MONOCRYSTALLINE SILICON MODULAR LONG TERM SUPPLY CONTRACT (English Translation) Entered by Tianjin Huan-ou Semiconductor Technology Inc. Ltd. And Perfectenergy (Shanghai), Co. Ltd. Date: July 2008
MONOCRYSTALLINE
SILICON MODULAR
(English
Translation)
Entered
by
Tianjin
Huan-ou Semiconductor Technology Inc. Ltd.
And
Perfectenergy
(Shanghai), Co. Ltd.
Date:
July 2008
1
Index
| 1. |
The
Parties
|
3
|
| 2. |
Background
|
3
|
| 3. |
Obligations
of the Seller
|
3
|
| 4. |
Obligations
of the Buyer
|
5
|
| 5. |
Overdue
Supply- Overdue Payment
|
7
|
| 6. |
Quality
Warrant
|
7
|
| 7. |
Intellectual
Property Rights
|
8
|
| 8. |
Special
Rules
|
8
|
| 9. |
Miscellaneous
|
9
|
Appendix
|
Appendix
1
|
Annual
Supply Volume
|
13
|
|
Appendix
2
|
Purchase
Order Requirements
|
13
|
|
Appendix
3
|
Technical
Specifications
|
13
|
|
Appendix
4
|
Price
List
|
13
|
|
Appendix
5
|
Refund
of Advance Payment
|
14
|
|
Appendix
6
|
Supplement
Agreement
|
14
|
2
| I. |
The
Parties
|
Seller:
Tianjin Huan-ou Semiconductor Technology Inc, Ltd. (hereinafter, known as
“Seller”)
Address:
Xx. 00 X Xxxxxx Xx., Xxxxxxx Xxxxxxxxxx Xxxxxxxx (Huanwai)
Tianjin,
China
Business
License Number: 120193000006017
Legal
Representative: Donghu Jin
Buyer:
Perfectenergy (Shanghai), Ltd. (hereinafter, known as
“Buyer”)
Address:
Xx. 000 Xxxx Xxxxxxxxx Xx.,
Xxxxxxxx,
Xxxxx
Business
License Number: 310000400431094
Legal
Representative: Xxxxxx Xx
| XX. |
Background
|
| 2.1 |
The
Seller is a manufacturer of semiconducting silicon and solar
monocrystalline silicon.
|
| 2.2 |
The
Buyer is a manufacturer of solar cell module.
|
| 2.3 |
This
agreement is entered into by and between the Seller and the Buyer so
as to
ensure the rights and obligations of the
parties.
|
| 2.4 |
The
purpose of entering this agreement is to ensure and consolidate the
coordination and cooperation between the parties during the agreed
term of
5 years from the signing date to December 31, 2013, to avoid or reduce
the
unexpected damages caused by the market change, and to assure the
fulfillment of the obligations of the parties.
|
| 2.5 |
Because
of the large total price of the deals involved, this Agreement serves
as
the basis and interim of the prospective contract.
|
| III. |
Obligations
of the Seller
|
| 3.1 |
The Supply Volume
|
| 3.1.1 |
The
Supply Volume Based on Agreement
|
Based
on
agreement, the Seller and the Buyer entered into a five-year monocrystalline
silicon modular supply contract. See Appendix 1 Annual Supply Volume. If the
actual annual supply volume differs from the number under Appendix 1(except
situations under 3.1.2), the parties shall reach an agreement in writing
regarding the supply volume to be realized in the coming year and other changes
incurred accordingly at least 90 days before the start of the coming year.
The
parties have 30 days to negotiate and change the supply volume for the next
year. If the parties fail to do so, the number under Appendix 1 for the next
year applies.
3
| 3.1.2 |
Adjustment
of Supply Volume
|
| 3.1.2.1 |
Adjustment
of Annual Supply Volume
|
Any
party
can increase or decrease the supply volume by less than 5% of the Annual Supply
Volume under Appendix 1. However, the adjustment is subject to consent of the
other party, who shall be informed of such change in writing at least 45 days
before the supply of the coming year.
| 3.1.2.2 |
Monthly
Supply
|
The
monthly supply volume can be regarded as 1/12 of the annual supply volume of
the
same year, except the parties agree on a change of supply volume in writing
at
least 15 days before the supply of the next month starts.
