Exhibit 4.4
EXECUTION COPY
SOLARFUN POWER HOLDINGS CO., LTD.
SERIES A CONVERTIBLE PREFERENCE SHARES
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PURCHASE AGREEMENT
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BY AND AMONG
SOLARFUN POWER HOLDINGS CO., LTD.
YONGHUA SOLAR POWER INVESTMENT HOLDING LTD.
XXXXXXX XX(CHINESE CHARACTERS)
CITIGROUP VENTURE CAPITAL INTERNATIONAL GROWTH PARTNERSHIP, L.P.
CITIGROUP VENTURE CAPITAL INTERNATIONAL CO-INVESTMENT, L.P.
HONY CAPITAL II L.P.
LC FUND III L.P.
XXXXXXX XXXXXX XXXXX
XXXXXXX YAR KHAN
AND
GOOD ENERGIES INVESTMENTS LIMITED
DATED AS OF JUNE 6, 2006
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..........................................................1
1.1 DEFINITIONS.........................................................1
1.2 CONSTRUCTION.......................................................10
ARTICLE II PURCHASE OF THE CLOSING SHARES.....................................10
2.1 PURCHASE OF THE CLOSING SHARES.....................................10
2.2 PURCHASE PRICE.....................................................10
2.3 CLOSING............................................................10
2.4 SECOND CLOSING.....................................................11
2.5 PURCHASE PRICE ADJUSTMENTS.........................................12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THE
FOUNDER AND THE CONTROLLING SHAREHOLDER.....................................13
3.1 ORGANIZATION.......................................................13
3.2 AUTHORITY..........................................................13
3.3 VALID ISSUANCE OF PREFERENCE AND ORDINARY SHARES...................14
3.4 CAPITAL STOCK......................................................14
3.5 SUBSIDIARIES.......................................................15
3.6 NO CONFLICTS.......................................................16
3.7 GOVERNMENTAL APPROVALS AND FILINGS.................................17
3.8 BOOKS AND RECORDS..................................................17
3.9 FINANCIAL STATEMENTS...............................................17
3.10 ABSENCE OF CHANGES.................................................18
3.11 NO UNDISCLOSED LIABILITIES.........................................19
3.12 TAXES..............................................................19
3.13 LEGAL PROCEEDINGS..................................................20
3.14 COMPLIANCE WITH LAWS AND ORDERS....................................21
3.15 REAL PROPERTY......................................................21
3.16 TANGIBLE PERSONAL PROPERTY; INVESTMENT ASSETS......................21
3.17 INTELLECTUAL PROPERTY RIGHTS.......................................22
3.18 CONTRACTS AND PRODUCT CERTIFICATIONS...............................22
3.19 LICENSES...........................................................25
3.20 INSURANCE..........................................................25
i
3.21 RELATED PARTY TRANSACTIONS.........................................26
3.22 EMPLOYEES; LABOR RELATIONS.........................................26
3.23 EMPLOYEE BENEFITS..................................................27
3.24 ENVIRONMENTAL MATTERS..............................................27
3.25 SUBSTANTIAL CUSTOMERS AND SUPPLIERS................................28
3.26 [INTENTIONALLY DELETED]............................................28
3.27 ACCOUNTS RECEIVABLE................................................29
3.28 INVENTORY..........................................................29
3.29 DERIVATIVE INSTRUMENTS.............................................29
3.30 BROKERS............................................................29
3.31 ETHICAL PRACTICES..................................................29
3.32 PRIOR REGISTRATION RIGHTS..........................................30
3.33 NO STATE ASSETS....................................................30
3.34 DISCLOSURE.........................................................30
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTORS....................30
4.1 ORGANIZATION.......................................................30
4.2 AUTHORITY..........................................................30
4.3 BROKERS............................................................31
4.4 PURCHASE ENTIRELY FOR OWN ACCOUNT..................................31
4.5 RELIANCE UPON INVESTORS' REPRESENTATIONS...........................31
4.6 RECEIPT OF INFORMATION.............................................31
4.7 INVESTMENT EXPERIENCE..............................................31
4.8 ACCREDITED INVESTOR................................................32
4.9 RESTRICTED SECURITIES..............................................32
4.10 FURTHER REPRESENTATION BY FOREIGN INVESTORS........................32
ARTICLE V PRE-CLOSING COVENANTS...............................................32
5.1 CONDUCT OF BUSINESS................................................32
5.2 CERTAIN RESTRICTIONS...............................................33
5.3 REGULATORY AND OTHER APPROVALS.....................................36
5.4 ACCESS.............................................................37
5.5 ALTERNATIVE TRANSACTIONS...........................................37
5.6 FULFILLMENT OF CONDITIONS..........................................38
ARTICLE VI POST-CLOSING COVENANTS.............................................38
ii
6.1 USE OF PROCEEDS....................................................38
6.2 EMPLOYEE STOCK OPTION PLAN.........................................38
6.3 APPOINTMENT OF CHIEF FINANCIAL OFFICER.............................38
6.4 MAINTENANCE OF LICENSES............................................38
6.5 RESERVATION OF CONVERSION SHARES...................................39
6.6 FURTHER ASSURANCES.................................................39
6.7 RELATED PARTY TRANSACTION..........................................39
6.8 LABOR LAW COMPLIANCE...............................................39
6.9 PRODUCT CERTIFICATIONS.............................................39
6.10 PRODUCT WARRANTY...................................................40
6.11 ENVIRONMENTAL COMPLIANCE...........................................40
6.12 POST-CLOSING RESTRUCTURING.........................................40
6.13 2006 FINANCIAL STATEMENTS..........................................40
6.14 GOOD ENERGIES DIRECTOR.............................................40
ARTICLE VII CONDITIONS TO OBLIGATIONS OF THE INVESTORS........................40
7.1 REPRESENTATIONS AND WARRANTIES.....................................40
7.2 PERFORMANCE........................................................41
7.3 ORDERS AND LAWS....................................................41
7.4 REGULATORY CONSENTS AND APPROVALS..................................41
7.5 THIRD PARTY CONSENTS...............................................41
7.6 OPINION OF COUNSEL.................................................41
7.7 FINANCIAL STATEMENTS...............................................42
7.8 DUE DILIGENCE......................................................42
7.9 TRANSACTION DOCUMENTS..............................................42
7.10 ARTICLES OF INCORPORATION..........................................42
7.11 DIRECTORS..........................................................42
7.12 OFFICERS AND KEY EMPLOYEES.........................................42
7.13 PROCEEDINGS........................................................42
7.14 INVESTMENT COMMITTEE APPROVAL......................................42
7.15 PRE-CLOSING RESTRUCTURING..........................................42
7.16 NO MATERIAL ADVERSE CHANGE.........................................42
7.17 FEES AND EXPENSES..................................................43
7.18 ENVIRONMENTAL COMPLIANCE...........................................43
iii
7.19 ANNUAL INSPECTION..................................................43
7.20 COMPLIANCE CERTIFICATE.............................................43
7.21 SHARE CHARGE.......................................................43
7.22 CALL OPTION AGREEMENT..............................................43
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF THE COMPANY.........................44
8.1 REPRESENTATIONS AND WARRANTIES.....................................44
8.2 PERFORMANCE........................................................44
8.3 ORDERS AND LAWS....................................................44
8.4 TRANSACTION DOCUMENTS..............................................44
8.5 GOOD ENERGIES' SECOND CLOSING......................................44
ARTICLE IX SURVIVAL OF REPRESENTATIONS AND WARRANTIES.........................45
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.........................45
ARTICLE X INDEMNIFICATION AND CONTRIBUTION....................................45
10.1 INDEMNIFICATION....................................................45
10.2 CONTRIBUTION.......................................................46
10.3 NO PREJUDICE.......................................................46
ARTICLE XI TERMINATION........................................................46
11.1 PRE-CLOSING TERMINATION............................................46
11.2 EFFECT OF TERMINATION AND SURVIVAL.................................47
ARTICLE XII COVENANTS RELATED TO CONFIDENTIALITY..............................47
12.1 CONFIDENTIALITY....................................................47
12.2 RESTRICTION ON ANNOUNCEMENTS.......................................48
ARTICLE XIII GOVERNING LAW AND RESOLUTION OF DISPUTES.........................48
13.1 GOVERNING LAW......................................................48
13.2 DISPUTE RESOLUTION FORUM...........................................48
13.3 SPECIFIC PERFORMANCE...............................................49
13.4 WAIVER OF IMMUNITIES...............................................49
13.5 PERFORMANCE PENDING DISPUTE RESOLUTION.............................50
13.6 SURVIVAL...........................................................50
ARTICLE XIV MISCELLANEOUS.....................................................50
14.1 ENTIRE AGREEMENT...................................................50
14.2 BINDING EFFECT; BENEFIT............................................50
14.3 ASSIGNMENT.........................................................50
iv
14.4 AMENDMENT; WAIVER..................................................51
14.5 NOTICES............................................................51
14.6 COUNTERPARTS.......................................................56
14.7 SEVERABILITY.......................................................56
14.8 OTHER ENGAGEMENTS AND ACTIVITIES...................................57
14.9 COSTS AND EXPENSES.................................................57
14.10 FURTHER ASSURANCES.................................................57
14.11 SEPARATE OBLIGATIONS...............................................57
LIST OF EXHIBITS
EXHIBIT A SCHEDULE OF INVESTORS
EXHIBIT B FORM OF SHARE CERTIFICATE
EXHIBIT C FORM OF SHAREHOLDERS AGREEMENT
EXHIBIT D FORM OF LEGAL OPINION
EXHIBIT E ARTICLES OF INCORPORATION
EXHIBIT F RESTRUCTURING
EXHIBIT G FORM OF EMPLOYMENT AGREEMENT
EXHIBIT H FORM OF EXCHANGE RATE CONFIRMATION
EXHIBIT I FORM OF KEY EMPLOYEE EMPLOYMENT AGREEMENT
EXHIBIT J CHARGE AND ASSIGNMENT OF SHARES
EXHIBIT K CALL OPTION AGREEMENT
EXHIBIT L EXISTING SHAREHOLDERS
EXHIBIT M OTHER CONTROLLING INDIVIDUALS
LIST OF SCHEDULES
SCHEDULE 7.9 TRANSACTION DOCUMENTS
SCHEDULE 7.11 INVESTOR DIRECTORS
SCHEDULE 7.12 OFFICERS AND KEY EMPLOYEES
v
SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT (this "AGREEMENT") dated as of June 6, 2006
is made by and among (i) Solarfun Power Holdings Co., Ltd., an exempted company
incorporated and validly existing with limited liability under the laws of the
Cayman Islands (the "COMPANY"), (ii) Yonghua Solar Power Investment Holding Ltd.
(the "FOUNDER"), a company incorporated and validly existing under the laws of
the British Virgin Islands which holds 77% of the outstanding ordinary shares of
the Company immediately prior to the Closing, (iii) Xx. Xxxxxxx Xx (CHINESE
CHARACTERS), a citizen of the PRC who is the sole shareholder of the Founder
(the "CONTROLLING SHAREHOLDER"), (iv) Citigroup Venture Capital International
Growth Partnership, L.P. and Citigroup Venture Capital International
Co-Investment, L.P., each a limited partnership organized under the laws of
Cayman Islands (together, "CVCI"), (v) Hony Capital II L.P., ("HONY") and LC
Fund III L.P. ("LC"), each a limited partnership organized under the laws of the
Cayman Islands (Hony and LC together, "LEGEND"), (vi) Xxxxxxx Xxxxxx Haram, a
Lebanese citizen (Passport No.: 2145190), (vii) Rasheed Yar Khan, an Indian
citizen (Passport No.: Z1710012), (viii) Good Energies Investments Limited
("GOOD ENERGIES"), a company organized under the laws of Jersey, and (ix) any
co-investors jointly approved by CVCI, Legend, and the Company and who shall
become a party to the Transaction Documents, as defined below, by executing and
delivering a counterpart signature page to each of the Transaction Documents
(CVCI, Legend, Xxxxxxx Xxxxxx Haram, Rasheed Yar Khan, Good Energies, and other
co-investors, if any, are collectively referred to hereinafter as the
"INVESTORS" and individually a "INVESTOR").
