Attached files
| file | filename |
|---|---|
| 8-K/A - Hoku Corp | v170289_8k.htm |
| EX-4.5 - Hoku Corp | v170289_ex4-5.htm |
| EX-4.4 - Hoku Corp | v170289_ex4-4.htm |
| EX-4.6 - Hoku Corp | v170289_ex4-6.htm |
| EX-10.111 - Hoku Corp | v170289_ex10-111.htm |
| EX-10.113 - Hoku Corp | v170289_ex10-113.htm |
| EX-10.114 - Hoku Corp | v170289_ex10-114.htm |
| EX-10.110 - Hoku Corp | v170289_ex10-110.htm |
Exhibit
10.112
FORM
OF SECURITY AGREEMENT
SECURITY
AGREEMENT (this “Agreement”) dated as of
December 22, 2009 between HOKU MATERIALS, INC., a Delaware corporation (together
with its successors and assigns, “HOKU”) and TIANWEI NEW ENERGY
(CHENGDU) WAFER CO., LTD., a People’s Republic of China company (together with
its successors and assigns, “TIANWEI”).
RECITALS
WHEREAS, the parties hereto have
entered into an Amended and Restated Supply Agreement No._____ dated as of the
date hereof (as amended from time to time, the “Supply Agreement”) pursuant to which
HOKU has agreed to sell to TIANWEI, and TIANWEI has agreed to purchase from
HOKU, an aggregate of _______ metric tons of Products over a ten-year
period;
WHEREAS,
HOKU is willing to secure its obligations under the Supply Agreement by granting
Liens on its assets to TIANWEI as provided hereunder;
WHEREAS,
TIANWEI is not willing to purchase Products under the Supply Agreement unless
the foregoing obligations of HOKU are secured as described above;
NOW,
THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION
1. Definitions.
(a) Terms Defined in Supply
Agreement. Unless otherwise specifically defined herein, each
term used herein which is defined in the Supply Agreement shall have the meaning
assigned to such term in the Supply Agreement.
(b) Terms Defined in the
UCC. The following terms that are defined in the UCC are used
herein as so defined: Accounts, Authenticate, Certificated Security, Chattel
Paper, Commodity Account, Commodity Intermediary, Documents, Equipment,
Financial Assets, General Intangibles, Instruments, Inventory, Investment
Property, Letter-of-Credit Rights, Security Entitlement and Uncertificated
Security.
(c) Additional
Definitions. The following additional terms, as used herein,
have the following meanings:
“Copyright
License” shall mean any agreement now or hereafter in existence granting
to HOKU, or pursuant to which HOKU grants to any other Person, any right to use,
copy, reproduce, distribute, prepare derivative works, display or publish any
records or other materials on which a Copyright is in existence or may come into
existence.
“Copyrights”
shall mean all the following: (i) all copyrights under the laws of the United
States or any other country (whether or not the underlying works of authorship
have been published), all registrations and recordings thereof, all
copyrightable works of authorship (whether or not published), and all
applications for copyrights under the laws of the United States or any other
country, including registrations, recordings and applications in the United
States Copyright Office or in any similar office or agency of the United States,
any State thereof or any other country or any political subdivision thereof,
(ii) all renewals of any of the foregoing, (iii) all claims for, and rights to
sue for, past or future infringements of any of the foregoing, and (iv) all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including damages and payments for past or
future infringements thereof.
“Deposit
Accounts” shall mean all of HOKU’s “deposit accounts” (as defined in
Section 9-102(a)(29) of the UCC) and all funds standing to the credit
thereof.
“Equity
Interest” shall mean (i) in the case of a corporation, any shares of its
capital stock, (ii) in the case of a limited liability company, any membership
interest therein, (iii) in the case of a partnership, any partnership interest
(whether general or limited) therein, (iv) in the case of any other business
entity, any participation or other interest in the equity or profits thereof,
(v) any warrant, option or other right to acquire any Equity Interest described
in this definition or (vi) any Security Entitlement in respect of any Equity
Interest described in this definition.