The
parties can make a change up to 10% of the product (including product category
and product specification) every month if such change will not affect the
Seller’s performance of contract to other buyers. An agreement of such change
must be made at least 45 days before the date of delivery of products. If the
Buyer requires an increase or a decrease of the supply volume at a rate higher
than the one under Article 3.1.2.1, the Buyer shall compensate the Seller for
the production adjustment, storage, and any influence on the supply volume
of
other buyers (while the Seller shall make all efforts to reduce such expense).
If the Seller requires an increase or a decrease of the supply volume at a
rate
higher than the one under Article 3.1.2.1, the Seller shall compensate the
Buyer
for production adjustment, storage and any breach of contract (while the Buyer
shall make all efforts to reduce such expense).
| 3.1.2.3 |
Extra
Orders
|
The
Seller only warrants the supply volume for the five years under this Agreement.
However, the Seller shall make all efforts to accept the Buyer’s extra orders
(as long as such orders do not affect the Seller’s performance of other
contracts).
| 3.1.2.4 |
Actual
Supply
|
The
actual supply means the adjusted supply volume under Article 3.1.2 Adjustments
of Supply Volume in a contract year.
The
actual supply shall be regarded as the basis of the Buyer’s obligation, no
matter whether the actual supply is more (due to the extra supply in Article
3.1.2.3) or less (due to insufficient supply) than the adjusted annual supply
volume.
| 3.1.2.5 |
The
Confirmation of Order
|
The
Seller shall confirm the order within 7 working days after receiving it. (See
Article 4.1 Purchase Order).
The
Seller shall not reject any purchase order, except under the following
situations: (a) the order discords with Appendix 2 Purchase Order Requirements;
(b) the number of product in the order exceeds the supply volume under Article
3.1.2, unless the Seller agrees otherwise; (c) other discordance with this
Agreement.
The
Sellers shall make no changes to the order after confirmation.
4
| 3.2 |
Product
Specification - Quality
|
The
product shall match the specification requirement under Appendix 3.
| 3.3 |
Transportation
- Shipment - Packaging
|
See
the
information of the frequency of transporting, destination of shipment, delivery
and packaging requirement under Appendix 3. The Seller shall, in accordance
with
this Agreement and the confirmed order, package the product, arrange and pay
for
the transportation, and make the delivery at the agreed time and place.
After
the
shipping starts, the Seller shall give notice to the Buyer timely by fax or
express mail of: (a) the order number; (b) a brief description of the product;
(c) an estimated time of arrival; (d) tracking number and the method of
shipping.
| 3.4 |
Invoice
|
Unless
negotiated and agreed in writing otherwise, the Seller shall issue a
value-added-tax invoice for the Buyer in accordance with the relevant tax laws
and regulations.
| IV. |
Obligations
of the Buyer
|
| 4.1 |
Purchase
and the Purchase Order
|
The
Buyer
shall pay for the actual supply under Article 3.1.2.4.
The
parties shall agree on the annual supply volume for the coming year 30 working
days before the start of the coming year. After that, the Buyer shall provide
the purchase order for the coming year within 15 working days.
The
purchase order shall match the requirements under Appendix 2 and include at
least the following information: (a) indicating the purchase order is based
on
this Agreement; (b) product name, price and number; (c) delivery requirement
and
the place for taking the delivery; (d) required delivery date; (e) issue date
of
purchase order.
The
purchase order is valid only under the terms of this Agreement (including the
Appendix).
As
under
Article 3.1.2.5, the Buyer is bond by the purchase order while the Seller is
bond by the confirmation of order.
When
any
item or condition under an order disagrees with this Agreement, the order
prevails if the Seller confirms the order in writing. Otherwise, this Agreement
prevails.
| 4.2 |
The
Price and the Price Adjustment
|
The
Buyer
shall pay the agreed price for the purchased product. See the product price
under Appendix 4.
