SUPPLY AGREEMENT
Exhibit
10.83
CONFIDENTIAL
[*]
=
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.
This
Supply Agreement is entered into as of this 4th
day of
September, 2008 (the “Effective
Date”)
between WEALTHY RISE INTERNATIONAL, LTD., a Hong Kong company (hereinafter
“CUSTOMER”)
and
HOKU
MATERIALS, INC., a
Delaware corporation (hereinafter “HOKU”).
HOKU
and CUSTOMER are sometimes referred to in the singular as a “Party”
or
in
the plural as the “Parties”.
Recitals
Whereas,
HOKU desires to supply polysilicon to CUSTOMER for its general use beginning
in
calendar year 2010 for a continuous period of ten years from the date of
the
first shipment.
Whereas,
in exchange for HOKU’s agreement to allocate the supply of polysilicon, CUSTOMER
desires to provide HOKU with a firm order for polysilicon upon the terms
and
conditions provided herein.
NOW,
THEREFORE, in furtherance of the foregoing Recitals and in consideration
of the
mutual covenants and obligations set forth in this Agreement, the Parties
hereby
agree as follows:
1. Definitions.
The
following terms used in this Agreement shall have the meanings set forth
below:
1.1. “Affiliate”
shall
mean, with respect to either Party to this Agreement, any entity that is
controlled by or under common control with such Party.
1.2. “Agreement”
shall
mean this Supply Agreement and all appendices annexed to this Agreement
as the
same may be amended from time to time in accordance with the provisions
hereof.
1.3. “First
Shipment Date”
shall
mean the date by which HOKU has delivered to CUSTOMER an aggregate total
of [*]
metric tons of Products pursuant to this Agreement.
1.4. “Facility”
shall
mean any facility used by HOKU for the production of the Product.
1.5. “Independent
Expert”
means
any Qualified Laboratory that is reasonably acceptable to each of HOKU
and
CUSTOMER; provided, however that if such parties cannot agree on the Independent
Expert within [*], each Party shall select one independent expert form
the list
of Qualified Laboratories, and those two independent experts shall select
the
Independent Expert.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
1 of
19
Exhibit
10.83
CONFIDENTIAL
1.6. “Minimum
Annual Quantity of Product”
means
[*] metric tons ([*] kilograms).
1.7. “Minimum
Monthly Quantity of Product”
means
[*] metric tons ([*] kilograms).
1.8. “Product”
shall
mean the raw polysilicon in chunk form manufactured by HOKU and sold to
CUSTOMER
pursuant to this Agreement.
1.9. “Product
Specifications”
shall
mean the quality and other specifications set forth on Appendix 2 to this
Agreement.
1.10. “Qualified
Laboratory”
means
each qualified laboratory set forth on Appendix
2
to this
Agreement.
1.11. “Term”
shall
mean the period during which this Agreement is in effect, as more specifically
set forth in Section 0
of this
Agreement.
1.12. “Total
Deposit”
shall
mean all deposits or prepayments made by CUSTOMER to HOKU hereunder including
without limitation the Initial Deposit and the Main Deposit.
1.13. “Year”
shall
mean each of the ten (10) twelve-month periods commencing on the First
Shipment
Date.
2. Ordering.
Starting
on the First Shipment Date and each Year during the term of this Agreement
thereafter, CUSTOMER agrees to purchase from HOKU, and HOKU agrees to sell
to
CUSTOMER, the Minimum Annual Quantity of Product at the prices set forth
on
Appendix 1 to this Agreement (the “Pricing
Schedule”).
This
Agreement constitutes a firm order from CUSTOMER for [*] metric tons of
Product
that cannot be cancelled during the term of this Agreement, except as set
forth
in Section 0
below.
3. Supply
Obligations.
3.1. HOKU
shall deliver each Year pursuant to this Agreement starting on the First
Shipment Date at least the Minimum Annual Quantity of Product in approximately
equal monthly shipments in amounts not less than the Minimum Monthly Quantity
pursuant to Section 4.1 below; provided however, that if HOKU fails to
deliver a
monthly shipment, then HOKU may deliver any deficiency within [*] days
without
breaching this section or incurring any purchase price adjustment (pursuant
to
Section 0
below).
At any time during the term of this Agreement, HOKU may ship to CUSTOMER
up to
the full cumulative balance of Minimum Annual Quantity of Product to be
shipped
through the end of the current Year (an “Excess
Shipment”)
with
CUSTOMER’s written consent. This shipment will be credited against each
subsequent Minimum Annual Quantity of Product. For example, if the Minimum
Annual Quantity of Product for a given Year is [*] metric tons, and if
HOKU
delivers [*] metric tons in January, then the next shipment of [*] metric
tons
is not required until the following Year.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
2 of
19
Exhibit
10.83
CONFIDENTIAL
3.2. HOKU
intends to manufacture the Products at its Facility; however, notwithstanding
anything to the contrary herein, HOKU may deliver to CUSTOMER Products
that are
manufactured by a third party other than HOKU, (the “Alternative
Products”).
The
Alternative Products shall conform to the warranties of HOKU to CUSTOMER
hereunder, and the quality, price, delivery and any other terms and conditions
of the Alternative Products shall be no less favorable than the terms
and
conditions
set
forth in this Agreement. Delivery
of the Alternative Products shall not release or mitigate HOKU’s liabilities and
obligations hereunder except that delivery of the Alternative Products
is deemed
to be delivery of Products, and CUSTOMER shall have the same rights and
HOKU
shall have the same obligations as set forth hereunder with respect to
any
Alternative Products. HOKU shall notify CUSTOMER in writing prior to
the
delivery of Alternative Products.
3.3. Except
in
the case of a force majeure pursuant to Section 12 below, if at any time
after
[*], HOKU does not supply any Products pursuant to Section 0
or
0
within
[*] days of the scheduled delivery date, HOKU will provide CUSTOMER with
a
purchase price adjustment. Such purchase price adjustment shall be [*]
percent
([*]%) of the value of the respective delayed Products for each week
or part
thereof that the Product shipment (or part thereof) is delayed beyond
the [*]
day grace period. Any
purchase price adjustment as a result of this Section 0
will be
paid by HOKU at the end of the term of the applicable calendar quarter.