“Excluded
Accounts” shall mean any Deposit Account established for the benefit of
HOKU’s Senior Lenders (as defined in Section 3(h) hereof) or as security for the
obligations under the Loan Contracts in connection with the debt financing
provided by such Senior Lenders for the construction of any HOKU
Facility.
“Intellectual
Property” shall mean all intellectual and similar property of HOKU of
every kind and nature now owned or hereafter acquired by HOKU, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the
foregoing.
2
“License”
means any Patent License, Trademark License, Copyright License or other license
or sublicense agreement relating to Intellectual Property to which HOKU is a
party.
“Lien”
shall mean any mortgage, pledge, hypothecation, assignment (fiduciary or
otherwise), deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any such encumbrance arising out of
or pursuant to any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under any recording or notice
statute, and any capital lease having substantially the same effect as any of
the foregoing).
“Loan
Contracts” shall mean the Tranche 1 Loan Contract and the Tranche 2 Loan
Contract.
“Patent
License” shall mean any agreement now or hereafter in existence granting
to HOKU, or pursuant to which HOKU grants to any other Person, any right with
respect to any Patent or any invention now or hereafter in existence, whether
patentable or not, whether a patent or application for patent is in existence on
such invention or not, and whether a patent or application for patent on such
invention may come into existence or not.
“Patents”
shall mean (i) all letters patent and design letters patent of the United States
or any other country and all applications for letters patent or design letters
patent of the United States or any other country, including applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or any political
subdivision thereof, (ii) all reissues, divisions, continuations, continuations
in part, revisions and extensions of any of the foregoing, (iii) all claims for,
and rights to sue for, past or future infringements of any of the foregoing and
(iv) all income, royalties, damages and payments now or hereafter due or payable
with respect to any of the foregoing, including damages and payments for past or
future infringements thereof.
“Person”
means an individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
“Proceeds”
means all proceeds of, and all other profits, products, rents or receipts, in
whatever form, arising from the collection, sale, lease, exchange, assignment,
licensing or other disposition of, or other realization upon, any Collateral,
including all claims of HOKU against third parties for loss of, damage to or
destruction of, or for proceeds payable under, or unearned premiums with respect
to, policies of insurance in respect of, any Collateral, and any condemnation or
requisition payments with respect to any Collateral.
3
“Securities
Accounts” shall mean all of HOKU’s “securities accounts” (as defined in
Section 8-501 of the UCC), including, without limitation, all cash, Financial
Assets and Investment Property standing to the credit thereof at any time and
from time to time.
“Trademark
License” shall mean any agreement now or hereafter in existence granting
to HOKU, or pursuant to which HOKU grants to any other Person, any right to use
any Trademark.
“Trademarks”
shall mean: (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos, brand names, trade dress, prints and labels on which any of the foregoing
have appeared or appear, package and other designs, and all other source or
business identifiers, and all general intangibles of like nature, and the rights
in any of the foregoing which arise under applicable law, (ii) the goodwill of
the business symbolized thereby or associated with each of them, (iii) all
registrations and applications in connection therewith, including registrations
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, (iv) all renewals of any of the
foregoing, (v) all claims for, and rights to sue for, past or future
infringements of any of the foregoing and (vi) all income, royalties, damages
and payments now or hereafter due or payable with respect to any of the
foregoing, including damages and payments for past or future infringements
thereof.
“Tranche 1 Loan
Contract” shall mean the construction loan agreement for a loan in the
amount of $20,000,000 among Hoku Scientific, Inc., as borrower, Tianwei New
Energy Holdings Co., Ltd., as entrusting lender, and China Construction Bank,
Shuangliu Branch, as bank.
“Tranche 2 Loan
Contract” shall mean the construction loan agreement for a loan in the
amount of $30,000,000 among Hoku Scientific, Inc., as borrower, Tianwei New
Energy Holdings Co., Ltd., as entrusting lender, and China Construction Bank,
Shuangliu Branch, as bank.