The
Buyer
shall compensate the Seller for the value-added-tax based on the value-added-tax
invoice issued by the Seller.
| 4.3 |
Advance
Payment, Deposit and
Compensation
|
Method
of
Payment: the parties shall use wire transfer to send the payment to the other
party’s bank account in its registered place in China.
5
| 4.3.1 |
Advance
Payment
|
The
term
of this Agreement is five years. The parties agree on the signing date that
the
total sale volume from 2008 to 2013 is 81,710,000 units with a total value
of
2,449,060,000.00 RMB.
To
ensure
the cooperation between the parties, the Buyer shall make the advance payment
to
the Seller in the year of signing this Agreement (2008). The total advance
payment is 100,000,000.00 RMB. This payment will be made by three installments.
Time
of
payment: the Buyer shall pay 30,000,000.00 RMB by September 20, 2008; the Buyer
shall pay 30,000,000.00 RMB by November 20, 2008; the Buyer shall pay
40,000,000.00 RMB by December 20, 2008.
| 4.3.2 |
Refund
of Advance Payment
|
The
Seller shall refund the advance payment during the five years period from 2009
to 2013, i.e. 20% of the total advance payment each year (20,000,000.00 RMB
per
year). The total refund of the five years shall be 100,000,000.00 RMB. The
Seller shall pay the refund no later than October 31 of each year.
| 4.3.3 |
The
Fund Cost’s Influence on Price
|
According
to Article 4.3.1, the advance payment will be a long-term saving in the Seller’s
account, which will affect 10% of the Buyer’s fund cost per year and become a
same amount of profit to the Seller. Through negotiations between the parties,
the Seller promised to compensate the fund cost to the Buyer every year. The
method of compensation is stated in the price of product.
| 4.3.4 |
Invoice
and Payment
|
The
Seller shall issue the product delivery instruction and the value-added-tax
invoice to the Buyer at the time of the delivery.
The
Buyer
shall pay the product and the value-added tax and provide proof of such payment
to the Seller within 3 working days after receiving the notice of delivery
or
the xxxx of loading.
| 4.3.5 |
Method
of Payment
|
The
parties shall use wire transfer to send the payment to the other party’s bank
account in its registered place in China or shall use other method agreed by
both parties.
| 4.4 |
Advance
Notice of Purchase
|
Although
the number and type of product are based on the confirmation of order, the
Buyer
shall give periodical advance notice to the Seller of the product to be
purchased. In accordance with the Agreement, the times to give such notice
are:
(a) the annual rolling advance notice each year shall be made in 90 days before
the next year; (b) the advance notice within a year shall be made quarterly,
in
15 days before the next quarter.
6
| 4.5 |
Product
Inspection
|
| 4.5.1 |
Packaging,
Exterior of Product and Quantity
Inspection
|
Within
3
working days of receiving a shipment, the Buyer shall inspect the packaging,
exterior quality and quantity of the product and respond to the Seller in
writing. Confirmed by both parties, if the packaging, exterior quality or
quantity does not comply with this Agreement or the confirmed purchase order,
the Seller shall change or supplement the product within 20 working days after
receiving the Buyer’s notice.
| 4.5.2 |
Quality
Inspection
|
The
Buyer
shall inspect the quality of the product timely after receiving a shipment.
If
the product does not match the required quality specification or has any other
defect, the Buyer shall provide a written inspection result to the Seller within
20 working days after receiving the shipment. If the Buyer fails to provide
such
result, the product is regarded as qualified and the Seller is not liable for
any quality defect caused by the Buyer.
| V. |
Overdue
Payment and Overdue Delivery
|
If
any
overdue payment and overdue delivery is resulted from a force majeure event,
the
breaching party shall be liable under this Article.
The
Seller shall pay the damage of 0.3% of the delivered product value every week
(less than one week is also regarded as one week) if the delivery is overdue
because of a reason other than a force majeure event or reasons acknowledged
by
the Buyer.