In lieu of making a cash payment to CUSTOMER pursuant to this Section
0,
HOKU
may,
at its option, pay for such purchase price adjustment in the form of
a credit
issued for future shipments of Products.
Notwithstanding anything to the contrary, the maximum amount of such
purchase
price reduction is limited to [*] percent ([*]%) of the value of the
respective
delayed Products. Monthly shipments which are delayed beyond [*] days
shall be
deemed to constitute a material breach of this Agreement pursuant to
Section
0
below.
Notwithstanding the foregoing, if CUSTOMER fails to make a payment to
HOKU
within the [*] period set forth in Section 0
below,
HOKU shall not be required to supply any Product to CUSTOMER until HOKU
has
received the past due amount including any interest payable thereon pursuant
to
this Agreement. For the avoidance of doubt, CUSTOMER’s right to reduce the
purchase price pursuant to this Section 0
shall
not apply if HOKU is not fulfilling its supply obligations for this
reason.
4. Shipping
& Delivery.
4.1. Except
as
provided in Section 0
above,
shipments shall be made from the Facility on a monthly basis in accordance
with
a shipment schedule that will be provided by HOKU each Year under this
Agreement
(the “Shipment
Schedule”)
no
later than sixty (60) days prior to the applicable Year. The Shipment
Schedule
shall provide for approximately equal monthly shipments in amounts not
less than
the Minimum Monthly Quantity that adds up to the Minimum Annual Quantity
of
Products.
4.2. HOKU
will
use commercially reasonable efforts to make available to CUSTOMER its
first
shipment of Products on or before [*].
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
3 of
19
Exhibit
10.83
CONFIDENTIAL
4.3. In
addition to the Minimum Annual Quantity of Product to be delivered
to CUSTOMER
each Year beginning no later than [*], pursuant to this Agreement,
HOKU hereby
agrees to sell to CUSTOMER, and CUSTOMER may elect to purchase from
HOKU from
[*], through and including [*], up to [*] percent ([*]%) of HOKU’s Spot Market
Products, as defined in the next sentence. For purposes of this Section
0,
“Spot
Market Products”
means
Products that meet the Product Specifications, and which are from HOKU’s excess
production output, which means that such Products are not required
to be shipped
pursuant to any of HOKU’s existing commitments to HOKU’s other Customers that
provide prepayments for Products (including SANYO Electric Co., Ltd.,
Suntech
Power Holding Co., Ltd., Global Expertise Wafer Division, Ltd., Solarfun
Power
Hong Kong Limited, Jiangxi Kinko Energy Co., Ltd., and Tianwei New
Energy
(Chengdu) Wafer Co., Ltd.), and which HOKU intends to sell on the spot
market.
Notwithstanding the foregoing, (A) HOKU shall have no obligation to
ship to
CUSTOMER any Products that HOKU intends to reserve for its inventory;
and (B)
HOKU is not guaranteeing that any Spot Market Products will be available.
Any
such shipments of Spot Market Products shall be invoiced at the [*]
Price as
reflected in the Pricing Schedule on Appendix 1, FOB Hoku’s Facility (INCOTERMS
2000) pursuant to Section 0
below.
Notwithstanding anything to the contrary, HOKU shall have no obligation
to ship
any Spot Market Products pursuant to this Agreement until CUSTOMER
has paid in
full the Initial Deposit, the Second Deposit, and the Third
Deposit.
5. Payments
& Advances.
5.1. Within
fifteen (15) days after the Effective Date, CUSTOMER shall provide
HOKU with a
payment of Twenty Two Million U.S. Dollars (US$22,000,000) as an advance
payment
for Products to be delivered under this Agreement, via wire transfer
of
immediately available funds (the “Initial
Deposit”);
provided, however, that in the event applicable law or the requirements
of the
Rules Governing the Listing of Securities on The Stock Exchange of
Hong Kong
Limited shall require the approval of this Agreement at an Extraordinary
General
Meeting of CUSTOMER’s shareholders, then CUSTOMER may delay such payment of the
Initial Deposit for up to an additional 60 calendar days. If such approval
is
not obtained, and if HOKU exercises its right to terminate this Agreement
pursuant to Section 0,
then
CUSTOMER shall be obligated to pay HOKU a break-up fee equal to [*].
5.2. CUSTOMER
shall pay in cash to HOKU the additional sum of Twenty-one Million
U.S. Dollars
(US$21,000,000) (the “Second
Deposit”)
as an
advance payment for Products to be delivered under this Agreement.
Payment of
the Second Deposit shall be made on or before December 20, 2008.
5.3. CUSTOMER
shall pay in cash to HOKU the additional sum of Twenty Million U.S.
Dollars
(US$20,000,000) (the “Third
Deposit”)
as an
advance payment for Products to be delivered under this Agreement.
Payment
of the Third Deposit shall be made on or before March 31, 2009.
5.4. CUSTOMER
shall pay in cash to HOKU the additional sum of Five Million U.S. Dollars
($5,000,000) (the “Fourth
Deposit”
and
together with the Second Deposit and the Third Deposit, the “Main
Deposit”)
as an
advance payment for Products to be delivered under this Agreement.
Payment of
the Fourth Deposit shall be made when HOKU completes the shipment to
CUSTOMER of
a cumulative aggregate of [*] metric tons of product pursuant to Section
4 of
this agreement (including Products shipped prior to March
2010).
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
4 of
19
Exhibit
10.83
CONFIDENTIAL
5.5.
On or
before sixtieth (60th)
day
after the Effective Date, CUSTOMER shall provide to HOKU an irrevocable
stand-by
letter of credit in substantially the form of Appendix
3
attached
hereto (the “Letter
of Credit”)
together with such additional restrictions consistent with this Agreement
in
substitution of the terms currently set forth on Appendix 3, and
reasonable
modifications proposed by the issuing bank, in the amount of the Main Deposit.