“UCC” means
the Uniform Commercial Code as in effect from time to time in the State of New
York; provided that, if
perfection or the effect of perfection or non perfection or the priority of any
Transaction Lien on any Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than New York, “UCC” means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non perfection or priority.
4
SECTION
2. Grant of
Security Interest.
(a) In
order to secure the repayment by HOKU to TIANWEI of the amounts payable pursuant
to Section 9 of the Supply Agreement, including without limitation, the return
of the Total Deposit, together with all costs and expenses incurred by TIANWEI
in enforcing its security interest in the Collateral, following any of the
events set forth in Sections 9.2.1, 9.2.2, 9.2.3, 9.2.4, 9.2.5 or 12 of the
Supply Agreement, (the “Secured
Obligations”), HOKU hereby grants to TIANWEI a continuing security
interest in all the following property of HOKU, whether now owned or existing or
hereafter acquired or arising and regardless of where located (collectively, the
“Collateral”):
(i) all Accounts; (ii) all Chattel Paper; (iii) all Deposit Accounts (other than
Excluded Accounts); (iv) all Documents; (v) all Equipment; (vi) all Financial
Assets; (vii) all General Intangibles (including (x) any Equity Interests in
other Persons that do not constitute Investment Property and (y) Intellectual
Property); (viii) all Instruments; (ix) all Inventory; (x) all Investment
Property; (xi) all Letter-of-Credit Rights; (xii) all Securities Accounts;
(xiii) all books and records pertaining to the Collateral; and (xiv) all
Proceeds of any and all of the foregoing.
(b) As
additional security for the Secured Obligations, HOKU shall grant to TIANWEI a
mortgage on its leasehold interest in the property located in Pocatello, Idaho
in form and substance satisfactory to TIANWEI, and HOKU shall deliver or cause
to be delivered to TIANWEI all such instruments and documents (including legal
opinions, title insurance policies and lien searches) as TIANWEI shall
reasonably require.
SECTION
3. Further
Assurances; General Covenants.
(a) HOKU
agrees that, from time to time upon the request of TIANWEI, HOKU shall execute
and deliver such further documents and diligently perform such other acts and
things in any jurisdiction as TIANWEI may reasonably request to fully effect the
purposes of this Agreement or to further assure the priority status of the Lien,
which shall be subject to no prior Lien (other than Liens securing the
obligations to the Senior Lenders) granted pursuant hereto, including, without
limitation, (i) executing and filing one or more financing statements pursuant
to the UCC naming TIANWEI as secured party, (ii) executing such other filings
required under the laws of all jurisdictions necessary or appropriate in the
judgment of TIANWEI to perfect or evidence TIANWEI’s security interest in and
Lien on the Collateral (including any filings necessary to perfect TIANWEI’s
second priority security interest in any Intellectual Property constituting
Collateral), (iv) execution of the Collateral Agreements (as defined below) and
(v) causing any third party holding Collateral to acknowledge in a signed
writing that such third party holds such Collateral solely on behalf of, and for
the sole benefit of, TIANWEI and HOKU’S Other Customers. HOKU hereby
irrevocably authorizes TIANWEI (or TIANWEI’s designee) at any time and from time
to time to execute and file and refile in any jurisdiction any financing
statement, continuation statements, any registration of mortgage or other
documents, as shall be necessary, appropriate or advisable in the judgment of
TIANWEI to create, perfect or evidence its security interest in or Lien on the
Collateral subject to no prior Lien (other than Liens securing the obligations
to the Senior Lenders), or to enable TIANWEI to obtain the full benefits of this
Agreement and to exercise and enforce any of their rights, and remedies with
respect to the Collateral. HOKU agrees that a carbon photographic,
photostatic or other reproduction of this Agreement or of a financing statement
is sufficient as a financing statement. HOKU hereby irrevocably
ratifies and approves any filing, registration or recordation in any
jurisdiction by or on behalf of TIANWEI (or TIANWEI’s designee) that has
occurred prior to the date hereof, of any financing statement, registration of
mortgage or otherwise. HOKU agrees to provide to TIANWEI (or
TIANWEI’s designees) any and all information required under the UCC or the law
of any other applicable jurisdiction for the effective filing of a financing
statement and/or any amendment thereto or continuation thereof or any
registration of a mortgage or otherwise. TIANWEI shall pay all
document preparation costs (including legal fees) and shall pay any filing or
registration fee in all public offices where filing or registration may be
deemed necessary or appropriate by TIANWEI and any stamp tax, assessment or duty
related to the Collateral.