WHEREAS:
The Company wishes to issue new Series A Convertible Preference Shares and
the Investors wish to purchase from the Company the Closing Shares at the
Closing (as defined below);
NOW THEREFORE, in consideration of the foregoing and the mutual promises,
covenants and agreements of the Parties contained herein, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. The following terms shall have the following meanings for
purposes of this Agreement:
"2006 AUDITED NET PROFIT" means the net profit of the Company as set forth
in the 2006 Financial Statements, excluding (i) any extraordinary gains; (ii)
any non-recurring gains; and (iii) any adjustments to the Company's financial
results of prior years.
"2006 FINANCIAL STATEMENTS" means the consolidated financial statements of
the Company prepared in accordance with US GAAP and audited by Ernst & Young for
the fiscal year ended on December 31, 2006 without any qualification.
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding, arbitration or
any investigation or audit by any Government Authority.
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person
(including any Subsidiary) and, for any person who is an individual, includes
such individual's spouse, and each of such individual's and such individual's
spouse's relatives to the third degree. "AFFILIATES" and "AFFILIATED" shall have
correlative meanings. For the purpose of this definition, the term "CONTROL"
(including with correlative meanings, the terms "CONTROLLING", "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"AGREEMENT" has the meaning stated in the preamble and includes the
Exhibits, and the Schedules hereto and the certificates to be delivered in
accordance with Section 7.20, as any of the same shall be amended from time to
time.
"ARTICLES OF INCORPORATION" means the memorandum and articles of
association of the Company, including the memorandum and articles of association
amended and restated in accordance with this Agreement and as amended from time
to time.
"ASSETS AND PROPERTIES" of any Person means assets and properties of any
kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including without limitation cash,
cash equivalents, Investment Assets, accounts and notes receivable, chattel
paper, documents, instruments, general intangibles, real estate, equipment,
inventory, goods and Intellectual Property.
"BANKRUPTCY EVENT" means with respect to any Person (the "BANKRUPTCY
PARTY"), (a) the commencement by it of a Bankruptcy Proceeding with respect to
itself or the consent by it to be subject to a Bankruptcy Proceeding commenced
by another Person, (b) the commencement by another Person of a Bankruptcy
Proceeding with respect to the Bankruptcy Party that remains unstayed or
undismissed for a period of thirty (30) consecutive days, (c) the appointment of
or taking possession by a Receiver over the Bankruptcy Party or any substantial
part of its property, (d) the making by the Bankruptcy Party of a general
assignment for the benefit of its creditors or the admission by the Bankruptcy
Party in writing of its inability to generally pay its debts as they come due,
(e) the entry by a court having jurisdiction over the Bankruptcy Party or a
substantial part of its property of an Order for relief under any Bankruptcy Law
which remains unstayed or undismissed for a period of thirty (30) consecutive
days, (i) adjudging the Bankruptcy Party bankrupt or insolvent, (ii) approving
as properly filed a petition
seeking the reorganization or other similar relief with respect to the
Bankruptcy Party, (iii) appointing a Receiver over the Bankruptcy Party or any
substantial part of its property or (iv) otherwise ordering the winding up and
liquidation of the Bankruptcy Party or (f) the occurrence of any event similar
to (a), (b), (c), (d) or (e) under any applicable Law with respect to the
Bankruptcy Party.
"BANKRUPTCY LAW" means any bankruptcy, insolvency, reorganization,
composition, moratorium or other similar Law.
"BANKRUPTCY PROCEEDING" means a case or proceeding under any Bankruptcy Law
wherein a Person may be adjudicated bankrupt, insolvent or become subject to an
Order of reorganization, arrangement, adjustment, winding up, dissolution,
composition or other similar Order.
"BENEFIT ARRANGEMENT" means any employment, severance or similar contract,
arrangement or policy, or any plan or arrangement (whether or not written)
providing for severance benefits, insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits or annual or monthly leave, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation rights or other forms of incentive compensation or post-retirement
insurance, compensation or benefits that (i) is not a Benefit Plan, (ii) is
entered into or maintained, by the Company or any Subsidiary, and (iii) covers
any Employee or former Employee of the Company or any Subsidiary.
"BENEFIT PLAN" means any Employee benefit plan (including pension and
severance) which (i) is maintained, administered or contributed to by the
Company or any Subsidiary or which could result in any liability for the Company
or a Subsidiary and (ii) covers any Employee or former Employee of the Company
or any Subsidiary.
"BOOKS AND RECORDS" means all files, documents, instruments, papers, books
and records relating to the Business or Condition of the Company, including
without limitation financial statements, tax returns and related work papers and
letters from accountants, budgets, pricing guidelines, ledgers, journals, deeds,
title policies, minute books, stock/share certificates and books, stock/share
transfer ledgers, Contracts, Licenses, customer lists, computer files and
programs, retrieval programs, operating data and plans and environmental studies
and plans.
"BUSINESS OR CONDITION OF THE COMPANY" means the business, condition
(financial or otherwise), results of operations, Assets and Properties and
prospects of the Company and its Subsidiaries taken as a whole.
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on which
banks located in the PRC, Hong Kong and New York are authorized or obligated to
close.
"CLOSING" shall have the meaning set forth in Section 2.3 hereof.
"CLOSING DATE" means June 16, 2006 or such other date as the Parties may
agree in writing.
"CLOSING SHARES" means 67,106,531 Series A Convertible Preference Shares of
the Company that will be issued during the Closing, and 12,538,223 Series A
Convertible Preference Shares of the Company that will be issued to the
Investors during the Second Closing, if such Second Closing takes place pursuant
to the terms and conditions of this Agreement.
"COMPANY" shall have the meaning set forth in the preamble hereof.
"COMPLETION OF POST-CLOSING RESTRUCTURING" means the obtaining of the
documents identified in Part II of Exhibit F.
"CONFIDENTIAL INFORMATION" means (a) any information concerning the
organization, business, technology, trade secrets, know-how, finance,
transactions or affairs of any Party or any Party's Representatives (whether
conveyed in written, oral or in any other form and whether such information has
been furnished before, on or after the date of this Agreement), (b) any
information or materials prepared by a Party or its Representatives that
contains or otherwise reflects, or is generated from, Confidential Information
and (c) this Agreement, the transactions contemplated hereby, including their
existence, the identity of the Investors and their Affiliates, the terms and
conditions hereof or any discussions, correspondence or other communications
among the Parties or their respective Representatives relating to this Agreement
or any of the transactions contemplated hereunder.
"CONTRACT" means any agreement, lease, license, engagement, evidence of
Indebtedness, mortgage, indenture, security agreement, financial instrument,
purchase order, commitment, arrangement, understanding or other contract
(whether written, oral or otherwise).
"EMPLOYEE STOCK OPTION PLAN" shall have the meaning set forth in Section
6.2.
"EMPLOYEE" means any officer or employee including any part-time, regular
contract or fixed-term officer or employee.
"ENCUMBRANCE" means (a) any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, deed of trust, title retention,
security interest or other encumbrance of any kind securing, or conferring any
priority of payment in respect of, any obligation of any Person, including any
right granted by a transaction which, in legal terms, is not the granting of
security but which has an economic or financial effect similar to the granting
of security under applicable Law, (ii) any lease, sub-lease, occupancy
agreement, easement or covenant granting a right of use or occupancy to any
Person, (iii) any proxy, power of attorney, voting trust agreement, interest,
option, right of first offer, negotiation or refusal or transfer restriction in
favor of any Person and (iv) any adverse claim as to title, possession or use.
"ENVIRONMENTAL CLAIM" means, with respect to any Person, any written or
oral notice, claim, demand or other communication by any other Person alleging
or asserting such Person's liability for investigatory costs, cleanup costs,
Government Authority response costs,
damages to natural resources or other property, personal injuries, fines or
penalties arising out of, based on or resulting from (a) the presence, or
Release into the environment, of any Hazardous Material at any location, whether
or not owned by such Person, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, any claim by any Government Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL LAW" means any Law relating to the regulation or protection
of human health, safety or the environment or to emissions, discharges, Releases
or threatened Releases of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes into the environment (including, ambient
air, soil, surface water, ground water, wetlands, land or subsurface strata), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes.
"EQUITY SECURITIES" means the capital stock, membership interests,
partnership interests, registered capital or other ownership interest in any
Person or any options, warrants or other securities that are directly or
indirectly convertible into, or exercisable or exchangeable for, such capital
stock, membership interests, partnership interests, registered capital or other
ownership interests (whether or not such derivative securities are issued by
such Person).
"EXISTING SHAREHOLDERS" means the existing shareholders of the Company as
set forth in Exhibit L attached hereto, each a company incorporated and validly
existing under the laws of the British Virgin Islands.
"GOVERNMENT AUTHORITY" means, with respect to a Person, any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of any jurisdiction in which such Person conducts business or
operations, any other country or territory or any province, state, county, city
or other political subdivision thereof.
"HAZARDOUS MATERIAL" means (A) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing polychlorinated
biphenyls (PCBs), (B) any chemicals or other materials or substances which are
now or hereafter become defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants"
or words of similar import in any language and under any Environmental Law, and
(C) any other chemical or other material or substance, exposure to which is now
or hereafter becomes prohibited, limited or regulated by any Government
Authority under any Environmental Law.
"IASB" means the International Accounting Standards Board.
"IFRS" means the body of pronouncements issued by the IASB, including
International Financial Reporting Standards and Interpretations approved by the
IASB, International Accounting Standards and Standing Interpretations Committee
interpretations approved by the predecessor International Accounting Standards
Committee.
"INDEBTEDNESS" of any Person means all obligations (contingent or
otherwise) of such Person (i) for borrowed money, (ii) evidenced by notes,
bonds, debentures or similar instruments, (iii) for the deferred purchase price
of goods or services (other than trade payables or accruals incurred in the
ordinary course of business), (iv) under capital leases and (v) in the nature of
guarantees of the obligations described in clauses (i) through (iv) above of any
other Person.
"INTELLECTUAL PROPERTY" means all patents and patent rights, entity models,
trademarks and trademark rights, trade names and trade name rights, service
marks and service xxxx rights, service names and service name rights, brand
names, internet domain names and sub-domains, inventions, processes, formulae,
copyrights and copyright rights, trade dress, business and product names, logos,
slogans, trade secrets, industrial models, processes, designs, methodologies,
computer programs (including all source codes), license rights to use packaged
software and related documentation, technical information, manufacturing,
engineering and technical drawings, know-how and all pending applications for
and registrations of patents, entity models, trademarks, service marks,
copyrights and internet domain names and sub-domains.
"INVESTMENT ASSETS" means all debentures, notes and other evidences of
Indebtedness, Equity Securities, interests in joint ventures and general and
limited partnerships, mortgage loans and other investment or portfolio assets
owned legally or beneficially by the Company or any Subsidiary and issued by any
Person other than the Company or any Subsidiary (other than trade receivables
generated in the ordinary course of business of the Company and the
Subsidiaries).
