10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission File Number: 001-13828

MEMC ELECTRONIC MATERIALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	56-1505767
(State or other jurisdiction of incorporation or organization)	(I. R. S. Employer Identification No.)
501 Pearl Drive (City of O’Fallon) St. Peters, Missouri	63376
(Address of principal executive offices)	(Zip Code)

(636) 474-5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of the registrant’s common stock outstanding at May 3, 2010 was 227,415,836.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

	Three Months Ended March 31,
	2010			2009
Net sales	$	437.7		$	214.0
Cost of goods sold		378.4			194.3
Gross profit		59.3			19.7
Operating expenses:
Marketing and administration		62.2			29.8
Research and development		11.1			9.6
Restructuring costs		1.3			6.7
Operating loss		(15.3	)		(26.4	)
Non-operating (income) expense:
Interest expense		12.1			0.3
Interest income		(2.3	)		(11.7	)
Decline in fair value of warrant		5.3			0.1
Other, net		0.6			2.6
Total non-operating (income) expense		15.7			(8.7	)
Loss before income tax benefit and equity in earnings of joint venture		(31.0	)		(17.7	)
Income tax benefit		(14.6	)		(18.9	)
(Loss) income before equity in earnings of joint venture		(16.4	)		1.2
Equity in earnings of joint venture, net of tax		7.3			—
Net (loss) income		(9.1	)		1.2
Net (income) loss attributable to noncontrolling interests		(0.5	)		0.8
Net (loss) income attributable to MEMC stockholders	$	(9.6	)	$	2.0
Basic (loss) income per share	$	(0.04	)	$	0.01
Diluted (loss) income per share	$	(0.04	)	$	0.01
Weighted-average shares used in computing basic (loss) income per share		226.8			223.6
Weighted-average shares used in computing diluted (loss) income per share		226.8			224.0

See accompanying notes to unaudited condensed consolidated financial statements.

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MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

UNAUDITEDCONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)

	March 31, 2010			December 31, 2009
ASSETS
Current assets:
Cash and cash equivalents	$	477.9		$	632.7
Restricted cash		42.8			37.4
Short-term investments		171.7			85.9
Accounts receivable, less allowance for doubtful accounts of $10.0 in 2010 and 2009		265.8			173.3
Inventories		188.3			160.8
Income taxes receivable		72.6			72.5
Prepaid and other current assets		91.7			87.0
Total current assets		1,310.8			1,249.6
Investments		209.6			297.6
Property, plant and equipment, net of accumulated depreciation of $577.5 and $551.7 in 2010 and 2009, respectively		1,487.3			1,460.7
Deferred tax assets, net		103.1			95.3
Customer warrant		13.9			19.2
Restricted cash		21.8			21.0
Other assets		88.8			91.1
Goodwill		285.3			285.3
Intangible assets, net		45.1			46.7
Total assets	$	3,565.7		$	3,566.5
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital leases	$	42.7		$	32.2
Accounts payable		230.0			219.3
Accrued liabilities		86.0			106.8
Contingent consideration related to acquisition		78.5			—
Accrued wages and salaries		35.8			39.2
Customer deposits		59.7			83.6
Income taxes payable		21.3			28.0
Total current liabilities		554.0			509.1
Long-term debt and capital leases, less current portion		401.2			384.4
Pension and post-employment liabilities		46.7			46.6
Deferred revenue		116.9			106.3
Other liabilities		233.8			313.3
Total liabilities		1,352.6			1,359.7
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value, 50.0 shares authorized, none issued and outstanding at 2010 and 2009		—			—
Common stock, $.01 par value, 300.0 shares authorized, 237.2 shares issued at 2010 and 2009		2.4			2.4
Additional paid-in capital		517.8			507.4
Retained earnings		2,069.5			2,079.1
Accumulated other comprehensive income		31.6			33.0
Treasury stock, 9.8 shares in 2010 and 2009, respectively		(453.4	)		(453.3	)
Total MEMC stockholders’ equity		2,167.9			2,168.6
Noncontrolling interests		45.2			38.2
Total stockholders’ equity		2,213.1			2,206.8
Total liabilities and stockholders’ equity	$	3,565.7		$	3,566.5

See accompanying notes to unaudited condensed consolidated financial statements.

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MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Three Months Ended March 31,
	2010			2009
Cash flows from operating activities:
Net (loss) income	$	(9.1	)	$	1.2
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		37.5			28.4
Stock-based compensation		10.9			9.2
Decline in fair value of warrant		5.3			0.1
Change in accounts receivable		(94.1	)		23.5
Working capital and other		(60.6	)		(77.0	)
Net cash used in operating activities		(110.1	)		(14.6	)
Cash flows from investing activities:
Proceeds from sale and maturities of investments		8.0			37.7
Capital expenditures		(46.2	)		(53.2	)
Construction of solar energy systems		(44.9	)		—
Restricted cash		(4.4	)		—
Other		6.1			0.1
Net cash used in investing activities		(81.4	)		(15.4	)
Cash flows from financing activities:
Net repayments of customer deposits related to long-term supply agreements		(27.6	)		(36.0	)
Principal payments on long-term debt		(0.3	)		—
Proceeds from financing obligations		72.8			—
Repayments of financing and capital lease obligations		(3.6	)		—
Common stock repurchased		—			(15.8	)
Proceeds from issuance of common stock		—			0.1
Cash contributions from noncontrolling interests		5.4			—
Debt financing fees		(6.6	)		—
Net cash provided by (used in) financing activities		40.1			(51.7	)
Effect of exchange rate changes on cash and cash equivalents		(3.4	)		(8.2	)
Net decrease in cash and cash equivalents		(154.8	)		(89.9	)
Cash and cash equivalents at beginning of period		632.7			988.3
Cash and cash equivalents at end of period	$	477.9		$	898.4
Supplemental schedule of non-cash financing activity:
Debt transferred to and assumed by buyer upon sale of solar energy systems	$	(43.3	)	$	—

See accompanying notes to unaudited condensed consolidated financial statements.

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MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of MEMC Electronic Materials, Inc. and subsidiaries (“MEMC”), in our opinion, include all adjustments (consisting of normal, recurring items) necessary to present fairly our financial position and results of operations and cash flows for the periods presented. MEMC has presented the unaudited condensed consolidated financial statements in accordance with the Securities and Exchange Commission’s (“SEC”) requirements of Form 10-Q and Article 10 of Regulation S-X and consequently, these financial statements do not include all disclosures required by U.S. generally accepted accounting principles (“US GAAP”). These unaudited condensed consolidated financial statements should be read in conjunction with our annual report on Form 10-K for the fiscal year ended December 31, 2009, which contains MEMC’s audited financial statements for such year. Operating results for the three-month period ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.

In preparing our financial statements, we use estimates and assumptions that may affect reported amounts and disclosures. Estimates are used when accounting for investments, depreciation, amortization, leases, accrued liabilities, employee benefits, derivatives, stock based compensation, income taxes, the fair value of assets acquired and liabilities assumed in connection with business combinations, goodwill and asset valuation allowances, among others. These estimates and assumptions are based on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. To the extent there are material differences between the estimates and actual results, our future results of operations would be affected.

On November 20, 2009, we completed the acquisition of Sun Edison LLC (“SunEdison”), a solar energy services provider that integrates the design, installation, monitoring and financing of solar energy systems in order to provide a comprehensive solar energy services solution. Until the acquisition of SunEdison, MEMC was engaged in one reportable industry segment—the design, manufacture and sale of silicon wafers—which was conducted as our Materials Business. From the time of the SunEdison acquisition until the end of 2009, MEMC was engaged in two reportable segments, Materials Business and Solar Energy Business (d/b/a SunEdison). Effective January 1, 2010, we are now engaged in three reportable segments: Semiconductor Materials, Solar Materials (both include the historical operations of MEMC) and Solar Energy (consists solely of SunEdison).

New Accounting Standards

In June 2009, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update included in Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing,” which removes the concept of a qualifying special-purpose entity from previous guidance. This guidance also clarifies the requirements for isolation and limitations on portions of financial assets that are eligible for sale accounting. It is effective for fiscal years beginning after November 15, 2009. The adoption of this guidance did not have a material impact on MEMC’s financial position or results of operations.

In June 2009, the FASB issued an accounting standards update included in ASC 810, “Consolidation,” which amends previous guidance to require an analysis to determine whether a variable interest gives a company a controlling financial interest in a variable interest entity. An ongoing reassessment of financial responsibility is required, including interests in entities formed prior to the effective date of this guidance, and eliminates the quantitative approach previously required for determining whether a company is the primary beneficiary. It is effective for fiscal years beginning after November 15, 2009. The adoption of this guidance did not have a material impact on MEMC’s financial position or results of operations.

In October 2009, the FASB issued Accounting Standards Update 2009-13 (“ASU 2009-13”), which updates the current guidance pertaining to multiple-element revenue arrangements included in ASC Subtopic 605-25. ASU 2009-13 will be effective for our annual reporting period beginning January 1, 2011. We are currently evaluating the impact of ASU 2009-13 on our consolidated results of operations and financial condition.

(2) Restructuring Costs

In order to better align manufacturing capabilities to projected demand, MEMC committed to workforce reductions during the first and second quarters of 2009 (the “2009 Global Plan”). In September 2009, MEMC committed to actions to reduce manufacturing costs by shifting manufacturing from our St. Peters, Missouri and Sherman, Texas facilities to other locations which are closer to a number of MEMC’s customers in the Asia Pacific region (the “2009 U.S. Plan”). MEMC has provided and paid severance benefits to those terminated under the 2009 Global Plan and will provide severance benefits to those employees who will be terminated under the 2009 U.S. Plan. The 2009 Global Plan was completed by June 30, 2009. We expect the 2009 U.S. Plan to be completed in 2011.

In the three months ended March 31, 2010, we recorded restructuring expenses of $1.3 million primarily for employee benefits and equipment moving costs related to the 2009 U.S. Plan. In the three months ended March 31, 2009, we recorded restructuring expenses for the 2009 Global Plan of $6.7 million related to one-time termination benefits, including $0.5 million of outplacement costs and a $0.3 million expense for one of our defined benefit pension plans. All restructuring costs were recorded to the Semiconductor Materials segment.

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Details of expenses related to the 2009 U.S. Plan are set out in the following table:

	Accrued, December 31, 2009		Year-to-Date Restructuring Charges		Cash Payments			Accrued, March 31, 2010		As of March 31, 2010
										Cumulative Costs Incurred		Total Costs Expected to be Incurred
In millions
2009 U.S. Plan
Severance and other employee benefits	$	15.2	$	0.7	$	—		$	15.9	$	16.8	$	18.0
Asset move costs		—		0.6		(0.6	)		—		0.6		20.3
Contract termination		—		—		—			—		—		5.8
Infrastructure costs		—		—		—			—		—		4.0
Outplacement costs		—		—		—			—		—		1.0
Total	$	15.2	$	1.3	$	(0.6	)	$	15.9	$	17.4	$	49.1

(3) Fair Value Measurements

The following table summarizes the financial instruments measured at fair value on a recurring basis classified in the fair value hierarchy (Level 1, 2 or 3) based on the inputs used for valuation in the accompanying unaudited condensed consolidated balance sheets:

	As of March 31, 2010								As of December 31, 2009
Assets (liabilities) in millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Available-for-sale investments	$	115.7	$	96.7	$	6.9	$	219.3	$	110.8	$	93.3	$	11.6	$	215.7
Trading investments		—		—		34.5		34.5		—		—		38.4		38.4
Auction rate securities right		—		—		1.8		1.8		—		—		2.0		2.0
Suntech warrant		—		—		13.9		13.9		—		—		19.2		19.2
Interest rate swaps		—		1.4		—		1.4		—		0.8		—		0.8
Currency forward contracts		3.7		—		—		3.7		3.3		—		—		3.3
	$	119.4	$	98.1	$	57.1	$	274.6	$	114.1	$	94.1	$	71.2	$	279.4

The carrying amount of our outstanding long-term debt at March 31, 2010 and December 31, 2009 was $300.9 million and $273.5 million, respectively. The estimated fair value of that debt was $299.8 million and $272.3 million, respectively, at March 31, 2010 and December 31, 2009.

The fair value of our currency forward contracts is measured by the amount that would have been paid to liquidate and repurchase all open contracts and was $3.7 million and $3.3 million at March 31, 2010 and December 31, 2009, respectively. The notional amount of our currency forward contracts was $82.2 million and $113.9 million as of March 31, 2010 and December 31, 2009, respectively. Refer to Note 4 for additional information pertaining to our derivative instruments.

6

There were no significant transfers in to or out of Level 1 and Level 2 assets during the three months ended March 31, 2010. The following table summarizes changes in Level 3 assets measured at fair value on a recurring basis for the three months ended March 31, 2009 and 2010:

	Fair Value Measurements Using Significant Unobservable Inputs  (Level 3)
In millions	Available–for- Sale Investments			Trading Investments			Auction Rate Securities Right			Suntech Warrant			Total
Balance at December 31, 2008	$	22.8		$	44.1		$	6.2		$	13.8		$	86.9
Total unrealized gains (losses):
Included in earnings(1)		(2.3	)		5.8			(5.0	)		(0.1	)		(1.6	)
Included in other comprehensive income, net		(2.2	)		—			—			—			(2.2	)
Sales, redemptions and maturities		(2.2	)		(4.0	)		—			—			(6.2	)
Transfers in to Level 3, net		5.6			—			—			—			5.6
Balance at March 31, 2009	$	21.7		$	45.9		$	1.2		$	13.7		$	82.5
Balance at December 31, 2009	$	11.6		$	38.4		$	2.0		$	19.2		$	71.2
Total unrealized gains (losses):
Included in earnings(1)		—			0.3			(0.2	)		(5.3	)		(5.2	)
Included in other comprehensive income, net		0.2			—			—			—			0.2
Sales, redemptions and maturities		(2.3	)		(4.2	)		—			—			(6.5	)
Transfers out of Level 3, net		(2.6	)		—			—			—			(2.6	)
Balance at March 31, 2010	$	6.9		$	34.5		$	1.8		$	13.9		$	57.1
The amount of total gains (losses) for the three months ended March 31, 2010 included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at the reporting date	$	—		$	0.3		$	(0.2	)	$	(5.3	)	$	(5.2	)

⁽¹⁾ Amounts included in earnings are recorded to non-operating (income) expense in the consolidated statements of operations

Valuations of our Level 3 available-for-sale investments were performed using a discounted cash flow model, which involved making assumptions about expected future cash flows based on estimates of current market interest rates. Our models include estimates of market data, including yields or spreads of trading instruments that are believed to be similar or comparable, when available, and assumptions that are believed to be reasonable based on nonobservable inputs. Such assumptions include the tax status (taxable vs. tax-exempt), type of security (type of issuer, collateralization, subordination, etc.), credit quality, duration, likelihood of redemption, insurance coverage and degree of liquidity in the current credit markets.

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(4) Derivatives and Hedging Instruments

MEMC’s derivatives and hedging activities consist of:

		Assets (Liabilities) Fair Value
In millions	Balance Sheet Location	As of March 31, 2010			As of December 31, 2009
Derivatives designated as hedging:
Interest rate swaps	Accrued liabilities	$	—		$	(1.2	)
Interest rate swaps	Prepaid and other current assets	$	1.4		$	2.0
Interest rate swaps	Accumulated other comprehensive income	$	(2.5	)	$	(1.8	)
Net investment hedge	Prepaid and other current assets	$	3.5		$	3.6
Net investment hedge	Accumulated other comprehensive income	$	(3.5	)	$	(3.6	)
Derivatives not designated as hedging:
Suntech warrant	Customer warrant	$	13.9		$	19.2
Currency forward contracts	Prepaid and other current assets	$	0.7		$	0.8
Currency forward contracts	Accrued liabilities	$	(0.5	)	$	(4.1	)
		(Gains) Losses
In millions	Statement of Operations Location	Three Months Ended March 31, 2010			Three Months Ended March 31, 2009
Derivatives not designated as hedging:
Suntech warrant	Decline in fair value of warrant	$	5.3		$	0.1
Currency forward contracts	Other, net	$	(1.0	)	$	(2.0	)

To mitigate financial market risks of foreign currency exchange rates, we utilize currency forward contracts. We do not use derivative financial instruments for speculative or trading purposes. We generally hedge transactional currency risks with currency forward contracts. Gains and losses on these foreign currency exposures are generally offset by corresponding losses and gains on the related hedging instruments, reducing the net exposure to MEMC. A substantial portion of our revenue and capital spending is transacted in U.S. Dollars. However, we do enter into transactions in other currencies, primarily the Euro, the Japanese Yen, and certain other Asian currencies. To protect against reductions in value and volatility of future cash flows caused by changes in foreign exchange rates, we have established transaction-based hedging programs. Our hedging programs reduce, but do not always eliminate, the impact of foreign currency exchange rate movements. At any point in time we may have outstanding contracts with several major financial institutions for these hedging transactions. Our maximum credit risk loss with these institutions is limited to any gain on our outstanding contracts.

We are party to three interest rate swap instruments with a notional amount of approximately $45.7 million at March 31, 2010 that are accounted for using hedge accounting. These instruments are used to hedge floating rate debt and are accounted for as cash flow hedges. Under the swap agreements, MEMC pays the fixed rate and the counterparties to the agreements pay MEMC a floating interest rate. The counterparties to these agreements are financial institutions. The estimated fair value recorded to the balance sheet as provided in the table above is an estimate of the net amount that MEMC would pay on March 31, 2010, if the agreements were transferred to other third parties or cancelled by MEMC. The effective portion of these hedges during the three months ended March 31, 2010 was a gain of $0.7 million and was recorded to accumulated other comprehensive income. No ineffectiveness was recognized in 2010.

Our unconsolidated joint venture with Q-Cells SE is a Euro functional currency entity accounted for under the equity method, in which we invested 72.5 million Euros (approximately $100 million). In order to manage the changes in foreign currency and any resulting gain or loss associated with this investment, MEMC entered into a Euro currency forward contract for 70.0 million Euros. The fair value of the effective portion of this hedge at March 31, 2010 was a gain of $3.5 million and was recorded to net translation adjustment in accumulated other comprehensive income. No ineffectiveness was recognized in 2010.

Suntech warrant consists of a fully vested, non-forfeitable warrant to purchase common shares of Suntech, a customer, which was received at the time that MEMC signed a long-term supply agreement with Suntech. The Suntech warrant exposes MEMC to equity price risk.

Refer to Note 3 for additional information pertaining to our derivative instruments.

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(5) Comprehensive Loss

Comprehensive loss consists of the following:

In millions	Three Months Ended March 31, 2010			Three Months Ended March 31, 2009
Net (loss) income	$	(9.1	)	$	1.2
Other comprehensive (loss) income, net of tax:
Net translation adjustment		(10.5	)		(32.9	)
Net unrealized gain on available-for-sale securities		9.5			1.8
Gain on mark-to-market for cash flow hedges		0.7			—
Other comprehensive (loss) income, net of tax		(0.3	)		(31.1	)
Total comprehensive loss		(9.4	)		(29.9	)
Net (income) loss attributable to noncontrolling interests		(0.5	)		0.8
Net translation adjustment attributable to noncontrolling interests		(1.1	)		—
Comprehensive loss attributable to MEMC stockholders	$	(11.0	)	$	(29.1	)

6) Earnings (Loss) Per Share

For the three month periods ended March 31, 2010 and 2009, basic and diluted earnings per share (EPS) were calculated as follows:

	Three Months Ended March 31, 2010						Three Months Ended March 31, 2009
In millions, except per share data	Basic			Diluted			Basic		Diluted
EPS numerator:
Net (loss) income attributable to MEMC stockholders	$	(9.6	)	$	(9.6	)	$	2.0	$	2.0
EPS denominator:
Weighted average shares outstanding		226.8			226.8			223.6		223.6
Effect of dilutive stock options and restricted stock units		—			—			—		0.4
Total shares		226.8			226.8			223.6		224.0
Earnings (loss) per share	$	(0.04	)	$	(0.04	)	$	0.01	$	0.01

Contingent consideration will be paid to the former SunEdison unit holders if certain operational criteria are met from January 1, 2010 through December 31, 2010. In order for the full consideration to be paid, the surviving SunEdison entity would have to install 150 megawatts of solar photovoltaic projects in 2010 and achieve certain profitability thresholds. This would entitle the former SunEdison unit holders to an additional $89.0 million of consideration in a combination of cash and MEMC common stock. If SunEdison completes less than 80 megawatts of solar photovoltaic projects, no contingent consideration will be paid. If 80 megawatts or more are completed, the SunEdison unit holders will receive between $25.0 million and $89.0 million of cash and MEMC common stock, based on the terms of the acquisition agreement. As of March 31, 2010, we have accrued approximately $78.5 million based on the estimated fair value of this contingency.

Approximately $6.9 million of the share consideration due to SunEdison’s former unit holders is currently held in escrow pursuant to the terms of the acquisition agreement.

For the three months ended March 31, 2010, all options to purchase MEMC stock and all restricted stock units were excluded from the calculation of diluted EPS because the effect was antidilutive due to the net loss incurred for the period. For the three months ended March 31, 2009, restricted stock units and options to purchase 9.1 million shares of MEMC stock were excluded from the calculation of diluted EPS because the effect was antidilutive.

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(7) Inventories

Inventories consist of the following:

In millions	As of March 31, 2010		As of December 31, 2009
Raw materials and supplies	$	27.5	$	47.2
Goods and work in process		112.0		55.4
Finished goods		48.8		58.2
	$	188.3	$	160.8

SunEdison inventories of $65.7 and $20.3 million at March 31, 2010 and December 31, 2009, respectively, consist of raw materials and supplies and work in process related to the construction of solar energy systems intended for sale. In the event the solar energy system is not sold and will be held and used in the foreseeable future, it will be capitalized to property, plant and equipment.