5
(b) HOKU
will deliver to TIANWEI on the date hereof as Collateral hereunder all
certificates representing Certificated Securities then owned by HOKU, in
suitable form for transfer by delivery, or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately
guaranteed. Thereafter, whenever HOKU acquires any other certificate
representing a Certificated Security, HOKU will immediately deliver such
certificate to TIANWEI as Collateral hereunder, in suitable form for transfer by
delivery, or accompanied by duly executed instruments of transfer or assignment
in blank, with signatures appropriately guaranteed.
(c) Promptly
(and in any event within 20 business days) upon the request of TIANWEI, HOKU
will enter into (and cause the relevant issuer to enter into) a control
agreement in form and substance reasonably satisfactory to TIANWEI in respect of
each Uncertificated Security pledged hereunder then owned by HOKU and deliver
such control agreement to TIANWEI (which shall enter into the
same). Thereafter, whenever HOKU acquires any other Uncertificated
Security pledged hereunder, promptly (and in any event within 20 business days)
upon the request of TIANWEI, HOKU will enter into (and cause the relevant issuer
to enter into) a control agreement in respect of such Uncertificated Security
and deliver such control agreement to TIANWEI (which shall enter into the
same).
(d) Promptly
(and in any event within 20 business days) upon the request of TIANWEI, HOKU
will, with respect to each Security Entitlement then owned by it, enter into
(and cause the relevant Securities Intermediary to enter into) a control
agreement in form and substance reasonably satisfactory to TIANWEI in respect of
such Security Entitlement and the Securities Account to which the underlying
Financial Asset is credited and will deliver such control agreement to TIANWEI
(which shall enter into the same). Thereafter, whenever HOKU acquires
any other Security Entitlement, HOKU will promptly (and in any event within 20
business days) upon TIANWEI’s request, cause the underlying Financial Asset to
be credited to a Securities Account that is subject to a control agreement in
form and substance reasonably satisfactory to TIANWEI for the benefit of
TIANWEI.
6
(e) Promptly
(and in any event within 20 business days) upon the request of TIANWEI, HOKU
will, with respect to each Deposit Account (other than the Excluded Accounts)
and Commodity Account then maintained by it, enter into (and cause the relevant
depositary bank and Commodity Intermediary to enter into) a control agreement in
form and substance reasonably satisfactory to TIANWEI in respect of such Deposit
Account or Commodity Account, as applicable, and will deliver such control
agreement to TIANWEI (which shall enter into the same). Thereafter,
whenever HOKU establishes any other Deposit Account (other than the Excluded
Accounts) or Commodity Account, HOKU will promptly (and in any event within 20
business days) upon TIANWEI’s request, cause the relevant depositary bank and
Commodity Intermediary to enter into a control agreement in form and substance
reasonably satisfactory to TIANWEI over such Deposit Account or Commodity
Account for the benefit of TIANWEI.
(f) Promptly
(and in any event within 20 business days) upon the request of TIANWEI, HOKU
will sign and deliver to TIANWEI, and have recorded, any and all arrangements,
instruments, documents and papers as TIANWEI may require to evidence TIANWEI’s
security interest in any Copyright, Patent or Trademark and the goodwill and the
General Intangibles of HOKU relating thereto or represented
thereby.
(g) HOKU
shall not, except upon 15 days’ prior written notice to TIANWEI and delivery to
TIANWEI of all additional executed financing statements and other documents
reasonably requested by TIANWEI to maintain the validity, perfection and
priority of the security interests provided for herein, (a) change its
jurisdiction of organization or the location of its chief executive office or
sole place of business or principal residence or (b) change its
name.