"INVESTOR" shall have the meaning set forth in the preamble hereof.
"INVESTOR INDEMNIFIED PARTIES" means the Investor and each of its
Representatives.
"KNOWLEDGE OF THE COMPANY" or "KNOWN TO THE COMPANY" means the knowledge of
the Company or any officer, director or Employee of the Company or any
Subsidiary after due inquiry and investigation.
"LAW" means any law, treaty, statute, ordinance, code, rule or regulation
of any Government Authority or any Order.
"LIABILITIES" means all Indebtedness, obligations and other liabilities of
a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or become due).
"LICENSES" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Government Authority.
"LOSS" means any and all damages, fines, fees, penalties, deficiencies,
losses and expenses of any kind or nature whatsoever (including interest, court
costs, fees of attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or assessment).
"MATERIAL ADVERSE EFFECT" means an effect of any change, circumstance,
condition, development, effect, event, occurrence or state of facts that,
individually or in the aggregate, is or has been, or would reasonably be
expected to be, materially adverse to (a) the Business or Condition of the
Company, or (b) on the validity or enforceability of this Agreement or any other
Transaction Documents or on the ability of the Company, the Founder or the
Controlling Shareholder to consummate the transactions contemplated hereby and
thereby.
"MOFCOM" means the Ministry of Commerce or, with respect to any matter to
be submitted for examination and approval by the Ministry of Commerce, any
government entity which is similarly competent to examine and approve such
matters under the Laws of the PRC.
"OPTION" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any Equity
Securities or (ii) receive or exercise any benefits or rights similar to any
rights enjoyed by or accruing to the holder of Equity Securities of such Person,
including any rights to participate in the equity or income of such Person or to
participate in or direct the election of any directors or officers of such
Person or the manner in which any Equity Securities of such Person are voted.
"ORDER" means any writ, judgment, decree, injunction, award or similar
order of any Government Authority (in each such case whether preliminary or
final).
"ORDINARY SHARES" means the Company's ordinary voting shares, par value
US$0.0001 per share, including any combinations, splits or reclassifications
thereof.
"OTHER CONTROLLING INDIVIDUALS" means the individuals listed on Exhibit M
of this Agreement.
"OTHER EXISTING SHAREHOLDERS" means the Existing Shareholders other than
Yonghua Solar Power Investment Holding Ltd.
"OUT-OF-POCKET EXPENSES" means expenses of the Investors incurred in
connection with the engagement of (i) Milbank, Tweed, Xxxxxx & XxXxxx LLP,
Fangda Partners and Walkers in connection with the transactions contemplated
hereunder and otherwise arising from, related to or in connection with the
preparation, execution, delivery and performance of this Agreement and each
other Transaction Document and (ii) the Hong Kong
office of Deloitte Touche & Tohmatsu for the tax-related due diligence in
connection the transactions contemplated in this Agreement.
"PARTIES" means collectively the Investors, the Company, the Founder, and
the Controlling Shareholder. Each of the Parties shall be referred to as
"PARTY."
"PERMITTED TRANSFEREE" shall have the meaning set forth in Section 14.3(b)
of this Agreement.
"PERSON" means an individual, firm, corporation, partnership, association,
limited liability company, union, trust or estate or any other entity or
organization whether or not having separate legal existence, including any
Government Authority.
"POST-CLOSING RESTRUCTURING" means each of the transactions identified in
Part II of Exhibit F hereto.
"PRC" means the People's Republic of China, excluding the Hong Kong Special
Administrative Region, Macau Special Administrative Region and Taiwan for the
sole purpose of this Agreement.
"PRE-CLOSING RESTRUCTURING" means each of the transactions identified in
Part I of Exhibit F hereto.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Hazardous Materials through
ambient air, soil, surface water, ground water, wetlands, land or subsurface
strata.
"REPRESENTATIVES" means with respect to any Person, such Person's
directors, officers, Employees, agents, Affiliates, partners, counsel, legal and
financial advisers, accountants, consultants and controlling persons.
"RESTRUCTURING" means each of the transactions identified in Exhibit F
hereto, which include the Pre-Closing Restructuring and Post-Closing
Restructuring.
"RMB INVESTMENT AMOUNT" means the RMB equivalent of the Investor Aggregate
Purchase Price paid by each Investor at the Closing, calculated at the middle
rate of exchange between RMB and U.S. Dollars published by the People's Bank of
China as of the date of this Agreement and acknowledged by the Parties in the
form attached hereto as Exhibit H.
"SAFE" means the State Administration of Foreign Exchange of the PRC, and
any PRC governmental body that is a successor thereto.
"SAIC" means the State Administration of Industry and Commerce or, with
respect to the issuance of any business license or filing or registration to be
effected with or by the State Administration of Industry and Commerce, any
government entity which is similarly
competent to issue such business license or accept such filing or registration
under the Laws of the PRC.
"SERIES A CONVERTIBLE PREFERENCE SHARES" means the Company's series A
convertible preference shares, par value US$0.0001 per share, with terms as set
forth in the Articles of Incorporation in substantially the form attached hereto
as Exhibit E.
"SHAREHOLDERS AGREEMENT" means the shareholders agreement to be entered
into on or prior to the Closing, a form of which is attached hereto as Exhibit
C.
"SHARES" means Ordinary Shares and the Series A Convertible Preference
Shares.
"SOLARFUN JIANGSU" means Jiangsu Linyang Solarfun Co., Ltd. (CHINESE
CHARACTERS), a limited liability company incorporated and validly existing under
the Laws of the PRC and a wholly owned Subsidiary of Solar Power BVI.
"SOLAR POWER BVI" means Linyang Solar Power Investment Holding Ltd., a
business company incorporated and validly existing under the Laws of the British
Virgin Islands and a wholly owned Subsidiary of the Company.
"SUBSIDIARY" means any Person which the Company controls, directly or
indirectly. For purposes of this definition, "control" has the meaning set forth
above under the definition of "Affiliate."
"TAX" means any form of taxation (including any value added, excise, use,
personal property, use and occupancy, business and occupation, mercantile, real
estate, payroll, franchise or capital gains tax), estate duty, customs duty,
deduction, withholding, duty, impost, levy or fee or charge levied, collected,
withheld or assessed by any Government Authority and any interest, penalty,
surcharge or fine in connection therewith or any other measure of tax.
"TAX RETURNS" shall have the meaning set forth in Section 3.12 hereof.
"TRANSACTION DOCUMENTS" means this Agreement, the Shareholders Agreement
and each of the agreements and documents set forth in Schedule 7.9 hereto,
including without limitation this Agreement and the Shareholders Agreement.
"US GAAP" means U.S. generally accepted accounting principles ,
consistently applied throughout the specified period and in the immediately
prior comparable period.
1.2 CONSTRUCTION. Whenever used in this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, any noun or pronoun
shall be deemed to include the plural as well as the singular and to cover all
genders. Unless otherwise specified, words such as "herein," "hereof," "hereby,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular clause or sub-clause of this Agreement, and references
herein to "articles" or "clauses" refer to articles or clauses of this
Agreement. Unless otherwise specified, references herein to the word "including"
shall be deemed to be followed by words "without limitation" or "but not limited
to," as applicable, or words of similar import. In the event that any translated
version of this Agreement differs from the English version, the English version
shall control. Whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless Business Days are specified.
ARTICLE II
PURCHASE OF THE CLOSING SHARES
2.1 PURCHASE OF THE CLOSING SHARES. At the Closing, and subject to the
terms and conditions of this Agreement, each Investor shall purchase from the
Company and the Company shall issue to each Investor that number of Series A
Convertible Preference Shares set forth opposite each Investor's name on Exhibit
A attached hereto. If the purchase and sale of the Closing Shares is consummated
in accordance with this Agreement, the equity percentage (the "INVESTOR INITIAL
SHARE PERCENTAGE") held by each Investor in the Company on an as converted and
fully-diluted basis (excluding the number of Ordinary Shares to be issued by the
Company pursuant to the Employee Stock Option Plan) shall be calculated based on
the following formula:
RMB Investment Amount
Investor Initial Share Percentage = ----------------------------
8 x XXX 000 million
The Investor Initial Share Percentage upon the Closing is set forth in Exhibit
A-1 hereof.
2.2 PURCHASE PRICE. At the Closing and subject to the terms and conditions
of this Agreement, each Investor will pay a purchase price per Series A
Convertible Preference Share (the "PURCHASE Price") representing (x) the
Aggregate Purchase Price divided by (y) the number of the Closing Shares. The
aggregate purchase price for the Closing Shares shall be Forty Eight Million US
Dollars (US$48,000,000) (the "AGGREGATE PURCHASE PRICE") and the aggregate
purchase price to be paid by each Investor (the "INVESTOR AGGREGATE PURCHASE
PRICE") at the Closing for the number of Series A Convertible Preference Shares
sold to such Investor and its equivalent RMB Investment Amount are set forth on
Exhibit A-1 attached hereto.
2.3 CLOSING. Subject to the terms and conditions of this Agreement, the
closing (the "CLOSING") shall take place on the Closing Date at the offices of
Milbank, Tweed Hadley & XxXxxx LLP, 3007 Xxxxxxxxx Xxxxx, 00 Xxxxxx Xxxx, Xxxx
Xxxx, or at such other time and place as the Parties mutually agree. At Closing:
(a) The Company shall deliver or cause to be delivered to each Investor (i)
a share certificate in a form attached hereto as Exhibit B representing the
number of Series A Convertible Preference Shares sold to such Investor and (ii)
a copy of the Company's register of members certified by an authorized officer
of the Company on which such Investor shall be registered as a record owner of
the number of Series A Convertible Preference Shares sold to such Investor;
(b) (i) Fifty percent (50%) of the Aggregate Purchase Price shall be paid
by the Investors to the Company by wire transfer of immediately available funds
to a bank account opened by the Company prior to the Closing with the Standard
Chartered Bank, Shenzhen Branch; provided that prior to the Completion of
Post-Closing Restructuring, any disbursement and use of funds from this account
shall require co-signatures by one (1) representative designated by CVCI, one
(1) representative designated by Hony, one (1) representative designated by LC,
and one (1) representative designated by the Company; and (ii) the remaining
balance of the Aggregate Purchase Price shall be paid by the Investors to the
Company by wire transfer of immediately available funds to an account to be
designated by the Company at least five (5) Business Days prior to the Closing.
(c) Each Party shall complete or deliver, as applicable, each other item
that is to be completed or delivered by it at Closing in accordance with this
Agreement and applicable Law.
2.4 SECOND CLOSING.
(a) Subject to the condition set forth in Section 8.5 hereof, the Purchase
Price shall be adjusted downward and the adjusted purchase price (the "ADJUSTED
PURCHASE PRICE") shall be the result representing (x) Fifty Three Million US
Dollars divided by (y) the number of the Closing Shares (including the number of
Series A Convertible Preference Shares to be issued at the Second Closing). The
Company shall issue to each of the Investors such additional number of Series A
Convertible Preference Shares for no additional consideration so that the total
number of Series A Convertible Preference Shares owned by each Investor will
equal to the result representing (x) the Investor Aggregate Purchase Price
divided by (y) the Adjusted Purchase Price. In addition, Good Energies shall
purchase from the Company and the Company shall issue to Good Energies that
number of Series A Preference Shares at the Adjusted Purchase Price for an
aggregate purchase price of Five Million US Dollars (US$5,000,000). The number
of additional Series A Convertible Preference Share issued to each Investor
under this Section 2.4 is set forth in Exhibit A-2 hereto.