(8) Investments

Equity Method Investments

In the fourth quarter of 2009, our equity method joint venture with Q-Cells SE (“Q-Cells”) completed the construction of a solar power plant and executed a contract to sell it to a third party. This contract resulted in the joint venture recognizing an impairment on the plant assets. MEMC’s share of the impairment was approximately $3.0 million in the fourth quarter of 2009 with an additional $1.5 million recognized in the first quarter of 2010 when concessions were made to the pre-negotiated sales price. Also in the first quarter of 2010, MEMC recognized its pro rata share of the net profit previously deferred for solar wafers sold to Q-Cells International of $8.8 million, which is recorded in the statement of operations as equity in earnings of joint venture, net of tax. MEMC has classified this joint venture as current because MEMC expects the proceeds from the sale of the solar power plant to be returned to the joint venture parties within the next twelve months.

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Investments Recorded at Fair Value

Short- and long-term investments measured and recorded at fair value on a recurring basis consist of the following:

In millions	Cost		Gross Unrealized Gains/(Losses) and Other-than- temporary Impairments Recorded in Earnings(1)			Other-than- temporary Impairments in Accumulated Other Comprehensive Income (Loss)(2)			Unrealized Gains/(Losses) in Other Comprehensive Income			Fair Value		Fair Value of Investments in Unrealized Loss Positions  with no Recognized Losses		Unrealized Losses on Investments in Unrealized Loss Positions with no Recognized Losses
																Greater than twelve months			Less  than twelve months
As of March 31, 2010:
Trading securities:
Auction rate securities	$	36.3	$	(1.8	)	$	—		$	—		$	34.5	$	—	$	—		$	—
Available-for-sale securities:
Fixed income funds		97.5		9.5			—			8.7			115.7		—		—			—
Corporate debt securities		27.7		(9.7	)		1.2			(0.5	)		18.7		5.0		(0.5	)		—
Asset-backed securities		16.8		(2.2	)		0.1			(0.1	)		14.6		14.4		(0.1	)		—
Mortgage-backed securities		30.7		(4.6	)		(1.6	)		(0.5	)		24.0		20.3		(0.5	)		—
Equity investment securities		12.4		—			—			33.9			46.3		—		—			—
		185.1		(7.0	)		(0.3	)		41.5			219.3		39.7		(1.1	)		—
Total	$	221.4	$	(8.8	)	$	(0.3	)	$	41.5		$	253.8	$	39.7	$	(1.1	)	$	—
As of December 31, 2009:
Trading securities:
Auction rate securities	$	40.5	$	(2.1	)	$	—		$	—		$	38.4	$	—	$	—		$	—
Available-for-sale securities:
Fixed income funds		97.5		7.7			—			5.6			110.8		—		—			—
Corporate debt securities		33.1		(9.7	)		1.2			(1.6	)		23.0		9.4		(1.6	)		—
Asset-backed securities		19.2		(2.2	)		0.1			(0.2	)		16.9		16.7		(0.2	)		—
Mortgage-backed securities		30.8		(4.6	)		(1.6	)		(0.5	)		24.1		20.9		(0.5	)		—
Equity investment securities		12.4		—			—			28.6			41.0		—		—			—
		193.0		(8.8	)		(0.3	)		31.9			215.8		47.0		(2.3	)		—
Total	$	233.5	$	(10.9	)	$	(0.3	)	$	31.9		$	254.2	$	47.0	$	(2.3	)	$	—

⁽¹⁾ Gross unrealized gains/(losses) were recorded to non-operating (income) expense in the consolidated statements of operations. The gains on fixed income funds relate to dividends earned and reinvested.

⁽²⁾ Represents the cumulative effect of adoption of accounting principle related to other-than-temporary impairments on investments. This required a reclassification of the non-credit related portion of changes in fair value of our investments to other comprehensive income previously recorded in our statement of operations.

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The carrying value of short- and long-term investments consists of the following:

In millions	As of March 31, 2010		As of December 31, 2009
Items measured at fair value on a recurring basis	$	253.8	$	254.2
Equity method investments		100.1		101.6
Time deposits		4.3		4.6
Equity investments at cost		23.1		23.1
Total investments		381.3		383.5
Less: short-term investments		171.7		85.9
Non-current investments	$	209.6	$	297.6

As of March 31, 2010, we held $115.7 million in fixed income funds, net of temporary gains of $8.7 million, with the intent of holding them for a period exceeding 12 months. As of December 31, 2009, we held $110.8 million in fixed income funds, net of temporary gains of $5.6 million.

As of March 31, 2010, we held $57.3 million in a portfolio comprised of corporate bonds and asset-backed and mortgage-backed securities, net of temporary losses of $1.1 million and other-than-temporary impairments of $16.8 million, of which $0.3 million is related to non-credit losses and is recorded in accumulated other comprehensive income. As of December 31, 2009, we held $64.0 million of these investments, net of temporary impairments of $2.3 million and other-than-temporary impairments of $16.8 million, of which $0.3 million is related to non-credit losses. A majority of these investments maintain a floating interest rate based on a range of spreads to the one and three month LIBOR rate. While we believe the decline in fair value related to the temporary impairments to be directly attributable to the current global credit conditions, we believe the time to reach the original carrying value for certain of these investments to be greater than 12 months. Accordingly, we have classified $32.6 million of those investments as non-current assets.

Our investments include asset-backed securities, mortgage-backed securities and corporate debt securities that have a market value below amortized cost and are not included in other-than-temporary impairments. The unrealized loss on these investments are considered temporary based on an evaluation of factors including the current credit rating and any changes in the rating since issuance, the current repayment schedule rate as compared to the expected amortization schedule, the fair value of the investment as compared to the amortized cost basis, the subordination level of the security, and any collateral associated with the security. Based on an evaluation of these qualitative factors and the intent to hold these investments for a period of time sufficient to recover all principal associated with the investments, MEMC does not consider the impairments to be other-than-temporary at March 31, 2010.

When the fair value of an investment is less than our cost basis, we evaluate the nature of the investment based on current and expected future market conditions, the duration of impairments, the extent to which fair value is less than cost, historical volatility of the security, the financial condition and near term prospects of the issuer, and our ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. As of March 31, 2010, we have recorded other-than temporary impairments for asset-backed securities, mortgage-backed securities and corporate debt securities. A discounted cash flow analysis was used to calculate the credit loss associated with the impairment considering current repayment of principal and interest as compared to the stated amortization schedule, default rates (if any), subordination level of the security within the structure (e.g. A notes as compared to B notes) and collateral ratios. For floating-rate securities, the current coupon rate is used as the discount rate and for fixed rate securities, the original coupon rate is used as the discount rate.

During the three months ended March 31, 2009, we recorded other-than-temporary impairments of $2.3 million on our available-for-sale investments. MEMC did not have any similar other-than-temporary impairments for the three months ended March 31, 2010.

Our unrealized other-than-temporary impairment losses on our debt securities held at March 31, 2010 were as follows:

In millions	Total
Unrealized other-than-temporary impairment losses	$	16.8
Unrealized other-than-temporary impairment losses reclassified to accumulated other comprehensive loss on April 1, 2009 in conjunction with cumulative effect transition adjustment		(0.3	)
Net impairment losses recognized in retained earnings	$	16.5

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Contractual maturities of our available-for-sale debt securities were as follows:

	As of March 31, 2010
In millions	Cost		Fair Value
Due in one year or less	$	15.8	$	15.8
Due after one year through five years		11.9		2.9
No single maturity date(1)		47.5		38.6
	$	75.2	$	57.3

⁽¹⁾ Securities with no single maturity date include mortgage- and asset-backed securities which have been classified as current or non-current based on estimated timing of receipt of the forecasted cash flows.

(9) Intangible Assets

Intangible assets at March 31, 2010 and December 31, 2009 are as follows:

	Weighted Average Amortization Period	Gross Carrying Amount				Accumulated Amortization						Net Carrying Amount
Dollars in millions		March 31, 2010		December 31, 2009		March 31, 2010			December 31, 2009			March 31, 2010		December 31, 2009
Amortizable intangible assets:
Favorable energy credits	7	$	14.2	$	14.2	$	(1.0	)	$	(0.3	)	$	13.2	$	13.9
Customer relationships	7		4.7		4.7		(0.2	)		—			4.5		4.7
Trade name	15		4.0		4.0		(0.1	)		—			3.9		4.0
Internally developed software	3		1.3		1.3		(0.2	)		(0.1	)		1.1		1.2
Purchased software	6		27.2		27.4		(22.8	)		(22.5	)		4.4		4.9
Other intangible assets:
Power plant development arrangements			18.0		18.0		—			—			18.0		18.0
Total intangible assets		$	69.4	$	69.6	$	(24.3	)	$	(22.9	)	$	45.1	$	46.7

(10) Debt and Capital Lease Obligations

Long-term debt and capital leases outstanding consist of the following:

	As of March 31, 2010		As of December 31, 2009
In millions
Solar energy systems:
Capital leases, bearing interest at 3.00%	$	140.8	$	140.9
Finance obligations, bearing interest from 3.00% to 11.11%		272.9		245.1
Long-term notes		25.4		25.4
Capital leases for equipment and other debt		4.8		5.2
Total		443.9		416.6
Less current portion		42.7		32.2
Long-term debt	$	401.2	$	384.4

We have non-solar energy system short-term committed financing arrangements renewable annually of approximately $20.7 million at March 31, 2010, of which there were no short-term borrowings outstanding at March 31, 2010. Of the $20.7 million committed short-term financing arrangements, $9.8 million is unavailable because it relates to the issuance of third party letters of credit. Interest rates are negotiated at the time of the borrowings.

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We have non-solar energy system long-term committed financing arrangements of approximately $320.8 million at March 31, 2010, of which $42.1 million is outstanding. Of the $320.8 million committed long-term financing arrangements, $66.7 million is unavailable because it relates to the issuance of third party letters of credit.

Our solar energy systems for which we have capital lease and finance obligations are included in separate legal entities. The capital lease and finance obligations have recourse to those separate legal entities but limited or no recourse to the MEMC parent or SunEdison parent under the terms of the applicable agreements.

The schedule of principal payments on long term debt is as follows:

In millions	As of March 31, 2010
April 1, 2010 through December 31,
2010	$	26.1
2011		14.2
2012		13.3
2013		13.1
2014		11.8
Thereafter		222.4
Total	$	300.9

(11) Stockholders’ Equity

The following table presents the change in total stockholders’ equity for the three months ended March 31, 2010.

In millions	MEMC Stockholders’ Equity			Noncontrolling Interest		Total
Balance, January 1, 2010	$	2,168.6		$	38.2	$	2,206.8
Net (loss) income		(9.6	)		0.5		(9.1	)
Other comprehensive (loss) income, net of tax		(1.4	)		1.1		(0.3	)
Stock plans, net		10.3			—		10.3
Contributions from noncontrolling interest		—			5.4		5.4
Balance, March 31, 2010	$	2,167.9		$	45.2	$	2,213.1

In the first quarter of 2010 Banco Santander (“Santander”) acquired a 50% ownership in certain SunEdison project entities which SunEdison will consolidate. Santander contributed $5.4 million of equity and $12.0 million in the form of a note payable. Santander’s interest is expected to be eliminated within the next twelve months upon the eventual sale of the project.

Stock-Based Compensation

We have equity incentive plans that provide for the award of non-qualified stock options, restricted stock, performance shares, and restricted stock units to employees, non-employee directors, and consultants. As of March 31, 2010, there were 5.8 million shares authorized for future grant under these plans. On April 20, 2010, MEMC’s stockholders approved a new 2010 Equity Incentive Plan, which has 15.0 million shares authorized and available for future grants.

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The following table presents information regarding outstanding stock options as of March 31, 2010 and changes during the three months then ended with regard to stock options:

	Shares		Weighted- Average Exercise Price		Aggregate Intrinsic Value (in millions)		Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2009	10,382,235		$	25.75
Granted	560,997			13.45
Exercised	(3,625	)		10.67
Forfeited	(57,165	)		21.84
Expired	(70,509	)		41.95
Outstanding at March 31, 2010	10,811,933		$	25.01	$	14.2	8 Years
Options exercisable at March 31, 2010	3,696,715		$	29.11	$	5.2	7 Years

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between our closing stock price on the last trading day of the first quarter of 2010 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2010. This amount changes based on the fair market value of our stock. For the three months ended March 31, 2010, the total intrinsic value of options exercised, the cash received from option exercises under our option plans and the actual tax benefit realized for the tax deductions from option exercises were all less than $0.1 million. The total intrinsic value of options exercised for the three months ended March 31, 2009 was $0.1 million. For the three months ended March 31, 2009, cash received from option exercises under our option plans was $0.1 million and the actual tax benefit realized for the tax deductions from option exercises was $0.1 million.

Our weighted-average assumptions are as follows:

	Three Months Ended March 31, 2010		Three Months Ended March 31, 2009
Risk-free interest rate	2.2	%	1.7	%
Expected stock price volatility	68.5	%	65.4	%
Expected term until exercise (years)	4		5
Expected dividends	0.0	%	0.0	%

The weighted-average grant-date fair value per share of options granted was $7.08 and $7.43 for the three months ended March 31, 2010 and 2009, respectively. As of March 31, 2010, $50.4 million of total unrecognized compensation cost related to stock options granted and outstanding as of March 31, 2010 is expected to be recognized over a weighted-average period of 2.9 years.

Restricted stock units represent the right to receive a share of MEMC stock at a designated time in the future, provided the stock unit is vested at the time. The following table presents information regarding outstanding restricted stock units as of March 31, 2010 and changes during the three months then ended:

	Restricted Stock Units		Aggregate Intrinsic Value (in millions)		Average Remaining Contractual Life
Outstanding at December 31, 2009	2,859,431
Granted	141,500
Converted	(33,000	)
Forfeited	858
Outstanding at March 31, 2010	2,968,789		$	43.9	2.4 years

At March 31, 2010, there were no restricted stock units which were convertible into shares. The weighted-average fair value of restricted stock units per share on the date of grant was $12.41 and $13.49 for the three months ended March 31, 2010 and 2009, respectively. As of March 31, 2010, $23.5 million of total unrecognized compensation cost related to restricted stock units is expected to be recognized over a weighted-average period of 2.4 years.

Stock-based compensation expense for the three months ended March 31, 2010 and 2009 was $6.8 million and $6.1 million, net of income tax benefit of $3.8 million and $3.4 million, respectively.

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(12) Income Taxes

We are currently under a tax examination by the Internal Revenue Service for the 2006 and 2007 tax years. It is reasonably possible that the examination could be completed within the next twelve months; however, the results of the examination and any potential settlement are not able to be determined as of March 31, 2010. There is risk, however, that the amounts ultimately settled upon resolution of the audit could be materially different from the amounts previously included in our income tax liabilities and, therefore, could have a material impact on our tax provision, net income, tax liabilities and cash flows.

During the three months ended March 31, 2010, we recorded an income tax benefit of $14.6 million and an effective tax rate of 47.1%. The income tax benefit for the first quarter of 2010 is primarily related to a discrete tax benefit of $5.4 million associated with a planned remittance of the undistributed earnings of one of our foreign wholly owned subsidiaries to the U.S. in the foreseeable future and a discrete benefit of $3.1 million associated with the reversal of a deferred tax asset valuation allowance for foreign net operating losses of SunEdison that can be used to offset current earnings. The remaining income tax benefit for the first quarter of 2010 is primarily attributed to a taxable loss in the U.S. offset by taxable income in lower rate jurisdictions. We recorded a tax benefit on the U.S. tax loss because there is sufficient taxable income in the allowable carry back period to absorb the loss.

(13) Benefit Plans

Net periodic postretirement benefit cost consists of the following:

	Three Months Ended March 31, 2010						Three Months Ended March 31, 2009
In millions	Pension Plans			Health Care and Other Plans			Pension Plans			Health Care and Other Plans
Service cost	$	0.6		$	—		$	0.8		$	—
Interest cost		2.4			0.4			2.5			0.4
Expected return on plan assets		(3.6	)		—			(3.3	)		—
Net actuarial loss/(gain) and amortization of prior service costs		2.2			(0.6	)		1.3			(0.6	)
Settlement and curtailment loss, net		—			—			0.3			—
Net periodic postretirement benefit cost	$	1.6		$	(0.2	)	$	1.6		$	(0.2	)

The settlement and curtailment loss, net is related to the restructuring charges discussed in Note 2 above.

(14) Long-term Customer Contracts

In January 2010, we reached an out of court settlement of a lawsuit filed in April 2009 related to our long-term solar wafer supply agreement with Conergy AG (“Conergy”). At the same time, we amended this agreement with Conergy, which amendment included a significant reduction in the minimum quantity of wafers that Conergy must purchase over the remaining eight years of the agreement, as well as a minimum market share commitment should Conergy’s demand exceed the reduced quantities. The amendment also modifies the pricing terms to be based on market rates similar to other MEMC long-term solar wafer supply agreements. The amendment includes MEMC permanently retaining $21.1 million of previously refundable deposits currently held by us which have been reclassified from customer deposits to deferred revenue. The deferred revenue will be amortized over the remaining term of the contract and recorded as revenue, $2.0 million of which was recorded in the first quarter of 2010. Another $7.0 million in short-term deposits are no longer required to be paid in the next twelve months and have therefore been classified as long-term. In addition, we applied $8.1 million of refundable security deposits against outstanding accounts receivable balances. The constructive receipt of the non-refundable deposit and corresponding reduction in refundable deposits of $19.1 million, as well as the application of the deposits against accounts receivables, have been reflected as cash provided by operating activities and cash used in financing activities in the unaudited condensed consolidated statement of cash flows.

(15) Commitments and Contingencies

Contingent Consideration

We issued contingent consideration to be paid to the former SunEdison unit holders if certain operational criteria are met from January 1, 2010 through December 31, 2010. This consideration is to be paid in the form of cash and MEMC common stock and ranges from zero up to $89.0 million. As of March 31, 2010, we have accrued approximately $78.5 million based on the estimated fair value of this contingency.

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Indemnification

We have agreed to indemnify some of our Semiconductor Materials and Solar Materials customers against claims of infringement of the intellectual property rights of others in our sales contracts with these customers. Historically, we have not paid any claims under these indemnification obligations and we do not have any pending indemnification claims as of March 31, 2010.

We generally warrant the operation of our solar energy systems. Due to the absence of historical material warranty claims and expected future claims, we have not recorded a warranty accrual related to solar energy systems as of March 31, 2010.

Legal Proceedings

We are involved in various legal proceedings which arise in the ordinary course of business. Although it is not possible to predict the outcome of these matters, we believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position, cash flows or results of operations.

BP Solar International v. MEMC Electronic Materials, Inc. and MEMC Pasadena, Inc.

In April 2007, BP Solar International, Inc. filed suit against MEMC and MEMC Pasadena, Inc. in the Circuit Court for Frederick County, Maryland (Civil Number 10-C-07-001240) alleging non-delivery of polysilicon powder for 2006. Plaintiff BP Solar subsequently amended the complaint on four separate occasions. The final complaint filed by Plaintiff alleged that MEMC Pasadena failed to supply polysilicon powder to the Plaintiff in 2006 and 2007 under an alleged three-year supply agreement. MEMC has always maintained that no such long term supply agreement ever existed. The case was tried before a jury and on July 31, 2009, the jury returned a verdict in favor of BP Solar, awarding damages of $8.8 million. Both MEMC and BP Solar have appealed.

MEMC and MEMC Pasadena continue to believe that the lawsuit is without merit and the Company remains committed to a vigorous defense of the case at the appellate level. The appellate court has docketed the case and has directed that the parties file their briefs over the course of the next several months, after which, in November 2010, the appellate court has scheduled oral argument on the matter. A decision from the appellate court could be expected some time in 2011. An unfavorable outcome on appeal would result in MEMC having to pay BP Solar the damages originally found by the jury, plus interest. MEMC accrued the full amount of damages of the verdict of $8.8 million in marketing and administration expense and accrued expenses and $3.7 million of income tax benefit, resulting in a net expense of $5.1 million, during the quarter ended June 30, 2009.

S.O.I.TEC Silicon on Insulator Technologies S.A. v. MEMC Electronic Materials, Inc.

On May 19, 2008, Soitec and Commissariat A L’Energie Atomique (“CEA”) filed a complaint against MEMC in the U.S. District Court for the District of Delaware (Civil Action No. 08-292) alleging infringement, including willful infringement, by MEMC of three U.S. patents related to silicon-on-insulator (SOI) technology, and requested damages and an injunction. Soitec and CEA filed an amended complaint on July 21, 2009, adding a fourth, related patent to the lawsuit. MEMC has filed a counterclaim against Soitec for infringement of one of MEMC’s U.S. patents. Discovery is ongoing. The Court recently bifurcated the case into two phases, a first liability phase which, to the extent liability is found, will be followed by a second damages phase. Trial of the liability phase is scheduled for late October 2010. We believe that Soitec and CEA’s suit against us has no merit, and we are asserting a vigorous defense against these claims, as well as our infringement counterclaim. We do not believe that this case, should it be decided against MEMC, in whole or in part, will have a material adverse effect on us. Due to uncertainty regarding the litigation process, the outcome of this lawsuit is unpredictable and the results of this case could be unfavorable for MEMC.

Semi-Materials Co., Ltd. v. MEMC Electronic Materials, Inc. and MEMC Pasadena, Inc.

