EXHIBIT 4.12
WARRANT SIDE LETTER
BAYTREE INVESTMENTS (MAURITIUS) PTE LTD.
December 20, 2006
To: Yingli Green Energy Holding Company Limited
Xx. Xxxxxxxxx Xxxx
Yingli Power Holding Company Ltd.
Address: No. 3055 Middle Fuxing Road
Baoding, People's Republic of China
Facsimile No.: x00 000 0000 000
Attn: Conghui Liu
Ladies and Gentlemen:
Reference is made to the Amended Series B Preferred Share Purchase
Agreement, dated December 15, 2006, as amended and restated from time to time
(the "Purchase Agreement"), by and between the Investors, the Company, the
Holdco and the Founder. Capitalized terms used but not defined herein shall have
the meaning set forth in the Purchase Agreement.
Immediately after but in no event later than one Business Day following the
Closing, the Company shall grant a warrant to purchase its Ordinary Shares in
the form attached hereto as Appendix A (the "Warrant") to each Investor other
than an Advance Payment Investor (the "Warrantholder") on the terms and
conditions set forth below:
(a) Number of Warrant Shares: The Company shall grant to each
Warrantholder such number of Warrants that the sum of the number of Ordinary
Shares that may be purchased by such Warrantholder under the Purchase Agreement
and the number of Ordinary Shares into which the Warrant is exercisable (the
"Warrant Shares") shall equal in value to a percentage of the equity interest in
Tianwei Yingli as if the Shareholder Loan were fully converted into the
Company's equity interest in Tianwei Yingli and the amount of the Capital
Increase had included the full amount of the Shareholder Loan. The aggregate
number of the Warrant Shares shall be calculated as follows:
Total number of the Warrant Shares to be issued = (Total Share Capital *
Indifference Stake of the Shareholder Loan - Released Shares) / (1 -
Indifference Stake of the Shareholder Loan), where:
(i) Total Share Capital = The total number of shares of the Company
outstanding following the issuance of the Series B Preferred Shares
pursuant to the Purchase Agreement + the total number of Ordinary Shares
issuable
pursuant to the TB Warrant (as defined in Section 2.04 of the Disclosure
Schedule) + the total number of Ordinary Shares issued to or issuable
pursuant to the exercise of stock options reserved for officers, directors,
and employees of, and consultants to, the Company and the Subsidiaries
(excluding those Ordinary Shares and stock options that constitute New
Securities (as defined in the Shareholders Agreement));
(ii) Released Shares = The total number of Shares issued pursuant to the
Purchase Agreement - (the total number of Shares held in escrow in the
Escrow Account and the total number of Shares issued to the Advance Payment
Investors); and
(ii) Indifference Stake of the Shareholder Loan = The effective equity
interest in Tianwei Yingli represented by the Shareholder Loan / 62.13%.
The Warrant Shares allocated to each Warrant issued to each Warrantholder
shall be proportionate to such Warrantholder's contribution to the
aggregate Released Amount.
Illustration:
Assuming (A) the total amount of the Series B investment is US$118 million,
(B) the price per Series B Preferred Shares is US$4.835, and (C) the
principal amount of the Shareholder Loan is US$78.4 million (consisting of
US$36 million from Baytree and US$42.4 million from other Series B
Investors), then:
- The Total Share Capital would be 96,359,324 shares, which includes
16,215,098 Released Shares consisting of 7,445,708 Released Shares
issued to Baytree and 8,769,390 Released Shares issued to other Series
B Investors;
- The effective equity interest in Tianwei Yingli represented by the
Shareholder Loan would be US$78.4 million divided by US$678 million,
or approximately 11.56342%;
- The Indifference Stake of the Shareholder Loan would be 11.56342%
divided by 62.13%, or approximately 18.6117%; and
- The total Warrant Shares would be (96,359,324 * 18.6117% - 16,215,098)
/ (1 - 18.6117%), or approximately 2,112,057 shares, and the Warrant
Shares allocated to the Warrant issued to Baytree shall be
proportionate to its contribution to the aggregate Released Amount.