(b) The closing for the issuance of additional Series A Convertible
Preference Shares under this Section 2.4 (the "SECOND CLOSING") shall take place
as soon as practical after the condition set forth in Section 8.5 of this
Agreement is satisfied and, at the Second Closing, the Company shall deliver or
cause to be delivered to each Investor (i) a share certificate in a form
attached hereto as Exhibit B representing the number of Series A Convertible
Preference Shares issued to such Investor under this Section 2.4 and (ii) a copy
of the Company's register of members certified by an authorized officer of the
Company on which such Investor shall be registered as a record owner of the
number of Series A Convertible Preference Shares issued to
such Investor under this Section 2.4. In the event that the Second Closing takes
place in accordance with the terms and conditions of this Agreement, the
Investor Initial Share Percentage, Investor Aggregate Purchase Price and the RMB
Investment Amount with respect to Good Energies shall be reflected to take into
account Good Energies' aggregate investment amount at both the Closing and the
Second Closing. The Investor Initial Share Percentage, Investor Aggregate
Purchase Price and RMB Investment Amount upon the Second Closing are also set
forth in Exhibit A-2 of this Agreement.
2.5 PURCHASE PRICE ADJUSTMENTS.
(a) On the date the 2006 Financial Statements are issued (the "ADJUSTMENT
DATE"), if the 2006 Audited Net Profit of the Company shall be greater than
RMB120 million, the Purchase Price shall be adjusted upward and certain number
of Series A Convertible Preference Shares sold to the Investors shall be
redeemed for no consideration so that each Investor's adjusted share percentage
(each an "INVESTOR ADJUSTED SHARE PERCENTAGE") in the Company after such
adjustment shall be equal to the result calculated in accordance with the
following formula:
RMB120 million
A = B x -----------------------------------------------------------------
RMB120 million + (2006 Audited Net Profit -- RMB120 million) / 2
For purpose of the foregoing formula, the following definition shall apply:
(i) A shall mean the Investor Adjusted Share Percentage; and
(ii) B shall mean the Investor Initial Share Percentage.
provided that, in the event that the Company completes an initial public
offering prior to the Adjustment Date, each of the Investors shall transfer to
the Existing Shareholders, free and clear of all Encumbrances and for no
consideration, certain number of Ordinary Shares converted from the Closing
Shares held by the Investors on a pro rata basis of the aggregate Closing Shares
held by the Investors, so that each Investor's adjusted share percentage will be
equal to the result calculated in accordance with the formula set forth in this
Section 2.5(a); and provided further that, to the extent that the 2006 Audited
Net Profit shall be greater than RMB158 million, the adjustment shall be made in
accordance with the formula provided above as if the 2006 Audited Net Profit is
equal to RMB158 million.
(b) On the Adjustment Date, if the 2006 Audited Net Profit of the Company
shall be less than RMB120 million, then the Purchase Price will be adjusted
downward and the Company will issue a number of the Company's Series A
Convertible Preference Shares as bonus Shares to the Investor (for which the
Investor shall not be required to pay) so that each Investor's adjusted share
percentage in the Company after such adjustment shall be such Investor's
Investor Initial Share Percentage multiplied by (x) RMB120 million divided by
(y) the 2006 Audited Net Profit; provided that in the event that the Company
completes an initial public offering prior to the Adjustment Date, the Company
shall not be obligated to issue any additional
shares to the Investors and each of the Founder and the Other Existing
Shareholders shall, and each of the Controlling Shareholder and the Other
Controlling Individuals shall cause each of the Founder and the Other Existing
Shareholders to, transfer to the Investors, for no consideration, certain number
of Ordinary Shares of the Company held by the Founder and the Other Existing
Shareholders on a pro rata basis based on the total number of Ordinary Shares
held thereby, free and clear of all Encumbrances, so that each Investor's
adjusted share percentage will be equal to the result calculated in accordance
with the formula set forth in the first sentence of this Section 2.5(b); and
provided further that, in the event that the Company completes an initial public
offering prior to the Adjustment Date, to the extent that the 2006 Audited Net
Profit shall be lower than RMB100 million, the adjustment shall be made in
accordance with the formula provided in the first sentence of this Section
2.5(b) as if the 2006 Audited Net Profit is equal to RMB100 million.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THE FOUNDER AND
THE CONTROLLING SHAREHOLDER
The Company, the Founder and the Controlling Shareholder hereby jointly and
severally represent and warrant to the Investor as of the date hereof and as of
the Closing Date (unless a representation or warranty is specified to be made as
of another time, in which it shall be made at such other time) as follows:
3.1 ORGANIZATION. The Company is an exempted limited liability company duly
organized, validly existing and in good standing under the laws of the Cayman
Islands. The Company has the full corporate power and authority to conduct its
business as and to the extent now conducted or as proposed to be conducted and
to own, use and lease its Assets and Properties. The Company is duly qualified,
licensed or admitted to do business in each jurisdiction in which the ownership,
use or leasing of its Assets and Properties, or the conduct or nature of its
business, makes such qualification, licensing or admission necessary. A true,
complete and up-to-date copy of the Articles of Incorporation have been
delivered to the Investors.
3.2 AUTHORITY.
(a) Each of the Company, the Founder and the Controlling Shareholder has
all requisite power and authority to execute and deliver each of the Transaction
Documents to which it is a party and to carry out and perform its obligations
hereunder and thereunder. The execution and delivery by the Company of this
Agreement and each other Transaction Document to which it is a party and the
performance by the Company of each of its obligations hereunder and thereunder
have been duly and validly authorized by all necessary action of the Company
(including all necessary corporate action).
(b) This Agreement has been duly and validly executed and delivered by the
Company, the Founder and the Controlling Shareholder and, assuming due
authorization, execution and delivery by the Investors, constitutes a legal,
valid and binding obligation of the Company, the Founder and the Controlling
Shareholder, enforceable against the Company, the
Founder and the Controlling Shareholder in accordance with its terms. Each of
the Transaction Documents other than this Agreement, when executed and delivered
by the Company, the Founder and/or the Controlling Shareholder, as the case may
be, will, assuming due authorization, execution and delivery by the Investors,
constitute, a legal, valid and binding obligation of the Company, the Founder
and/or the Controlling Shareholder, as the case may be, enforceable against the
Company, the Founder and/or the Controlling Shareholder, as the case may be, in
accordance with its terms.
(c) The authorization, issuance (or reservation for issuance), sale and
delivery of the Closing Shares being sold hereunder (including as a result of
any purchase price adjustment pursuant to Section 2.5 hereof) and the Ordinary
Shares issuable upon conversion of the Closing Shares has been taken or will be
taken prior to the Closing.
3.3 VALID ISSUANCE OF PREFERENCE AND ORDINARY SHARES. The Closing Shares
being purchased by the Investors hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable, free and
clear of all Encumbrances, and free of restrictions on transfer other than
restrictions on transfer under U.S. federal securities laws, and a certificate
or certificates will be delivered to each Investor at the Closing (or the Second
Closing as the case may be) to evidence the number of Series A Convertible
Preference Shares that each Investor will own upon the Closing (or the Second
Closing as the case may be). The entry of the Investors' names into the register
of members of the Company will transfer to the Investors good and valid title to
such Closing Shares, free and clear of all Encumbrances, except for restrictions
on transfer under the Shareholders Agreement. The Ordinary Shares issuable upon
conversion of the Closing Shares has been duly and validly reserved for issuance
and, upon issuance in accordance with the terms of the Articles of
Incorporation, will be duly and validly issued, fully paid and nonassessable,
free of clear of all Encumbrances and free of restrictions on transfer other
than restrictions on transfer under U.S. federal securities laws and the
Shareholders Agreement.
3.4 CAPITAL STOCK.
(a) Immediately prior to the Closing, the authorized share capital of the
Company consists of (a) 100,000,000 shares of preference shares, par value
US$0.0001 per share, all of which have been designated Series A Convertible
Preference Shares, none of which are issued and outstanding and (b) 400,000,000
Ordinary Shares, par value US$0.0001 per share, of which 100,350,000 are issued
and outstanding. Each of the issued and outstanding Shares, have been duly
authorized, validly issued, fully paid and nonassessable. Except as set forth in
Schedule 3.4(a) attached hereto, there are no outstanding Options, right of
first refusal, preemptive rights or other rights or agreements, either directly
or indirectly, to purchase or otherwise acquire or issue any Equity Securities
of the Company.
(b) No stock plan, stock purchase, stock option or other agreement or
understanding between the Company and any holder of any Equity Securities or
rights to purchase Equity Securities provides for acceleration or other changes
in the vesting provisions or other terms of such agreement or understanding as
the result of any merger, consolidation, sale
of stock or assets, change in control or any other transaction(s) by the
Company.
3.5 SUBSIDIARIES.
(a) Schedule 3.5(a) accurately lists the name and the jurisdiction of
organization of each Subsidiary. Each Subsidiary is a corporation duly organized
and validly existing under the Laws of its jurisdiction of incorporation, and
has full corporate power and authority to conduct its business as and to the
extent now conducted or as proposed to be conducted and to own, use and lease
its Assets and Properties. Each Subsidiary is duly qualified, licensed or
admitted to do business in each jurisdiction in which it currently conducts
business and has all necessary licenses, franchises, concessions, consents,
authorizations, approvals, orders, certificates and permits of and from, and has
made all declarations and filings with, all Government Authorities to own, use
and lease its Assets and Properties and to conduct business. All filings and
registrations with the relevant PRC Government Authority required in respect of
all Subsidiaries which are incorporated under the Laws of the PRC, including but
not limited to registration with MOFCOM, SAIC and SAFE have been duly and timely
completed in accordance with the relevant PRC Laws, except for such failures
that would not, individually or in the aggregate, have a Material Adverse
Effect. Neither the Company, the Founder nor the Controlling Shareholder has any
reason to believe that any Government Authority is considering modifying,
suspending or revoking any such licenses, consents, authorizations, approvals,
orders, certificates or permits and the Company and each of its Subsidiaries are
in compliance with the provisions of all such licenses, consents,
authorizations, approvals, orders, certificates or permits in all respects. A
true, complete and up-to-date copy of the articles of incorporation and/or other
constitutional documents of each Subsidiary has been delivered to the Investors,
and such constitutional documents have been duly adopted and approved or issued
(as applicable) by the appropriate authorities and are valid and in full force
and effect.
(b) Schedule 3.5(b) accurately lists for each Subsidiary, the amount of its
authorized capital stock, the amount of its outstanding capital stock or its
equivalent and the record owners and beneficial owners, if different from the
record owners, of such outstanding capital stock or its equivalent. All of the
outstanding shares of capital stock or its equivalent of each Subsidiary have
been duly authorized and validly issued, are fully paid and nonassessable, and
are owned, beneficially and legally by the Company or Subsidiaries wholly owned
by the Company free and clear of all Encumbrances. There are no outstanding
Options or other rights, agreements, arrangements or commitments to which any
Subsidiary is a party or by which any Subsidiary is bound relating to the issued
or unissued shares of capital stock or its equivalent or any security of any
kind convertible into or exchangeable for any shares of capital stock of any
Subsidiary.
(c) Except in respect of any interest held in any Subsidiaries, none of the
Company or any Subsidiaries owns or controls, directly or indirectly, any
interest in any other Person. Except as set forth in Schedule 3.5(c), none of
the Company or any Subsidiary maintains any offices or any branches. The Company
does not have any Assets or Properties other than its equity interest in the
Subsidiaries. In respect of any ownership interest held in a Subsidiary by the
Company or another Subsidiary, (i) the Company or such other Subsidiary holds
good and valid title to such ownership interest free and clear of all
restrictions on transfer
or other encumbrances, other than those restrictions on transfer or other
encumbrances created by the Transaction Documents, (ii) such ownership interest
was acquired in compliance with all applicable Laws, including those promulgated
by SAFE and those regulating the offer, sale or issuance of securities
generally, and (iii) there are no outstanding Options or rights for the purchase
or acquisition from the Company or such other Subsidiary of such ownership
interest.