On September 28, 2006, Semi-Materials Co., Ltd. (“Semi-Materials”) filed a complaint against MEMC in the U.S. District Court for the Eastern District of Missouri (Case No. 4:06-CV-01426-FRB) alleging breach of contract, unjust enrichment, fraud, and conversion, and seeking specific performance, all related to a series of purchase orders for chunk polysilicon and polysilicon solar ingot. MEMC filed its answer in the case in December 2006. On MEMC’s motion, the Court dismissed Semi-Materials’ conversion claim.

The parties entered into settlement discussions for this case in November 2007 and December 2007. In early 2008, Semi-Materials claimed that a binding settlement was reached as a result of those late 2007 discussions. MEMC denied Semi-Materials’ allegation that a binding settlement was reached. In January 2008, Semi-Materials moved the trial court to enforce the alleged settlement terms. On March 17, 2008, the trial court sustained Semi-Materials’ motion and found that binding settlement terms had been reached as a result of the late 2007 negotiations between Semi-Materials and MEMC. This decision was immediately appealed by MEMC to the United States Court of Appeals for the Eighth Circuit, and enforcement of the trial court’s order was stayed pending that appeal. The Eighth Circuit heard oral argument on September 26, 2008. Just prior to the September 26 oral argument, Semi-Materials informed MEMC and the Eighth Circuit that Semi-Materials no longer sought enforcement of the alleged settlement agreement (although Semi-Materials still claimed that a binding settlement was reached in late 2007). Semi-Materials instead requested that the Eighth Circuit vacate the trial court’s March 2008 order enforcing the alleged settlement agreement and remand the case back to the trial court for further proceedings. On May 4, 2009, the Eighth Circuit requested a rehearing of the appeal, which rehearing was held on June 10, 2009. On July 10, 2009, the Eighth Circuit vacated the trial court’s order, and returned the case to the trial court for further proceedings. The parties are currently engaged in discovery for this case. This case has been set for trial beginning November 15, 2010.

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On March 31, 2008, Semi-Materials and its affiliate SMC Shanghai (“SMC”) filed two additional lawsuits against MEMC, one in the United States District Court for the Southern District of Texas (Case No. 4:08-CV-00991) (the “Texas Action”) and another in the United States District Court for the Eastern District of Missouri (Case No. 4:08-CV-00434-JCH) (the “Missouri Action”). In both cases, Semi-Materials and SMC alleged that: (i) MEMC Pasadena, Inc. (“MEMC Pasadena”) breached an agreement with SMC for SMC to act as MEMC’s exclusive sales agent in China; (ii) MEMC Pasadena breached an agreement with Semi-Materials for Semi-Materials to act as MEMC Pasadena’s exclusive sales agent in Korea; (iii) MEMC tortiously interfered with the purported sales agency agreements among MEMC Pasadena and SMC and Semi-Materials; and (iv) MEMC tortiously interfered with a separate sales agency agreement Semi-Materials claimed existed with an unrelated party. In the Missouri Action, Semi-Materials also claimed that MEMC tortiously interfered with an expectancy for an on-going business relationship Semi-Materials claimed existed with the unrelated party. Upon MEMC’s motions for summary judgment in the Missouri Action, the Court dismissed the claim that MEMC tortiously interfered with the purported sales agency agreements, and the claim that MEMC tortiously interfered with the alleged sales agency agreement between Semi-Materials and the unrelated party. The remaining claims were tried before a jury between January 4 and January 12, 2010. At trial, the jury found in favor of Semi-Materials and SMC on their respective claims for breach of contract against MEMC Pasadena, awarding a verdict of $0.2 million, and found in favor of MEMC on Semi-Materials’ claim for tortious interference with an expectancy of an ongoing business relationship with the unrelated party. MEMC Pasadena filed a post-trial motion for judgment as a matter of law as to the breach of contract claims on which the jury found in favor of Semi-Materials and SMC. The Court has not yet ruled upon the motion. Semi-Materials and SMC filed a Notice of Appeal to the United States Court of Appeals for the Eighth Circuit concerning rulings the Court made at summary judgment concerning Plaintiffs’ alleged damages on their breach of contract claims. MEMC Pasadena filed a Notice of Cross-Appeal concerning the Court’s entry of judgment based upon the jury verdict and the Court’s denial of MEMC’s motion for judgment as a matter of law. The appellate matters have been docketed as Appeal Nos. 10-1324 and 10-1626 in the United States Court of Appeals for the Eighth Circuit. The opening appellate brief of Semi-Materials and SMC is due to be filed on April 28, 2010. No discovery has been undertaken in the Texas Action, and it has been stayed.

We do not believe that the Semi-Materials cases, should the jury’s verdict in the Missouri action be maintained or should the case set for trial in November 2010 ultimately be decided against MEMC, in whole or in part, will have a material adverse effect on us. Due to uncertainty regarding the litigation process, the outcome of these matters are unpredictable and the results of these cases could be unfavorable for MEMC.

Minneapolis Firefighters’ Relief Association v. MEMC Electronic Materials, Inc., et al.

On September 26, 2008, a putative class action lawsuit was filed in the U.S. District Court for the Eastern District of Missouri by plaintiff Minneapolis Firefighters’ Relief Association asserting claims against MEMC and Nabeel Gareeb, MEMC’s former Chief Executive Officer. On October 10, 2008, a substantially similar putative class action lawsuit was filed by plaintiff Donald Jameson against MEMC, Mr. Gareeb and Ken Hannah, MEMC’s former Chief Financial Officer and currently MEMC’s Executive Vice President and President—Solar Materials. These cases purportedly are brought on behalf of all persons who acquired shares of MEMC’s common stock between June 13, 2008 and July 23, 2008, inclusive (the “Class Period”). Both complaints allege that, during the Class Period, MEMC failed to disclose certain material facts regarding MEMC’s operations and performance, which had the effect of artificially inflating MEMC’s stock price in violation of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Plaintiffs further allege that Messrs. Gareeb and Hannah are subject to liability under Section 20(a) of the Act as control persons of MEMC. Plaintiffs seek certification of the putative class, unspecified compensatory damages, interest and costs, as well as ancillary relief. On December 12, 2008, these actions were consolidated, and the Court appointed Mahendra A. Patel as lead plaintiff. Plaintiff filed a consolidated amended complaint on February 23, 2009. Defendants filed a motion to dismiss the Consolidated Amended Complaint, which was fully briefed by the parties by June 24, 2009. On March 8, 2010, the Court dismissed the consolidated class action with prejudice. On March 31, 2010, Plaintiff filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit.

MEMC and the individual defendants believe this action has no merit and intend to vigorously defend themselves against the appeal of the order granting the motion to dismiss. However, due to the inherent uncertainties of litigation, we cannot predict the ultimate outcome of this action.

Brian Larkowski v. John Marren, et al.

On November 4, 2008, Brian Larkowski, a purported shareholder of MEMC, filed a derivative action in the Circuit Court of St. Charles County, Missouri against defendants John Marren, Peter Blackmore, Nabeel Gareeb, Marshall Turner, Robert J. Boehlke, C. Douglas Marsh, William E. Stevens, James B. Williams and Michael McNamara (collectively “individual defendants”) and MEMC as a nominal defendant. Each individual defendant is a current or former officer and/or director of MEMC. The lawsuit alleges breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment, based on allegations of conduct similar to that alleged in the putative class action lawsuit described above. On December 19, 2008, the court entered a stipulated order staying the derivative action pending resolution of any motions to dismiss in the putative class action described above.

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On January 30, 2009, a second putative derivative plaintiff served a demand letter on the Company’s Board of Directors requesting that it investigate factual allegations similar to those underlying the Larkowski derivative action. In response, the Board of Directors appointed a special committee to investigate these allegations. On October 8, 2009, the special committee submitted a final report of its findings to our Board of Directors. In its report, the special committee concluded that there is no substantiation for the claims of wrongful conduct referenced in the demand letter. After its review and consideration, our Board of Directors determined to accept the report of the special committee in its entirety, including the findings and recommendations set forth therein.

Jerry Jones v. MEMC Electronic Materials, Inc., et al.

On December 26, 2008, a putative class action lawsuit was filed in the U.S. District Court for the Eastern District of Missouri by plaintiff, Jerry Jones, purportedly on behalf of all participants in and beneficiaries of MEMC’s 401(k) Savings Plan (the “Plan”) between September 4, 2007 and December 26, 2008, inclusive. The complaint asserted claims against MEMC and certain of its directors, employees and/or other unnamed fiduciaries of the Plan. The complaint alleges that the defendants breached certain fiduciary duties owed under the Employee Retirement Income Security Act (“ERISA”), generally asserting that the defendants failed to make full disclosure to the Plan’s participants of the risks of investing in MEMC’s stock and that the Company’s stock should not have been made available as an investment alternative in the Plan. The misstatements alleged in the complaint significantly overlap with the misstatements alleged in the federal securities class action described above.

On June 1, 2009, an amended class action complaint was filed by Mr. Jones and another purported participant of the Plan, Manuel Acosta, which raises substantially the same claims and is based on substantially the same allegations as the original complaint. However, the amended complaint changes the period of time covered by the action, purporting to be brought on behalf of beneficiaries of and/or participants in the Plan from June 13, 2008 through the present, inclusive (the “Class Period”). The amended complaint seeks unspecified monetary damages, including losses the participants and beneficiaries of the Plan allegedly experienced due to their investment through the Plan in MEMC’s stock, equitable relief and an award of attorney’s fees. No class has been certified and discovery has not begun. The Company and the named directors and employees filed a motion to dismiss the complaint, which was fully briefed by the parties as of October 9, 2009. The parties each subsequently filed notices of supplemental authority and corresponding responses. On March 17, 2010, the court denied the motion to dismiss. On April 14, 2010, Defendants filed a motion for reconsideration or, in the alternative, certification for interlocutory appeal. On April 22, 2010, the court ordered that plaintiff’s response to the motion for reconsideration be filed on or before May 26, 2010 and that defendants’ reply be filed on or before June 16, 2010. The Company and the named directors and employees intend to vigorously defend themselves against these claims.

MEMC believes the above class actions and derivative suit are without merit and we will assert a vigorous defense. Due to the inherent uncertainties of litigation, we cannot predict the ultimate outcome or resolution of the foregoing proceedings or estimate the amounts of, or potential range of, loss with respect to these proceedings. An unfavorable outcome could have a material adverse impact on our business, results of operations and financial condition. We have indemnification agreements with each of our present and former directors and officers, under which we are generally required to indemnify each such director or officer against expenses, including attorney’s fees, judgments, fines and settlements, arising from actions such as the lawsuits described above (subject to certain exceptions, as described in the indemnification agreements).

(16) Reportable Segments

Our reportable segments are determined based on the management of the businesses and the types of products sold and services provided. On November 20, 2009, we completed the acquisition of SunEdison. Until the acquisition of SunEdison, MEMC was engaged in one reportable industry segment—the design, manufacture and sale of silicon wafers—which was conducted as our Materials Business. From the time of the SunEdison acquisition until the end of 2009, MEMC was engaged in two reportable segments, Materials Business and Solar Energy Business (d/b/a SunEdison). Effective January 1, 2010, MEMC reorganized its historical Materials Business operations into two separate businesses and is now engaged in three reportable segments: Semiconductor Materials, Solar Materials (both include the historical operations of MEMC) and Solar Energy (consists solely of SunEdison). This reorganization reflects how we are currently operating our business and analyzing our operating results.

The Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. The CODM evaluates segment performance based on segment operating profit plus interest expense. In order to determine segment operating profit, standard costs are used as the basis for raw material costs allocated between segments and any related variances are allocated based on usage of those raw materials. MEMC incurs expenses for research and development costs and marketing activities that are not specific to any one segment or allocated to any segments. These costs, as well as general corporate marketing and administration costs, stock compensation expense, research and development administration costs, legal professional services and related costs, and other items are not evaluated by segment and are included in Corporate and other below. Because certain sites include operations, facilities and/or back office functions that are utilized to support our Semiconductor Materials and Solar Materials businesses, we do not have discrete financial information for total assets. Accordingly, the CODM does not consider total assets when analyzing segment performance.

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MEMC’s Semiconductor Materials segment includes the development, production and marketing of wafers with a wide variety of features satisfying numerous product specifications to meet our customers’ exacting requirements, which wafers are utilized in the manufacture of semiconductor devices.

MEMC’s Solar Materials segment includes the development, production and marketing of square and pseudo-square crystalline solar wafers, which wafers are utilized by customers in the manufacture of solar cells, and then solar modules (panels), which convert energy from the sun into usable electrical energy. Our Solar Materials segment also includes our polysilicon production.

MEMC’s Solar Energy segment consists solely of SunEdison and includes the development and construction of solar power plants, which are then either sold or held to produce power. The results of the segment include the sale of solar plants and services for customers to purchase renewable energy by delivering solar power to them under long-term power purchase arrangements and feed-in tariff arrangements.

We have provided 2009 financial information on a comparative basis to conform to the 2010 segment presentation:

	Three Months Ended March  31, 2010			Three Months Ended March  31, 2009
In millions
Net sales:
Semiconductor Materials	$	219.3		$	58.7
Solar Materials		157.7			155.3
Solar Energy		60.7			—
Consolidated net sales	$	437.7		$	214.0
Operating (loss) income:
Semiconductor Materials	$	(7.9	)	$	(73.4	)
Solar Materials		12.2			67.8
Solar Energy		6.8			—
Corporate and other		(26.4	)		(20.8	)
Consolidated operating loss	$	(15.3	)	$	(26.4	)
Interest expense:
Semiconductor Materials	$	1.0		$	0.3
Solar Materials		0.1			—
Solar Energy		11.0			—
Consolidated net interest expense	$	12.1		$	0.3
Depreciation and amortization:
Semiconductor Materials	$	26.2		$	23.0
Solar Materials		6.9			5.4
Solar Energy		4.4			—
Consolidated depreciation and amortization	$	37.5		$	28.4
Capital expenditures:
Semiconductor Materials	$	18.8		$	32.8
Solar Materials		27.4			20.4
Solar Energy(1)		44.9			—
Consolidated capital expenditures	$	91.1		$	53.2

⁽¹⁾ Consists of construction of solar energy systems of $44.9 million in the three months ended March 31, 2010.

Equity in earnings of joint venture, net of tax of $7.3 million in the first quarter of 2010 and equity in joint venture of $100.1 million at March 31, 2010 and $101.6 million at December 31, 2009 is part of our Solar Materials segment.

The Solar Energy segment includes $285.3 million of goodwill and we have recorded no impairment on this goodwill.

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Item  2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto of MEMC Electronic Materials, Inc. included herein.

OVERVIEW

Business

We are a global leader in the manufacture and sale of silicon wafers and have been a pioneer in the design and development of wafer technologies over the past fifty years. We provide wafers in sizes ranging from 100 millimeters (4 inch) to 300 millimeters (12 inch). Since 2007, we have been selling 156 millimeter wafers targeted for solar applications. Depending on market conditions, we also sell intermediate products such as polysilicon, silane gas, ingots and scrap wafers to semiconductor device and equipment makers, solar cell and module manufacturers, flat panel and other industries. On November 20, 2009, we completed the acquisition of Sun Edison LLC (“SunEdison”), a solar energy services provider that integrates the design, installation, monitoring and financing of solar energy systems in order to provide a comprehensive solar energy services solution. Prior to the acquisition, we were engaged in one reportable segment—the design, manufacture and sale of silicon wafers. With the acquisition of SunEdison, we now also participate in the development and maintenance of solar energy systems and the sale of solar energy. Effective January 1, 2010, we reorganized our historical operations into two separate businesses, and we are now engaged in three reportable segments: Semiconductor Materials, Solar Materials (both of which include the historical operations of MEMC) and Solar Energy (consists solely of SunEdison).

Business Segments Overview

Semiconductor Materials Segment

We offer wafers for semiconductor devices with a wide variety of features. Our wafers vary in size, surface features, composition, purity levels, crystal properties and electrical properties. Our monocrystalline wafers for use in semiconductor applications range in size from 100 millimeter to 300 millimeter and include four general categories: prime, epitaxial, test/monitor wafers and silicon-on-insulator (SOI) wafers.

Increases in global consumer spending have driven increases in volumes in our Semiconductor Materials segment over the prior year quarter and sequentially. We also continue to see modest sequential pricing improvements.

Solar Materials Segment

Our solar wafers are used as the starting material for crystalline solar cells which fit into solar modules (panels) and convert energy from the sun into usable electrical energy. Our solar materials segment also includes our polysilicon production.

While the overall demand for wafers for solar applications continued to improve in the first quarter, pricing pressures offset any gains realized from volume increases. Our sales of polysilicon continued to decline as a percent of total revenue in the first quarter of 2010 compared to the same period in 2009 due to lower volumes and pricing. Polysilicon sales were approximately 1% and 7% of consolidated revenue for the quarter ended March 31, 2010 and 2009, respectively.

In January 2010, we reached an out of court settlement of a lawsuit related to our long-term solar wafer supply agreement with Conergy AG (“Conergy”). At the same time, we amended this agreement with Conergy, which amendment included a significant reduction in the minimum quantity of wafers that Conergy must purchase over the remaining eight years of the agreement, as well as a minimum market share commitment should Conergy’s demand exceed the reduced quantities. The amendment also modifies the pricing terms to be based on market rates similar to other MEMC long-term solar wafer supply agreements. The amendment includes MEMC permanently retaining a portion of the refundable deposits currently held by us.

Solar Energy Segment

Our SunEdison business provides our customers with a simplified and economical way to purchase renewable energy, by delivering solar power to them under long-term power purchase arrangements and feed-in tariff arrangements. Our SunEdison business provides solar energy services that integrate the design, installation, financing, monitoring, operations and maintenance portions of the downstream solar market to provide a more comprehensive and cost effective service to our customers.

In 2009, Sun Edison began development of 10 projects in the Puglia region of Italy all below 1 megawatt each. Seven of the ten were completed during the first quarter of 2010 and we expect to complete the remaining three in the second and third quarter of 2010. We also broke ground on two systems in Canada totaling eighteen megawatts in the first quarter of 2010, which are expected to be completed in stages within the next twelve months.

In March 2010, SunEdison, along with our joint venture partner Banco Santander (“Santander”), received approval from the Italian government to develop and construct a 72 megawatt photovoltaic solar power plant in Northeastern Italy, near the town of Rovigo. SunEdison will share equally in the earnings on this project with Santander. Power generation is expected to begin in the second half of 2010 with final completion of the project expected by year end. Santander’s interest is expected to be eliminated within the next twelve months upon the eventual sale of the project.

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Corporate and other

MEMC incurs expenses for research and development costs and marketing activities that are not specific to any one segment or allocated to any segments. These costs, as well as general corporate marketing and administration costs, stock compensation expense, research and development administration costs, legal professional services and related costs, and other items are not evaluated by segment and are included in Corporate and other.

RESULTS OF OPERATIONS

	Three Months Ended March 31,
Net Sales	2010		2009
Dollars in millions
Semiconductor Materials	$	219.3	$	58.7
Solar Materials		157.7		155.3
Solar Energy		60.7		—
Total Net Sales	$	437.7	$	214.0

The consolidated increase in net sales of $223.7 million, or 105% compared to the prior year period, is mainly attributed to increases in consumer spending and other positive macroeconomic effects. In addition, the acquisition of SunEdison on November 20, 2009 increased our sales by $60.7 million during the three months ended March 31, 2010. While we continue to experience pricing pressure in our Solar Materials segment, volumes in both the Solar Materials and Semiconductor Materials segments are trending upward.

Semiconductor Materials Segment Net Sales

The increase of $160.6 in Semiconductor Materials sales in the first quarter of 2010 compared to the prior year was primarily the result of volume increases of $198.0 million, which was partially offset by pricing decreases of $33.5 million. These price and volume changes were consistent among all diameters. Our overall wafer average selling prices were approximately 10% lower than the overall wafer average selling prices for the same period in 2009, although they are slightly higher than the fourth quarter of 2009.

Solar Materials Segment Net Sales

Solar Materials net sales for the period ended March 31, 2010 were $157.7 million compared to $155.3 million in the first three months of 2009. While volumes for solar wafers increased in the first quarter of 2010 due to increased volumes with customers under long-term agreements and new customers, decreases in pricing almost completely offset the increases in volumes. In order to reduce our concentration of solar wafer customers, we continue to diversify our customer base by serving additional solar wafer customers beyond our long-term solar wafer supply agreements. The decrease in sales also resulted from a decrease in polysilicon sales of $13.0 million attributable to decreased volumes and selling prices. Raw polysilicon sales are expected to remain low as our wafer sales grow. Polysilicon sales amounted to only 1% of total sales in the quarter, down from 7% in the same period of 2009.

Solar Energy Segment Net Sales

As noted previously, we acquired SunEdison in November 2009. Solar Energy net sales for the period ended March 31, 2010 were $60.7 million and consisted mainly of the completion and sale of seven solar energy systems totaling 11 megawatts and, to a lesser extent, revenues from energy production. Upon construction of a solar energy system, we may sell the system outright with no continuing involvement (“direct sales”), sell and then lease the system back (“sale-leaseback”) or retain and finance the system (“financing”). Direct sales are recorded in the statement of operations as sales with related cost of sales based on the cost to construct the system. Sale-leasebacks and financing results in the retention of assets on our balance sheet along with the related capital lease obligation or debt. Any changes in the mix of these three alternatives could result in different accounting effects on our financial statements. The amount and timing of revenues associated with the sale of solar energy systems could vary from quarter to quarter depending on when those sales are finalized.