(h) TIANWEI
acknowledges and agrees that the Lien on and security interest in the Collateral
will be a second priority security interest, expressly subordinated to HOKU’s
third-party lenders, which lenders may affiliates of HOKU, that provide debt
financing (the “Senior
Lenders”) for the construction of any HOKU Facility (including but not
limited to the lenders party to the Loan Contracts), and may be subordinated as
a matter of law to other security interests. If required by the
Senior Lenders, TIANWEI shall enter into subordination agreements with the
Senior Lenders to more fully effectuate the subordination provided for in the
previous sentence, on terms and conditions reasonably acceptable to the Senior
Lenders.
7
(i) TIANWEI
shall enter into collateral, intercreditor and other agreements (the “Collateral
Agreements”) with HOKU’s Senior Lenders and with 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 and Lien granted hereby is pari passu with the security interests that
may be granted to HOKU’s Other Customers. TIANWEI may not
unreasonably refuse to sign any such Collateral Agreement, provided that such
Collateral Agreement establishes that TIANWEI’s security interest created
hereunder has pari passu priority with the security interests securing HOKU’s
obligations with respect to HOKU’s Other Customers, and is expressly
subordinated to the Senior Lenders.
(j) When
HOKU shall have paid the Secured Obligations in full, the security interest in
and the Lien on the Collateral created hereunder shall
terminate. Upon any sale or other disposition of Collateral in a
transaction entered into by HOKU in the ordinary course of business, including
the sale of inventory to HOKU’s Other Customers, the security interest in and
Lien on such Collateral shall automatically be released. Upon
termination of this Agreement, TIANWEI shall, upon the request and at the sole
cost and expense of HOKU, assign, transfer and deliver to HOKU, against receipt
and without recourse to or warranty by TIANWEI, such of the Collateral to be
released (in the case of a release) as may be in possession of TIANWEI and as
shall not have been sold or otherwise applied pursuant to the terms hereof, and,
with respect to any other Collateral, proper documents and instruments
(including UCC-3 termination statements) acknowledging the termination of this
Agreement and the Lien on the Collateral hereunder or the release of such
Collateral, as the case may be.
SECTION
4. Remedies. If
TIANWEI terminates the Supply Agreement pursuant to Sections 9.2.1, 9.2.2,
9.2.3, 9.2.4, 9.2.5 or 12 thereof:
(a) If
following termination of the Supply Agreement by TIANWEI, HOKU fails to pay the
amounts payable by HOKU under Section 9 of the Supply Agreement within ten days,
TIANWEI may thereupon exercise from time to time, any and all rights and
remedies of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised) or any applicable laws in effect
in any jurisdiction where any rights and remedies may be asserted and any and
all rights and remedies available to it as a result of this Agreement or the
Supply Agreement including, without limitation, the right, to the maximum extent
permitted by law, to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if it were the sole and absolute owner
thereof (and HOKU agrees to take all actions as TIANWEI may deem to be required
or appropriate to give effect to such right);
8
(b) TIANWEI
may upon ten days’ prior written notice to HOKU of the time and place, with
respect to the Collateral or any part thereof that shall then be or shall
thereafter come into the possession, custody or control of TIANWEI or any of its
agents, sell, lease, assign or otherwise dispose of all or any part of the
Collateral, at such place or places as TIANWEI deems best, and for cash or for
credit or for future delivery, at public or private sale, without demand of
performance or notice of intention to effect any such disposition or of the time
or place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and TIANWEI or any one else may be the purchaser,
lessee, assignee or recipient of any or all of the Collateral so disposed of at
any public sale (or, to the extent permitted by law, at any private sale) and
thereafter hold the same absolutely free from any claim or right of whatsoever
kind, including any right or equity of redemption (statutory or otherwise) of