(d) The Subsidiaries are not prohibited, directly or indirectly, from
making any payments, dividends or other distributions to the Company or from
making any other distribution on the Subsidiaries' equity interest or from
transferring any of the Subsidiaries' property or assets to the Company. All
dividends and other distributions declared and payable upon the equity interest
in the Subsidiaries to the Company may be converted into foreign currency that
may be freely transferred out of the PRC.
3.6 NO CONFLICTS. The execution and delivery by the Company, the Founder
and the Controlling Shareholder of this Agreement and each other Transaction
Document to which it is a party does not, and the performance by the Company,
the Founder and the Controlling Shareholder of each of their respective
obligations under this Agreement and such other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, including
without limitation the Restructuring, will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the formation and/or constitutional documents of the
Company or any Subsidiary;
(b) conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to the Company, any Subsidiary, the
Founder or the Controlling Shareholder, or any of their respective Assets and
Properties; or
(c) except as disclosed in Schedule 3.6 hereto, (i) conflict with or result
in a violation or breach of, (ii) constitute (with or without notice or lapse of
time or both) a default under, (iii) require the Company, any Subsidiary, the
Founder or the Controlling Shareholder to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a result or under
the terms of, (iv) result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, (v) result in
or give to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under, or (vi) result in the
creation or imposition of any Encumbrance upon the Company, any Subsidiary, the
Founder or the Controlling Shareholder or any of their respective Assets and
Properties under, any Contract or License to which the Company, any Subsidiary,
the Founder or the Controlling Shareholder is a party or under which any of
their respective Assets and Properties is bound.
3.7 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed in Schedule 3.7
hereto, no consent, approval, order, license, authorization or action of, or
registration, qualification, designation, declaration or filing with, or notice
to any Government Authority on the part of the Company, any Subsidiary, the
Founder or the Controlling Shareholder is required in connection with the
execution, delivery and performance of this Agreement or any other Transaction
Document to which any of them is a party or the consummation of the transactions
contemplated hereby or thereby, including without limitation the Restructuring,
or for the normal business operations of the Company or any Subsidiary.
3.8 BOOKS AND RECORDS. The minute books and other similar records of the
Company and the Subsidiaries as made available to the Investors prior to the
execution of this Agreement contain a true and complete record of all action
taken at all meetings and by all written consents in lieu of meetings of the
shareholders, the boards of directors and any committees of the boards of
directors of the Company and each of the Subsidiaries. The stock transfer
ledgers and other similar records of the Company and each of the Subsidiaries as
made available to the Investors prior to the execution of this Agreement
accurately reflect all record transfers prior to the execution of this Agreement
in the Shares of the Company and the Subsidiaries. Neither the Company nor any
Subsidiary has any of its Books and Records recorded, stored, maintained,
operated or otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of the Company or such
Subsidiary.
3.9 FINANCIAL STATEMENTS. Prior to the execution of this Agreement, the
Company has delivered to the Investors true and complete copies of the
consolidated financial statements of Solarfun Jiangsu audited by Ernst & Young
for the fiscal years ended on December 31, 2004 and December 31, 2005, including
notes thereto, and unaudited consolidated financial statements of Solarfun
Jiangsu as of and for the three-month period ended on March 31, 2006 (such
audited and unaudited financial statements collectively the "FINANCIAL
STATEMENTS"). Except as set forth in the notes thereto, the Financial Statements
(i) were prepared in accordance with IFRS, (ii) fairly present the financial
condition and results of operations of each Subsidiary of the Company as of the
date thereof and for the period covered thereby, and (iii) were compiled from
the Books and Records of the Subsidiaries of the Company regularly maintained by
management and used to prepare the financial statements of the Subsidiaries of
the Company in accordance with the principles stated therein. The Subsidiaries
have maintained their respective Books and Records in a manner sufficient to
permit the preparation of financial statements in accordance with IFRS. Except
for those Subsidiaries listed in Schedule 3.9, the financial condition and
results of operations of each Subsidiary are, and for all periods referred to in
this Section 3.9 have been, consolidated with those of Solarfun Jiangsu.
3.10 ABSENCE OF CHANGES. Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto on or prior to the
Closing Date, since December 31, 2005 there has not been any material adverse
change, or any event or development which, individually or together with other
such events, could reasonably be expected to result in a material adverse
change, in the Business or Condition of the Company or its Subsidiaries. Without
limiting the foregoing, except as disclosed in Schedule 3.10, there has not
occurred since December 31, 2005:
(a) any declaration, setting aside or payment of any dividend or other
distribution in respect of the Equity Securities of the Company or any
Subsidiary, or any direct or indirect redemption, purchase or other acquisition
by the Company or any Subsidiary of any such Equity Securities of or any Option
with respect to the Company or any Subsidiary;
(b) any authorization, issuance, sale or other disposition by the Company
or any Subsidiary of any Equity Securities of or Option with respect to the
Company or any Subsidiary, or any modification or amendment of any right of any
holder of any outstanding Equity Securities of or Option with respect to the
Company or any Subsidiary;
(c) (x) any increase in the salary, wages or other compensation of any
officer, Employee or consultant of the Company or any Subsidiary, (y) any
establishment or modification of (A) target, goals, pools or similar provisions
in respect of any fiscal year under any Benefit Plan, employment related
Contract or other Employee compensation arrangement or (B) salary ranges,
increase guidelines or similar provisions in respect of any Benefit Plan,
employment related Contract or other Employee compensation arrangement, or (z)
any adoption, entering into or becoming bound by any Benefit Plan, employment
related Contract or collective bargaining agreement, or amendment, modification
or termination (partial or complete) of any Benefit Plan, employment related
Contract or collective bargaining agreement;
(d) (A) incurrence by the Company or any Subsidiary of Indebtedness other
than in the ordinary course of business or (B) any voluntary purchase,
cancellation, prepayment or complete or partial discharge in advance of a
scheduled payment date with respect to, or waiver of any right of the Company or
any Subsidiary under, any Indebtedness of or owing to the Company or any
Subsidiary other than in the ordinary course of business;
(e) any physical damage, destruction or other casualty loss (whether or not
covered by insurance) materially affecting any of the plant, real or personal
property or equipment of the Company or any Subsidiary;
(f) any material change in (x) any pricing, investment, accounting,
financial reporting, inventory, credit, allowance or Tax practice or policy of
the Company or any Subsidiary, or (y) any method of calculating any bad debt,
contingency or other reserve of the Company or any Subsidiary for accounting,
financial reporting or Tax purposes, or any change in the fiscal year of the
Company or any Subsidiary;
(g) any write off or write down of or any determination to write off or
write down any of the Assets and Properties of the Company or any Subsidiary;
(h) any acquisition or disposition of, or incurrence of an Encumbrance on,
any Assets and Properties of the Company or any Subsidiary exceeding RMB10
million;
(i) any (w) amendment of the Articles of Incorporation or the articles of
incorporation or other constitutional documents of any Subsidiary, (x)
recapitalization, reorganization, composition, liquidation or dissolution of the
Company or any Subsidiary, (y) merger or other business combination involving
the Company or any Subsidiary with any other Person or (z) any Bankruptcy Event
with respect to the Company or any Subsidiary;
(j) any material amendment, material modification, or termination (partial
or complete) or any material waiver under or material consent with respect to
(A) any Contract which is required (or had it been in effect on the date hereof
would have been required) to be disclosed in Schedule 3.18(a) or (B) any License
held by the Company or any Subsidiary;
(k) capital expenditure or commitments for additions to property, plant or
equipment of the Company and the Subsidiaries constituting capital assets;
(l) any commencement or termination by the Company or any Subsidiary of any
line of business;
(m) any transaction by the Company or any Subsidiary with any Existing
Shareholder or any Representative of any Existing Shareholder;
(n) any change in the accounting methods or practices followed by the
Company or any Subsidiary;
(o) any entering into of a Contract to do or engage in any of the foregoing
after the date hereof; or
(p) any other transaction involving or development affecting the Company or
any Subsidiary outside the ordinary course of business consistent with past
practice.
3.11 NO UNDISCLOSED LIABILITIES. Except as reflected or reserved against in
the balance sheets included in the Financial Statements or in the notes thereto,
there are no Liabilities against, relating to or affecting the Company or any
Subsidiary or any of their respective Assets and Properties, other than
Liabilities which, individually or in the aggregate, are not material to the
Business or Condition of the Company or any Subsidiary.
3.12 TAXES.
(a) The Company and each Subsidiary has filed all Tax returns, statements,
reports and forms (including estimated Tax returns and reports and information
returns and reports) ("TAX RETURNS") that it was required to file in accordance
with all applicable Laws. All such Tax Returns were true, correct and complete.
All Taxes which have become due and payable by the Company and each Subsidiary
(whether or not shown on any Tax Return) have
been fully paid. Neither the Company nor any Subsidiary is currently the
beneficiary of any extension of time within which to file any Tax Return. No
claim has been made by a Government Authority in a jurisdiction where the
Company or any Subsidiary does not file Tax returns that the Company or any
Subsidiary is or may be subject to Taxation by that jurisdiction. There are no
security interests on any of the Assets and Properties of the Company or any
Subsidiary that arose in connection with any failure (or alleged failure) to pay
any Tax.
(b) The Company and each Subsidiary has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any Employee, creditor, independent contractor, or other third party in
accordance with applicable Law and procedure.
(c) Neither the Company nor any Subsidiary is aware of any statement of
deficiency, assessment of additional Taxes or any claim or dispute regarding the
Tax liability of the Company or any Subsidiary for any period for which Tax
Returns have been filed. Each Subsidiary of the Company has delivered to the
Investors correct and complete copies of all Tax Returns for the past two (2)
complete fiscal years and all examination reports, and statements of
deficiencies assessed against or agreed to by the Company or any Subsidiary.
(d) Neither the Company nor any Subsidiary has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
3.13 LEGAL PROCEEDINGS. Except as disclosed in Schedule 3.13:
(a) there are no Actions or Proceedings pending or, to the Knowledge of the
Company, the Founder or the Controlling Shareholder, threatened against,
relating to or affecting any of the Existing Shareholders, the Company or any
Subsidiary or any of their respective Assets and Properties which (i) could
reasonably be expected to result in the issuance of an Order restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement or any other Transaction
Document, including without limitation the Restructuring, or otherwise result in
a material diminution of the benefits contemplated by this Agreement or any
other Transaction Document to the Investors, or (ii) if determined adversely to
any Existing Shareholder, the Company or a Subsidiary, could reasonably be
expected to result in (x) any injunction or other equitable relief against the
Company or any Subsidiary that would interfere in any material respect with its
business or operations or (y) Losses by the Company or any Subsidiary,
individually or in the aggregate in respect of other such Actions or
Proceedings, exceeding RMB100,000;
(b) there are no Orders outstanding against the Company, any Subsidiary,
the Founder or the Controlling Shareholder.
Prior to the execution of this Agreement, the Company has delivered to the
Investors all responses of counsel for the Company and the Subsidiaries to
auditors' requests for information delivered in connection with the Financial
Statements (together with any updates provided by
such counsel) regarding Actions or Proceedings pending or threatened against,
relating to or affecting the Company or any Subsidiary.