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	Three Months Ended March 31,
Gross Profit	2010			2009
Dollars in millions
Cost of goods sold	$	378.4		$	194.3
Gross profit		59.3			19.7
Gross margin percentage		13.5	%		9.2	%

The increase in our gross profit dollars and gross margin percentage for the period ended March 31, 2010 was primarily the result of Semiconductor Materials volume increases and productivity improvements of $146.0 million. This included charges in 2009 which did not recur in the 2010 current period consisting of unallocated fixed overhead costs of $36.2 million recorded as period expenses and lower of cost or market adjustments on our inventory of $11.4 million. The increase was also due to the acquisition of SunEdison on November 20, 2009, which contributed $22.8 million of gross profit in the three months ended March 31, 2010. We also had a decrease in charges for an adverse annual long-term purchase obligation of $4.8 million. These improvements were offset by pricing declines impacting Semiconductor Materials and Solar Materials segment income by $133.4 million.

	Three Months Ended March 31,
Marketing and Administration	2010			2009
Dollars in millions
Marketing and administration	$	62.2		$	29.8
As a percentage of net sales		14.2	%		13.9	%

The increase in marketing and administration expenses for the period ended March 31, 2010 resulted from the inclusion of SunEdison costs of $18.7 million, as well as an increase in pre-operating start-up costs for our new manufacturing facility in Ipoh, Malaysia of $5.4 million and increased logistics costs of $4.9 million, with the remaining difference mainly due to increased benefits expense.

	Three Months Ended March 31,
Research and Development	2010			2009
Dollars in millions
Research and development	$	11.1		$	9.6
As a percentage of net sales		2.5	%		4.5	%

R&D expenses consisted mainly of product and process development efforts to increase our capability in the areas of flatness, particles and crystal defectivity. The increase in R&D expenses in the first quarter of 2010 compared to the same period in the prior year is due to new efforts for emerging technologies included in the Solar Materials and Solar Energy segments.

	Three Months Ended March 31,
Restructuring Costs	2010			2009
Dollars in millions
Restructuring costs	$	1.3		$	6.7
As a percentage of net sales		0.3	%		3.1	%

In order to better align manufacturing capabilities to projected manufacturing needs for Semiconductor Materials, MEMC committed to workforce reductions in the first and second quarters of 2009 (the “2009 Global Plan”). In September 2009, MEMC also committed to actions to reduce manufacturing costs by shifting Semiconductor Materials manufacturing from our St. Peters, Missouri and Sherman, Texas facilities to other locations which are closer to a number of MEMC’s customers in the Asia Pacific region (the “2009 U.S. Plan”).

The 2009 Global Plan actions reduced our workforce by approximately 500 employees, from 4,800 prior to the reductions. Severance and other costs associated with this plan totaled $6.7 million in the three months ended March 31, 2009 and $12.3 million in the year ended December 31, 2009 when the plan was completed. We expect that the 2009 Global Plan reductions in force will result in annualized cost savings of approximately $30 million, primarily in cost of goods sold, because a majority of those affected were manufacturing facility employees. We began realizing some of these savings in the second quarter of 2009.

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The 2009 U.S. Plan actions are expected to affect approximately 540 employees in the United States. MEMC will provide severance benefits to those employees who will be terminated, and expects to incur total severance charges related to the terminations of approximately $19 million. We recorded $1.3 million and in the first three months of 2010 and expect to make the related severance payments at the time of the final production dates for the facilities through the second quarter of 2011. We also anticipate charges of approximately $30.1 million for other related move costs and contract terminations associated with the closings which will be expensed as incurred until the final production date in the respective U.S. facilities. In total, we have recorded charges of $17.4 million associated with these actions since inception and estimate we will incur approximately $49.1 million in cash costs classified as restructuring expenses. We estimate that the facility closings will result in an annualized savings beginning in the third quarter of 2010 of approximately $10 million, rising to approximately $55 million of annualized savings beginning in the second quarter of 2011.

	Three Months Ended March 31,
Operating Loss	2010			2009
Dollars in millions
Semiconductor Materials	$	(7.9	)	$	(73.4	)
Solar Materials		12.2			67.8
Solar Energy		6.8			—
Corporate and other		(26.4	)		(20.8	)
Total Operating Loss	$	(15.3	)	$	(26.4	)

During the three months ended March 31, 2010, our consolidated operating loss of approximately $15.3 million represented an improvement of $11.1 million from the comparable period in 2009. This improvement was the net result of the changes in gross profit dollars and operating costs discussed above.

Semiconductor Materials Segment

The decrease in our Semiconductor Materials segment loss for the period ended March 31, 2010 was primarily the result of volume increases and productivity improvements, including charges in 2009 which did not recur in the current period. These charges consisted of unallocated fixed overhead costs of $36.2 million recorded as period expenses and lower of cost or market adjustments on our inventory of $11.4 million. These improvements were partially offset by pricing declines and pre-operating start-up costs for our new manufacturing facility in Ipoh, Malaysia of $5.4 million.

Solar Materials Segment

The decrease in our Solar Materials segment income for the period ended March 31, 2010 was primarily the result of pricing declines for solar wafers of $102.8 million, a reduction in polysilicon volumes of $7.9 million and higher wafering costs of $5.3 million. These decreases were slightly offset by increases in solar wafer volumes of $54.7 million.

Solar Energy Segment

As noted above, we acquired SunEdison in November 2009. Solar Energy segment income for the period ended March 31, 2010 was $6.8 million and consisted mainly of the completion and sale of seven solar energy systems totaling 11 megawatts noted above plus income from energy production.

Corporate and other

Corporate and other loss was $26.4 million in the 2010 first quarter, compared to $20.8 million in the first quarter of 2009. The increase was a result of the inclusion of SunEdison costs of $3.2 million and general corporate overhead to support the segments.

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	Three Months Ended March 31,
Non-operating (Income) Expense	2010			2009
Dollars in millions
Interest expense	$	12.1		$	0.3
Interest income		(2.3	)		(11.7	)
Decline in fair value of warrant		5.3			0.1
Other, net		0.6			2.6
Total	$	15.7		$	(8.7	)

Interest expense primarily relates to debt and capital leases for solar energy systems. We incurred $11.0 million of interest expense in the Solar Energy segment and $1.0 million in the Semiconductor Materials segment with the remaining recorded to the Solar Materials segment. Of the $11.0 million recorded in the Solar Energy segment, $6.6 million relates to deferred financing fees that were charged to interest expense when previously incurred solar energy system debt was transferred to the buyer upon sale of the system.

Interest income relates to returns on cash equivalents, restricted cash and investments. Interest income was lower in 2010 compared to 2009 due to lower average cash equivalent and investment balances throughout the year as we adjusted our portfolio of investments to fund current and future operations and acquisitions.

Decline in fair value of warrant represents the mark-to-market adjustment for a warrant received from Suntech Power Holdings (“Suntech”). We recorded a decrease in the estimated fair value of the warrant of $5.3 million in the first quarter of 2010 compared to $0.1 million in the same period of 2009. The change in the estimated fair value of the warrant is driven by the change in the price of Suntech’s ordinary shares, which had a price per share of $14.02 and $16.63 at March 31, 2010 and December 31, 2009, respectively.

	Three Months Ended March 31,
Income Taxes	2010			2009
Dollars in millions
Income tax benefit	$	(14.6	)	$	(18.9	)
Effective tax rate		47.1	%		106.8	%

During the three months ended March 31, 2010, we recorded an income tax benefit of $14.6 million and an effective tax rate of 47.1% compared to an income tax benefit of $18.9 million and an effective tax rate of 106.8% in the three months ended March 31, 2009. The income tax benefit for the first quarter 2010 is primarily related to a discrete tax benefit of $5.4 million associated with a planned remittance of the undistributed earnings of one of our foreign wholly owned subsidiaries to the United States in the foreseeable future and a discrete benefit of $3.1 million associated with the reversal of a deferred tax asset valuation allowance for foreign net operating losses of SunEdison that can be used to offset current earnings. The remaining income tax benefit for the first quarter of 2010 is primarily attributed to a taxable loss in the U.S. offset by taxable income in lower rate jurisdictions. The effective rate was lower in 2010 compared to 2009 primarily due to larger tax losses in higher rate jurisdictions offset by taxable income in lower rate jurisdictions.

We are currently under a tax examination by the Internal Revenue Service for the 2006 and 2007 tax years. It is reasonably possible that portions of the examination could be completed within the next 12 months; however, the results of the examination and any potential settlement are not able to be determined as of March 31, 2010. There is a risk that the amounts ultimately settled upon resolution of the audit could be materially different from the amounts previously included in our income tax liabilities and, therefore, could have a material impact on our tax provision, net income, tax liabilities and cash flows.

	Three Months Ended March 31,
Equity in Earnings of Joint Venture, Net of Tax	2010		2009
Dollars in millions
Equity in Earnings of Joint Venture, Net of Tax	$	7.3	$	—

In the fourth quarter of 2009, our equity method joint venture with Q-Cells SE (“Q-Cells”) completed the construction of a solar power plant and executed a contract to sell it to a third party. This contract resulted in the joint venture recognizing an impairment on the plant assets. MEMC’s share of the impairment was approximately $3.0 million in the fourth quarter of 2009 with an additional $1.5 million recognized in the first quarter of 2010 when concessions were made to the pre-negotiated sales price. Also in the first quarter of 2010, MEMC recognized its pro rata share of the net profit previously deferred for solar wafers sold to Q-Cells International of $8.8 million, which is recorded in the statement of operations as equity in earnings of joint venture, net of tax.

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FINANCIAL CONDITION

Cash and cash equivalents decreased $154.8 million from $632.7 million at December 31, 2009 to $477.9 million at March 31, 2010. See additional discussion in Liquidity and Capital Resources below.

Short-term and long-term investments of $381.3 million at March 31, 2010 decreased from $383.5 million at December 31, 2009. This decrease was primarily due to sales and maturities of available for sale investments of $8.0 million, offset by increases in the fair value of our investments compared to the prior year. The investment in our joint venture with Q-Cells of $100.1 million is now classified as current because MEMC expects the proceeds from the sale of the solar power plant to be returned to the joint venture parties within the next twelve months. At December 31, 2009, the joint venture investment was classified as long-term.

Accounts receivable of $265.8 million at March 31, 2010 increased $92.5 million from $173.3 million at December 31, 2009. The increase was primarily attributable to the increase in sales of $81.0 million, as well as a larger volume of sales taking place late in the first quarter of 2010 compared to the fourth quarter of 2009.

Our inventories increased $27.5 million to $188.3 million at March 31, 2010 from $160.8 million at December 31, 2009. Inventories primarily increased as a result of the increase in goods in process inventories related to SunEdison for several large projects. At March 31, 2010, we had approximately $20.8 million of Semiconductor Materials inventory held on consignment, compared to $18.9 million at December 31, 2009.

Our net property, plant and equipment increased $26.6 million to $1,487.3 million from December 31, 2009. This increase was primarily due to capital expenditures of $91.1 million, $44.9 million of which is related to the construction of solar energy systems. The remaining capital expenditures related to expansions at our plants in Merano, Italy, Pasadena, Texas and Hsinchu, Taiwan, offset by depreciation expense. Included in property, plant and equipment is $107.2 million in capital leases related to the Solar Energy segment at March 31, 2010.

Our net deferred tax assets totaled $135.0 million at March 31, 2010 (of which $31.9 million of current deferred tax assets was included in prepaid and other assets) compared to $127.1 million at December 31, 2009 (of which $31.8 million of current deferred tax assets was included in prepaid and other assets). The increase of $7.9 million in net deferred tax assets is primarily attributed to a discrete tax benefit of $5.4 million associated with a planned remittance of the undistributed earnings of one of our foreign wholly-owned subsidiaries to the United States in the foreseeable future. At March 31, 2010, we have valuation allowances of $15.2 million, primarily related to net operating losses acquired through the purchase of SunEdison, reducing our net deferred tax assets to $135.0 million. We believe that it is more likely than not, with our projections of future taxable income, that we will generate sufficient taxable income to realize the benefits of the net deferred tax assets (which have not been offset by a valuation allowance) at March 31, 2010.

Long-term debt and capital leases increased to $443.9 million at March 31, 2010 from $416.6 million at December 31, 2009. This increase was mainly due to solar energy system financing incurred during the quarter in connection with the completion and financing of 7 systems totaling 2.5 megawatts. The current portion of long-term debt and capital leases of $42.7 million at March 31, 2010 relates primarily to solar energy systems.

Accrued liabilities decreased $20.8 million to $86.0 million at March 31, 2010 from $106.8 million at December 31, 2009 mainly due to a payment for an adverse long-term purchase obligation and recognition of our pro rata share of the net profit previously deferred for solar wafers sold to QCells International of $8.8 million.

Contingent consideration related to acquisition of $78.5 million at March 31, 2010 is our current estimate of the amount to be paid to the former SunEdison unit holders if certain operational criteria are met from January 1, 2010 through December 31, 2010. This consideration is to be paid in the form of cash and MEMC common stock and ranges from zero up to $89.0 million. As of December 31, 2009, this amount was not a current liability and was therefore included in other liabilities—long-term.

Short-term customer deposits decreased $23.9 million to $59.7 million at March 31, 2010 from $83.6 million at December 31, 2009. The amendment of our long-term agreement with Conergy discussed above includes MEMC permanently retaining $17.1 million of previously refundable deposits currently held by us which have been reclassified from short-term customer deposits to deferred revenue. In addition, $7.0 million of short-term deposits were no longer required to be repaid in the next twelve months and have therefore been classified as long-term.

Other long-term liabilities decreased $79.5 million to $233.8 million at March 31, 2010 from $313.3 million at December 31, 2009 mainly due to the contingent consideration related to the acquisition of SunEdison now classified as current discussed above.

26

LIQUIDITY AND CAPITAL RESOURCES

In the three months ended March 31, 2010, cash used in operating activities was $110.1 million compared to $14.6 million in the three months ended March 31, 2009. This increase was primarily a result of the increase in accounts receivable. The increase in cash used for accounts receivable was due to the overall increase in sales, as well as a larger volume of sales taking place late in the first quarter of 2010 compared to the same period in 2009.

Cash used in investing activities increased to $81.4 million in the three months ended March 31, 2010 compared to $15.4 million in the three months ended March 31, 2009, primarily as a result of the construction of solar energy systems and a decrease in proceeds from sales and maturities of investments, slightly offset by a decrease in capital expenditures. Capital expenditures in 2010 primarily relate to increasing our polysilicon capacity and expanding capability for our next generation products in the Semiconductor Materials segment.

Cash provided by financing activities was $40.1 million in the three months ended March 31, 2010 compared to $51.7 million used in the three months ended March 31, 2009. The change in cash provided by financing activities was mainly due to proceeds from financing obligations of $72.8 million which relates to solar energy system financing. Approximately $43.3 million of this was transferred to and assumed by the buyer upon the sale of certain systems during the quarter in a non-cash transaction. We also used $15.8 million in the first quarter of 2009 for our share repurchase program which was suspended in April 2009. In addition, we recorded $36.0 million of repayments on customer deposits related to long-term supply agreements in the first quarter of 2009 compared to $27.6 million in 2010. The current period repayments of customer deposit consist of the constructive receipt of non-refundable deposits due to the amendment with Conergy discussed above and the corresponding reduction in refundable deposits of $19.1 million, as well as the application of the deposits against accounts receivable of $8.1 million.

We have short-term committed loan agreements renewable annually of approximately $20.7 million at March 31, 2010, of which there were no short-term borrowings outstanding. Of the $20.7 million committed short-term loan agreements, $9.8 million is unavailable because it relates to the issuance of third party letters of credit. Interest rates are negotiated at the time of the borrowings. We have long-term committed loan agreements of approximately $320.8 million at March 31, 2010, of which $42.1 million is outstanding. Of the $320.8 million committed long-term loan agreements, $66.7 million is unavailable because it relates to the issuance of third party letters of credit.

On December 23, 2009, we entered into a corporate revolving credit agreement with Bank of America, N.A., PNC Bank, National Association, US Bank National Association and other lenders named therein and such other lending institutions as may from time to time become lenders (the “Corporate Credit Facility”). The Corporate Credit Facility provides for a $250.0 million revolving credit facility and has a term of three years. The facility contains an accordion feature, allowing us to request an increase in the size of the facility, up to an aggregate of $400.0 million, upon terms to be agreed upon by the parties at the time of such request.

Interest on borrowings under the Corporate Credit Facility will be based on our election at LIBOR plus an applicable margin (currently 2.50%) or at a defined prime rate plus an applicable margin (currently 1.50%). The Corporate Credit Facility also provides for us to pay various fees, including a commitment fee (currently 0.50%) on the lenders’ commitments. The Corporate Credit Facility contains certain covenants typical for credit arrangements of this size, including covenants relating to a consolidated interest charge ratio, consolidated leverage ratio and a minimum liquidity ratio. Repayment of any amounts borrowed under the facility is guaranteed by certain of our subsidiaries. The obligations of MEMC and the guaranty obligations of the subsidiaries are secured by a pledge of the capital stock of certain domestic and foreign subsidiaries of MEMC. The other assets of MEMC are not pledged as security for the facility. As of March 31, 2010, we had no outstanding borrowings under this facility, although we had approximately $63.1 million of outstanding third party letters of credit backed by this facility at such date. We met all covenants under this facility at March 31, 2010.

We have approximately $413.7 million of capital lease and finance obligations for solar energy systems which are included in separate legal entities. The individual capital lease and finance obligations have recourse to those separate legal entities but limited or no recourse to the MEMC parent or SunEdison parent legal entities.

These solar energy system obligations generally were provided under master lease agreements, which issued financing for solar energy systems that met pre-established master lease criteria. MEMC has approximately $96 million of potential financing available for future solar energy systems under three such master lease agreements, subject to acceptance of specific systems by the master trustee.

The construction of solar projects will require working capital during the construction phase, and we expect this working capital funding will be sourced from corporate cash and investments or current or future project financing arrangements. However, there can be no guarantees that additional sources of financing will be obtained with terms acceptable to us. Upon completion of a project, it is our expectation the solar energy system will either be sold or will be financed by system specific nonrecourse debt or sale-leaseback thus replenishing the working capital used during the construction.

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The credit ratings for our investments in debt securities as of March 31, 2010 are as follows:

			Credit Ratings
Dollars in millions	Fair Value		AAA		AA+ to A-		BBB+ and Below
Corporate debt securities	$	18.7	$	—	$	16.8	$	1.9
Asset-backed securities		14.6		8.3		6.1		0.2
Mortgage-backed securities		24.0		18.2		3.1		2.7
Auction rate securities		34.5		34.5		—		—
	$	91.8	$	61.0	$	26.0	$	4.8

We take into consideration the credit ratings of the individual securities when evaluating the financial condition and near term prospects of the issuer in determining whether an impairment is temporary or other-than-temporary. See Critical Accounting Policies and Estimates related to our process of evaluating investments for impairment and balance sheet classification included in Exhibit 13 to our annual report on Form 10-K for the fiscal year ended December 31, 2009.

We believe that, based on our current cash, cash equivalents, restricted cash and investment balances of approximately $923.8 million at March 31, 2010, our expected operating cash flows and our $250 million Corporate Credit Facility, the current liquidity concerns in the credit and capital markets will not have a material impact on our liquidity, cash flow, financial flexibility or our ability to fund our operations. We believe that we have the financial resources needed to meet business requirements for at least the next 12 months, including capital expenditures and working capital requirements. With the addition of SunEdison and our expansion into the development of solar power plants, we expect to have increased liquidity requirements in 2010 and beyond. We may need to make investments in working capital to fund solar projects and expect the funding of this working capital will be sourced from both corporate cash and investments, and project finance. If our financial performance, the growth in SunEdison, or the capital expenditures required to fund our Semiconductor Materials or Solar Materials segments change from our current assumptions, we may choose to access the capital markets in order to execute our operating plan.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related footnotes. In preparing these financial statements, we have made our best estimates of certain amounts included in the financial statements. Application of these accounting policies and estimates, however, involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. In arriving at our critical accounting estimates, factors we consider include how accurate the estimate or assumptions have been in the past, how much the estimate or assumptions have changed and how reasonably likely such change may have a material impact. Our critical accounting policies and estimates are more fully described in Item 7 and Note 2 of Notes to Consolidated Financial Statements, included in Exhibit 13 to our annual report on Form 10-K for the fiscal year ended December 31, 2009. There have been no significant changes to our critical accounting policies and estimates since December 31, 2009.