HOKU, any such demand, notice (other than the notice specified above) and right
or equity being hereby expressly waived and released. TIANWEI may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
sale may be so adjourned. With respect to that portion of the
Collateral consisting of “securities” (as defined in Section 8-102(a)(15) of the
UCC), the parties acknowledge and agree that if such Collateral may be sold on a
nationally recognized market, TIANWEI need not furnish HOKU with notice of its
intention to sell such Collateral;
(c) TIANWEI
may (and to the extent that action by it is required, HOKU will as promptly as
practicable) cause the Collateral (or any portion thereof specified in such
direction) to be transferred of record into the name of TIANWEI or its
nominee. HOKU will take any and all actions reasonably requested by
TIANWEI to facilitate compliance with this Section 4(c). If the
provisions of this Section 4(c) are implemented, Sections 3(c) and 3(d) shall
not thereafter apply to any such pledged Collateral that is registered in the
name of TIANWEI or its nominee. TIANWEI will promptly give to HOKU
copies of any notices and other communications received by TIANWEI with respect
to such pledged Collateral registered in the name of TIANWEI or its
nominee;
(d) For
the purpose of enabling TIANWEI to exercise rights and remedies under this
Agreement at such time as TIANWEI shall be lawfully entitled to exercise such
rights and remedies, HOKU hereby grants to TIANWEI an irrevocable license
(exercisable without payment of royalty or other compensation to HOKU), to use,
license or sublicense any of the Collateral consisting of Intellectual Property
now owned or hereafter acquired by HOKU, and including in such license access to
all media in which any of the licensed items may be recorded or stored and to
all computer software and programs used for the compilation or printout
thereof. The use of such license by TIANWEI may be exercised only
upon the termination of the Supply Agreement pursuant to Sections 9.2.1, 9.2.2,
9.2.3, 9.2.4, 9.2.5 or 12 thereof; provided that any license,
sublicense or other transaction entered into by TIANWEI in accordance herewith
shall be binding upon HOKU notwithstanding any subsequent reinstatement of the
Supply Agreement.
9
(e) HOKU
recognizes that, by reason of certain prohibitions contained in the Securities
Act of 1933, as amended from time to time, and applicable state securities laws,
or other laws, or because of certain provisions in the organizational documents
of Investment Property, TIANWEI, in the exercise of its rights and remedies upon
the occurrence of any of the events set forth in this Section 4 may, with
respect to any sale of all or any part of the Collateral, limit purchasers to
Persons who are not United States persons and/or who will agree, among other
things, to acquire the Collateral for their own account, for investment and not
with a view to the distribution or resale thereof and who otherwise satisfy
applicable legal and contractual restrictions on the transfer of such
Collateral. HOKU acknowledges that any such restricted or private
sales may be at prices and on terms less favorable to HOKU than those obtainable
through a public sale without such restrictions, but agrees that such sales are
commercially reasonable so long as sales to TIANWEI or any of its affiliates are
based on arm’s length terms consistent with industry practice. HOKU
further acknowledges that any specific disclaimer of any warranty of title or
the like by TIANWEI, will not be considered to adversely affect the commercial
reasonableness of any sale of Collateral; and
(f) TIANWEI
shall incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to this Section 4 conducted in a
commercially reasonable manner. HOKU hereby waives any claims against
TIANWEI arising by reason of the fact that the price at which the Collateral may
have been sold at such a private sale was less than the price that might have
been obtained at a public sale or was less than the aggregate amount of the
Total Deposit, even if TIANWEI accepts the first offer received and does not
offer the Collateral to more than one offeree. HOKU shall remain
liable for any deficiency if the proceeds of any sale or other disposition of
the Collateral are insufficient to pay the Secured Obligations and the fees and
disbursements of any attorney employed by TIANWEI to collect such
deficiency.