(b) Exercise Price. The exercise price shall be US$0.01 per Warrant
Share.
(c) Exercise Period. Each Warrant shall be exercisable, in whole but
not in part, (i) at any time after March 31, 2007 or such later date on which
the
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Lead Series B Shareholder reasonably believes, as indicated in a prior written
notice to the Company and all of the Warrantholders, that the full conversion of
the Shareholder Loan into an equity interest in Tianwei Yingli will not be
consummated within one calendar month thereafter and (ii) prior to the earlier
of (x) the closing of the Company's Qualified IPO and (y) the conversion of the
full amount of the principal and accrued interest of the Shareholder Loan into
Tianwei Yingli's registered capital in accordance with the Joint Venture
Contract, as evidenced by a capital verification report issued by a PRC
certified public accountant and an updated business license of Tianwei Yingli to
such effect (the "Full Conversion"). The period during which the Warrant shall
be exercisable pursuant to the provisions of this Section 1.6(c) shall
hereinafter be referred to as the "Exercise Period".
(d) Conditionality. Notwithstanding anything herein to the contrary:
(i) in the event of the Full Conversion which occurs prior to the
Company's Qualified IPO, any and all outstanding Warrants shall be cancelled,
forfeited or terminated and any and all Warrant Shares issued to the
Warrantholders following the exercise of any Warrants shall be returned to the
Company for US$0.01 per Warrant Share for cancellation, and the Company shall
cancel such Warrant Shares, in each case immediately upon the Full Conversion,
and
(ii) in the event of the Full Conversion which occurs subsequent
to the Company's Qualified IPO, each Warrantholder shall either (x) return to
the Company any and all Warrant Shares issued to such Warrantholder following
the exercise of any Warrant for US$0.01 per Warrant Share for cancellation, and
the Company shall cancel such Warrant Shares, in each case immediately upon the
Full Conversion or (y) pay to the Company a sum certain the amount of which
shall be determined by mutual agreement between the Company and such
Warrantholder as soon as reasonably practicable following the Full Conversion.
For the avoidance of doubt, notwithstanding anything herein to
the contrary, no Warrants shall be granted if the Full Conversion occurs prior
to the Closing.
(e) Registration of the Shareholder Loan. The Company shall, and each
Warrantor shall procure the Company to register the Shareholder Loan with the
Baoding Branch of the State Administration of Foreign Exchange in accordance
with applicable Laws as promptly as practicable, but in no event later than ten
Business Days following the Closing. Promptly following the repayment or
conversion of the Shareholder Loan, the Company shall, and Warrantor shall
procure the Company to deregister the Shareholder Loan with the Baoding Branch
of the State Administration of Foreign Exchange in accordance with applicable
Laws as promptly as practicable, but in no event later than ten Business Days
following such repayment or conversion.
This Side Letter Agreement may not be amended or waived except by an
instrument in writing signed by the parties hereto. This Side Letter Agreement
shall
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not diminish or modify any rights of the Investors arising out of the Purchase
Agreement and the Shareholders Agreement. This Side Letter Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, and may be executed in any number of counterparts, each of which shall be
an original, and all of which, when taken together, shall constitute one
agreement. Any controversy or claim arising out of or relating to this Side
Letter Agreement shall be resolved in accordance with Section 10.10(b) of the
Purchase Agreement. Delivery of an executed signature page of this Side Letter
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. This Side Letter Agreement and its contents are
subject to the confidentiality provisions of the Purchase Agreement.
[Signature pages follow]
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Please confirm that the foregoing is our mutual understanding by signing and
returning to us an executed counterpart of this Side Letter Agreement.
Very truly yours,
BAYTREE INVESTMENTS (MAURITIUS) PTE LTD.
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Director
ACCEPTED AND AGREED TO:
YINGLI GREEN ENERGY HOLDING
COMPANY LIMITED
By: /s/ Xxxxxxxxx Xxxx
------------------------------------
Name: Xxxxxxxxx Xxxx
Title: Chairman and Chief Executive
Officer