ACCOUNTING STANDARDS NOT YET EFFECTIVE

In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2009-13 (“ASU 2009-13”), which updates the current guidance pertaining to multiple-element revenue arrangements included in ASC Subtopic 605-25. ASU 2009-13 will be effective for our annual reporting period beginning January 1, 2011. We are currently evaluating the impact of ASU 2009-13 on our consolidated results of operations and financial condition.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains “forward-looking” statements within the meaning of the Securities Litigation Reform Act of 1995, including those concerning our belief that the decline in fair value related to the temporary impairments of our investments to be directly attributable to the current global credit conditions; our belief that the time to reach the original carrying value for certain of our investments to be greater than twelve months; our belief that our Internal Revenue Service audit could be completed within the next twelve months; our expectation that the proceeds from the sale of the Q-Cells power plant will be returned to the parties within the next twelve months; our belief that we do not anticipate having to sell our securities in order to operate our business; our expectation that we will complete the three remaining projects in Puglia in the second and third quarter of 2010; our expectation that power generation for our Rovigo project will begin in the second half of 2010 with final completion expected by year end, when Santander’s interest is expected to be eliminated; our expectation that we will complete our 18 megawatt system in Canada in the next twelve months; our expectation that polysilicon sales will remain low as our wafer sales grow; our intention to bring a solar wafer manufacturing facility online in 2010; our intention to continue to use subcontractors for part of our solar wafer manufacturing needs; our belief that the 2009 Global Plan reductions in force will result in annualized cost savings of approximately $30 million, primarily in cost of goods sold because a majority of those affected are manufacturing facility employees; our expectation that the 2009 U.S. Plan will be completed in 2011; our expectation that approximately 540 employees will be affected by the 2009 U.S. Plan and severance charges related to employee termination for the 2009 U.S. Plan will amount to approximately $19 million; our estimation that the facility closings will result in annualized savings beginning in the third quarter of 2010 of approximately $10 million, rising to approximately $55 million beginning in the second quarter of 2009; our belief that it is more likely than not, with our projections of future taxable income, that we will generate sufficient taxable income to realize the benefits of the net deferred assets (which have not been offset by a valuation allowance) at March 31, 2010; our belief that based on our current cash, cash equivalents, restricted cash and investment balances of approximately $923.8 million at March 31, 2010, our expected operating cash flows and our $250 million Corporate Credit Facility, the current liquidity concerns in the credit and capital markets will not have a material impact on our liquidity, cash flow, financial flexibility or our ability to fund our operations; and our belief that we have the financial resources needed to meet business requirements for at least the next twelve months, including capital expenditures and working capital requirements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include market demand for our products and services; changes in the pricing environment for silicon wafers and polysilicon, as well as solar power systems; concentrated project development risks related to large scale solar projects; changes to accounting interpretations or accounting rules; the terms of any potential future amendments to our long-term agreements with our solar wafer customers; the availability and size of government and economic incentives to adopt solar power, including tax policy and credits and renewable portfolio standards; the availability of attractive project finance and other capital for SunEdison projects; existing or new regulations and policies governing the electric utility industry; dependence on single and limited source suppliers; availability of solar wafer subcontracting capacity at reasonable prices;utilization of our manufacturing volume and capacity; general economic conditions, including the ability of our customers to pay their debts as they become due; our ability to realize the benefits of announced closing and restructurings; our ability to maintain future growth; failure of third-party subcontractors to construct and install our solar energy systems; customer acceptance of our new products; the impact of competitive products and technologies; inventory levels of our customers; supply chain difficulties or problems; interruption of production; outcome of pending and future litigation matters; good working order of our manufacturing facilities; our ability to reduce manufacturing and operating costs; assumptions underlying management’s financial estimates; delays in capacity expansion and the restructuring of our manufacturing operations across different plants; customer acceptance of our new products; actions by competitors, customers and suppliers; changes in the retail industry; changes in federal or state laws governing utilities; damage to our brand; the integration of the SunEdison acquisition and future acquisitions; changes in product specifications and manufacturing processes; changes in financial market conditions; changes in foreign economic and political conditions; changes in the composition of worldwide taxable income; changes in technology; the impact of competitive products and technologies; changes in interest and currency exchange rates and other risks described in MEMC’s filings with the Securities and Exchange Commission, including MEMC’s annual report on Form 10-K for the year ended December 31, 2009.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There has been no material change to MEMC’s market risks since December 31, 2009. Please refer to “Market Risk” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the fiscal year ended December 31, 2009. Also see Note 4 to our unaudited condensed consolidated financial statements included herein.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation as of March 31, 2010, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of March 31, 2010.

Changes in Internal Control Over Financial Reporting

There have been no changes in MEMC’s internal control over financial reporting during the quarter ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect, MEMC’s internal control over financial reporting.

29

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 14 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for disclosures concerning our legal proceedings, which disclosures are incorporated herein by reference.

Item 1A. Risk Factors.

In addition to the information set forth below and elsewhere in this Form 10-Q, you should carefully consider the factors discussed under “Cautionary Statements Regarding Forward Looking Statements” above and under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2009 and those risk factors set forth below. These risks could materially and adversely affect our business, financial condition and results of operations. These enumerated risks are not the only risks we face. Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business.

Large scale solar projects in our SunEdison segment involve concentrated project development risks that may cause significant changes in our financial results.

SunEdison has recently focused on developing large solar projects involving significantly greater megawatt production than previous projects. These larger projects may create new operating and financial risks, as well as concentrate project development risks otherwise described in these risk factors. The effect of recognizing revenue on the sale of a larger project, including through percentage of completion accounting for certain projects, or the failure to recognize revenue as anticipated in a given reporting period because a project is not yet completed or sold under applicable accounting rules by period end, may materially impact our quarterly or annual financial results. These projects may give rise to significant capital commitments which could materially affect cash flow. In addition, if construction, module delivery, financing, warranty or operational issues arise on a larger project, such issues could have a material impact on our financial results. Finally, SunEdison has not historically built such large scale projects, including multiple large scale projects in different markets, and the management of such projects represents a new test of SunEdison’s internal processes, external construction management, capital commitment process, project finance infrastructure and financing ability. The inability to successfully manage these large scale projects could materially adversely affect our results of operations.

From time to time, we may become involved in costly and time-consuming litigation and other regulatory proceedings, which require significant attention from our management.

In addition to litigation related to our intellectual property rights, we are a defendant from time to time in other lawsuits and regulatory actions relating to our business, some of which may claim significant damages. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such proceedings. An unfavorable outcome could have a material adverse impact on our business and financial position, results of operations or cash flows or limit our ability to engage in certain of our business activities. In addition, regardless of the outcome of any litigation or regulatory proceedings, such proceedings are often expensive, lengthy, disruptive to normal business operations and require significant attention from our management. For example, we are currently and may be subject in the future to claims in tort or under contracts, lawsuits relating to employment matters, antitrust allegations, securities class action lawsuits, IRS examinations or other lawsuits, regulatory actions or government inquiries and investigations. Any such claims or inquiries could harm our business and financial position, results of operations or cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Since 2007, our Board of Directors had in place a share repurchase program. There were no repurchases during the first quarter of 2010.

Item 6. Exhibits.

Exhibit Number	Description
3-(i)	Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3-a of the Company’s Form 10-Q for the Quarter ended June 30, 1995)
3-(i)(a)	Certificate of Amendment of Restated Certificate of Incorporation of the Company as filed with the Secretary of State of the State of Delaware on June 2, 2000 (incorporated by reference to Exhibit 3-(i)(a) of the Company’s Form 10-Q for the Quarter ended June 30, 2000)
3-(i)(b)	Certificate of Amendment of Restated Certificate of Incorporation of the Company as filed with the Secretary of State of the State of Delaware on July 10, 2002 (incorporated by reference to Exhibit 3-(i)(b) of the Company’s Form 10-Q for the Quarter ended September 30, 2002)

30

Exhibit Number	Description
3(ii)	Restated By-laws of the Company (Incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on February 25, 2010)
10.66*	Amendment No. 2 to Solar Wafer Supply Agreement, by and between MEMC Singapore Ptd. Ltd. and Conergy AG dated January 24, 2010
10.67†	Amendment dated January 29, 2010 to Employment Agreement by and between the Company and Ahmad Chatila
10.68†	MEMC Electronic Materials, Inc. 2001 Equity Incentive Plan as Restated on February 26, 2010 (Incorporated by reference to Exhibit 99.7 to the Company’s Current Report on Form 8-K filed on April 22, 2010)
10.69†	MEMC Electronic Materials, Inc. 2010 Equity Incentive Plan (Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on April 22, 2010)
31.1	Certification by the Chief Executive Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification by the Chief Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification by the Chief Executive Officer and the Chief Financial Officer of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

* Confidential treatment of certain portions of this document has been requested.

† These exhibits constitute management contracts, compensatory plans and arrangements.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MEMC Electronic Materials, Inc.
	/s/ TIMOTHY C. OLIVER
May 10, 2010	Name:	Timothy C. Oliver
	Title:	Senior Vice President and Chief Financial Officer (on behalf of the registrant and as principal financial officer)

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EXHIBIT INDEX

The exhibits below are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K.

Number Exhibit	Description
10.66*	Amendment No. 2 to Solar Wafer Supply Agreement, by and between MEMC Singapore Ptd. Ltd. and Conergy AG dated January 24, 2010
10.67†	Amendment dated January 29, 2010 to Employment Agreement by and between the Company and Ahmad Chatila
31.1	Certification by the Chief Executive Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification by the Chief Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification by the Chief Executive Officer and the Chief Financial Officer of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

* Confidential treatment of certain portions of this document has been requested.

† This exhibit constitutes management contracts, compensatory plans and arrangements.

33

EX-10.66

Exhibit 10.66

EXECUTION VERSION

CONFIDENTIAL

CONFIDENTIAL TREATMENT REQUESTED

REDACTED VERSION

AMENDMENT NUMBER 2 TO

SOLAR WAFER SUPPLY AGREEMENT

This Amendment Number 2 to Solar Wafer Supply Agreement (this “Second Amendment”) is entered into as of January 24, 2010 by and between MEMC SINGAPORE PTE. LTD., a Singapore corporation (“MEMC Singapore”) and wholly-owned subsidiary of MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation with its principal place of business at 501 Pearl Drive (City of O’Fallon), St. Peters, Missouri 63376, United States of America (“MEMC”), or such other designated majority-owned subsidiary of MEMC, and CONERGY AG, a German corporation with its principal place of business at Anckelmannsplatz 1, 20537 Hamburg, Germany (“Conergy”). MEMC Singapore and Conergy together shall be referred to as the “Parties” and individually as a “Party”.

RECITALS:

WHEREAS, on October 25, 2007, MEMC and Conergy entered into that certain Solar Wafer Supply Agreement; and

WHEREAS, on October 26, 2007, pursuant to Section 7.6 of the Solar Wafer Supply Agreement, MEMC assigned the Solar Wafer Supply Agreement to its wholly-owned subsidiary, MEMC Singapore; and

WHEREAS, on July 10, 2008, MEMC Singapore and Conergy (with the consent of MEMC) amended the October 25, 2007 Solar Wafer Supply Agreement, by executing Amendment No. 1 to Solar Wafer Supply Agreement (the “First Amendment”) between MEMC Singapore and Conergy; and

WHEREAS, Conergy has commenced litigation against MEMC Singapore and MEMC in the United States District Court for the Southern District of New York captioned: Conergy AG, v. MEMC Electronic Materials, Inc. and MEMC Singapore Pte. Ltd., Case No. 09 Civ. 4906(SAS) (“the Litigation”), in which Conergy alleges, among other allegations, that the Solar Wafer Supply Agreement is violative of the law; and

WHEREAS, the parties to the Litigation desire to settle the dispute encompassed by the Litigation; and

WHEREAS, Conergy desires to modify the Agreement because Conergy’s long-term business strategy no longer requires the delivery of Wafers in the quantities agreed under the Agreement; and

WHEREAS, Conergy has ascertained that, in the light of the change in Conergy’s business model, the terms of this Second Amendment are significantly more advantageous for Conergy in comparison to all other available solutions, in particular, in comparison to fulfillment of the Agreement over its full term, and the conclusion hereof will significantly contribute to the success of Conergy’s ongoing restructuring process; and

EXECUTION VERSION

CONFIDENTIAL

CONFIDENTIAL TREATMENT REQUESTED

REDACTED VERSION

WHEREAS, against the background of the past and future business relationship with Conergy, MEMC Singapore is willing to agree to such amendment; and

WHEREAS, the Parties are not aware of any legal restrictions or bans hindering them to enter into this Second Amendment and to validly fulfill their obligations hereunder; and

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, MEMC Singapore and Conergy agree as follows:

ARTICLE I

AMENDMENT TO SELECTED SECTIONS OF THE AGREEMENT

1.1 Defined Terms. The following terms shall have the following meanings for the purposes of this Agreement:

(a) “Agreement” shall mean the Solar Wafer Supply Agreement dating from October 25, 2007 as amended by the First Amendment on July 10, 2008 including all Attachments and Exhibits thereto.

(b) “Effective Date” shall mean January 24, 2010.

(c) “Second Amendment” shall mean this Second Amendment, including all Attachments and Exhibits hereto, as it may be amended, modified or supplemented from time to time in accordance with its terms.

(d) “Conergy Wafer Demand” shall mean Conergy’s demand for solar wafers (that Conergy manufactures into cells and/or modules), but excluding, for the avoidance of doubt, Conergy’s external demand for modules (that include solar wafers), measured in Watts. However: (i) if and to the extent that Conergy supplies solar wafers to a third party for the manufacture by such third party of modules for Conergy, such solar wafers included in such modules shall (without duplication) be “counted” as part of the Conergy Wafer Demand; and (ii) Conergy shall be required to use commercially reasonable best efforts, pursuant to Section 1.9(a) hereof, to have MEMC Singapore Wafers used in modules purchased from third parties (and not “counted” as part of Conergy Wafer Demand pursuant to clause (i)).

Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Agreement.

2

EXECUTION VERSION

CONFIDENTIAL

CONFIDENTIAL TREATMENT REQUESTED

REDACTED VERSION

1.2 Reduction in Yearly Target Quantities and Yearly Minimum Quantities under Agreement; Revision of Attachment B-1 to the First Amendment; Minimum Revenue Requirement. With this Second Amendment, in consideration of all of the items set forth herein, including, but not limited to, the items set forth in Section 1.9, MEMC Singapore has agreed to significantly reduce the total volume of Watts to be purchased by Conergy under the Agreement, subject to the increase or decrease in such volumes based on the provisions of Section 1.4 and Section 1.5 hereof. Notwithstanding the price and volume schedules set forth in the Agreement and the First Amendment, the Parties hereby amend, restate and revise the price and Yearly Target Quantities and Yearly Minimum Quantities for the remaining Contract Years (starting at the midpoint of Contract Year 2 of January 1, 2010) and, subject to Section 1.13 hereof, to that end, (a) page B-1 of Attachment B to the Agreement (as page B-1 of Attachment B to the Agreement was revised as set forth on Attachment B-1 to the First Amendment) and (b) Attachment B-1 to the First Amendment, in each case are amended and restated as is set forth on Attachment B-2 to this Second Amendment (all of the foregoing, the “Aggregate Wafer Volume Purchase Requirement Amendment”).

(a) Yearly Target Quantities. Each Contract Year, Conergy agrees to purchase from MEMC Singapore, over the course of the Contract Year in quantities that comply with the requirements of Section 1.3(b) below, in accordance with the process set forth in Section 1.3 below (unless otherwise agreed by the parties pursuant to the process set forth in Section 1.3 below), at least a target quantity of Wafers (such yearly target purchase quantity commitments, measured in megawatts, the “Yearly Target Quantit(ies)”), in the amount and at the prices set forth on Attachment B-2 hereto (as the same may be adjusted pursuant to Section 1.5 hereof). Each Contract Year, MEMC Singapore agrees to supply Conergy, over the course of the Contract Year assuming that Conergy has complied with the process set forth in Section 1.3 below, with at least the Yearly Target Quantity per Contract Year (to the extent actually ordered by Conergy pursuant to Section 1.3), at the prices set forth on Attachment B-2 hereto (as the same may be adjusted pursuant to Section 1.5 hereof). Without limitation of the preceding sentence, Conergy’s obligations pursuant to this Section 1.2(a) are subject to Section 1.2(d) [Possible Deferrals] and Section 1.4(b) [Additions to Yearly Target Quantities] hereof.

(b) Yearly Minimum Quantities. Attachment B-2 also sets forth certain “Yearly Minimum Quantities” that must be purchased by Conergy from MEMC Singapore each Contract Year. The Yearly Minimum Quantities are lower than the Yearly Target Quantities, and are the minimum baseline for the calculation of Conergy’s annual take or pay commitment to MEMC Singapore in Section 1.2(c) below; provided, however, that if the life of the Agreement is extended past Contract Year 10 pursuant to Section 1.4(d), the annual Yearly Minimum Quantity for any Contract Year after Contract Year 10 during the extended Term of the Agreement shall be the lesser of (i) the greater of (x) the Yearly Minimum Quantity for Contract Year Ten as set forth in Attachment B-2 hereto and (y) [*****]% of the Conergy Wafer Demand for such Contract Year and (ii) a volume of Watts, the aggregate purchase price of which (at the actual purchase prices in effect (from time to time) pursuant to Section 1.5 hereof) equals the remaining aggregate (from all prior Contract Years) Contract Year X Purchase Shortfall as at the commencement of such Contract Year.

3

EXECUTION VERSION

CONFIDENTIAL

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(c) Take or Pay Purchase Shortfalls. If, during the course of any Contract Year, Conergy purchases fewer Watts than the Yearly Minimum Quantity, as calculated in accordance with Section 1.2(b) hereof, then Conergy shall pay to MEMC Singapore via wire transfer of immediately available funds, within ten (10) days after being invoiced therefor, the difference between (A) the amount that would have been payable by Conergy for such Contract Year if Conergy had purchased the Yearly Minimum Quantity as calculated in accordance with Section 1.2(b) hereof, and (B) the amount payable by Conergy during such Contract Year for the actual volume of Watts purchased by Conergy from MEMC Singapore during such Contract Year based on the applicable price listed on Attachment B-2 hereto (such calculated amount, the “Take or Pay Purchase Shortfall”). The Take or Pay Purchase Shortfall shall accrue interest at the rate of one and one-half percent (1.5%) per month from the date of the invoice therefor, unless prohibited by Law.

(d) Possible Deferrals and Future Contract Years. In the Agreement and the First Amendment, Conergy had previously committed to purchase certain Yearly Target Quantities from MEMC Singapore, on a set price curve, which would have resulted in minimum aggregate revenues in each Contract Year to MEMC Singapore. Those Yearly Target Quantities have now been reduced as set forth in this Section 1.2, and the Parties have assigned, for calculation purposes only, a new baseline (reference) price of $[*****]/per Watt for all remaining Contract Years in order to calculate (for illustration purposes only) the revised minimum aggregate revenues in each Contract Year to MEMC Singapore (these revised minimum aggregate revenues for each Contract Year, the “Contract Year X Revenue Amount”). For Contract Year 2 and future Contract Years, Conergy has requested relief from (x) the take or pay provisions of Section 2.2 of the Agreement and (y) the requirement of payment of any Purchase Shortfalls under Section 2.2(d) of the Agreement immediately after the conclusion of any Contract Year (pursuant to the provisions of Section 2.2(d) of the Agreement). MEMC Singapore is unwilling to provide such unconditional relief from these take or pay and Purchase Shortfall provisions for future Contract Years, but MEMC Singapore is willing (subject to Section 1.13) to lower the amount of Conergy’s take or pay commitment (as reflected in Section 1.2(c) above) and defer the immediate payment of Contract Year X Purchase Shortfalls (as defined below) for future Contract Years, pursuant to the procedures set forth in Section 1.4 below, including specifically Section 1.4(f). The amount by which the aggregate revenue to MEMC Singapore from actual purchases made by Conergy in any individual Contract Year is less than the Contract Year X Revenue Amount, disregarding for this purpose any portion of such amount reflected in any Take or Pay Purchase Shortfall that has been paid by Conergy in accordance with Section 1.2(c) hereof, is the “Contract Year X Purchase Shortfall.” Conversely, the amount by which the aggregate revenue to MEMC Singapore from actual purchases made by Conergy in any individual Contract Year exceeds the Contract Year X Revenue Amount is the “Contract Year X Purchase Excess”.

(e) Reduced Minimum Revenue Requirements for each Contract Year. The net end result of the revisions to Attachment B-2 reflected in this Second Amendment is to greatly decrease the aggregate revenue commitment from Conergy to MEMC Singapore for each of the remaining Contract Years.

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1.3 Rolling Forecasts and Binding Purchase Orders.

(a) Rolling Forecasts and Binding Purchase Orders. Pursuant to Section 2.2(e) of the Agreement, Conergy is required to provide twelve month rolling forecasts to MEMC Singapore, and pursuant to Section 2.3 of the Agreement, Conergy is required to maintain at all times firm, binding purchase orders with MEMC Singapore for at least the next ninety (90) days. As of early 2009, Conergy ceased to provide such forecasts or binding purchase orders. Conergy affirms that it will use best efforts to comply with the binding purchase orders requirement of Section 2.3 of the Agreement and the twelve month rolling forecast requirement of Section 2.2(e) of the Agreement. MEMC Singapore will issue MEMC Singapore Order Acknowledgements against these binding purchase orders consistent with the provisions of Section 2.3 of the Agreement and this Second Amendment. MEMC Singapore acknowledges that any rolling forecasts provided by Conergy beyond day 90 are not intended to be binding on Conergy, except as set forth in the next sentence. For days 91-180 in the twelve month rolling forecasts provided by Conergy to MEMC Singapore pursuant to this Section 1.3(a), [*****] percent ([*****]%) of such forecast shall be binding on Conergy, and Conergy shall be committed to purchase [*****] percent ([*****]%) of such forecast, and MEMC Singapore shall be similarly obligated to provide during the relevant 90 day forecast period [*****] percent ([*****]%) of such forecast amount (i.e., the binding commitment of each of Conergy and MEMC Singapore shall be equal for such time period).

(b) Minimum Calendar Quarter Quantities. Conergy agrees that the binding purchase orders submitted by it pursuant to Section 2.3 of the Agreement for any particular Contract Year quarter shall be for, and MEMC Singapore in turn agrees to supply Conergy over the course of each Contract Year quarter with, an amount of Wafers (measured in Watts) that is not less than [*****]% of the amount (measured in Watts) set forth for such Contract Year as the “Yearly Minimum Quantity” on Attachment B-2, at the prices set forth on Attachment B-2 hereto (subject to adjustment pursuant to Section 1.5 [Future Contract Year Pricing] hereof). MEMC Singapore shall deliver all Wafers that it is obligated to deliver pursuant to Section 1.3(a) or this Section 1.3(b), or that MEMC Singapore otherwise issues MEMC Singapore Order Acknowledgments in respect of, within five (5) Business Days of the delivery date specified therefor in the relevant Conergy binding purchase order. For the avoidance of doubt, references in this Second Amendment to a “Contract Year quarter(s)” are references to particular calendar quarters in a Contract Year(s), and not to rolling quarterly periods.