The Letter of Credit shall be issued to HOKU by a bank which has
a credit rating
that is acceptable to HOKU in its sole discretion, or such other
bank as may be
approved by HOKU and CUSTOMER (the “Issuing
Bank”).
The
Letter of Credit shall be issued in US Dollars for the full amount
of the Main
Deposit, and shall be freely assignable by HOKU in connection with
any
assignment of this Agreement by HOKU pursuant to Section 0
below.
Payment to HOKU of the Second Deposit, the Third Deposit, and the
Fourth Deposit
shall be made by the Issuing Bank upon its receipt of written notice
that
CUSTOMER has failed to make such payment on the applicable date.
If CUSTOMER
terminates this Agreement pursuant to Section 0,
0,
0,
0,
0,
0,
or
0
then
HOKU shall not have the right to request payment from the Issuing
Bank of funds
remaining on the Main Deposit. The Letter of Credit shall expire
on June 30,
2010, but shall be renewable for an additional one-year period if
the entire
amount of the Main Deposit has not been paid to HOKU as of such expiration
date.
5.6. HOKU
shall invoice CUSTOMER at or after the time of each shipment of Products
to
CUSTOMER. Taxes, customs and duties, if any, will be identified as
separate
items on HOKU invoices. All invoices shall be sent to CUSTOMER’s address as
provided herein. Payment terms for all invoiced amounts shall be
[*] days from
date of shipment. All payments shall be made in U.S. Dollars. Unless
HOKU is
entitled to retain the Total Deposit as liquidated damages pursuant
to Section
0
below,
shipments
to CUSTOMER shall be credited against the Total Deposit according
to the schedule of credits in Appendix 1 until there are no Funds
Remaining on
the Deposit (as defined in Section 0).
5.7. The
prices for the Products do not include any excise, sales, use, import,
export or
other similar taxes, such taxes will not include income taxes or
similar taxes,
which taxes will be invoiced to and paid by CUSTOMER, provided that
CUSTOMER is
legally or contractually obliged to pay such taxes. CUSTOMER shall
be
responsible for all transportation charges, duties or charges, liabilities
and
risks for shipping and handling (and hereby indemnifies HOKU for
such costs,
liabilities and risks); thus, the price for the Products shall not
include any
such charges.
5.8. Late
payments and outstanding balances shall accrue interest at the lesser
of [*] per
annum or the maximum allowed by law.
6. Security
Interest.
6.1. Subject
to receipt of the Initial Deposit HOKU hereby grants to CUSTOMER
a security
interest to secure the repayment by HOKU to CUSTOMER of the Total
Deposit
following any of the events set forth in Section 0
below,
which shall be subordinated in accordance with Section 0
below,
in all of the tangible and intangible assets related to HOKU’s polysilicon
business (the “Collateral”).
6.2. CUSTOMER
acknowledges and agrees that the security interests and liens in
the Collateral
will not be first priority security interests, will be expressly
subordinated to
HOKU’s third-party lenders (the “Senior
Lenders”)
that
provide debt financing for the construction of any HOKU Facility,
and may be
subordinated as a matter of law to other security interests, and
to security
interests that are created and perfected prior to the security interest
granted
to CUSTOMER hereby. CUSTOMER shall enter into subordination agreements
with the
Senior Lenders on terms and conditions reasonably acceptable to the
Senior
Lenders.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
5 of
19
Exhibit
10.83
CONFIDENTIAL
6.3. In
addition, CUSTOMER shall enter into collateral, intercreditor and
other
agreements (the “Collateral
Agreements”)
with
HOKU’s Senior Lenders, and with SANYO Electric Co., Ltd., Suntech Power
Holding
Co., Ltd., Global Expertise Wafer Division, Ltd., Solarfun Power
Hong Kong
Limited, Jiangxi Kinko Energy Co., Ltd., and Tianwei New Energy
(Chengdu) Wafer
Co., Ltd and HOKU’s other customers who provide prepayments for Products
(collectively, “HOKU’s
Other Customers”),
as
may be reasonably necessary to ensure that the security interest
granted hereby
is pari passu with the security interests that may be granted to
HOKU’s Other
Customers. CUSTOMER may not unreasonably refuse to sign any such
Collateral
Agreement, provided that such Collateral Agreement grants CUSTOMER
a pari passu
priority with respect to HOKU’s Other Customers, and is expressly subordinated
to the Senior Lenders.
6.4. The
security interest granted hereby shall continue so long as HOKU
continues to
maintain any amount of the Total Deposit, and only to the extent
of such
remaining amount of the Total Deposit being held by HOKU, which
has not been
credited against the shipment of Products pursuant to this Agreement,
or
otherwise repaid to CUSTOMER. Notwithstanding anything to the contrary
contained
in this Agreement, the Collateral consisting of real property shall
secure only
the obligations of HOKU to refund any portion of the Total Deposit
to CUSTOMER
in accordance with the terms of this Agreement. When the Total
Deposit is no
longer held by HOKU, CUSTOMER will sign such documents as are necessary
to
release its security interests.
6.5. HOKU
and
CUSTOMER each agree to act in good faith to execute and deliver
any additional
document or documents that may be required in furtherance of the
foregoing
provisions of this Section 0,
including the Collateral Agreements. Neither HOKU nor CUSTOMER
may unreasonably
refuse to sign any such document.
7. Product
Quality Guarantee.
7.1. HOKU
warrants to CUSTOMER that the Products shall meet the Product Specifications.
For each shipment, this warranty shall survive for [*] days after
the applicable
shipment date (the “Warranty
Period”).
