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Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc established to manufacture and sell polysilicon for the solar market, and Tianwei New Energy (Chengdu) Wafer Co., Ltd., a subsidiary of Tianwei New Energy Holdings Co., Ltd. that manufactures silicon wafers, photovoltaic cells, and modules in China, today announced the signing of a definitive contract for Hoku's sale and delivery of polysilicon to Tianwei over a ten-year period beginning in early 2010.

According to the contract, up to approximately $284 million may be payable to Hoku during the ten-year period, subject to product deliveries and other conditions. The take-or-pay contract provides for the delivery of predetermined volumes of polysilicon each year, with the first shipment in the first half of 2010 and the remainder over a ten-year period at set prices that will decline throughout the term of the agreement. The contract also provides for a deposit of $15 million to Hoku in August 2008, and requires that Tianwei make additional deposits for products in the amount of $15 million by November 15, 2008, $10 million by January 15, 2009, and $5 million upon first shipment. Under the agreement, Hoku will grant to Tianwei a security interest in its polysilicon assets to secure Hoku's obligation to repay $45 million to Tianwei as a credit against product shipments over time.

"We look forward to a long and mutually-beneficial business relationship with Hoku," said Tianwei's general manager, A. Guo. "We evaluated many potential polysilicon manufacturers and are very confident in our selection of Hoku as one of our key suppliers."

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