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(c) Status of Conergy Binding Purchase Orders Re Purchase Requirements. It is specifically understood and agreed that 100% of the Wafers for which Conergy submits binding purchase orders from time to time (in accordance with Sections 1.3(a) and 1.3(b)) shall, unless and to the extent Conergy subsequently, in breach of the Agreement (as modified by this Second Amendment), (i) refuses to accept timely delivery of any such Wafers in respect of which MEMC Singapore timely issues a MEMC Singapore Order Acknowledgment, or (ii) refuses to pay for any such Wafers in accordance with the terms of the Agreement, as modified by this Second Amendment (disregarding for this purpose any payment or payments that are the subject of a good faith dispute between the Parties (for clarity, the Parties agree that any Wafers that have been used by Conergy cannot be the subject of a good faith dispute for payment)) count (i.e., as a Conergy Wafer purchase) towards all Wafer order and/or purchase-related obligations and/or conditions hereunder for the Contract Year (and relevant Contract Year quarter) in which the relevant Conergy-requested delivery date for such Wafers falls (and (without limitation of the generality of the foregoing) towards determining whether any Take or Pay Purchase Shortfall or Yearly Target Quantity Shortfall (or Contract Year X Purchase Shortfall) exists for such Contract Year (and the amount thereof)), regardless of (for example and without limitation) the extent to which MEMC Singapore declines (to the extent of its discretion to do so pursuant to this Section 1.3) to issue a MEMC Singapore Order Acknowledgment with respect to any such binding purchase order.

(d) MEMC Singapore Force Majeure Event. It is agreed that Conergy shall not be prejudiced, in relation to any Wafer order and/or purchase-related obligations and/or conditions hereunder (including without limitation of the generality of the foregoing in relation to determining whether any Take or Pay Purchase Shortfall or Yearly Target Quantity Shortfall (or Contract Year X Purchase Shortfall) exists for any Contract Year (and the amount thereof)), by any instance of the application of Section 2.11 of the Agreement. For example (and without limitation), appropriate adjustments shall be made in the Yearly Minimum Quantity and Yearly Target Quantity for any Contract Year during which MEMC Singapore’s Wafer production is interrupted due to a Force Majeure Event.

(e) Conergy Force Majeure Event. If Conergy suffers a “Force Majeure Event” (defined for this purpose in the same manner as set forth in the Agreement, mutatis mutandis) affecting the Conergy Wafer Demand, then Conergy shall give prompt written notice (within five (5) Business Days at the latest) to MEMC Singapore of any such Force Majeure Event and any associated requested delivery delays, and appropriate adjustments shall be made in the Yearly Minimum Quantity and Yearly Target Quantity for the affected Contract Year(s). Conergy shall take appropriate means to minimize or remove the effects of the Conergy Force Majeure Event and, within the shortest practicable time, attempt to resume performance of its obligations under the Agreement (as modified by this Second Amendment) affected by the Conergy Force Majeure Event. Notwithstanding anything in this Second Amendment to the contrary, in no event shall the occurrence of a Conergy Force Majeure Event excuse Conergy from its obligations to pay to MEMC Singapore any sums accrued or due hereunder as of such date to MEMC Singapore.

1.4 Additions to Yearly Target Quantity Amounts for future Contract Years.

(a) Comparison to Conergy’s actual purchases in Contract Year. In any Contract Year, if Conergy’s actual purchases are less than the Yearly Target Quantity, but greater than the Yearly Minimum Quantity, then the provisions of this Section 1.4 shall apply, and no Take or Pay Purchase Shortfall shall be due pursuant to Section 1.2(c) of this Second Amendment. For clarity, for Contract Years that Conergy’s actual purchases are less than the Yearly Minimum Quantity, then the provisions of both this Section 1.4 (with respect to the shortfall in excess of the Take or Pay Purchase Shortfall actually paid by Conergy) and Section 1.2(c) (with respect to Take or Pay Purchase Shortfall portion of such shortfall) of this Second Amendment shall apply.

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(b) Additions to Yearly Target Quantity Generally. Assuming that Conergy’s actual Watts purchased in Contract Year X is less than the Yearly Target Quantity for that Contract Year X (disregarding for this purpose any portion of such shortfall reflected in any Take or Pay Purchase Shortfall actually paid by Conergy pursuant to Section 1.2(c)) (a “Yearly Target Quantity Shortfall”), then, (A) subject to Section 1.13 hereof and without limitation of Conergy’s Take or Pay Purchase Shortfall obligations under Section 1.2(c), but otherwise any term of the Agreement, or this Second Amendment, to the contrary notwithstanding, Conergy shall not have any liability or obligation to MEMC Singapore in respect of such Yearly Target Quantity Shortfall (or the corresponding Contract Year X Purchase Shortfall for such particular Contract Year) except as set forth in clause (B) of this sentence (and provided that this clause (A) shall not be applicable at all in the event that, pursuant to Section 1.4(f) hereof, the deferral set forth in said clause (B) does not apply), and (B) subject to Section 1.4(f) hereof [Possible Deferrals], the Yearly Target Quantities required to be purchased by Conergy in any particular future Contract Year shall be equal to (i) the Yearly Target Quantity for such future Contract Year set forth on Attachment B-2 to this Second Amendment; plus (ii) the quantity of Watts equal to the amount of the Contract Year X Purchase Shortfall required to be purchased in that Contract Year as described in Section 1.2(d) above and as calculated in Section 1.4(c) below, if any; provided, however, that Conergy’s actual purchases in any Contract Year (at the commencement of which there shall be any outstanding Contract Year X Purchase Shortfall) shall not be less than [*****]% of the Conergy Wafer Demand for such Contract Year, unless Conergy makes up all outstanding Contract Year X Purchase Shortfalls during such Contract Year (including without limitation in the manner specified in the last sentence of Section 1.4(c)); and provided, further that if Conergy’s actual purchases in any Contract Year (at the commencement of which there shall be any outstanding Contract Year X Purchase Shortfall) are less than [*****]% of the Conergy Wafer Demand for such Contract Year (again, unless Conergy makes up all outstanding Contract Year X Purchase Shortfalls during such Contract Year (including without limitation in the manner specified in the last sentence of Section 1.4(c))), then the deferral by MEMC Singapore of its right to collect immediately for any Take or Pay Purchase Shortfalls shall lapse, and all such deferred Take or Pay Purchase Shortfalls shall be due and payable immediately (in the same manner as set forth in Section 1.2(c) hereof, mutatis mutandis).

(c) Additions to Yearly Target Quantities for Contract Year 4 through Contract Year 10 Mechanics. For any Contract Year in which Conergy’s actual purchases and the provisions of Section 1.4(b) above produce a Contract Year X Purchase Shortfall, then the Parties agree that (unless deferral of such Contract Year X Purchase Shortfall is denied pursuant to Section 1.4(f)) [*****] percent ([*****]%) of the amount of such Contract Year X Purchase Shortfall shall be added to the Yearly Target Quantity for each of the next five (5) Contract Years. Such addition shall be effected at the beginning of each of such future Contract Years by converting such [*****]% figure, which will be a dollar amount, into a volume of Wafers (measured in Watts) at the baseline (reference) price of $[*****] per Watt, subject to the immediately following sentence. The Yearly Target Quantities, as first adjusted by this Section 1.4(c), in turn shall be subject to further adjustment (upwards or downwards) based on the actual prices per Watt in future Contract Years, as is required by Section 1.4(e) below. Any Contract Year X Purchase Excess shall be credited against any Contract Year X Purchase Shortfall then outstanding.

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(d) Contract Year 10. The Parties hereto understand that the deferral and roll-forward provisions of Section 1.4 hereof could produce a Yearly Target Quantity amount in Contract Year 10 that is greater than the [*****]% of the Conergy Wafer Demand constraint of Section 1.4(b) above. In such event, the Parties hereby agree that, unless the Parties otherwise agree at such future time, such amounts will be similarly rolled forward into future years, and that the Agreement will be automatically extended for such number of years until Conergy has purchased all of its required Yearly Target Quantities (the Parties acknowledge that after Contract Year 10, there will only be “make-up” quantities from Section 1.4(b) above, if any, left to purchase (and the “Contract Year X Revenue Amount” for such subsequent Contract Years shall be zero)). If the life of the Agreement is extended beyond Contract Year 10 pursuant to this Section 1.4(d), the provisions of Sections 1.2, 1.3, 1.4, 1.5, 1.6, 1.8 and 1.11 hereof shall apply to each such additional year of the Agreement, mutatis mutandis (including that the term “Contract Years” shall also include such additional years of the Term of the Agreement beyond Contract Year 10, but provided that the Yearly Target Quantities for such additional Contract Years will consist solely of the outstanding “make-up” quantities as described above (and the “Contract Year X Revenue Amount” for such subsequent Contract Years shall be zero)). The Parties agree that both Section 1.7 and Section 1.13 hereof shall apply in accordance with their terms to Contract Year 11 and beyond (if applicable). For the avoidance of doubt, the Parties hereby agree that once Conergy’s actual purchases pursuant to this Second Amendment (including without limitation during the extended Term of the Agreement pursuant to this Section 1.4(d)) have reached the revised aggregate revenue commitment from Conergy to MEMC Singapore during the life of the Agreement (i.e., the aggregate Contract Year X Revenue Amount for Contract Years 2 through 10 set forth on Attachment B-2 hereto), Conergy shall have no further obligation to purchase Wafers from MEMC Singapore under the Agreement (and/or under this Second Amendment).

(e) Consequence of Further Price Reductions or Increases. If the Parties subsequently reduce pricing for all or a portion of any future Contract Year pursuant to Section 1.5 hereof, then the Yearly Target Quantity for each such future Contract Year affected by this price decrease (as applicable, including, if applicable, as previously adjusted pursuant to Section 1.4(c) hereof) will increase by a corresponding amount such that the same aggregate revenue commitment from Conergy to MEMC Singapore for such Contract Year and/or the life of the Agreement (as the Agreement may be extended pursuant to Section 1.4(d) hereof) shall be maintained. The price for any such additional Wafers (measured in Watts) would be at the same reduced price per Watt used to calculate the increase in Yearly Target Quantities described in the preceding sentence (subject to possible subsequent increase or decrease thereof pursuant to Section 1.5 hereof). Similarly, if pricing is increased for all or a portion of any future Contract Year, then the Yearly Target Quantities for such future Contract Years will decrease by a corresponding amount. The Parties acknowledge that the operation of this Section 1.4(e) may require extension of the Agreement pursuant to Section 1.4(d) hereof.

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(f) Contract Year X Purchase Shortfalls – Possible Deferrals. Conergy agrees and acknowledges that (if the Agreement were to be enforced in accordance with its terms), but for this Second Amendment, any Contract Year X Purchase Shortfalls would be due and payable to MEMC Singapore in accordance with the provisions of Section 2.2(d) and Section 3.1 of the Agreement. The Parties have agreed in this Second Amendment that the payment to MEMC Singapore of any future Contract Year X Purchase Shortfall (including, for the avoidance of doubt, for the remainder of Contract Year 2 from the Effective Date), if any, may nonetheless be deferred by Conergy (notwithstanding the timetable set forth in Sections 2.2(d) and 3.1 of the Agreement) if all of the following conditions are met:

(i) Subject to Sections 1.3(c), 1.3(d) and 1.3(e) hereof but otherwise notwithstanding any other provision of this Second Amendment, Conergy has actually purchased (and paid for in accordance with the payment terms of Section 1.6 hereof, if the payment terms of Section 1.6 hereof then in effect between the Parties would have required payment by such date (disregarding for this purpose any payment or payments that are the subject of a good faith dispute between the Parties (for clarity, the Parties agree that any Wafers that have been used by Conergy cannot be the subject of a good faith dispute for payment))) the required minimum quantity of Watts required to be purchased as of such date pursuant to the provisions of Section 1.2(b) [Yearly Minimum Quantities] and Section 1.3(b) [Minimum Calendar Quarter Quantities] hereof, or has made all requisite payments pursuant to Section 1.2(c); and

(ii) If, as of any such particular future date, Conergy is current in all payments due to MEMC Singapore, in accordance with the terms of Section 2.7 of the Agreement, except as the same may be modified by Section 1.6 hereof (disregarding for this purpose any payment or payments that are the subject of a good faith dispute between the Parties (for clarity, the Parties agree that any Wafers that have been used by Conergy cannot be the subject of a good faith dispute for payment)); and

(iii) If, by no later than the required dates set forth in the Agreement (or a different date if the Parties have agreed at least twenty (20) Business Days in advance of the required due date), Conergy has provided the required Refundable Capacity Reservation Deposit and the required Letter of Credit (in the required Letter of Credit Amount) for such Contract Year X to MEMC Singapore (as the same may be agreed by the Parties in the future, including pursuant to the provisions of Section 1.7 below).

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(g) Delivery of Conergy Officer’s Certificate. Upon MEMC Singapore’s written request delivered not earlier than 45 days prior to the end of, and not later than seven days after the end of, any Conergy fiscal year, Conergy shall deliver to MEMC Singapore, within thirty (30) days after the end of such fiscal year, a certificate of its chief financial officer, and of Conergy’s independent certified public accountants, certifying the Conergy Wafer Demand for such fiscal year.

1.5 Future Contract Year Pricing. Conergy has requested that MEMC Singapore amend the Agreement now to replace the agreed-upon pricing per Watt for each future Contract Year in the Agreement and the First Amendment with a fluctuating quarterly pricing mechanism. Given MEMC Singapore’s expenditures on capacity expansion predicated on the ten year take or pay commitment from Conergy, MEMC Singapore cannot agree to such a blanket price change request. However, MEMC Singapore is willing to provide Conergy with a quarterly “market” price, on a per Watt basis, which market price shall be determined only on a quarter-by-quarter basis as described below and on Attachment B-2, Section 1.5 (unless the Parties otherwise specifically agree to a longer time period) if, and only if, all of the following conditions are met at any particular future date:

(a) If, as of any such particular future date during any future Contract Year, Conergy is current in all payments due to MEMC Singapore, in accordance with the terms of Section 2.7 of the Agreement, except as the same may be modified by Section 1.6 hereof (disregarding for this purpose any payment or payments that are the subject of a good faith dispute between the Parties (for clarity, the Parties agree that any Wafers that have been used by Conergy cannot be the subject of a good faith dispute for payment)); and

(b) If, as of any such particular future date during any future Contract Year, Conergy has provided, by no later than the required dates set forth in the Agreement (or a different date if the Parties have agreed at least twenty (20) Business Days in advance of the required due date), the required Refundable Capacity Reservation Deposit and the required Letter of Credit (in the required Letter of Credit Amount) for such Contract Year to MEMC Singapore (as the same may be agreed by the Parties in the future pursuant to the provisions of Section 1.7 below); and

(c) If, as of any such particular future date during any future Contract Year, Conergy has actually purchased the required minimum quantity of Watts required to be purchased as of such date pursuant to the provisions of Sections 1.2(b) [Yearly Minimum Quantities] and 1.3(b) [Minimum Calendar Quarter Quantities] hereof, or has made all requisite payments pursuant to Section 1.2(c); and

(d) If, as of any such particular future date during any future Contract Year, Conergy has not (i) become insolvent, (ii) made a general assignment for the benefit of creditors, (iii) suffered or permitted the appointment of a receiver for its business or assets, (iv) become subject as the debtor to any proceeding under any bankruptcy or insolvency Law, whether domestic or foreign, and such proceeding has not been dismissed within sixty (60) days after filing, or (v) commenced liquidation or dissolution proceedings, voluntarily or otherwise.

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If all of the foregoing conditions are met at the beginning of any particular calendar quarter during any future Contract Year, then MEMC Singapore agrees that a competitive price per Watt for such calendar quarter (unless the Parties otherwise specifically agree to a longer time period, or shorter time period, or if market conditions, in MEMC Singapore’s reasonable discretion, would require a shorter time period or faster potential price adjustment), shall be determined pursuant to the pricing mechanism described on Attachment B-2, Section 1.5. Conergy acknowledges that (x) such competitive price per Watt will be a price that reflects the stability of supply and quality of MEMC Singapore-supplied Wafers, and will not be merely a “matching” of the lowest spot price available in the market; (y) any lowering of the price per Watt in a future Contract Year will require a corresponding increase in Conergy’s Yearly Target Quantity commitment based on the principles set forth in Section 1.3 and Section 1.4 above; and (z) prices per Watt under this Section 1.5 could also rise from quarter to quarter as well (which would then dictate a corresponding decrease in Conergy’s Yearly Target Quantity commitment based on the principles set forth in Section 1.3 and Section 1.4 above).

1.6 Payment Terms. Notwithstanding the provisions of Section 2.7 of the Agreement, the Parties hereby agree that Section 2.7 of the Agreement is modified only as follows: Payment is due thirty (30) days from the date of the invoice (unless the Parties have otherwise agreed to a different arrangement in writing prior to the shipment of the Wafers for such invoice (or such a different arrangement is in place pursuant to Attachment B-2, Section 1.5)); provided, however, that the Parties agree that if Conergy has not paid any such invoice within such thirty (30) days term (or other longer term, if applicable), MEMC Singapore shall assess a late payment charge of one and one-half percent (1.5%) per month (after the due date) on the unpaid balance of any past due amount, unless prohibited by Law. If Conergy fails to pay the purchase price when due for any shipment, MEMC Singapore may, but need not, require receipt of payment in full prior to manufacturing the balance of any outstanding or subsequent order. Payment of sums due from Conergy shall be made upon terms set forth above. MEMC Singapore may recover for each delivery hereunder as a separate transaction, without reference to any other delivery. If Conergy has been failing to pay the purchase price when due for one or more shipments, and not paying the additional interest as described above, and MEMC Singapore reasonably concludes that Conergy is in unsound financial condition and has notified Conergy of such conclusion, and the Parties have then negotiated in good faith for at least ten (10) Business Days to remedy such conclusion, or if Conergy is in default with respect to any of the material terms and conditions of this or any other agreement with MEMC Singapore, MEMC Singapore shall forthwith have the right to demand cash payment in advance or additional financial assurance until such time as said credit has been reestablished or default cured to MEMC Singapore’s satisfaction. If Conergy fails to pay the purchase price when due for any shipment, MEMC Singapore may also, but need not, (i) immediately offset any late payments against the Refundable Capacity Reservation Deposit and/or the Letter of Credit then held by MEMC Singapore and (ii) prior to any further shipments of Wafers, require that Conergy replenish the Refundable Capacity Reservation Deposit and/or the Letter of Credit required by Section 3.1 of the Agreement.

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1.7 Revision and Calculation of Refundable Capacity Reservation Deposits and Letter of Credit Amounts. Notwithstanding the Required Letter of Credit Amount rows for future Contract Years set forth on Attachment C to the Agreement (as revised on Attachment B-1 to the First Amendment) or any other term of the Agreement to the contrary notwithstanding, the Parties now agree to revise the Refundable Capacity Reservation Deposit and the Letter of Credit Amount for each future Contract Year (including the remainder of Contract Year 2) to be as follows:

(a) Anything in Section 3.1 of the Agreement to the contrary notwithstanding, the Refundable Capacity Reservation Deposit shall cease to consist of a series of deposits that Conergy must make to MEMC Singapore each Contract Year. In addition, except as set forth below in this Section 1.7, MEMC Singapore shall cease to have any obligation to make annual partial repayments of the Refundable Capacity Reservation Deposit to Conergy. Instead, the “Refundable Capacity Reservation Deposit” refers simply to, at any date of computation, the aggregate amount of cash that Conergy shall have deposited with MEMC Singapore as such “Refundable Capacity Reservation Deposit”, net of any portion of any such deposit that has previously been returned to Conergy by MEMC Singapore pursuant to Section 1.7(c) hereof. The required amount of the Refundable Capacity Reservation Deposit may fluctuate from time to time as set forth below in this Section 1.7 and as calculated and set forth in the sample calculations set forth on Attachment B-2 to this Second Amendment. The Parties agree that, as of the date hereof, the actual, current Refundable Capacity Reservation Deposit made by Conergy and held by MEMC Singapore pursuant to the Agreement and the First Amendment, prior to any adjustments to such Refundable Capacity Reservation Deposit amount pursuant to the terms of the Agreement, the First Amendment and this Second Amendment, equals $65.9 million.

(b) Anything in Section 3.1 of the Agreement to the contrary notwithstanding, the required combined Refundable Capacity Reservation Deposit amount and Letter of Credit Amount for any particular Contract Year (including without limitation the remainder of Contract Year Two and (if the life of the Agreement is extended beyond Contract Year Ten pursuant to Section 1.4(d)) any Contract Year beyond Year Ten) (the “Combined Deposit/LC Amount”) shall be an amount equal to the aggregate purchase price (at (i) for the remainder of Contract Year Two, the price-per-Watt (set forth for the purpose of this calculation on Attachment B-2 to this Second Amendment), and (ii) for any other Contract Year, the actual price-per-Watt last in effect pursuant to Section 1.5 on the tenth Business Day prior to the commencement of such Contract Year) for a volume of Wafers (measured in Watts) equal to [*****]% of the Yearly Target Quantity for such Contract Year set forth in Attachment B-2 hereto (as the same may be adjusted pursuant to Sections 1.4(b) and (c) hereof (but disregarding any further adjustments thereto for such Contract Year pursuant to Section 1.4(e) hereof)); provided, however, that notwithstanding the foregoing, the Parties agree that for the remainder of Contract Year 2 and through the end of calendar 2011, the Combined Deposit/LC Amount shall be $42.5 million.