Upon
release of the Products to a common carrier or freight forwarder,
FOB origin
(INCOTERMS 2000), HOKU warrants that the Products shall be free
of all liens,
mortgages, encumbrances, security interests or other claims or
rights. HOKU
will, upon prompt notification and compliance with HOKU’s instructions, refund
or replace, at CUSTOMER’s sole option, any Product which does not meet the
Product Specifications, and CUSTOMER shall comply with the inspection
and return
goods policy described in Section 0
below
with respect to such Products. No employee, agent or representative
of HOKU has
the authority to bind HOKU to any oral representation or warranty
concerning the
Products. Any oral representation or warranty made prior to the
purchase of any
Product and not set forth in writing and signed by a duly authorized
officer of
HOKU shall not be enforceable by CUSTOMER. HOKU makes no warranty
and shall have
no obligation with respect to damage caused by or resulting from
accident,
misuse, neglect or unauthorized alterations to the Products.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
6 of
19
Exhibit
10.83
CONFIDENTIAL
7.2. HOKU
EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED
OR STATUTORY,
INCLUDING THE WARRANTIES OF MERCHANTABILITY, AND FITNESS FOR
A PARTICULAR
PURPOSE. Except as otherwise provided in Section 0
below,
HOKU’s sole responsibility and CUSTOMER’s exclusive remedy for any claim arising
out of the purchase of any Product is a refund or replacement,
as described
above. In no event shall HOKU’s liability exceed the purchase price paid
therefore; nor shall HOKU be liable for any claims, losses or
damages of any
individual or entity or for lost profits or any special, indirect,
incidental,
consequential, or exemplary damages, howsoever arising, even
if HOKU has been
advised of the possibility of such damages.
7.3. HOKU
shall, at its own expense, indemnify and hold CUSTOMER and its
Affiliates
harmless from and against any expense or loss resulting from
any actual or
alleged infringement of any patent, trademark, trade secret,
copyright, mask
work or other intellectual property related to the Products,
and shall defend at
its own expense, including attorneys fees, any suit brought against
CUSTOMER or
CUSTOMER’s Affiliates alleging any such infringement. CUSTOMER agrees
that: (i)
CUSTOMER shall give HOKU prompt notice in writing of any such
suit; (ii) if HOKU
provides evidence reasonably satisfactory to CUSTOMER of HOKU’s financial
ability to defend the matter vigorously and pay any reasonably
foreseeable
damages, CUSTOMER shall permit HOKU, through counsel of HOKU’s choice, to answer
the charge of infringement and defend such suit (but CUSTOMER,
or CUSTOMER’s
Affiliate may be represented by counsel and participate in the
defense at its
own expense); and (iii) CUSTOMER shall give HOKU all needed information,
assistance, and authority, at HOKU’s expense, to enable HOKU to defend such
suit. In case of a final award of damages in any such suit HOKU
shall pay such
award, but shall not be responsible for any settlement made without
its prior
consent. Except as otherwise expressly set forth herein, HOKU
disclaims any
obligation to defend or indemnify CUSTOMER, its officers, agents,
or employees,
from any losses, damages, liabilities, costs or expenses which
may arise out of
the acts of omissions of XXXX.
0. Inspection
and Return Goods Policy.
8.1. An
inspection of appearance of each shipment of Product shall be
made by CUSTOMER
in accordance with sound business practice upon the delivery
of the Product, and
in no case later than [*]
after
delivery at CUSTOMER’s factory. CUSTOMER shall inform HOKU promptly, and in no
case later than [*]
after
delivery of Product, in case of any obvious damages or other
obvious defects to
the Product which CUSTOMER discovers under the inspection of
appearance.
8.2. CUSTOMER
shall perform final inspection of the Product upon introducing
the Product into
CUSTOMER’s production process. Such inspection shall take place during
the
Warranty Period. If the Product does not meet the Product Specifications,
CUSTOMER shall notify HOKU in writing without undue delay after
the inspection
and, together with the notification, submit documentary evidence
of the result
of the final inspection whereupon HOKU shall have the right to
undertake its own
inspection prior to any return of the Products pursuant to Section
0
below.
8.3. Products
may be returned to HOKU within the later of (a) [*] after discovery
of a defect
consistent with Sections 0
and
0
above;
and (b) [*] after HOKU completes its inspection and confirms
the defect pursuant
to Section 0
above,
for replacement or a refund including all return shipment expenses.
To assure
prompt handling, HOKU shall provide CUSTOMER a return goods authorization
number
within 48 hours of CUSTOMER’s request. Provided that HOKU communicates this
number to CUSTOMER within such timeframe, CUSTOMER will reference
this number on
return shipping documents. Returns made without the authorization
number
provided by HOKU in accordance with the foregoing may be subject
to HOKU’s
reasonable charges due to HOKU’s additional handling costs. HOKU reserves the
right to reverse any credit issued to CUSTOMER if, upon return,
such Product is
determined by an Independent Expert not to be defective.
The
conclusion of the Independent Expert shall be final, binding
and non-appealable
in respect of the conformity of the Products to the warranties
set forth in
Section 0
above.
The fees and expenses of the Independent Expert shall be paid
solely by the
party that does not succeed in the dispute.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
7 of
19
Exhibit
10.83
CONFIDENTIAL
9. Term
and Termination.
9.1. The
term
of this Agreement shall begin on the Effective Date and shall
remain in force
for a period of ten Years beginning with the First Shipment
Date.
9.2. Each
Party may, at its discretion, upon written notice to the other
Party, and in
addition to its rights and remedies provided under this Agreement
or any other
agreement executed in connection with this Agreement and at
law or in equity,
terminate this Agreement in the event of any of the following:
9.2.1. Upon
a
material breach of the other Party of any material provision
in this Agreement,
and failure of the other Party to cure such material breach
within sixty (60)
days after written notice thereof;
provided, however, that such cure period shall not modify or
extend the
[*]
cure
period for HOKU’s delivery obligations pursuant to Section 0
above;
and provided, further that each sixty (60) day cure period
shall not apply to
CUSTOMER’s failure to make payment to HOKU pursuant to this Agreement.
In the
event of CUSTOMER’s failure to make payment on the [*]
payment
terms set forth in Section 0
hereof,
termination by HOKU shall require the issuance of a written
notice of default
containing the threat of immediate termination if payment is
not made within an
additional grace period of not less than ten (10) business
days.