3.14 COMPLIANCE WITH LAWS AND ORDERS. Except as disclosed in Schedule 3.14,
neither the Company nor any Subsidiary is or has at any time within the last
three years been, or has received any notice that it is or has at any time
within the last three years been, in violation of or in default under any Law or
Order applicable to the Company or any Subsidiary or any of their respective
Assets and Properties, except for such violations or defaults that, individually
or in the aggregate, would not have a Material Adverse Effect.
3.15 REAL PROPERTY.
(a) Schedule 3.15(a)-1 hereto lists all real properties owned by the
Company or any of its Subsidiaries. Except as disclosed in Schedule 3.15(a)-2,
each of the Company and the Subsidiaries has good and marketable title to each
parcel of real property owned by it, free and clear of all Encumbrances. Each of
the Company and the Subsidiaries is in possession of each parcel of real
property owned by it, together with all buildings, structures, facilities,
fixtures and other improvements thereon. The Company and the Subsidiaries have
adequate rights of ingress and egress with respect to the real property owned or
leased by each of them and all buildings, structures, facilities, fixtures and
other improvements thereon. None of such real property, buildings, structures,
facilities, fixtures or other improvements, or the use thereof, contravenes or
violates any building, zoning, administrative, occupational safety and health or
other applicable Law in any material respect (whether or not permitted on the
basis of prior nonconforming use, waiver or variance).
(b) Schedule 3.15(b) hereto lists all real properties leased by the Company
or any of its Subsidiaries. Each of the Company and the Subsidiaries has a valid
and subsisting leasehold estate in and the right to quiet enjoyment of the real
properties leased by it for the full term of the lease thereof. Each lease under
which the Company or a Subsidiary leases real property is a legal, valid and
binding agreement, enforceable in accordance with its terms, of the Company or
such Subsidiary and of each other Person that is a party thereto.
(c) The improvements on the real property owned or leased by the Company
and/or its Subsidiaries are in good operating condition and in a state of good
maintenance and repair, ordinary wear and tear excepted, are adequate and
suitable for the purposes for which they are presently being used and, there are
no condemnation or appropriation proceedings pending or to the Knowledge of the
Company, the Founder or the Controlling Shareholder threatened against any of
such real property or the improvements thereon.
3.16 TANGIBLE PERSONAL PROPERTY; INVESTMENT ASSETS.
(a) Each of the Company and the Subsidiaries is in possession of and has
good title to, or has valid leasehold interests in or valid rights under
Contract to use, all machinery, equipment, furniture, fixtures, vehicles and
other properties and assets used in or reasonably necessary for the conduct of
its business, including all such property reflected on the balance sheets
included in the Financial Statements and such property acquired since December
31, 2005 other than property disposed of since such date in the ordinary course
of business consistent with past practice. All such property is free and clear
of all Encumbrances and is in good working order and condition, ordinary wear
and tear excepted, and its use complies with all applicable Laws. All requisite
formalities in respect of the importation of machinery, equipment, parts, tools
and materials by each of the Company and the Subsidiaries have been complied
with in accordance with applicable laws and regulations.
(b) Schedule 3.16 describes each Investment Asset owned by the Company or
any Subsidiary on the date hereof valued in excess of RMB1,000,000. All such
Investment Assets are owned by the Company or its Subsidiary free and clear of
all Encumbrances.
3.17 INTELLECTUAL PROPERTY RIGHTS. Schedule 3.17(a) hereto lists all
Intellectual Property used by the Company and its Subsidiaries in the conduct of
their respective businesses. The Company or a Subsidiary has all rights, titles
and interests in or valid and binding rights under Contract to use the
Intellectual Property used by it in the conduct of its business. Except as
disclosed in Schedule 3.17(b), (i) the Company or a Subsidiary has the exclusive
right to use the Intellectual Property utilized in the conduct of its business,
(ii) all registrations with and applications to any Government Authority in
respect of such Intellectual Property are valid and in full force and effect and
are not subject to the payment of any Taxes or maintenance fees or the taking of
any other actions by the Company or a Subsidiary to maintain their validity or
effectiveness, (iii) there are no restrictions on the direct or indirect
transfer of any Contract, or any interest therein, held by the Company or any
Subsidiary in respect of such Intellectual Property, (iv) the Company has
delivered to the Investors prior to the execution of this Agreement
documentation with respect to any invention, process, design, computer program
or other know-how or trade secret included in such Intellectual Property, which
documentation is accurate in all respects and sufficient in detail and content
to identify and explain such invention, process, design, computer program or
other know-how or trade secret and to facilitate its full and proper use without
reliance on the special knowledge or memory of any Person, (v) the Company and
the Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of their trade secrets, (vi) neither the Company nor
any Subsidiary is, or has received any notice that it is, in default (or with
the giving of notice or lapse of time or both, would be in default) under any
Contract to use such Intellectual Property and (vii) to the Knowledge of the
Company, the Founder or the Controlling Shareholder, no such Intellectual
Property is being infringed by any other Person. None of the Existing
Shareholders, the Company or any Subsidiary has received notice that the Company
or any Subsidiary is infringing any Intellectual Property of any other Person,
and no claim is pending or, to the Knowledge of the Company, the Founder or the
Controlling Shareholder, has been made to such effect that has not been resolved
and, to the Knowledge of the Company, the Founder or the Controlling
Shareholder, neither the Company nor any Subsidiary is infringing any
Intellectual Property of any other Person.
3.18 CONTRACTS AND PRODUCT CERTIFICATIONS.
(a) Schedule 3.18(a) contains a true and complete list of each of the
following Contracts or other material arrangements (true and complete copies or,
if none, reasonably complete and accurate written descriptions of which,
together with all amendments and
supplements thereto and all waivers of any terms thereof, have been delivered to
the Investors prior to the execution of this Agreement), to which the Company or
any Subsidiary is a party or by which any of their respective Assets and
Properties is bound, including, but not limited to the following:
(i) (A) all Contracts providing for a commitment of employment or
consultation services or otherwise relating to employment or the termination of
employment which exceeds the amount of RMB200,000 per annum; and (B) any written
or unwritten representations, commitments, promises, communications or courses
of conduct, other than with respect to salary or incentive compensation payments
in the ordinary course of business, to any management or executive level
Employee;
(ii) all Contracts with any Person containing any provision or covenant
prohibiting or limiting the ability of the Company or any Subsidiary to engage
in any business activity or compete with any Person or prohibiting or limiting
the ability of any Person to compete with the Company or any Subsidiary;
(iii) all partnership, joint venture, shareholders or other similar
Contracts with any Person;
(iv) all Contracts relating to Indebtedness of the Company or any
Subsidiary exceeding RMB30 million or to any preferred stock issued by the
Company or any Subsidiary;
(v) all warranties, guaranties or similar undertakings with respect to
contractual performance extended by the Company or any Subsidiary other than in
the ordinary course of business;
(vi) all Contracts with distributors, dealers, manufacturers
representatives, sales agencies or franchisees exceeding RMB5 million in value;
(vii) all Contracts relating to (A) the future disposition or acquisition
of any Assets and Properties with a value exceeding RMB10 million and (B) any
merger or other business combination;
(viii) all Contracts between or among the Company and any Subsidiary
relating to Indebtedness or the provision of services between such entities;
(ix) all Contracts that (A) limit or contain restrictions on the ability of
the Company or any Subsidiary to declare or pay dividends on, to make any other
distribution in respect of or to issue or purchase, redeem or otherwise acquire
its Equity Securities, to incur Indebtedness, to incur or suffer to exist any
Encumbrance, to purchase or sell any Assets and Properties, to change the lines
of business in which it participates or engages or to engage in any business
combination, (B) require the Company or any Subsidiary to maintain specified
financial ratios or levels of net worth or other indicia of financial condition
or (C) limit or contain restrictions on the powers and voting rights of the
shareholders of any Subsidiary;
(x) all Contracts requiring the Company or any Subsidiary to make future
capital contribution to any entity;
(xi) all management, service, consulting or any other similar type of
Contracts requiring payment of fees in excess of RMB500,000 per annum;
(xii) all collective bargaining agreements with any labor union or other
representative of employees;
(xiii) all Contracts that require a consent to or otherwise contains a
provision relating to a "change of control," or all Contracts that would
prohibit or delay the consummation of the transactions contemplated by this
Agreement or the other Transaction Documents to which the Company or any
Subsidiary is a party or that would trigger, give rise to, accelerate or augment
any liabilities or terminate or modify any rights of the Company or any
Subsidiary as a result of the consummation of the transactions contemplated
hereby and thereby;
(xiv) all other Contracts that (A) involve the payment or potential
payment, pursuant to the terms of such Contract, by or to the Company or any
Subsidiary of more than RMB500,000 annually and (B) cannot be terminated within
thirty (30) days after giving notice of termination without resulting in
material cost or penalty to the Company or any Subsidiary;
(xv) any other Contract material to the Business and Condition or Assets
and Properties of the Company or any of its Subsidiaries; or
(xvi) any amendment, modification or supplement in respect of any of the
foregoing made other than in the ordinary course of business consistent with
past practice.
(b) Each Contract required to be disclosed in Schedule 3.18(a) hereto,
including without limitation the Purchase Agreement (CHINESE CHARACTERS) dated
as of May 12, 2006 between Jiangsu Linyang Solarfun Co., Ltd. (CHINESE
CHARACTERS) and Jiangxi Saiwei LDK Solar Energy High Technology Co., Ltd.
(CHINESE CHARACTERS) and the Cooperation Agreement (CHINESE CHARACTERS) dated as
of May 15, 2006 between Jiangsu Linyang Solarfun Co., Ltd. (CHINESE CHARACTERS)
and Jinzhou Yangguang Energy Co., Ltd. (CHINESE CHARACTERS), is in full force
and effect and constitutes a legal, valid and binding agreement, enforceable in
accordance with its terms, of each party thereto; and except as disclosed in
Schedule 3.18(b) hereto neither the Company nor any Subsidiary is, or has
received notice that it is, in violation or breach of or default under any such
Contract (or with notice or lapse of time or both, would be in violation or
breach of or default under any such Contract) or has any Knowledge that any
other party to any such Contract is in violation or breach of or default in any
respect under any such Contract (or with notice or lapse of time or both, would
be in violation of or default under any such Contract).
(c) Schedule 3.18(c) hereto provides a complete list of all product
certifications that have been obtained by the Company and its Subsidiaries. The
Company and
its Subsidiaries have all product certifications necessary to permit the Company
and its Subsidiaries to perform their respective obligations under any Contract
or otherwise to engage in the business of the Company and its Subsidiaries as
currently conducted or proposed to be conducted and such product certifications
shall be in full force and effect.
3.19 LICENSES. Schedule 3.19 hereto contains a true and complete list of
all Licenses used in and material, individually or in the aggregate, to the
business or operations of the Company or any Subsidiary (and all pending
applications for any such Licenses), setting forth the grantor, the grantee, the
function and the expiration and renewal date of each. Prior to the execution of
this Agreement, the Company has delivered to the Investors true and complete
copies of all such Licenses. Except as disclosed in Schedule 3.19:
(i) the Company and each Subsidiary owns or validly holds all Licenses that
are material, individually or in the aggregate, to its business or operations;
(ii) each License listed in Schedule 3.19 is valid, binding and in full
force and effect; and
(iii) neither the Company nor any Subsidiary is, or has received any notice
that it is, in default (or with the giving of notice or lapse of time or both,
would be in default) under any such License.
3.20 INSURANCE. Schedule 3.20 hereto provides a complete list of all
insurance policies to which the Company or any Subsidiary is a party. The
Company and each Subsidiary maintain suitable and customary insurance coverage
for their business as presently conducted and such insurance coverage will not
terminate or lapse by reason of the transactions contemplated by this Agreement.