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(c) Conergy may meet the Combined Deposit/LC Amount for any particular Contract Year through such combination of Refundable Capacity Reservation Deposit and Letter of Credit as Conergy determines in its discretion from time to time (including without limitation from time to time within any particular Contract Year), provided that the portion of the Combined Deposit/LC Amount that is met through the Refundable Capacity Reservation Deposit cannot, at any particular date, be less than an amount equal to the aggregate purchase price (at (x) for the remainder of Contract Year Two, the price-per-Watt (set forth for the purpose of this calculation on Attachment B-2 to this Second Amendment), and (y) for any other Contract Year, the actual price-per-Watt last in effect pursuant to Section 1.5 on the tenth Business Day prior to the commencement of such Contract Year) for a volume of Wafers (measured in Watts) equal to the product of (A) the fraction specified below in this Section 1.7(c), multiplied by (B) [*****]% of the Yearly Target Quantity for such Contract Year set forth in Attachment B-2 hereto (as the same may be adjusted pursuant to Sections 1.4(b) and (c) hereof (but disregarding any further adjustments thereto for such Contract Year pursuant to Section 1.4(e) hereof)). The “fraction” referred to in the immediately preceding sentence shall, at any particular date, be a fraction the numerator of which equals the sum of (A) the number of days from the respective dates thereof by which Conergy must pay Wafer purchase invoices issued by MEMC Singapore (as established pursuant to Section 1.6 hereof and Section 2 of Attachment B-2, Section 1.5), plus (B) 60, and the denominator of which equals 180 (it being understood that the fraction cannot exceed 1).

(d) By way of example of the operation of Sections 1.7(a), (b) and (c), the Parties have set forth on Attachment B-2 to this Second Amendment a revised Table that includes the minimum Refundable Capacity Reservation Deposit amounts, and corresponding Letter of Credit Amounts, for each of Contract Years 2 through Ten assuming (i) that the new baseline (reference) price of $[*****] per Watt is the price per Watt for each future Contract Year, (ii) there are no Contract Year X Purchase Shortfalls and (iii) the payment terms are thirty (30) days.

(e) MEMC Singapore shall reasonably cooperate with Conergy with respect to revisions to any outstanding Letter of Credit, or substitutions of Letters of Credit, and/or returns to Conergy of amounts held as Refundable Capacity Reservation Deposit, all as necessary so that neither the Refundable Capacity Reservation Deposit nor the amount which may be drawn under the Letter of Credit at any time exceeds the required amounts thereof (including without limitation the changed amounts thereof from time to time pursuant to Section 1.7(c)).

(f) Retained Refundable Capacity Reservation Deposit. Pursuant to Attachment C-1 of the First Amendment, the Retained Refundable Capacity Reservation Deposit was $14.7 million. The Parties agree that, after this Second Amendment, for the avoidance of doubt, the Retained Refundable Capacity Reservation Deposit shall not change over the Term and shall be $4 million.

(g) At the end of Contract Year 10 (or, if the life of this Agreement shall be extended beyond Contract Year Ten pursuant to Section 1.4(d) hereof, when all outstanding Contract Year X Purchase Shortfalls have been made up) or the termination of the Agreement pursuant to Article IV thereof (except as modified by Section 1.14 hereof), (i) the Refundable Capacity Reservation Deposit then held by MEMC Singapore, net of the Retained Refundable Capacity Reservation Deposit, shall be paid by MEMC Singapore to Conergy, and (ii) any outstanding Letter of Credit (after any final draw thereon in accordance with the Agreement (as amended and supplemented by this Second Amendment)) shall be returned by MEMC Singapore to Conergy.

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1.8 Section 2.14 – Continuous Improvement; Quality Assurance Agreement. Attachment A hereto is hereby substituted for (and from and after the execution and delivery of this Second Amendment, shall constitute) Attachment A to the Agreement. In addition, pursuant to (but without limitation of) Section 2.8 of the Agreement, the Parties agreed to work together on continuous improvement efforts to Wafers and Wafer specifications throughout the period of the Agreement. For example, in order to allow MEMC Singapore to offer the Wafer price reduction offered by this Second Amendment, the Parties have now agreed to cooperate with each other to reach a [*****] Wafer thickness as soon as reasonably practicable after the Effective Date hereof. In addition, the Parties hereby agree to negotiate in good faith and implement a reasonable Quality Assurance Agreement.

1.9 Additional Consideration to be provided by Conergy. Conergy acknowledges that the price reduction included in this Second Amendment is significant. In exchange for this price reduction, Conergy agrees to use commercially reasonable best efforts as follows:

(a) Wafer Purchases. Within ten (10) Business Days of the date of this Second Amendment, Conergy shall provide MEMC Singapore with a listing of all non-deminimus suppliers to Conergy of Wafer-based modules (“Third Party Module Suppliers”) with which Conergy will use commercially reasonable best efforts over at least the next five (5) years after the Effective Date of this Second Amendment to have such Wafer-based module suppliers purchase approximately [*****] percent ([*****]%) (based on volume of Watts) of their Wafer needs for Conergy Wafer-based modules from MEMC Singapore. Conergy and MEMC Singapore will then use their respective commercially reasonable best efforts to work with such Third Party Module Suppliers so to utilize MEMC Singapore Wafers, and each Party will assign appropriate resources to effect such efforts.

(b) Project Business. Conergy shall work with MEMC Singapore in good faith and shall use commercially reasonable best efforts, over at least the next five (5) years after the Effective Date of this Second Amendment, to include MEMC Singapore in large (i.e., 1MW or greater), photovoltaic (through Wafer-based modules, the Wafers for which would not be included in the calculation of Conergy Wafer Demand) projects developed by Conergy (such projects, “Large Conergy PV Projects”). Conergy and MEMC Singapore will also use commercially reasonable best efforts to work together to jointly sponsor and pursue large project opportunities. These opportunities could include referring project opportunities to each other (either MEMC Singapore to Conergy, or Conergy to MEMC Singapore) for development, depending on the specific project and the opportunity available to do so, and the relative strength of the other Party in that geographic area and/or area of expertise. Separate and apart from Conergy’ covenant in Section 1.9(a) above, Conergy will use commercially reasonable best efforts over at least the next five (5) years after the Effective Date of this Second Amendment to include MEMC Singapore Wafers in the Large Conergy PV Projects that Conergy does not jointly develop with MEMC Singapore (again, for approximately [*****] percent ([*****]%) (based on volume of Watts) of such Wafer-based modules).

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(c) It is understood and agreed that Conergy will not be required pursuant to this Section 1.9 to offer, make or render any payment or other consideration to any third-party (including without limitation any Third Party Module Supplier). It is further understood and acknowledged that (i) the success of any Conergy efforts pursuant to this Section 1.9 will depend (without limitation) on the competitiveness of MEMC Singapore’s terms (pricing and otherwise) for the supply of Wafers and MEMC Singapore’s ability to respond promptly (and in any event in a commercially reasonable manner) to requests for such terms and (ii) further (and without limitation of clause (i)), the success of any Large Conergy PV Project will depend (without limitation) on the availability from third parties of project financing on commercially reasonable terms.

(d) For the purposes of this Section 1.9 of this Second Amendment, “commercially reasonable best efforts” shall include those items (and only those items) set forth on Attachment B-2, Section 1.9. Both Parties’ outside counsel have reviewed and approved the language of this Section 1.9 and Attachment B-2, Section 1.9 and have advised their respective clients as to applicable Law.

1.10 Payment for Contract Year 1 and Contract Year 2 Purchase Shortfalls; Payment for Unpaid Wafers.

(a) In the Agreement and the First Amendment, Conergy had previously committed to certain Yearly Target Quantities from MEMC Singapore, on a set price curve. Because Conergy purchased only approximately [*****] MW out of the agreed [*****] MW at the agreed price during Contract Year 1, the Purchase Shortfall payment to be made by Conergy to MEMC Singapore pursuant to Section 2.2(d) of the Agreement would amount to approximately US$ [*****] million. During the current Contract Year 2, up until the Effective Date of this Second Amendment, Conergy has purchased and paid for only approximately [*****] MW out of the agreed [*****] MW for Contract Year 2, and none at the agreed Contract Year 2 price from the First Amendment. Section 3.1(b) of the Agreement allows MEMC Singapore at the end of any Contract Year to retain the respective amount of the Refundable Capacity Reservation Deposit equivalent to the aggregate unpaid Purchase Shortfalls. As part of the settlement of the Litigation in connection with this Second Amendment (and in lieu of the higher damages entitlement that MEMC Singapore could assert under the Agreement and First Amendment), the Parties confirm and agree that MEMC Singapore may deduct and retain $[*****] million of the Refundable Capacity Reservation Deposit currently held by MEMC Singapore, effective immediately, with no further action required by MEMC Singapore or Conergy (but such portion of the Refundable Capacity Reservation Deposit is smaller than the amount calculated pursuant to Section 2.2(d) of the Agreement and, pursuant to Section 2.2(d), would have fallen due immediately at the end of a Contract Year and not be amortized over time), with (x) $[*****] million to be amortized pro rata over the next nine (9) years, as set forth on Attachment B-2 to this Second Amendment and (y) $[*****] million to be amortized over the remainder of calendar 2010 ($[*****] million in Q1 2010, and $[*****] million in each of Q2, Q3 and Q4 2010). The Parties agree that the remaining Purchase Shortfall payment for Contract Year 1 and the portion of Contract Year 2 up until the Effective Date of this Second Amendment calculated under the Agreement and the First Amendment (i.e., the portion of the aggregate Purchase Shortfall for such periods that is not satisfied through this Section 1.10) (the “Remaining Pre-Effective Date Purchase Shortfall”) is deferred and automatically (without any further action on the part of MEMC Singapore) will be waived entirely, released and discharged at the end of Contract Year 10 (or later Contract Year, if the life of the Agreement is extended beyond Contract Year 10 pursuant to Section 1.4(d)), to the effect that Conergy is not required to pay for the Remaining Pre-Effective Date Purchase Shortfall, provided only that MEMC Singapore does not rightfully exercise its right of reversal agreed under Section 1.13 in any particular Contract Year (including any Contract Year after Contract Year 10, if the Term of this Agreement is extended beyond Contract Year 10 pursuant to Section 1.4(d)), and provided further that if MEMC Singapore does exercise its right of reversal agreed under Section 1.13 in any particular Contract Year (including any Contract Year after Contract Year 10, if the Term of this Agreement is extended beyond Contract Year 10 pursuant to Section 1.4(d)), such deferral shall lapse and the Remaining Pre-Effective Date Purchase Shortfall falls due immediately.

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(b) Unpaid Wafers. The Parties confirm and agree that the $[*****] of unpaid invoices for Wafers delivered by MEMC Singapore shall be deducted and retained by MEMC Singapore from the $65.9 million Refundable Capacity Reservation Deposit currently held by MEMC Singapore, with no further action required by MEMC Singapore or Conergy, as set forth under Section 2.7 of the Agreement.

(c) Mutual Partial Releases. The Parties, on behalf of themselves and their affiliates and Subsidiaries, hereby unconditionally and irrevocably release each other from any claims, liabilities and/or obligations arising out of or relating to any act or omission prior to the Effective Date concerning which any of the Parties (including for this purpose their affiliates and Subsidiaries) has knowledge of or is on notice of as of the Effective Date, but this release shall become null and void if any Partial Second Amendment Reversal shall occur, but only to the extent necessary to permit any Party to assert rights or claims that have been restored to them as a result of such Partial Second Amendment Reversal. This release shall not release any Party from any of its obligations set forth in this Second Amendment.

1.11 Mono Wafers. With the First Amendment, the Parties agreed to eliminate Mono Wafers from the Agreement. From time to time during the term of this Agreement (including any extension thereof pursuant to Section 1.4(c) hereof), Conergy in its discretion but upon not less than six months’ prior notice to MEMC Singapore (which notice cannot be delivered prior to January 1, 2011), may substitute Mono Wafers for Multi Wafers under the Agreement (as modified and supplemented by this Second Amendment), or vice versa, in whole but not in part (such that, for example, solely Mono Wafers (or, if the notice was to substitute Multi Wafers for Mono Wafers, solely Multi Wafers) would be sold and purchased under the Agreement (as modified and supplemented by this Second Amendment) after the expiration of such notice period). If the Parties otherwise decide to add Mono Wafers (or substitute Mono Wafers for Multi Wafers) to the Agreement in the future, such decision, including pricing, as set forth in Attachment B-2, Section 1.5, will need to be mutually agreed at that time.

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1.12 Deleted Sections of the Agreement. Without limitation of, and subject to, Section 1.13 hereof, Sections 2.2(a), 2.2(d), 2.2(f), 2.12, 2.13, 2.14 and 3.2 of the Agreement are hereby deleted in their entirety, and such Sections shall be of no further force or effect.

1.13 Possible Prospective Reversal of this Second Amendment. Conergy understands and agrees that the Aggregate Wafer Volume Purchase Requirement Amendment is conditional, in the sense that it is subject to this Section 1.13. In the event that Conergy shall fail to pay a Take or Pay Purchase Shortfall with respect to any particular Contract Year (including any Contract Year after Contract Year 10, if the Term of this Agreement is extended beyond Contract Year 10 pursuant to Section 1.4(d)) within five (5) Business Days of being notified thereof by MEMC Singapore, then, at MEMC Singapore’s election made by notice to such effect while such failure continues and within ten (10) Business Days of the delivery of such notice, the Aggregate Wafer Volume Purchase Requirement Amendment shall be deemed to be reversed (any such reversal, a “Partial Second Amendment Reversal”), such that both the volume of Watts to be purchased by Conergy and prices per Watt will revert back to the volumes and prices set forth in Attachment B-1 to the First Amendment and the take or pay provisions of Section 2.2 of the Agreement shall be restored, including the requirement of payment of any Purchase Shortfalls under Section 2.2(d) of the Agreement immediately after the conclusion of any Contract Year. In the event of a Partial Second Amendment Reversal, (i) all other provisions of the Second Amendment will continue to be in effect; (ii) both MEMC Singapore and Conergy shall have all the same claims, defenses, legal positions and arguments with respect to the volumes and prices set forth in the First Amendment and the take or pay provisions of Section 2.2 of the Agreement as they had prior to the execution of this Second Amendment, and the execution and delivery of this Second Amendment shall be without prejudice to all such claims, defenses, legal positions and arguments, except Conergy agrees to abandon any claim, defense, legal position or argument that the provisions so restored constitute an unreasonable or unjustifiable restraint of trade or otherwise constitute an antitrust violation under United States federal law, the laws of the State of New York, the European Community Treaty or the law of any other jurisdiction; and (iii) neither this Second Amendment, the execution and delivery thereof, nor any negotiations or proceedings in connection herewith may be used by either party in any proceeding against the other for any purpose, except to seek to enforce (in a manner that is not inconsistent with clause (ii) of this sentence) the terms of this Second Amendment, as modified by the Partial Second Amendment Reversal. In the event that Conergy ever in the future brings an action or proceeding (other than the Litigation) challenging the validity of the Agreement or this Second Amendment on grounds substantially similar to those that have been asserted in the Litigation, then, at MEMC Singapore’s election made by notice to such effect and within ten (10) Business Days of the delivery of such notice, a Partial Second Amendment Reversal shall be deemed to have occurred.

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1.14 Revised Termination Provisions.

(a) Section 4.4 of the Agreement is amended and restated in its entirety as follows:

“4.4 Termination by Conergy.

(a) In the event that MEMC Singapore has failed to deliver the Yearly Minimum Quantities as would be required to be delivered pursuant to the provisions of Section 2.2(a) of the Agreement, as modified by Section 1.2(b) of the Second Amendment, for three (3) consecutive Contract Years, then, no later than thirty (30) days after the end of such third consecutive Contract Year, Conergy may provide written notice to MEMC Singapore that Conergy intends to immediately terminate the Agreement. Such termination will take effect five (5) Business Days thereafter if the breach is not cured (in which case delivery shall be made for such deliveries only DDP Incoterms 2000 Conergy’s designated location) by MEMC Singapore within such five (5) Business Day period; provided, however, that Conergy shall be required to accept delivery of and pay for Wafers already manufactured or in the process of manufacture for any accepted purchase orders at the time the termination notice pursuant to this Section 4.4(a) is received by MEMC Singapore in accordance with the notice provisions of Section 7.4.

(b) If Conergy would have the right to terminate this Agreement pursuant to Section 4.4(a), but Conergy does not provide written notice of such intent to terminate to MEMC Singapore within the prescribed time frames of Section 4.4(a), then Conergy may not terminate the Agreement pursuant to Section 4.4(a) for that entire Contract Year, and will be deemed to have waived such right to terminate the Agreement pursuant to Section 4.4(a) for that three (3) Contract Year period of missed deliveries. In such event, Conergy can still “count” the two most recent Contract Years of missed deliveries of Wafers (as would be required to be delivered by MEMC Singapore pursuant to the provisions of Section 1.2(a) of the Agreement as modified by Section 1.2(b) of the Second Amendment) for the purposes of determining whether, at the end of the subsequent Contract Year, a new right to terminate the Agreement pursuant to Section 4.4(a) has been triggered. In such case, the provisions of both Section 4.4(a) and this Section 4.4(b) shall again apply.”

(b) The last sentence of Section 4.5 of the Agreement is deleted and shall be replaced by the following sentence:

“If the termination was validly made by Conergy pursuant to Section 4.2 or Section 4.4, MEMC Singapore shall return to Conergy (i) the balance of the Refundable Capacity Reservation Deposit then held by MEMC Singapore and (ii) the pro rata “unearned” portion of the Retained Refundable Capacity Reservation Deposit Amount (calculated based on a fraction, the numerator of which equals the amount of the denominator described immediately below minus the aggregate quantity of Watts actually purchased by Conergy (and delivered by MEMC Singapore) from and after the Effective Date of this Second Amendment, and the denominator of which is the aggregate quantity of Watts of the Yearly Minimum Quantities for the Term of the Agreement, as modified by this Second Amendment, from and after the Effective Date of this Second Amendment) then held by MEMC Singapore, each within sixty (60) days of the date of the valid termination.”

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1 Scope. Conergy hereby gives the following warranties and representations to MEMC Singapore:

(a) Conergy is not in a state of illiquidity within the meaning of Art. 17 German Insolvency Code (GIC) at the time this Second Amendment is executed;

(b) Conergy’s illiquidity is not imminent within the meaning of Art. 18 GIC at the time this Second Amendment is executed. According to Conergy’s liquidity analysis, Conergy is and will be in a position to meet its financial obligations and not become illiquid in the meaning of Art. 17 GIC within at least the next 13 weeks after the time this Second Amendment is executed;

(c) Conergy is not in a state of over-indebtedness within the meaning of Art. 19 GIC at the time this Second Amendment is executed;

(d) According to Conergy’s own thorough legal assessment and according to the thorough assessment of Conergy’s outside legal counsel, whereas each assessment was made on the basis of the same complete and accurate facts that are relevant for such assessment as far as they are known to Conergy until the date hereof, neither the execution of this Second Amendment nor the consummation of any action contemplated under this Second Amendment constitutes an action that meets the legal requirements for a legal appeal or challenge under any applicable Law, in particular, but not limited to, the German Civil Code, GIC or Law governing the challenge of debtor’s transactions (Anfechtungsgesetz) to the effect that any challenge or appeal before court will remain unsuccessful;

(e) Conergy has not assigned, pledged, hypothecated or transferred any of its claims arising out of or in connection with the negotiation, execution, or termination of the Agreement, including without limitation, a claim that the Agreement, or any provision thereof, is unenforceable or invalid, to any third party;

(f) Conergy has not commenced any litigation, or similar proceeding, against MEMC Singapore or any of its affiliates other than the Litigation; and

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(g) Conergy has provided MEMC Singapore with a statement by Ernst & Young regarding the absence of any state of over-indebtedness, illiquidity or imminent illiquidity of Conergy within the meaning of the GIC, dated December 15, 2010 (“Updated Ernst & Young Statement”). The Updated Ernst & Young Statement was based on information provided by Conergy to Ernst & Young. Conergy warrants that as of December 15, 2010, this information was complete and accurate in all material aspects and that Conergy did not withhold any information or facts that would have rendered such assessment by Ernst & Young contained in the Updated Ernst & Young Statement incomplete or inaccurate in any material respect if Ernst & Young had been familiarized with this information or with these facts prior to the delivery of the Updated Ernst & Young Statement.

2.2 Legal Consequences of Breach of Warranty. If and to the extent that any of the warranties and representations set out in Section 2.1(a) through 2.1(g) is inaccurate, Conergy shall be liable to put MEMC Singapore in the position MEMC Singapore would be in if the respective warranty and representation had been accurate. Any knowledge of MEMC Singapore about any inaccuracy of any of the warranties and representations set out in Section 2.1(a) through 2.1(g) shall not adversely affect MEMC Singapore’s above rights against Conergy.

ARTICLE III

[INTENTIONALLY OMITTED]

ARTICLE IV

MISCELLANEOUS

4.1 No Other Changes. Other than with respect to the Sections of the Agreement specifically enumerated above, this Second Amendment does not modify, change or delete any other addendum, term, provision, representation, warranty or covenant (the “Provisions”) relating to or contained in the Agreement or any Attachment, and all such Provisions of the Agreement shall remain in full force and effect.