The
Buyer
shall pay the damage of 0.3% of the payment every week (less than one week
is
also regarded as one week) if payment is overdue because of a reason other
than
a force majeure event or reasons acknowledged by the Seller. If the payment
is
due over three weeks, the Seller has the right to terminate the Agreement and
inform the Buyer in writing. The Buyer shall pay the damage and all the payables
within 5 working days after receiving the notice of termination from the Seller.
| VI. |
Quality
Warrant
|
| 6.1 |
Quality
Warrant of Product
|
Under
Article 3.2 and 3.3, the Seller shall assure that the quality of product matches
the requirements under Appendix 3.
Due
to
the physical and chemical stability of monocrystalline silicon modular, the
solar industry has longer production and sale cycles and longer quality
inspection cycles compared with other industries. The parties agree that the
term of quality warranty is 8 weeks after the delivery of product.
| 6.2 |
Quality
Evaluation and Remedy
|
If
any
defect of product occurs during the warranty period, the Buyer shall inform
the
Seller of the defect and the number of the defected product in writing or other
means (including fax, email). After both parties confirm the above information,
the Seller shall change the defected product timely and ensure that the changed
product matches the specification requirements.
7
| VII. |
Intellectual
Property
|
The
Seller shall warrant that the sale and use of its product will not infringe
the
intellectual property right of a third party.
Once
the
Buyer is aware of the fact that the Seller’s product may infringe the
intellectual property right of a third party, the Buyer shall inform the Seller
and provide relevant evidence of such infringement. However, the Seller is
not
liable for the damages caused by the following infringement:
| (1) |
The
infringement is caused by a composite of the Seller’s product and the
product of other party or the product required by the Seller. The
infringement warning, charge or litigation aims at the composite, not
at
the Seller’s product in the composite not modified by the Seller.
|
| (2) |
The
infringement is caused by the modification of the Buyer after the product
reaches the Buyer.
|
| VIII. |
Special
Rules
|
| 8.1 |
The
Use of Product
|
The
Buyer
agrees that the products under the terms of sale, delivery and payment of this
Agreement are only used to produce solar cell and module and are not to be
sold
or used for other purposes. The Seller has the right to require remedy if the
Seller uses the products for other purposes.
| 8.2 |
Liability
Scope
|
The
monetary liability of any party shall not exceed 10% of the total value of
the
transaction under this Agreement.
The
above
liability scope does not have effect on the liability of the breaching party
under Article 4, 6 and 7.
| 8.3 |
Force
Majeure
|
Any
party
shall not be liable for breach of contract due to a force majeure event, which
includes war, terrorist attack, government suppression and blockade, domestic
transportation failure, change of laws and regulations, government act, natural
disaster such as storm and fire, explosion and any other unforeseeable,
unavoidable and irresistible reasons. When a force majeure event happens, the
breaching party shall inform the non-breaching party of the reason of
non-performance or the late performance within 30 days after the force majeure
event happens. If the force majeure event remains more than 30 days, the parties
shall meet and negotiate how the Agreement will be carried out. If the force
majeure event remains more than two months, any party has the right to terminate
the Agreement after informing the other party in writing. The Agreement will
be
terminated when the written notice reaches the other party.
8
| IX. |
Miscellaneous
|
| 9.1 |
The
Effectiveness and Validation Period of the
Agreement
|
Once
the
parties agree that this Agreement is effective, this Agreement becomes binding
and enforceable.
The
conditions of effectiveness: A. the Buyer makes the advance payment to the
Seller according to Article 4.3; B. when condition A satisfied, the parties
agree that the Agreement becomes effective on December 20, 2008; C. as public
companies, both parties shall have their shareholder meetings approve the
Agreement.
Validation
period: this Agreement is effective for five years since the effective date,
until December 31, 2013.
| 9.2 |
The
Termination of the Agreement
|
During
the validation period of this Agreement, if any party does not comply with
the
specification of business and technology agreed by both parties (including
this
Agreement and its Appendix), the breaching party shall make remedy to the
non-breaching party in accordance with this Agreement.
If
the
breaching party fails to make remedy or gives any writing notice in 60 days,
the
non-breaching party has the right to terminate the Agreement
unilaterally and
inform the breaching party in writing.