Each insurance policy to which the Company or any Subsidiary is a party is valid
and binding and in full force and effect, no premiums due thereunder have not
been paid and neither the Company, any Subsidiary nor any other Person to whom
such policy has been issued has received any notice of cancellation or
termination in respect of any such policy or is in default thereunder. The
insurance policies to which the Company or any Subsidiary is a party are placed
with financially sound and reputable insurers and, in light of the respective
business, operations and Assets and Properties of the Company and the
Subsidiaries, are in amounts and have coverages that are reasonable and
customary for Persons engaged in such businesses and operations and having such
Assets and Properties. Neither the Company, any Subsidiary nor the Person to
whom such policy has been issued has received notice that any insurer under any
policy referred to in this Section is denying liability with respect to a claim
thereunder or defending under a reservation of rights clause.
3.21 RELATED PARTY TRANSACTIONS. Except as disclosed in Schedule 3.21(a)
hereto, no employee, officer, director or shareholder of the Company or any
Subsidiary or any Affiliate of any of them (a "RELATED PARTY") or member of such
Related Party's immediately family, or any corporation, partnership or other
entity in which such Related Party is an officer, director or partner, or in
which such Related Party has significant ownership interests or otherwise
controls, is indebted to the Company, or any Subsidiary, nor is the Company or
any Subsidiary indebted (or committed to make loans or extend or guarantee
credit) to any of them other than (a) for payment of salary for services
rendered not exceeding amounts equal to one month's salary, (b) reimbursement
for reasonable expenses incurred on behalf of the Company or the Subsidiary, and
(c) for other standard employee benefits made generally available to all
employees, which indebtedness described in clauses (a)-(c) is incurred in the
ordinary course of business consistent with past practice. Except as disclosed
in Schedule 3.21(b), none of such persons has any direct or indirect ownership
interest in any firm or corporation with which the Company or any Subsidiary is
affiliated or with which the Company or any Subsidiary has a business
relationship, or any firm or corporation that competes with the Company or any
Subsidiary, except that employees, officers, or directors of the Company and its
Subsidiaries and members of such Related Party's immediately families may own
shares in publicly traded companies that may compete with the Company or any
Subsidiary. No Related Party or member of their immediate family is directly or
indirectly interested in any material contract with the Company or any
Subsidiary.
3.22 EMPLOYEES; LABOR RELATIONS.
(a) Except as disclosed in Schedule 3.22(a) hereto, neither the Company nor
any of its Subsidiaries is bound by or subject to any contract, commitment or
arrangement with any labor union and no labor union has requested, sought or
attempted to represent any employees, representatives or agents of the Company
or any of its Subsidiaries. Except as disclosed in Schedule 3.22(a), there is no
strike or other labor dispute involving the Company or any of its Subsidiaries
pending nor, to the Knowledge of the Company, the Founder or the Controlling
Shareholder, threatened. Except as set forth in Schedule 3.22(a) hereto, neither
the Company, the Founder nor the Controlling Shareholder is aware of the
existence of any labor union or any labor union activities involving its
employees and neither the Company, the Founder nor the Controlling Shareholder
is aware of any existing or imminent labor disturbance by the employees of any
of its principal suppliers, manufacturers, customers and contractors. To the
Knowledge of the Company, the Founder and the Controlling Shareholder, none of
the members of the senior management and the key technical personnel of the
Company or its Subsidiaries, including but not limited Xxxxxx Xxxx (CHINESE
CHARACTERS), Xxxxxx Xxxx (CHINESE CHARACTERS) and Rongqiang Cui (CHINESE
CHARACTERS), is or will be in violation of any judgment, decree or order, or any
term of any employment contract, patent disclosure agreement, or other contract
or agreement relating to the relationship of any such person with the Company or
its Subsidiaries. Except as disclosed in Schedule 3.22(a), neither the Company
nor any of its Subsidiaries is a party to or bound by any currently effective
employment contract, deferred compensation agreement, bonus plan, incentive
plan, profit sharing plan, retirement agreement, or other employee compensation
agreement. Neither the Company, the Founder nor the Controlling Shareholder is
aware that any officer or key employee, or any group of key employees, intends
to terminate their employment
with the Company or any of its Subsidiaries, as applicable, nor does the Company
nor any of its Subsidiaries have a present intention to terminate the employment
of any of the foregoing.
(b) Except as disclosed in Schedule 3.22(b) hereto, each of the
Subsidiaries has complied with all applicable Laws relating to the employment of
labor, including provisions thereof relating to wages, hours, housing funds,
social welfare, social insurance contribution and collective bargaining and none
of the Subsidiaries is subject to any investigation or examination by any
applicable Government Authority regarding the employment of labor, including but
not limited to matters relating to social welfare, employee safety, housing
funds and social insurance contribution.
3.23 EMPLOYEE BENEFITS.
(a) Except as disclosed in Schedule 3.23(a) hereto, there is no Benefit
Plan or Benefit Arrangement of the Company or of any Subsidiary.
(b) Neither the Company nor any Subsidiary has any current or projected
liability in respect of post-employment or post-retirement health or medical or
life insurance benefits for retired or former Employees of the Company or any
Subsidiary.
3.24 ENVIRONMENTAL MATTERS. The Company and each Subsidiary has obtained
all Licenses which are required under applicable Environmental Laws in
connection with the conduct of the business or operations of the Company or such
Subsidiary. Each of such Licenses is in full force and effect and the Company
and each of the Subsidiaries is in compliance with the terms and conditions of
all such Licenses and with any applicable Environmental Law. In addition, except
as set forth in Schedule 3.24 hereto:
(a) No Order has been issued, no Environmental Claim has been filed, no
penalty has been assessed and no investigation or review is pending or, to the
Knowledge of the Company, the Founder or the Controlling Shareholder, threatened
by any Government Authority with respect to any alleged failure by the Company
or any Subsidiary to have any License required under applicable Environmental
Laws in connection with the conduct of the business or operations of the Company
or any of the Subsidiaries or with respect to any generation, treatment,
storage, recycling, transportation, discharge, disposal or Release of any
Hazardous Material generated by the Company or any Subsidiary, and to the
Knowledge of the Company or the Controlling Shareholder, there are no facts or
circumstances in existence which could reasonably be expected to form the basis
for any such Order, Environmental Claim, penalty or investigation.
(b) Neither the Company nor any Subsidiary owns, operates or leases a
treatment, storage or disposal facility in violation of any Environmental Law,
and, without limiting the foregoing, (i) no polychlorinated biphenyl is or has
been present, (ii) no asbestos or asbestos-containing material is or has been
present, (iii) there are no underground storage tanks or surface impoundments
for Hazardous Materials, active or abandoned, and (iv) no Hazardous Material has
been Released in violation of any Environmental Law or otherwise Released, in
the cases of clauses (i) through (iv), at, on or under any site or facility now
or previously owned,
operated or leased by the Company or any Subsidiary. Neither the Company nor any
Subsidiary has transported or arranged for the transportation of any Hazardous
Material to any location that may lead to Environmental Claims against the
Company or any Subsidiary.
(c) No Hazardous Material generated by the Company or any Subsidiary has
been recycled, treated, stored, disposed of or Released by the Company or any
Subsidiary at any location in violation of any Environmental Law.
(d) No Encumbrances have arisen under or pursuant to any Environmental Law
on any site or facility owned, operated or leased by the Company or any
Subsidiary, and no Government Authority action has been taken or, to the
Knowledge of the Company, the Founder or the Controlling Shareholder, is in
process that could subject any such site or facility to such Encumbrances, and
neither the Company nor any Subsidiary would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any site or
facility owned by it in any deed to the real property on which such site or
facility is located.
(e) There have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by, or that are in the possession of,
the Company or any Subsidiary in relation to any site or facility now or
previously owned, operated or leased by the Company or any Subsidiary which have
not been delivered to the Investors prior to the execution of this Agreement.
(f) Each party that has contracted with the Company or any Subsidiary with
respect to treatment, storage, recycling, transportation or disposal of any
Hazardous Material generated by the Company or any Subsidiary has obtained all
Licenses which are required under applicable Environmental Laws in connection
with the conduct of its business or operations. Each of such Licenses is in full
force and effect and such party is in compliance with the terms and conditions
of all such Licenses and with any applicable Environmental Law.
3.25 SUBSTANTIAL CUSTOMERS AND SUPPLIERS. Schedule 3.25(a) hereto lists the
ten (10) largest customers of the Company and the Subsidiaries, on the basis of
revenues for goods sold or services provided for the most recently-completed
fiscal year. Schedule 3.25(b) hereto lists the ten (10) largest suppliers of the
Company and the Subsidiaries, on the basis of cost of goods or services
purchased for the most recently-completed fiscal year. Except as disclosed in
Schedule 3.25(c) hereto, no such customer or supplier has ceased or materially
reduced its purchases from, use of the services of, or sales or provision of
services to the Company and the Subsidiaries since December 31, 2005, or to the
Knowledge of the Company, the Founder or the Controlling Shareholder, has
threatened to cease or materially reduce such purchases, use, sales or provision
of services after the date hereof. Neither the Company, the Founder, nor the
Controlling Shareholder is aware that any of such customer or supplier is
subject to a Bankruptcy Event.
3.26 [INTENTIONALLY DELETED].
3.27 ACCOUNTS RECEIVABLE. Except as set forth on Schedule 3.27, each of the
accounts and notes receivable of the Company and the Subsidiaries reflected on
the balance sheets included in the Financial Statements, and all accounts and
notes receivable arising subsequent to December 31, 2005, (i) arose from bona
fide sales transactions in the ordinary course of business and are payable on
ordinary trade terms, (ii) are legal, valid and binding obligations of the
respective debtors enforceable in accordance with their terms, (iii) are not
subject to any valid set-off or counterclaim, (iv) do not represent obligations
for goods sold on consignment, on approval or on a sale-or-return basis or
subject to any other repurchase or return arrangement, (v) are collectible in
the ordinary course of business consistent with past practice in the aggregate
recorded amounts thereof, net of any applicable reserve reflected in the balance
sheets included in the Financial Statements, and (vi) are not the subject of any
Actions or Proceedings brought by or on behalf of the Company or any Subsidiary.
All steps necessary to render all such security arrangements legal, valid,
binding and enforceable, and to give and maintain for the Company or a
Subsidiary, as the case may be, a perfected security interest in the related
collateral, have been taken.
3.28 INVENTORY. All inventory of the Company and the Subsidiaries reflected
on the balance sheets included in the Financial Statements consisted, and all
such inventory acquired since December 31, 2005 consists, of a quality and
quantity usable and salable in the ordinary course of business consistent with
past practice, subject to normal and customary allowances in the industry for
spoilage, damage and outdated items. All items included in the inventory of the
Company and the Subsidiaries are the property of the Company and the
Subsidiaries, free and clear of any Encumbrances, have not been pledged as
collateral, are not held by the Company or any Subsidiary on consignment from
others and conform to all standards applicable to such inventory or its use or
sale imposed by Government Authorities.
3.29 DERIVATIVE INSTRUMENTS. Neither the Company nor any of its
Subsidiaries is a party to any swaps, caps, floors, futures, forward contracts,
option agreements, and any other derivative financial instruments, contracts or
arrangements.
3.30 BROKERS. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Company directly
with the Investors without the intervention of any Person on behalf of the
Company in such manner as to give rise to any valid claim by any Person against
the Investors, the Company or any Subsidiary for a finder's fee, brokerage
commission or similar payment.