4.2 Expenses. Each Party hereto shall bear its own fees and expenses with respect to the transactions contemplated hereby.

4.3 No Waiver. By agreeing to this Second Amendment, and except as set forth in Section 1.10 hereof, in no way is MEMC Singapore waiving any past actions or inactions by Conergy under the Agreement or any Amendments thereto, or consenting to any future action or inactions by Conergy under the Agreement or any Amendments thereto, and similarly, by agreeing to this Second Amendment, in no way is Conergy waiving any past actions or inactions by MEMC Singapore under the Agreement or any Amendments thereto, other than as set forth in Section 1.10 hereof, as contemplated by the withdrawal of the Litigation pursuant to the stipulation which is attached hereto as Exhibit C, or consenting to any future action or inactions by MEMC Singapore under the Agreement or any Amendments thereto. The failure of a Party hereto at any time or times to require strict performance of any provision hereof or claim damages with respect thereto shall in no manner affect its right at a later time to enforce the same. No waiver by a Party of any condition or of any breach of any term, covenant, representation or warranty contained in this Second Amendment shall be effective unless in writing, and no waiver in any one or more instances shall be deemed to be a further or continuing waiver of any such condition or breach in other instances or a waiver of any other condition or breach of any other term, covenant, representation or warranty.

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4.4 No Assignment. Neither Party has assigned, nor shall assign, to any of its affiliates or Subsidiaries, or any third party, any of its claims arising out of or in connection with the negotiation, execution or amendment of the Agreement, the First Amendment, and the Second Amendment, including all attachments and exhibits thereto, including without limitation, a claim that the Agreement, the First Amendment, or the Second Amendment or any provision thereof, is unenforceable or invalid.

4.5 Amendment; Entire Agreement. This Second Amendment may be amended, modified or supplemented only in writing signed by MEMC Singapore and Conergy. This Second Amendment sets forth the entire agreement and understanding of the Parties hereto with respect to the specific amendment(s) to the Agreement contemplated hereby and supersedes any and all prior agreements, arrangements and understandings, both written and oral, among the Parties relating to the subject matter of this Second Amendment.

4.6 Dismissal of the Litigation. This Second Amendment shall be effective on the Effective Date. As soon as reasonably practicable after this Second Amendment has been executed by all Parties, counsel for each of the Parties shall sign a stipulation of dismissal in substantially the form annexed hereto as Exhibit C (the “Stipulation”) and counsel for Conergy shall submit the fully-executed Stipulation to be “so ordered” by the United States District Court for the Southern District of New York (the “Court”). Counsel for the Parties shall thereupon cease activity in the Litigation, except that they shall cooperate in taking such further steps as may appear reasonably necessary to obtain Court approval of the Stipulation. In the event the Stipulation has not been approved by the Court within 42 days after the Effective Date, the parties shall confer in good faith with respect to how to proceed under the circumstances.

4.7 Applicable Law. This Second Amendment shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without giving effect to the principles of conflicts of law thereof.

4.8 Counterparts; Facsimile Signatures. This Second Amendment may be executed in counterparts, and when so executed each counterpart shall be deemed to be an original, and said counterparts together shall constitute one and the same instrument. This Second Amendment may be executed and delivered by facsimile and upon such delivery the facsimile signature shall be deemed to have the same effect as if the original signature had been delivered to the other Part(ies). The original signature copy shall be delivered to the other Part(ies) by express overnight delivery. The failure to deliver the original signature copy and/or the nonreceipt of the original signature copy shall have no effect upon the binding and enforceable nature of this Second Amendment.

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4.9 Consistency. To the extent of any inconsistency between the terms of this Second Amendment and the Agreement, the terms of this Second Amendment shall govern. From and after the date hereof, all references in the Agreement to “Purchase Shortfalls” shall be deemed to refer to Take or Pay Purchase Shortfalls.

[remainder of page intentionally left blank; signature page follows]

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Exhibit 10.66

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IN WITNESS WHEREOF, the Parties hereto have caused this Second Amendment to be executed and delivered as of the date first above written.

MEMC SINGAPORE PTE LTD.		CONERGY
By:	/s/ Ken Hannah	By:	/s/ Dieter Ammer
	Ken Hannah		Dieter Ammer
	Director and Chief Financial Controller		Vorstandsvorsitzender

SIGNATURE PAGE TO

AMENDMENT NO.2 TO SOLAR WAFER SUPPLY AGREEMENT

Exhibit 10.66

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Attachment A – Revised Specifications

[See attached Revised Specifications.]

Document Titel Standard mc-Si Wafer Specification
Doc. Owner        Technology/Conergy SolarModule GmbH & Co. KG
Document No. WS-002                                         Revision        A5 MEMC Discussion

Conergy Quality Management System

Specification Sheet

Standard Solar Multi-Crystalline Silicon Wafer

Specification

Issued Date: 10.08.2009

Conergy Solar Module GmbH & Co. KG
Wafer	Cell	Module	Technology	Quality	Procurement
S. Pracht	I. Walter	A. Lindner	P. Pollow	R. Niendorf	M. Müller
approved by
A. Jahnke

Accepted by

Supplies Address Signature Date

Page 1 of 8

Document Titel Standard mc-Si Wafer Specification
Doc. Owner        Technology/Conergy SolarModule GmbH & Co. KG
Document No. WS-002                                         Revision        A5 MEMC Discussion

1. Document History

Revision	Reason	Content of Revision	Date
A1	new edition	new edition	05.05.2009
A2	change	resistivity spec tightened, roughness spec added	26.06.2009
A3	change	pallet rejection criteria added	21.07.2009
A4	change	special request section updated	10.08.2009
A5	Change	Discussion with MEMC	14.01.2010

Special Request Items

Item	Reason	Content	Date
	Standard
1	Request
	Standard
2	Request
	Request

Page 2 of 8

Document Titel Standard mc-Si Wafer Specification
Doc. Owner        Technology/Conergy SolarModule GmbH & Co. KG
Document No. WS-002                                         Revision        A5 MEMC Discussion

1. Scope

The requirements shown here summarize the specifications for standard solar multi crystalline Silicon wafer. The thickness class is distinguished by [*****] um. Relaxed/tightened specifications need to be listed under “special request items” and need to be signed-off.

2. Property Specification

2.1 Geometrical Properties

[*****]

2.2 Crystallization and Purity

[*****]

Page 3 of 8

Document Titel Standard mc-Si Wafer Specification
Doc. Owner        Technology/Conergy SolarModule GmbH & Co. KG
Document No. WS-002                                         Revision        A5 MEMC Discussion

No. Property Specification Comment

[*****]

2.3 Electronic Properties

No. Property Specification Comment

[*****]

Page 4 of 8

Document Titel Standard mc-Si Wafer Specification
Doc. Owner        Technology/Conergy SolarModule GmbH & Co. KG
Document No. WS-002                                         Revision        A5 MEMC Discussion

3. Surface and Appearance Specification

No. Property Specification Comment

[*****]

Page 5 of 8

Document Titel Standard mc-Si Wafer Specification
Doc. Owner        Technology/Conergy SolarModule GmbH & Co. KG
Document No. WS-002                                         Revision        A5 MEMC Discussion

4. Replacement of out of spec wafer

In case of spec violation a joint investigation is performed. Conergy will initiate conference calls/meetings and an 8D report, a common assessment of the problem will be conducted. MEMC and Conergy reach agreement on the spec violation.

No. Property Specification Reclamation

[*****]

5. Required Information

The following information shall be delivered together with the supplied wafers.

No. Property Description Comment

[*****]

Page 6 of 8

Document Titel Standard mc-Si Wafer Specification
Doc. Owner        Technology/Conergy SolarModule GmbH & Co. KG
Document No. WS-002                                         Revision        A5 MEMC Discussion

6. Inspection Methods and Sampling

6.1 Geometrical Properties

No. Property Inspection Sampling

[*****]

Page 7 of 8

Document Titel Standard mc-Si Wafer Specification
Doc. Owner        Technology/Conergy SolarModule GmbH & Co. KG
Document No. WS-002                                         Revision        A5 MEMC Discussion

6.2 Crystallization and Purity

deleted

6.3 Electronic Properties

No. Property Inspection Sampling

[*****]

Page 8 of 8

Exhibit 10.66

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Attachment B-2 – Yearly Target Quantities

[See attached Excel Table.]

[*****]

1

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Attachment B-2, Section 1.5

1. Pricing. The Parties agree that the Price per Watt shall be determined on a Contract Year quarterly basis, and shall be a price that is competitive in the market at the time that it is established each Contract Year quarter. The Parties further agree that they shall mutually negotiate in good faith the foregoing Contract Year quarterly Price per Watt. If, for any particular Contract Year quarter, the Parties mutually agree on a Price per Watt for such Contract Year quarter, then the rest of Paragraph 1 of this Attachment B-2, Section 1.5 shall be inapplicable for such quarter. If, for any particular Contract Year quarter, notwithstanding the Parties’ good faith negotiations to attempt to mutually agree on a Price per Watt for such Contract Year quarter, the Parties have not agreed on a Price per Watt for such Contract Year quarter, the Price per Watt for such Contract Year quarter shall be the Last LTA Price, as calculated below.

The “Last LTA Price” means, for any particular Contract Year quarter, the product of [*****]. MEMC Singapore shall disclose to Conergy such Last LTA Price within five (5) Business Days of Conergy’s written request for such Last LTA Price.

“LTA Customer” shall mean, for the purpose of Section 1.5 and this Second Amendment, Suntech and Gintech. If MEMC Singapore or any affiliate of MEMC Singapore adds another Wafer customer (other than Conergy or Tainergy) under a long-term agreement (of at least five (5) years in duration), then such customer shall also constitute an LTA Customer hereunder (unless the Parties agree otherwise). If the Parties believe that neither Suntech nor Gintech no longer should constitute an LTA Customer hereunder, then the Parties shall negotiate in good faith at such time to determine a new reference pricing mechanism.

“Special Project” shall mean, for the purposes of this Second Amendment, large (i.e., 1MW or greater), photovoltaic projects developed by one of MEMC Singapore’s LTA Customers, that include MEMC Singapore wafers that are nonetheless excluded from counting towards the minimum quantity commitments and calculations under the Solar Wafer Supply Agreements for such LTA Customers.

The “Applicable Percentage” shall equal, for any particular Contract Year quarter, if, during the Contract Year quarter immediately preceding such particular Contract Year quarter, the volume of Multi Wafers and/or Mono Wafers (in each case measured in Watts) purchased by Conergy hereunder is (A) [*****]% or more, (B) [*****]% or more (but less than [*****]%), or (C) less than [*****]%, of the average aggregate volume of Multi Wafers and/or Mono Wafers (in each case measured in Watts) purchased by all LTA Customers during the same period, [*****]% (in the case of (A)), up to [*****]% (as determined by MEMC Singapore in its discretion) (in the case of (B)), and up to [*****]% (as determined by MEMC Singapore in its discretion) (in the case of (C)), respectively.

For all purposes of determining any Applicable Percentage only (and for no other purpose under this Second Amendment), each solar wafer order to MEMC Singapore or any of its affiliates to which Conergy’s efforts pursuant to Section 1.9 of the Second Amendment reasonably clearly contributed to such order being placed with MEMC Singapore shall be treated (measured in Watts) as if it was an order of Mono Wafers or Multi Wafers purchased by Conergy hereunder.

2

EXECUTION VERSION

CONFIDENTIAL

CONFIDENTIAL TREATMENT REQUESTED

REDACTED VERSION

Upon Conergy’s written request delivered not earlier than forty five (45) days prior to the end of, and not later than seven days after the end of, any Contract Year, MEMC Singapore shall deliver to Conergy, within thirty (30) days after the end of such fiscal year, a certificate of its chief financial officer, and of MEMC Singapore’s independent certified public accountants, certifying that any price actually charged by MEMC Singapore during the course of such Contract Year as the “Last LTA Price” in fact was the Last LTA Price, and (without limitation of the foregoing) that MEMC Singapore has fully complied with the last sentence of the first paragraph of Section 1 of this Attachment B-2, Section 1.5, together with copies of the relevant purchase orders and invoices which reflect the relevant Last LTA Prices during the course of such Contract Year.

2. Payment Terms. The Parties agree that Conergy may request additional days of credit beyond the thirty (30) days terms set forth in Section 2.7 of the Agreement (and Section 1.6 of this Second Amendment), which request may be approved or rejected by MEMC Singapore in its sole discretion. If MEMC Singapore agrees to such request and such additional days of credit are therefore extended, Conergy shall have such additional days of credit, and MEMC Singapore shall then charge Conergy for this extension of credit [*****].

3

EXECUTION VERSION

CONFIDENTIAL

CONFIDENTIAL TREATMENT REQUESTED

REDACTED VERSION

Attachment B-2, Section 1.9.

For the purposes of Section 1.9 of the Second Amendment, “commercially reasonable best efforts” shall mean and include the items set forth below in this Attachment B-2, Section 1.9.

1. With Regard to Section 1.9(a):

• Conergy will pursue the Third Party Module Suppliers to enter into a three-way confidentiality agreement with Conergy and MEMC Singapore.

• Conergy will express to each such Third Party Module Supplier that enters into such a confidentiality agreement its desire to have such Third Party Module Suppliers purchase from MEMC Singapore (under a direct business relationship between such Third Party Module Supplier and MEMC Singapore) approximately [*****] percent ([*****]%) (based on volume of Watts) of Wafers needed for the modules delivered by such Supplier to Conergy.

• All other considerations (including without limitation commercial, technical and quality factors) being equal, Conergy will endeavor to give incremental business to Third Party Module Suppliers which enter into the above mentioned relationship with MEMC Singapore.

• Upon MEMC Singapore’s request, Conergy is also willing to evaluate 1-2 new Wafer- based module suppliers per Contract Year (over at least the next five (5) years after the Effective Date of the Second Amendment) (including without limitation with respect to commercial, technical and quality factors) in order to potentially add, as new Third Party Module Suppliers, those of such suppliers which accept MEMC Singapore as their Wafer supplier for Wafer-based modules delivered to Conergy.

• Upon MEMC Singapore’s request, Conergy will endeavor to introduce MEMC Singapore to other former or de minimus Wafer-based module suppliers to Conergy to give a reference and discuss business opportunities.

2. With Regard to Section 1.9(b):

• Subject to any confidentiality constraints Conergy might be subject to, whenever a specific photovoltaic project (that, if accepted by Conergy, would constitute a Large Conergy PV Project) is offered to Conergy by a third party or Conergy determines itself to pursue the development of a specific photovoltaic project (that, if developed, would constitute a Large Conergy PV Project), Conergy will (i) apprise MEMC Singapore of such potential project, (ii) if Conergy is interested in participating in such project (in the case of a third-party offer), (x) jointly evaluate with MEMC Singapore how to attempt to include MEMC Singapore Wafers in such project and (y) in any event express to the relevant third party(ies) its desire to have the relevant project entity purchase from MEMC Singapore (under a direct business relationship between such project entity and MEMC Singapore) approximately [*****] percent ([*****]%) (based on volume of Watts) of Wafers needed for such project, and (iii) if Conergy is not interested in participating in such project (in the case of a third-party offer), endeavor to introduce MEMC Singapore to the relevant third party(ies) that offered such project to Conergy.

4

EXECUTION VERSION

CONFIDENTIAL

CONFIDENTIAL TREATMENT REQUESTED

REDACTED VERSION

• At least once each Contract Year (over at least the next five (5) years after the Effective Date of the Second Amendment), Conergy and MEMC Singapore will jointly approach Third Party Module Suppliers involved in the business of large (i.e., 1MW or greater), photovoltaic (through Wafer-based modules) projects to discuss developing opportunities for such projects.

Reference is hereby made to Section 1.9(c) of the Second Amendment, which applies to each of the items listed above in this Attachment B-2, Section 1.9.

5

EXECUTION VERSION

CONFIDENTIAL

CONFIDENTIAL TREATMENT REQUESTED

REDACTED VERSION

Exhibit C

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - CONERGY AG, Plaintiff, v. MEMC ELECTRONIC MATERIALS, INC. and MEMC SINGAPORE PTE. LTD., Defendants.	x : : : : : : : : : :	09 CIV. 4906 (SAS) (AJP) STIPULATION OF DISMISSAL
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	x

IT IS HEREBY STIPULATED AND AGREED by and between the undersigned, on behalf of their respective clients, that the first and fourth causes of action in Plaintiff’s Amended Complaint in the above entitled action are dismissed without prejudice and the remaining causes of action in Plaintiff’s Amended Complaint are dismissed with prejudice, without costs or attorneys’ fees to either party against the other. This Stipulation, once fully executed, may be filed without further notice with the Clerk of the Court.

Dated:	New York, New York
	January     , 2010

HUGHES HUBBARD & REED LLP		BRYAN CAVE LLP
By:		By:
	Derek J.T. Adler		William J. Hibsher
	(adler@hugheshubbard.com) One Battery Park Plaza New York, New York 10004 (212) 837-6000 Attorneys for Plaintiff		(wjhibsher@bryancave.com) 1290 Avenue of the Americas New York, New York 10104 (212) 541-2000 Attorneys for Defendants
	So Ordered:

6

EXECUTION VERSION

CONFIDENTIAL

CONFIDENTIAL TREATMENT REQUESTED

REDACTED VERSION

Shira A Scheindlin, U.S.D.J.

7

EX-10.67

Exhibit 10.67

Amendment to Employment Agreement

This Amendment to Employment Agreement (the “Amendment”) is entered into as of this 29th day of January, 2010, by and between MEMC Electronic Materials Inc., a Delaware corporation (the “Company”), and Ahmad Chatila (“Executive”).

WHEREAS, the Company and Executive are parties to that certain Employment Agreement dated as of February 4, 2009 (the “Agreement”) which sets forth the respective rights and obligations with respect to Executive’s employment by the Company; and

WHEREAS, the Company and the Executive desire to amend the Agreement on the terms and subject to the conditions set forth in this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive hereby agree as follows:

1. Amendment. The phrase “; provided, however, that for calendar year 2009, Executive’s bonus under this Section 2(b) shall be no less than $500,000” in paragraph 2(b) of the Agreement is hereby deleted in its entirety.

2. General Provisions.

a. Entire Agreement; Amendment. Subject to the terms of the various plans and documents referenced in the Agreement, the Agreement and this Amendment constitute the entire agreement among the parties hereto with respect to Executive’s employment and his right to compensation and benefits, including without limitation severance or termination pay. All prior correspondence and proposals (including, but not limited to, summaries of proposed terms) and all prior promises, representations, understandings, arrangements and agreements relating to such subject matter (including, but not limited to, those made to or with Executive by any other Person and those contained in any prior offer, employment, consulting or similar agreement entered into by Executive and the Company or any predecessor thereto or Affiliate thereof) are merged herein and superseded hereby. Except as provided in this Amendment, the Agreement is hereby ratified, confirmed and approved, and all other terms thereof shall remain in full force and effect. This Amendment may be amended, modified, superseded, cancelled, renewed or extended, and the terms and covenants hereof may be waived, only by a written instrument signed by all parties hereto, or in the case of a waiver, by the party waiving compliance.

b. Severability. If any provision of this Amendment shall be invalid or unenforceable to any extent or in any application, then the remainder of this Amendment and of such term and condition, except to such extent or in such application, shall not be affected thereby and each and every term and condition of this Amendment shall be valid and enforced to the fullest extent and in the broadest application permitted by law.

c. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Missouri without reference to principles of conflicts of laws.

d. Definitions. Terms not otherwise defined herein shall have the meanings ascribed to them as set forth in the Agreement.

1

e. Binding Effect; Assignment. This Amendment shall be binding on and inure to the benefit of the Company and its successors and permitted assigns. This Amendment shall also be binding on and inure to the benefit of Executive and his heirs, executors, administrators and legal representatives. This Amendment shall not be assignable by any party hereto without the prior written consent of the other parties hereto, except that the Company may effect such an assignment without prior written approval of Executive upon the transfer of all or substantially all of its business and/or assets (by whatever means).

f. Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. A facsimile of a signature shall be deemed to be and have the effect of an original signature.

g. Headings. The section and other headings contained in this Amendment are for the convenience of the parties only and are not intended to be a part hereof or to affect the meaning or interpretation hereof.

[Remainder of page left intentionally blank; signature page follows]

2

IN WITNESS WHEREOF, the Company has duly executed this Amendment by its authorized representatives and Executive has hereunto set his hand, in each case effective as of the date first above written.

MEMC ELECTRONIC MATERIALS, INC.
By:	/s/ John Marren
	Name:	John Marren
	Title:	Chairman of the Board of Directors
EXECUTIVE:
	/s/ Ahmad Chatila
	Name:	Ahmad Chatila

3

EX-31.1

Exhibit 31.1

Certification

I, Ahmad Chatila, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MEMC Electronic Materials, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision; to ensure that material information relating to the registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2010

/s/ Ahmad Chatila

Ahmad Chatila

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Timothy C. Oliver, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MEMC Electronic Materials, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision; to ensure that material information relating to the registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2010

/s/ Timothy C. Oliver

Timothy C. Oliver

Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of MEMC Electronic Materials, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Ahmad Chatila, President, Chief Executive Officer and Director of the Company, and Timothy C. Oliver, Senior Vice President and Chief Financial Officer of the Company, certify, to the best of our knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2010

By:	/s/ Ahmad Chatila
Name:	Ahmad Chatila
Title:	President and Chief Executive Officer MEMC Electronic Materials, Inc.

Date: May 10, 2010

By:	/s/ Timothy C. Oliver
Name:	Timothy C. Oliver
Title:	Senior Vice President and Chief Financial Officer MEMC Electronic Materials, Inc.