For
purposes of this Section 0,
a
“material breach” means a monthly shipment which is delayed beyond one hundred
twenty (120) days, a payment default or any other material
breach of this
Agreement which materially and adversely affects a Party or
which occurs on
multiple occasions;
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);
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
8 of
19
Exhibit
10.83
CONFIDENTIAL
9.2.4. In
accordance with the provisions of Section 0
(Force
Majeure) below; provided, however, that CUSTOMER may not
terminate this
Agreement pursuant to Section 0
if HOKU
is supplying Products to CUSTOMER pursuant to Section 0
of this
Agreement;
9.2.5. HOKU’s
repetitive failure to deliver Products conforming to the
warranties set forth in
Section 0
above,
subject to applicable cure periods; or
9.2.6. Without
limiting the foregoing, CUSTOMER shall have the right to
terminate this
Agreement if the First Shipment Date does not occur on or
before June 30,
2010.
9.3. HOKU
shall have the right to terminate this Agreement if (A) on
or before the
seventy-fifth (75th)
calendar day after the Effective Date, CUSTOMER has failed
to pay the Initial
Deposit, in which case CUSTOMER shall pay HOKU the sum of
[*] as a break-up fee
as liquidated damages; (B) on or before the sixtieth (60th)
calendar day after the Effective Date, CUSTOMER has failed
to deliver the Letter
of Credit pursuant to Section 05
above,
in which case, HOKU shall be entitled to retain the Initial
Deposit as
liquidated damages; (C) on or before December 20, 2009, CUSTOMER
and the Issuing
Bank have failed to pay the Second Deposit pursuant to Section
5.2 above, in
which case, HOKU shall be entitled to retain the Initial
Deposit as liquidated
damages; (D) on or before March 31, 2009, CUSTOMER and the
Issuing Bank have
failed to pay the Third Deposit pursuant to Section 5.3 above,
in which case,
HOKU shall be entitled to retain the Initial Deposit and
the Second Deposit as
liquidated damages; or (E) CUSTOMER and the Issuing Bank
have failed to pay the
Fourth Deposit pursuant to Section 5.4 above, in which case,
HOKU shall be
entitled to retain the Initial Deposit, the Second Deposit
and the Third Deposit
as liquidated damages.
UPON
PAYMENT OF THE BREAK-UP FEE OR FORFEITURE OF SUCH DEPOSITS
AS LIQUIDATED DAMAGES
PURSUANT TO THIS SECTION 0,
ALL
CLAIMS, OBLIGATIONS AND LIABILITIES OF CUSTOMER DERIVING
FROM OR RELATING TO
THIS AGREEMENT AND ITS TERMINATION SHALL BE DEEMED TO BE
DISCHARGED AND FINALLY
SETTLED.
9.4. Upon
the
expiration or termination of this Agreement howsoever arising,
the following
Sections shall survive such expiration or termination: Sections
0
(Definitions); Section 0
(Product
Quality Guarantee), Section 0
(Inspection and Return Goods Policy); Section 0
(Term
and Termination); Section 0
(Liability); Section 0
(Liquidated Damages); and Section 0
(General
Provisions).
9.5. If
CUSTOMER terminates this Agreement pursuant to Xxxxxxx 0,
0,
0,
0,
0,
0,
xx
0,
then,
in addition to CUSTOMER’s other remedies pursuant to this Agreement, and all
available remedies at law and in equity, 100% of the Funds
Remaining on the
Total Deposit on such date of termination shall be returned
to CUSTOMER within
thirty (30) calendar days, with any late payment accruing
interest pursuant to
Section 0
above;
provided however that if CUSTOMER is in material breach of
this Agreement at the
time it terminates this Agreement, then HOKU shall not be
required to repay any
of the Funds Remaining on the Total Deposit up to the amounts
of HOKU’s direct
loss from such material breach (unless CUSTOMER cures such
breach within the
applicable cure period) or CUSTOMER’s other outstanding and unpaid obligations
hereunder (including, without limitation, obligations under
Section 0).
If
HOKU
terminates this Agreement pursuant to Section 0,9.2.2,
,
0,
0,
or
0
then, in
addition to HOKU’s other remedies pursuant to this Agreement, and all available
remedies at law and in equity, HOKU shall be entitled to
retain any Funds
Remaining on the Total Deposit on such date of termination
in accordance with
Section 0.
“Funds
Remaining”
on
the
Total Deposit are funds not applied against CUSTOMER’s purchase of Product,
pursuant to Section 0
above,
for Product actually shipped to CUSTOMER hereunder.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
9 of
19
Exhibit
10.83
CONFIDENTIAL
10. Liability.
10.1. IN
NO
EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, SPECIAL,
INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR FOR EXEMPLARY OR PUNITIVE DAMAGES,
EVEN IF CUSTOMER OR
HOKU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
10.2. NEITHER
PARTY’S TOTAL LIABILITY TO THE OTHER FOR ANY KIND OF LOSS, DAMAGE
OR LIABILITY
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT, UNDER
ANY THEORY OF
LIABILITY, SHALL EXCEED IN THE AGGREGATE THE TOTAL DEPOSIT,
EXCEPT WITH RESPECT
TO CUSTOMER’S CONTINUING OBLIGATION TO PURCHASE THE PRODUCTS AS SET
FORTH
HEREIN.
11. Liquidated
Damages; Off-Set.
11.1.
THE
PARTIES ACKNOWLEDGE AND AGREE THAT ANY BREACH OF SECTION
0
OF THIS
AGREEMENT BY CUSTOMER MAY CAUSE IRREPARABLE AND IMMEASURABLE
DAMAGE TO HOKU.
BECAUSE IT IS DIFFICULT TO MEASURE THESE DAMAGES, IN THE
EVENT THAT THIS
AGREEMENT IS TERMINATED BY HOKU PURSUANT TO SECTION 0,
THEN
HOKU SHALL BE ENTITLED TO RETAIN AS LIQUIDATED DAMAGES,
ANY FUNDS REMAINING ON
THE TOTAL DEPOSIT THEREOF NOT CREDITED AGAINST PRODUCT
SHIPMENTS.