The
termination of this Agreement by any reason shall not affect the obligations
generated before the termination and other obligations that are not affected
by
the termination (see Article 7). The termination by one party shall not make
the
purchase order confirmed before the termination invalid. The Seller shall supply
the product based on the purchase order and the Buyer shall pay all fees
generated before the termination.
If
any
dispute occurs, no damage shall be paid before the parties settle the dispute.
| 9.3 |
Calculating
- Packaging
|
All
products shall be calculated by calculation tools in accordance with the state
standard. The calculated number is the actual supply volume.
The
Seller shall package the products properly so as to ensure a safe
transportation.
| 9.4 |
Confidentiality
|
The
parties shall keep the relevant information confidential during and after the
validation period of this Agreement. No party shall disclose the identities
of
relevant personnel, or any articles of this Agreement. No party shall disclose
the information of the products, transactions, business relationships,
organizations, production methods, financial status, trade secret or any other
relevant information that deemed confidential. However, such information can
be
disclosed to the confidential agreement signers and relevant employees, experts,
financial advisers, relevant governmental agencies and judicial institutions.
Confidential
information does not include the information that needs to be disclosed to
the
public according to laws and regulations, court orders or the company management
decisions. Confidential information does not include the information that must
be disclosed according to security exchange regulations, such as information
of
company management and number of shares. However, before disclosure, the
disclosing party shall provide the information to the other party and get
recognition from the other party.
9
| 9.5 |
Modification
and Supplement of the Agreement
|
See
extra
agreement under Appendix 6. When the extra agreement disaccords with the
Agreement, the Appendix 6 applies.
This
Agreement (including its Appendix) is the only final and complete contract
made
by the Seller and the Seller. No concession, announcement, promise, persuasion,
dictation, interpretation or supplement shall be made, except the parties
negotiate and agree otherwise and resort it in writing. This Article applies
to
all the unilateral purchase order under this Agreement.
Any
modification of this Agreement shall not be effective unless signed by both
parties. Any modified article does not affect the validity of other articles.
Any
other
agreement made by the parties that is supplemental to this Agreement shall
be
referred as Supplement Agreement in Appendix 6.
If
agreed
by both parties, this Agreement can be performed in part. The performance of
every part of the Agreement shall accord with the original Agreement. The
combination of partial performances shall have the same effect to the
performance of the whole Agreement. The copies of signed partial agreement
have
the same effect as the original partial agreement.
| 9.6 |
Notice
|
All
the
notice, requirements and information shall be communicated by email and domestic
express delivery. Fax and email shall be kept for later reference. Contact
information:
Buyer:
Perfectenergy (Shanghai), Ltd.
Address:
No. 000 X Xxxxxxxxx Xx., Xxxxxxxx, Xxxxx 000000
Tel:
000-00000000
Fax:
000-00000000
Contact
Person: Wennan Li, Xxxxxx Xxxx
Email:
xxxx.xx@xxxxxxxxxxxxx.xxx.xx
Seller:
Tianjin Huan-ou Semiconductor Technology Inc, Ltd.
Address:
Xx. 00 X Xxxxxx Xx., Xxxxxxx Xxxxxxxxxx Xxxxxxxx (Huanwai), Xxxxxxx, Xxxxx
000000
Tel:
000-00000000
Fax:
000-00000000
Contact
Person: Xxxxxxx Xxxx, Xxxxxxx Xxxx
Email:
xxxx@xxxx.xxx,
xxxx0000@000.xxx
Any
party
shall inform the other party if any of the above information is changed. Such
change shall be effective 5 days after the other party receiving the notice.
| 9.7 |
The
Change of Controlling Person
|
A
change
of the controlling person of any party shall not affect the validity and
enforceability of this Agreement. Before such change, the controlling person
shall inform the succeeding controlling person of the validity and
enforceability of this Agreement so as to protect the rights and interests
of
the other party.
The
rights and obligations under this Agreement shall not be assigned to a third
party without the permission of the other party in writing. Any violation of
this Article shall be deemed as a breach of contract.