SECTION
5. Authority to
Administer Collateral. HOKU irrevocably appoints TIANWEI its
true and lawful attorney, with full power of substitution, in the name of HOKU
or otherwise, for the sole use and benefit of TIANWEI, but at HOKU’s expense, to
the extent permitted by law to exercise, at any time and from time to time after
TIANWEI terminates the Supply Agreement pursuant to Sections 9.2.1, 9.2.2,
9.2.3, 9.2.4, 9.2.5 or 12 thereof, all or any of the following powers with
respect to all or any of HOKU’s Collateral:
(a) to
demand, sue for, collect, receive and give acquittance for any and all monies
due or to become due upon or by virtue thereof;
(b) to
settle, compromise, compound, prosecute or defend any action or proceeding with
respect thereto;
(c) to
sell, lease, license or otherwise dispose of the same or the proceeds or avails
thereof, as fully and effectually as if TIANWEI was the absolute owner thereof;
and
10
(d) to
extend the time of payment of any or all thereof and to make any allowance or
other adjustment with reference thereto;
provided that, except in the
case of Collateral that is perishable or threatens to decline speedily in value
or is of a type customarily sold on a recognized market, TIANWEI will give HOKU
at least ten days’ prior written notice of the time and place of any public sale
thereof or the time after which any private sale or other intended disposition
thereof will be made. Any such notice shall (i) contain the
information specified in UCC Section 9-613, (ii) be Authenticated and (iii) be
sent to the parties required to be notified pursuant to UCC Section 9-611(c);
provided further that if TIANWEI fails
to comply with this sentence in any respect, its liability for such failure
shall be limited to the liability (if any) imposed on it as a matter of law
under the UCC.
SECTION
6. Limitation on
Duty in Respect of Collateral. Beyond the exercise of
reasonable care in the custody and preservation thereof, TIANWEI will have no
duty as to any Collateral in its possession or control or in the possession or
control of any sub-agent or bailee or any income therefrom or as to the
preservation of rights against prior parties or any other rights pertaining
thereto. TIANWEI will be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession or control if
such Collateral is accorded treatment substantially equal to that which it
accords its own property, and will not be liable or responsible for any loss or
damage to any Collateral, or for any diminution in the value thereof, by reason
of any act or omission of any sub-agent or bailee selected by TIANWEI in good
faith, except to the extent that such liability arises from TIANWEI’s gross
negligence or willful misconduct.
SECTION
7. Notices. Each
notice, request or other communication given to any party hereunder shall be
given in accordance with Section ____ of the Supply Agreement.
SECTION
8. No Implied
Waivers; Remedies Not Exclusive. No failure by TIANWEI to
exercise, and no delay in exercising and no course of dealing with respect to,
any right or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by TIANWEI of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right or
remedy. The rights and remedies specified hereunder are cumulative
and are not exclusive of any other rights or remedies provided by
law.
SECTION
9. Successors and
Assigns. This Agreement is for the benefit of TIANWEI and
shall not be assigned or otherwise transferred by HOKU without the express
written consent of TIANWEI. If all or any part of TIANWEI’s interest
hereunder is assigned or otherwise transferred, the transferor’s rights
hereunder, to the extent applicable to the obligation so transferred, shall be
automatically transferred with such obligation. This Agreement shall
be binding on HOKU and its successors and assigns.
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SECTION
10. Amendments and
Waivers. Neither this Agreement nor any provision hereof may
be waived, amended, modified or terminated except pursuant to an agreement or
agreements in writing entered into by TIANWEI. No such waiver,
amendment or modification shall be binding upon HOKU, except with its written
consent.
SECTION
11. Choice of
Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, except as otherwise required by
mandatory provisions of law and except to the extent that remedies provided by
the laws of any jurisdiction other than the State of New York are governed by
the laws of such jurisdiction.
SECTION
12. Waiver of Jury
Trial. EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY
SECURITY DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION
13. Severability. If
any provision of this Agreement is invalid or unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions of this
Agreement shall remain in full force and effect in such jurisdiction and shall
be liberally construed in favor of TIANWEI in order to carry out the intentions
of the parties hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of such provision in such jurisdiction shall not affect the
validity or enforceability thereof in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
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TIANWEI
NEW ENERGY (CHENGDU) WAFER CO., LTD.
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HOKU
MATERIALS, INC.
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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