11.2. THE
PARTIES ACKNOWLEDGE AND AGREE THAT, IN THE EVENT THAT CUSTOMER
IS LATE IN MAKING
ANY PAYMENTS TO HOKU FOR PRODUCTS THAT HAVE BEEN SHIPPED
BY HOKU, HOKU RESERVES
THE RIGHT TO OFF-SET THE AMOUNT OF THE TOTAL DEPOSIT BY
CREDITING TO HOKU’S
ACCOUNT THE AMOUNT OF THE TOTAL DEPOSIT THAT IS EQUAL TO
THE PAST DUE AMOUNT,
INCLUDING ANY INTEREST PAYABLE THEREON PURSUANT TO THIS
AGREEMENT; PROVIDED,
HOWEVER, THAT HOKU SHALL NOTIFY CUSTOMER IN WRITING PRIOR
TO SUCH OFF-SET. FOR
THE AVOIDANCE OF DOUBT, THE INTEREST PAYABLE SET FORTH
ABOVE SHALL ACCRUE FROM
THE DUE DATE TO THE DATE WHEN HOKU EXERCISES THE RIGHT
TO OFF-SET. IN CASE OF
SUCH OFF-SET BY HOKU, CUSTOMER SHALL BE REQUIRED TO REPLENISH
THE DEPOSIT BY THE
SET-OFF AMOUNT WITHIN THIRTY (30) BUSINESS DAYS AFTER CUSTOMER’S RECEIPT OF SUCH
NOTIFICATION.
12. Force
Majeure.
Neither
Party shall be liable to the other Party for failure of
or delay in performance
of any obligation under this Agreement, directly, or indirectly,
owing to acts
of God, war, war-like condition, embargoes, riots, strike,
lock-outs and other
events beyond its reasonable control, provided, however,
that the non-performing
Party shall not be so excused to the extent such default
or delay is
attributable to such non-performing Party failing to use
reasonable efforts to
prevent or such non-performing Party causing such default
or delay, and such
default or delay could not reasonably be circumvented by
the non-performing
Party through the use of alternate sources, workaround
plans or other means.
Notwithstanding the foregoing, a strike, lock-out or other
labor dispute
involving a Party (or, in the case of Supplier, a subcontractor
or supplier) and
its own personnel will not excuse such Party from performing
its obligations
hereunder. In such event, the non-performing Party will
be excused from further
performance or observance of the obligation(s) so affected
for as long as such
circumstances prevail and such Party continues to use commercially
reasonable
efforts to recommence performance or observance whenever
and to whatever extent
without delay. If such failure or delay occurs, the affected
Party (i.e. the
Party that is unable to perform) shall notify the other
Party of the occurrence
thereof as soon as possible, and the Parties shall discuss
the best way to
resolve the event of force majeure. If the conditions of
Force Majeure apply for
a period of more than two (2) consecutive calendar months,
the non-affected
Party shall be entitled to terminate this Agreement upon
written notice to the
other Party.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
10
of 19
Exhibit
10.83
CONFIDENTIAL
13. General
Provisions.
13.1. CUSTOMER
acknowledges that it is the policy of HOKU to scrupulously
comply with the
Foreign Corrupt Practices Act of 1977 (as amended, the
“FCPA”)
and to
adopt appropriate and reasonable practices and procedures
that are undertaken in
such a manner as to substantially eliminate the potential
for violation of the
FCPA. CUSTOMER further acknowledges that it shall be
bound by any law,
regulation or other legal enactment, that prohibits corrupt
practices of the
type or nature described in the FCPA and that is applicable
to CUSTOMER, and
CUSTOMER hereby represents and warrants that neither
HOKU, nor to CUSTOMER’s
knowledge, any other authorized person or entity associated
with or acting for
or on behalf of HOKU, has knowingly directly or indirectly
made any
contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other
payment to CUSTOMER, whether in money, property, or services
(i) to obtain
favorable treatment in securing business from CUSTOMER,
(ii) to pay for
favorable treatment for business secured from CUSTOMER,
or (iii) to obtain
special concessions or for special concessions already
obtained from CUSTOMER,
for or in respect of HOKU, in violation of any legal
requirement or applicable
law. HOKU acknowledges that it is the policy of CUSTOMER
to scrupulously comply
with the FCPA and to adopt appropriate and reasonable
practices and procedures
that are undertaken in such a manner as to substantially
eliminate the potential
for violation of the FCPA. HOKU further acknowledges
that it shall be bound by
any law, regulation or other legal enactment, that prohibits
corrupt practices
of the type or nature described in the FCPA and that
is applicable to HOKU, and
HOKU hereby represents and warrants that neither CUSTOMER,
nor to HOKU’s
knowledge, any other authorized person or entity associated
with or acting for
or on behalf of CUSTOMER, has knowingly directly or indirectly
made any
contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other
payment to HOKU, whether in money, property, or services
(i) to obtain favorable
treatment in securing business from HOKU, (ii) to pay
for favorable treatment
for business secured from HOKU, or (iii) to obtain special
concessions or for
special concessions already obtained from HOKU, for or
in respect of CUSTOMER,
in violation of any legal requirement or applicable law.
13.2. This
Agreement shall be construed under and governed by the
laws of the State of
California, U.S.A.
13.3. Upon
notice from one Party to the other of a dispute hereunder,
the Parties agree to
hold a meeting within thirty (30) days of receipt of
such notice with at least
one (1) representative from each Party who has decision-making
authority for
such company. At this meeting, the Parties will attempt
to resolve the dispute
in good faith. If, after the meeting, the dispute has
not been resolved, only
then may a Party resort to litigation. Any proceeding
to enforce or to resolve
disputes relating to this Agreement shall be brought
in California, USA. In any
such proceeding, neither Party shall assert that such
a court lacks jurisdiction
over it or the subject matter of the proceeding.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
11
of 19
Exhibit
10.83
CONFIDENTIAL
13.4. HOKU
may
assign its rights under this Agreement to any collateral
agent as collateral
security for HOKU’s secured obligations in connection with the financing
a HOKU
Facility, without the consent of CUSTOMER. Except as
stated in the previous
sentence, neither HOKU nor CUSTOMER may assign this
Agreement to a third party
without the prior written consent of the other Party,
which consent shall not be
unreasonably withheld. Notwithstanding the foregoing,
an assignment of this
Agreement by either Party in connection with a merger,
acquisition, or sale of
all or substantially all of the assets or capital stock
of such Party shall not
require the consent of the other Party. If this Agreement
is assigned
effectively to a third party, this Agreement shall
bind upon successors and
assigns of the Parties hereto.
