terminated,
amended, supplemented, waived or modified except by an instrument in writing
signed by the Contracting Party, the Borrower and the Agent.
13. Notices.
All notices required or permitted hereunder shall be in writing and shall be
effective (a) upon receipt if hand delivered, (b) upon receipt if sent by
facsimile and (c) if otherwise delivered, upon the receipt thereof. Any such
notices to the Contracting Party or the Borrower shall be delivered to their
respective addresses as specified in the Contract. Any such notices to the
Agent
shall be addressed as follows:
[_______________]
[_______________]
[_______________]
Attn:
[_______________]
Telephone
No.: [_______________]
Telecopy
No.: [_______________]
If
any
notice is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender. Any party shall
have
the right to change its address for notice hereunder to any other location
within the continental United States by providing 30 days’ notice to the other
parties in the manner set forth hereinabove.
14. Third
Party Beneficiaries. This Consent and the representations, covenants and
agreements contained herein are and shall be held to be for the sole benefit
of
the parties hereto and the Secured Parties, and their respective successors
and
assigns.
15. Interpretation.
All references in this Consent to any document, instrument or agreement (a)
shall include all exhibits, schedules and other attachments thereto, and (b)
shall include all documents, instruments or agreements issued or executed in
replacement thereof in accordance with the terms thereof.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Consent and Agreement to be
duly
executed and delivered as of the date first above written.
HOKU
MATERIALS, INC,
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Title:
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[___________________________]
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By:
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Title:
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[_______________],
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as
Agent for the Secured Parties
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By:
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EXHIBIT
A
FORM
OF
OPINION OF CONTRACTING PARTY’S COUNSEL
[Letterhead
of ________________]
[Date]
[Agent]
[_______________]
[_______________]
[_______________]
Ladies
and Gentlemen:
[We/I]
have acted as counsel for [_______________], a [________________] (the
“Company”), in connection with that certain [Contract and Consent]
(collectively, the “Contracts”). Capitalized terms used and not otherwise
defined herein shall have the respective meanings specified in the
Consent.
This
letter is being delivered to you in satisfaction of the condition set forth
in
Section 3 of the Consent.
In
this
connection, [we/I] have examined such certificates of public officials,
certificates of officers of the Company and copies certified to [our/my]
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as [we/I] have deemed relevant
and necessary as a basis for [our/my] opinions hereinafter set forth. [We/I]
have relied upon such certificates of public officials and of officers of the
Company with respect to the accuracy of material factual matters contained
therein which were not independently established.
Based
on
the foregoing, it is [our/my] opinion that:
1.
The
Company is a corporation duly incorporated and validly existing in good standing
under the laws of [__________].
2.
The
Contracts have been duly authorized by all requisite corporate action and duly
executed and delivered by authorized officers of the Company, and are valid
obligations of the Company, legally binding upon and enforceable against the
Company in accordance with their respective terms, except as such enforceability
may be limited by (a) bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors’ rights generally, and (b) general
principles of equity (regardless of whether such enforceability is considered
in
a proceeding in equity or at law).
3.
The
execution and delivery of the Contracts, and fulfillment of and compliance
with
the respective provisions of the Contracts, do not conflict with, or result
in a
breach of the terms, conditions or provisions of, or constitute a default under,
or result in any violation of, or result in the creation of any lien upon any
of
the properties or assets of the Company pursuant to, or require any
authorization, consent, approval, exemption, or other action by or notice to
or
filing with any court, administrative or governmental body or other person
or
entity pursuant to, the charter or by-laws of the Company, any applicable law,
statute, rule or regulation or (insofar as is known to us after having made
due
inquiry with respect thereto) any agreement, instrument, order, judgment or
decree to which the Company is a party or otherwise subject.
Very
truly yours,
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EXHIBIT
B
AUTHORIZATIONS
AND APPROVALS
[Contracting
Party To Provide, If Any]
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