10
| 9.8 |
Applicable
Laws and Dispute Settlement
|
| 9.8.1 |
Applicable
Laws
|
The
laws
of People’s Republic of China are applicable to this Agreement.
| 9.8.2 |
Dispute
Settlement
|
Both
parties shall settle their disputes through negotiations. If a dispute remains
unresolved through negotiation after 60 days, any party can submit the dispute
to the Beijing Office of China Economic and Trade Commission.
| 9.8.3 |
Waiver
of Immunity
|
Any
party
shall waive its immunity of person and assets so as to ensure the performance
of
this Agreement, no matter such immunity is granted by any arbitration
commission, any court or litigation (such as the collateral of court decision
and supplement of other legal procedures).
| 9.8.4 |
Waiver
of Judicial Decision
|
With
the
judicial settlement agreed, the parties still have right to waive judicial
settlement, litigation and counterclaim regarding this Agreement and any
infringement.
| 9.9 |
Copies
of Agreement
|
Four
copies of this Agreement shall be made. Each party owns 2 copies.
11
Signature
Page
Seller:
Tianjin Huan-ou Semiconductor Technology Inc, Ltd.
Address:
Xx. 00 X Xxxxxx Xx., Xxxxxxx Xxxxxxxxxx Xxxxxxxx (Huanwai), Tianjin, China
Signature:
Stamp:
Title:
Date:
July 17, 2008
Buyer:
Perfectenergy (Shanghai), Ltd.
Address:
No. 000 X Xxxxxxxxx Xx., Xxxxxxxx, Xxxxx 000000
Signature:
Stamp:
Title:
Date:
July 20, 2008
12
Appendix
1: Annual Supply Volume
(Unit:
10,000 pieces)
|
Time
of Supply
|
2009
|
0000
|
0000
|
0000
|
0000
|
Total
|
|
Number
of Supply
|
1275
|
1715
|
1720
|
1726
|
1735
|
8171
|
Appendix
2: Purchase Order Requirements
| 1. |
The
purchase order shall accord with all articles of this
Agreement.
|
| 2. |
The
purchase order shall state the product name, price and
number.
|
| 3. |
The
purchase order shall state the delivery articles and delivery
place.
|
| 4. |
The
purchase order shall state the time of
delivery.
|
| 5. |
The
purchase order shall state the time of
issuance.
|
| 6. |
The
purchase order shall state all the other agreement of the parties.
|
Appendix
3: Technological Specifications
| 1. |
Product
Description: Monocrystalline silicon
(SOLAR-WAFER)
|
| 2. |
Product
Specificaton:
|
Conductor
type: Type P
Crystallographic
directions: <100>+3
Size:
125mm x 125mm+0.5mm
Diagonal
diameter: ≥
X
000
xx ± 0.5mm
Electrical
resistance: 0.5-3
Ω
C.T ,
3-6 Ω, cm
TTV:
<
50
µm
Minority
carrier life: >
10
µs
Thickness
Stall: 180
+
20
µm
No
fracture, no hole, no stria
Appendix
4: Supply Cycle, Quantity and Price (2008-2013)
(Unit:
10,000 pieces/ 10,000 RMB)
|
Time
of Supply
|
2009
|
0000
|
0000
|
0000
|
0000
|
Total
|
|
Number
of Supply (10,000
pieces)
|
1275
|
1715
|
1720
|
1726
|
1735
|
8171
|
|
Price
(RMB/Piece)
|
47.5
|
35
|
26
|
23.5
|
22.5
|
|
|
Annual
Purchase (10,000 RMB)
|
60562.5
|
60025
|
44720
|
40561
|
39037.5
|
244906
|
13
Price
Floatation: to remain the competitiveness, the parties agree that they can
adjust the price based on the market price since 2011. The agreed price can
have
a +5%
floatation after negotiation.
Appendix
5: Refund of Advance Payment
(Unit:
RMB)
|
Year
|
2009
|
0000
|
0000
|
0000
|
0000
|
|
Refund
Per Year
|
20,000,000
|
20,000,000
|
20,000,000,
|
20,000,000
|
20,000,000
|
|
Advance
Payment Balance (at the end of year)
|
80,000,000
|
60,000,000
|
40,000,000
|
20,000,000
|
0
|
Appendix
6: Supplement Agreement and Modification
14