13.5. All
notices delivered pursuant to this Agreement shall
be in writing and in the
English language. Except as provided elsewhere in this
Agreement, a notice is
effective only if the Party giving or making the notice
has complied with this
Section 0
and if
the addressee has received the notice. A notice is
deemed to have been received
as follows:
|
(a)
|
If
a notice is delivered in person, or sent
by registered or certified mail,
or nationally or internationally recognized
overnight courier, upon
receipt as indicated by the date on the signed
receipt;
or
|
|
(b)
|
If
a notice is sent by facsimile, upon receipt
by the Party giving the notice
of an acknowledgment or transmission report
generated by the machine from
which the facsimile was sent indicating that
the facsimile was sent in its
entirety to the addressee’s facsimile number.
|
Each
Party giving a notice shall address the notice to the appropriate
person at the
receiving Party at the address listed below or to a
changed address as the Party
shall have specified by prior written notice:
CUSTOMER:
WEALTHY
RISE INTERNATIONAL, LTD.
RM
4001-06,Office Tower, Xxxxxxxxxx Xxxxx
0
Xxxxxxx
Xxxx, Xxxxxxx, Xxxx Xxxx
Attn:
X.X. Xxx, CEO
HOKU:
HOKU
MATERIALS, INC.
Xxx
Xxxx
Xxx
Xxxxxxxxx,
Xxxxx, 00000
Attn:
Xx.
Xxxxxx Xxxxxx, CEO
Facsimile:
[*]
13.6. The
waiver by either Party of the remedy for the other
Party’s breach of or its
right under this Agreement will not constitute a waiver
of the remedy for any
other similar or subsequent breach or right.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
12
of 19
Exhibit
10.83
CONFIDENTIAL
13.7. If
any
provision of this Agreement is or becomes, at any
time or for any reason,
unenforceable or invalid, no other provision of this
Agreement shall be affected
thereby, and the remaining provisions of this Agreement
shall continue with the
same force and effect as if such unenforceable or
invalid provisions had not
been inserted in this Agreement.
13.8. No
changes, modifications or alterations to this Agreement
shall be valid unless
reduced to writing and duly signed by respective
authorized representatives of
the Parties.
13.9. No
employment, agency, trust, partnership or joint venture
is created by, or shall
be founded upon, this Agreement. Each Party further
acknowledges that neither it
nor any Party acting on its behalf shall have any
right, power or authority,
implied or express, to obligate the other Party in
any way.
13.10. Neither
Party shall make any announcement or press release
regarding this Agreement or
any terms thereof without the other Party’s prior written consent; provided,
however, that the Parties will work together to issue
a joint press release
within two (2) days after execution of this Agreement.
Notwithstanding the
foregoing, either Party may publicly disclose the
material terms of this
Agreement pursuant to the United States Securities
Act of 1933, as amended, the
United States Securities Exchange Act of 1934, as
amended, or other applicable
law and Solargiga Energy Holdings Limited, being
the ultimate holding company of
CUSTOMER, may publicly disclose the material terms
of this agreement pursuant to
Hong Kong law and the Rules Governing the Listing
of securities on The stock
Exchange of Hong Kong Limited, as amended; provided,
however, that the Party
being required to disclose the material terms of
this Agreement shall provide
reasonable advance notice to the other Party.
13.11. This
Agreement constitutes the entire agreement between
the Parties and supersedes
all prior proposal(s) and discussions, relative to
the subject matter of this
Agreement and neither of the Parties shall be bound
by any conditions,
definitions, warranties, understandings or representations
with respect to such
subject matter other than as expressly provided herein.
No oral explanation or
oral information by either Party hereto shall alter
the meaning or
interpretation of this Agreement.
13.12. The
headings are inserted for convenience of reference
and shall not affect the
interpretation and or construction of this Agreement.
13.13. Words
expressed in the singular include the plural and
vice-versa.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Page
13
of 19
Exhibit
10.83
CONFIDENTIAL
IN
WITNESS WHEREOF, the Parties have executed this
Supply Agreement as of the date
last set forth below.
|
CUSTOMER:
WEALTHY
RISE INTERNATIONAL, LTD.
By: /s/
X. X. XXX
Name: X.
X. Xxx
Title: CEO
Authorized
Signatory
Date: 9/04/08
|
HOKU:
HOKU
MATERIALS, INC.
By: /s/
XXXXXX X. XXXXXX
Name: Xxxxxx
X. Xxxxxx
Title: CEO
Authorized
Signatory
Date: 9/04/2008
|
Signature
Page to Supply Agreement
Page
14
of 19
Exhibit
10.83
CONFIDENTIAL
Appendix
1
Pricing
Schedule
|
Price
|
Year
1
|
Year
2
|
Year
3
|
Year
4
|
Year
5
|
Year
6
|
Year
7
|
Year
8
|
Year
9
|
Year
10
|
Total
|
|
Volume
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
Price
per kg
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
If
there
is uncertainty in price between the delivery
period and the total quantity for
that period based on the table above, the price
assigned to the quantity shall
prevail. For example, the first [*] shall be
invoiced at [*] per kilogram.
Credit
Schedule
|
Credit
|
Year
1
|
Year
2
|
Year
3
|
Year
4
|
Year
5
|
Year
6
|
Year
7
|
Year
8
|
Year
9
|
Year
10
|
Total
|
|
Total
credit per Year ($ millions)
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
HOKU
will
credit CUSTOMER against the Total Deposit according
to the above schedule.
