MEMC Electronic Materials Inc (WFR.N) said on Sunday it had reached an out-of-court settlement of a solar wafer supply contract lawsuit with Germany's Conergy AG (CGYG.DE) and that it would receive an undisclosed payment.

Under the terms of a contract signed about two years ago, MEMC supplies solar wafers to Conergy over a 10-year period, with pre-determined pricing, on a take-or-pay basis. Conergy has sought to declare the contract invalid.

Under the terms of the amended contract, Conergy can cut the minimum quantity of wafers it must buy over the remaining eight-plus years of the contract.

Other changes include modifying the pricing terms, so they are based on market rates similar to other MEMC long-term solar wafer supply agreements. The settlement includes a payment to MEMC of an undisclosed amount, MEMC said in a statement.

"This agreement provides the foundation for a strong strategic relationship with Conergy," Ken Hannah, president of MEMC Solar Materials, said in a statement. "We have also agreed to work together to facilitate large projects in the future. This cooperation should help generate growth for both companies."

On Jan. 8, Conergy's shares had soared 19 percent in German trading on statements that negotiations with MEMC were progressing amiably.

Conergy shares closed at 0.778 euros on Friday, while MEMC shares closed at $13.19.