AMENDED & RESTATED AGREEMENT FOR CONSTRUCTION OF HOKU ELECTRIC SUBSTATION AND ASSOCIATED FACILITIES

THIS AMENDED & RESTATED AGREEMENT for the construction of Hoku electric substation and associated facilities (the “Agreement”) is entered into as of the __ 17th _______ day of __ September ____, 2008 by and between HOKU MATERIALS, INC., One Hoku Way, Pocatello, Idaho 83204 (“Hoku”) and IDAHO POWER COMPANY, P.O. Box 70, Boise, Idaho 83707 (“Idaho Power” or “IPCO”). Hoku and IPCO may also be referred to hereinafter individually as “Party” or collectively as the “Parties”.

A.   Hoku is developing a manufacturing plant to produce polysilicon, a key material used in the production of solar cells and integrated circuits. The construction of an electric substation and associated transmission facilities is required to allow IPCO to supply electric capacity and energy to Hoku’s manufacturing complex located at One Hoku Way in Pocatello, Idaho (“Hoku Facility”). Hoku has requested that the substation and associated facilities be sized to allow IPCO to provide electric service to the Hoku Facility in an amount up to 82 Megawatts (“MW”) of demand.

B.   Hoku and IPCO are parties to that certain Agreement for Construction of Hoku Electric Substation and Associated Facilities dated December 28, 2007 (the “Prior Agreement’). This Agreement shall amend and restate in its entirety, the Prior Agreement.

C.   Because the Hoku Facility will be located in an area where Idaho Power does not have existing facilities of adequate capacity, delivery of power to the Hoku Facility site will require the construction of (1) approximately six (6) miles of 138,000 volt overhead transmission line to interconnect with Idaho Power’s existing transmission system, (2) a new 138,000-13,800 volt electric substation at the Hoku Facility to supply up to 82 MWs with two 67 MVA transformers, and (3) additional equipment and facilities at IPCO’s existing substations. These facilities are sometimes hereinafter collectively referred to as the “Requested Facilities” and are described in greater detail in Exhibit 1 to this Agreement. This Agreement is not subject to or governed by Rule H, Idaho Power’s tariff governing line installations, including any revisions to that rule, or any successor rules or schedules.

D.   Idaho Power will construct the Requested Facilities in accordance with the terms and provisions of this Agreement.

E.   Pursuant to the Prior Agreement, HOKU has paid Idaho Power the sum of $7,402,000, the receipt of which is hereby acknowledged by Idaho Power. An outstanding balance of $3,701,000 is presently owed under the prior Agreement and is hereby acknowledged by Hoku. This outstanding amount is included in the payments listed in Section 2.1 below.

NOW, THEREFORE, in consideration of the mutual obligations and undertakings set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, Hoku and Idaho Power agree as follows:

1.   Construction of Requested Facilities Without duplicating any of the work performed pursuant to the Prior Agreement, and in furtherance thereof:

1.1   Idaho Power will construct the Requested Facilities to provide for the delivery of power (capacity) at a point generally described as the load side terminals of the substation transformer 13.8 kilovolt (“kV”) disconnect switches at the Hoku Facility (the “Delivery Point”).

1.2   Idaho Power will use commercially reasonable efforts to provide up to 20 MW of transmission service from the Alameda Substation by May 18, 2009. Requested facilities, including the second transmission line from the Don Substation, will be constructed and ready to serve up to 43 MW of demand by July 19, 2009. Idaho Power will use commercially reasonable efforts to complete final construction of the Requested Facilities by August 19, 2009. However, Hoku recognizes that Idaho Power’s ability to complete the Requested Facilities on or before that date is subject to the receipt of the payments and performance under the contract from Hoku as described herein, Idaho Power’s ability to obtain required labor, materials and equipment, timely receipt of satisfactory easements and rights of way, and timely receipt of governmental regulatory authorizations.

1.3   If Idaho Power fails to meet the completion deadline described above, and such failure is not excused as provided in Section 1.2, the Parties agree that Hoku may submit the matter to the Idaho Public Utilities Commission (“Commission”) for appropriate relief, and pending final resolution, Hoku’s obligation to make further payments pursuant to the terms of this Agreement shall be suspended.

2.   Project Cost  

2.1   Excluding amounts previously paid for design and engineering expenses, and including the amounts paid pursuant to the Prior Agreement, the total cost for the construction of the Requested Facilities is estimated to be $16,542,000.   Hoku’s payments to IPCO constitute a Contribution In Aid of Construction (“CIAC”) and include a tax gross-up of thirty-one percent (31%) to cover IPCO’s resulting income tax liability. Hoku shall pay IPCO in the amounts and at the times specified below:

At the completion of the project, Idaho Power will provide a true-up of the actual work order costs to the $16,542,000 estimate. Idaho Power will provide Hoku a report that will reflect actual dollars charged to the project by labor, materials, purchased services, overheads, and other expenses. Idaho Power will refund to Hoku any over collected amounts; any amounts under collected will be invoiced to Hoku with the refund or payment to be made to Idaho Power within 30 days from the true-up date. In the event of significant scheduling changes, the payment milestones will be delayed or accelerated accordingly. The total estimated cost of the Requested Facilities does not include costs associated with use of any temporary substations, transmission or distribution facilities that may be necessary to provide Hoku with temporary demonstration power prior to the expected August 19, 2009, completion date.   The cost of such temporary facilities will be invoiced to and paid by Hoku separately from this Agreement and has no impact on the performance of either party under this Agreement.

2.2   If Hoku fails to pay an amount due on or before the payment milestone date specified in Section 2.1, any obligation of Idaho Power to further perform under this Agreement will be suspended pending receipt of such payment. If, after Idaho Power’s delivery to Hoku of notice that such payment has not been received, Hoku fails to make such payment within ten (10) days of Idaho Power sending such notice, Idaho Power may, in its sole discretion, terminate this Agreement. Hoku acknowledges that any delay in payment is likely to result in a schedule delay pursuant to Section 1.2 of this Agreement. If this Agreement is terminated by Idaho Power pursuant to this Section 2.2, Idaho Power shall refund to Hoku any porti