Credits
will be reflected on shipping invoices and shall
be applied in full for each
shipment of Products until the amount specified
above for each year is fully
exhausted. In the event that any credit is not
applied due to HOKU’s failure to
ship Products, then such credit shall be carried
forward to the next
Year.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Appendix
1 to Supply Agreement
Page
15
of 19
Exhibit
10.83
CONFIDENTIAL
Appendix
2 -- Product Specifications
PRODUCT
CODE: CAS # 7440-21-3
1.
Description
[*]
2.
Bulk & Surface Impurity Specifications
[*]
3.
Size Specifications
[*]
4.
Certification & Elemental Analysis
[*]
5.
Packaging
[*]
6. Qualified
Laboratories:
[*]
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Appendix
2 to Supply Agreement
Page
16
of 19
Exhibit
10.83
CONFIDENTIAL
APPENDIX
3
Form
of
Letter of Credit
[This
Letter of Credit may be replaced by a Letter
of Credit that is mutually
acceptable to HOKU and the Issuing Bank.]
IRREVOCABLE
STANDBY LETTER OF CREDIT
|
BENEFICI”RY:
|
“DVISING
B”NK:
|
|
HOKU
M”XXXX”LS, INC.
|
[INSERT
“DVISING B”NK N”ME]
|
|
ONE
HOKU W”Y
|
[INSERT
B”NK “DDRESS]
|
|
POC”XXXXX,
ID”HO 83204
|
Gentlemen:
We
hereby
establish in your favor our Irrevocable Standby
Letter of Credit
No.______________, available by your drafts
at sight on (ISSUING BANK’S NAME) )
for the account of _______________, up to
an aggregate amount of Forty-six
Million U.S. Dollars (US$46,000,000).
Alternatively,
electronic drawings may be made by authenticated
Swift indicating the amount
drawn and stating “Drawn under Credit No. ___________ of (ISSUING
BANK’S NAME
AND ADDRESS) dated _______, 2008.
Multiple
presentations permitted.
All
drafts must bear or be electronic drawings
with the clause "Drawn under Credit
No. ___________ of (ISSUING BANK’S NAME) dated __________, 2008."
This
Letter of Credit is subject to an automatic
extension, without a written
amendment, to extend the expiration date
for an additional period of one year
from the present or each future expiration
date unless at least thirty (30) days
prior to any expiration date we notify you
in writing by certified or registered
mail or other similarly expeditious receipted
service at the above address that
this Letter of Credit will not be extended
for any such additional period. Upon
receipt by you of such notice, you may draw
hereunder on or before the then
relevant expiration date by means of your
draft on us at sight or alternatively,
by electronic drawings as mentioned above.
Any
and
all banking charges are for the account of
the applicant.
Pursuant
to U.S. Law, we are prohibited from issuing,
transferring, accepting or paying
letters of credit to any party or entity
identified on the Office of Foreign
Asset Control, U.S. Department of Treasury
list or subject to the denial of
export privileges by the U.S. Department
of Commerce.
This
Credit is issued subject to the International
Standby Practices 1998 (ISP98),
International Chamber of Commerce Publication
No. 590.
It
is a
condition of this letter of credit that it
is transferable and may be
transferred in its entirety, but not in part,
and may be successively
transferred by you or any transferee hereunder
to a successor transferee(s).
Transfer under this letter of credit to such
transferee must be jointly signed
by Beneficiary and shall be effected upon
presentation to us of the original of
this letter of credit and any amendments
hereto accompanied by a request
designating the transferee in the form of
Annex A, attached hereto,
appropriately completed.
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Appendix
3 to Supply Agreement
Page
17
of 19
Exhibit
10.83
CONFIDENTIAL
We
hereby
engage with you that all drawings under
and in compliance with the terms and
conditions of this Credit shall be duly
honored if drawn and presented on or
before June 30, 2010, the expiration date,
or any extended date as provided
above, at (ISSUING BANK’S NAME AND ADDRESS).
If
CUSTOMER terminates this Agreement pursuant
to Section 0,
0,
0,
0,
0,
0,
or
0
then
HOKU shall not have the right to request
payment from the Issuing Bank of funds
remaining on the Main Deposit.
|
Sincerely,
|
||
|
________________________
|
__________________________
|
|
|
Authorized
Signature
|
Authorized
Signature
|
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Appendix
3 to Supply Agreement
Page
18
of 19
Exhibit
10.83
CONFIDENTIAL
ANNEX
A
Transfer
of Letter of Credit
[Date]
Delivered
under [insert Bank name],
Irrevocable
Standby Letter of Credit No. [_____],
dated
[__________].
[_______________]
[_______________]
[_______________]
Attention:
[_______________]
Ladies
and Gentlemen:
Reference
is made to [insert Bank name], Irrevocable
Standby Letter of Credit No. [_____]
dated [_______] (the “Letter of Credit”), issued by you in favor of us. Any
capitalized terms used, but not defined,
herein shall have its respective
meaning as set forth in the Letter of
Credit.
For
value
received, the undersigned, as Beneficiary
under the Letter of Credit, hereby
irrevocably assigns and transfers to
[__________] (the “Transferee”) all rights
of the undersigned to draw under the
Letter of Credit in their
entirety.
By
this
transfer, all rights of the undersigned,
as Beneficiary under the Letter of
Credit, are transferred to the Transferee,
and the Transferee shall have the
sole rights with respect to the Letter
of Credit relating to any amendments
thereof and any notices thereunder. All
amendments to the Letter of Credit are
to be consented to by the Transferee
without necessity of any consent of or
notice to the undersigned.
Simultaneously
with the delivery of this notice to you,
copies of this notice are being
transmitted to the Transferee.
The
Letter of Credit is returned herewith,
and we ask you to either issue a
substitute letter of credit for the benefit
of the Transferee or endorse the
transfer on the reverse thereof, and
forward it directly to the Transferee
with
your customary notice of transfer.
Yours
faithfully
(Authorized
Signatory)
For
[BENEFICIARY]
ACKNOWLEDGED:
(Authorized
Signatory)
For
[SUCCESSOR
BENEFICIARY]
|
CUSTOMER
Initials & Date ___________________________
|
HOKU
Initials & Date
___________________________
|
Appendix
3 to Supply Agreement
Page
19
of 19