3.31 ETHICAL PRACTICES. Each of the Existing Shareholders, the Company, any
of its Subsidiaries, their respective Affiliates and any other Person acting on
behalf of any of them has not, whether in connection with the proposed
transactions contemplated under the Transaction Documents or otherwise, (i)
knowingly acted in violation of any Laws and Orders applicable to them, or (ii)
made any improper payments to public officials in order to secure a business
advantage.
3.32 PRIOR REGISTRATION RIGHTS. Except as to be provided in the
Shareholders Agreement, neither the Company nor any of its Subsidiaries is under
any contractual obligation to register under the United States Securities Act of
1933, as amended, any of its presently outstanding securities or any of its
securities that may subsequently be issued.
3.33 NO STATE ASSETS. None of the assets of the Company or any Subsidiary
constitute state-owned assets or are required to undergo any form of valuation
under applicable Laws of the PRC governing the transfer of state-owned assets
prior to the consummation of the transactions contemplated herein or in any of
the other Transaction Documents.
3.34 DISCLOSURE. The Company and its Subsidiaries have provided the
Investors with all the information necessary for the Investors to decide whether
to subscribe to the Closing Shares. There is no fact known to the Company or any
Subsidiary or the Founder or the Controlling Shareholder that has not been
disclosed herein or in any other agreement, document or written statement
furnished by the Company to the Investors in connection with the transactions
contemplated hereby which materially adversely affects, or is reasonably likely
to materially adversely affect the business of the Company or of any Subsidiary.
No representation or warranty contained in this Agreement, and no statement
contained in any Exhibit or Schedule hereto or in any certificate, list or other
writing furnished to the Investors pursuant to any provision of this Agreement
or in the course of the due diligence conducted in connection with the
transactions contemplated hereby (including without limitation the Financial
Statements) contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor hereby represents and warrants to the Company, severally and
not jointly, as of the date hereof and as of the Closing Date as follows:
4.1 ORGANIZATION. The Investor is a corporation duly organized and validly
existing under the Laws of the jurisdiction of its incorporation. The Investor
has full corporate power and authority to execute and deliver this Agreement and
each other Transaction Document to which it is a party, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.
4.2 AUTHORITY. The execution and delivery by the Investor of this Agreement
and each other Transaction Document to which it is a party, and the performance
by the Investor of its obligations hereunder and thereunder, have been duly and
validly authorized by all necessary action on the part of the Investor. This
Agreement has been duly and validly executed and delivered by the Investor and
constitutes, and upon the execution and delivery by the Investor of each other
Transaction Document to which it is a party, such Transaction Documents will
constitute, a legal, valid and binding obligation of the Investor enforceable
against it in accordance with each of their terms.
4.3 BROKERS. Except for the Canadian Imperial Bank of Commerce, whose fees,
commissions and expenses will be paid by CVCI, all negotiations relative to this
Agreement and the transactions contemplated hereby have been carried out by the
Investor and its Affiliates directly with the Company without the intervention
of any Person on behalf of the Investor in such manner as to give rise to any
valid claim by any Person against the Company for a finder's fee, brokerage
commission or similar payment.
4.4 PURCHASE ENTIRELY FOR OWN ACCOUNT. Each Investor represents that the
Series A Convertible Preference Shares to be purchased by such Investor
hereunder and the Ordinary Shares issuable upon conversion thereof will be
acquired for investment for such Investor's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. Each Investor represents
that such Investor does not presently have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Closing Shares or any
Ordinary Shares issuable upon conversion thereof.
4.5 RELIANCE UPON INVESTORS' REPRESENTATIONS. Each Investor understands
that the Closing Shares, and, if issued, the Ordinary Shares issuable upon
conversion, are not registered under the United States Securities Act of 1933,
as amended, on the ground that the sale provided for in this Agreement and the
issuance of securities hereunder is exempt from registration under the
Securities Act, and that the Company's reliance on any such exemption is
predicated on the Investors' representations set forth herein.
4.6 RECEIPT OF INFORMATION. Each Investor believes that such Investor has
received all the information such Investor considers necessary or appropriate
for deciding whether to purchase the Shares. Each Investor further represents
that such Investor has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Closing Shares and the business, properties, prospects, and financial condition
of the Company and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify the accuracy of any information furnished to such
Investor or to which such Investor had access. The foregoing, however, does not
limit or modify the representations and warranties of the Company in Article III
of this Agreement or the right of the Investors to rely thereon.
4.7 INVESTMENT EXPERIENCE. Each Investor represents that such Investor is
experienced in evaluating and investing in private placement transactions of
securities of companies in a similar stage of development and acknowledges that
such Investor can bear the economic risk of such Investor's investment for an
indefinite period of time, and has such knowledge and experience in financial
and business matters that such Investor is capable of evaluating the merits and
risks of the investment in the Shares. If other than an individual, such
Investor also represents it has not been organized for the purpose of acquiring
the Closing Shares.
4.8 ACCREDITED INVESTOR. Each Investor represents that such Investor is an
"Accredited Investor", as that term is defined in Rule 501 of Regulation D
promulgated under the United States Securities Act of 1933, as amended.
4.9 RESTRICTED SECURITIES. Each Investor understands that the Closing
Shares (or the Ordinary Shares issuable upon conversion thereof ) may not be
sold, transferred, or otherwise disposed of without registration under the
United States Securities Act of 1933, as amended, or an exemption therefrom, and
that in the absence of an effective registration statement covering the Closing
Shares (or the Ordinary Shares issuable upon conversion thereof ) or an
available exemption from registration under the United States Securities Act of
1933, as amended, the Closing Shares (and the Ordinary Shares issuable upon
conversion thereof) must be held indefinitely. In particular, each Investor is
aware that the Closing Shares (and the Ordinary Shares issuable upon conversion
thereof) may not be sold pursuant to Rule 144 promulgated under the United
States Securities Act of 1933, as amended, unless all of the conditions of that
Rule are met. Among the conditions for use of Rule 144 may be the availability
of current information to the public about the Company. Each Investor
understands that such information is not now available.
4.10 FURTHER REPRESENTATION BY FOREIGN INVESTORS. With respect to each
Investor, if neither the Investor nor any beneficiary of any trust or any
investment client for whose account the Investor is purchasing the Series A
Convertible Preference Shares is a citizen or resident of the United States or
any state, territory or possession thereof, including but not limited to any
estate of any such person, or any corporation, partnership, trust or other
entity created or existing under the laws thereof, or any entity controlled or
owned by any of the foregoing (a "U.S. PERSON"), such Investor hereby represents
that such Investor is satisfied as to the full observance of the laws of such
Investor's jurisdiction in connection with any invitation to subscribe for the
Series A Convertible Preference Shares or any use of this Agreement, including
(i) the legal requirements with such Investor's jurisdiction for the purchase of
the Series A Convertible Preference Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, which may be relevant to the purchase, holding,
redemption, sale, or transfer of the Series A Convertible Preference Shares.
Such Investor's subscription and payment for, and such Investor's continued
beneficial ownership of, the Series A Convertible Preference Shares will not
violate any applicable securities or other laws of such Investor's jurisdiction.
ARTICLE V
PRE-CLOSING COVENANTS
5.1 CONDUCT OF BUSINESS. The Company and each Subsidiary shall, and the
Founder and the Controlling Shareholder shall cause the Company and each
Subsidiary to, conduct its business only in the ordinary course consistent with
past practice. Without limiting the generality of the foregoing, between the
date of this Agreement and the Closing, the Company shall, and the Founder and
the Controlling Shareholder shall cause the Company to:
(a) Use and the Company shall cause each Subsidiary to use its best efforts
to (i) preserve intact the present business organization and reputation of the
Company and the Subsidiaries, (ii) keep available (subject to dismissals and
retirements in the ordinary course of business consistent with past practice)
the services of the present officers, Employees and consultants of the Company
and the Subsidiaries, (iii) maintain the Assets and Properties of the Company
and the Subsidiaries in good working order and condition, ordinary wear and tear
excepted, (iv) maintain the good will of customers, suppliers, lenders and other
Persons to whom the Company or any Subsidiary sells goods or provides services
or with whom the Company or any Subsidiary otherwise has significant business
relationships and (v) continue all current sales, marketing and promotional
activities relating to the business and operations of the Company and the
Subsidiaries;
(b) (i) maintain and the Company shall cause each Subsidiary to maintain
the Books and Records in the usual, regular and ordinary manner, (ii) not make
or permit to be made any material change in (A) any pricing, investment,
accounting, financial reporting, inventory, credit, allowance or Tax practice or
policy of the Company or any Subsidiary, or (B) any method of calculating any
bad debt, contingency or other reserve of the Company or any Subsidiary for
accounting, financial reporting or Tax purposes and (iii) not make or permit to
be made any change in the fiscal year of the Company or any Subsidiary;
(c) (i) use and the Company shall cause each Subsidiary to use its best
efforts to maintain in full force and effect until the Closing substantially the
same levels of coverage as the insurance afforded under the Contracts listed in
Schedule 3.20 hereto, (ii) use its best efforts to cause such insurance coverage
held by any Person (other than the Company or any Subsidiary) for the benefit of
the Company or any Subsidiary to continue to be provided at the expense of the
Company and the Subsidiaries after the Closing on substantially the same terms
and conditions as provided on the date of this Agreement and (iii) cause any and
all benefits under such Contracts paid or payable (whether before or after the
date of this Agreement) with respect to the business, operations, Employees or
Assets and Properties of the Company and the Subsidiaries to be paid to the
Company and the Subsidiaries; and
(d) comply with and the Company shall cause each Subsidiary to comply with
all Laws and Orders applicable to the business and operations of the Company and
the Subsidiaries, and promptly following receipt thereof to give the Investors
copies of any notice received from any Government Authority or other Person
alleging any violation of any such Law or Order.
5.2 CERTAIN RESTRICTIONS. Except for the transactions contemplated by the
Transaction Documents, between the date of this Agreement and the Closing, the
Company shall, the Company shall cause each Subsidiary to, and the Founder and
the Controlling Shareholder shall cause the Company and each Subsidiary to, not
take any of the following actions unless unanimous written approval of CVCI,
Legend and Good Energies is obtained:
(a) the issuance of any kind of equity or equity-linked securities or
equivalent arrangements, including creation of new or additional employee stock
option plans or changes to existing stock option plan; provided that with
respect to the Employee Stock Option Plan as
provided in Section 6.2 hereof, CVCI, Legend and Good Energies shall respond to
the Company's proposal within ten (10) Business Days following the date that the
Company has delivered such proposal to each of CVCI, Legend and Good Energies
pursuant to Section 14.5 hereof, and in the event any of CVCI, Legend and Good
Energies disapproves of any aspects of the Company's proposal, it shall give the
Company reasonable explanations for its disapproval. The Company may revise its
proposal and resubmit it to CVCI, Legend and Good Energies for their approval
pursuant to the same procedure described above;
(b) any stock split, or stock combination, or redemption or repurchase of
any securities;
(c) any change to the terms and conditions of any existing securities;
(d) the issuance of any debt or debt instruments in excess of RMB50 million
in any one transaction or RMB100 million in any consecutive twelve month period;
(e) any non-operational transactions, loans, guarantees, mortgages or
charges with Affiliates, executives or any party;
(f) engagement of any business other than photovoltaic business and change
of nature or scope of business of the Company or any Subsidiary;
(g) any acquisition or disposal of assets, businesses or assumption of any
debt in connection of such acquisition exceeding RMB10 million in any one
transaction or RMB20 million in any consecutive twelve month period;
(h) any unbudgeted acquisition of fixed assets in an amount exceeding RMB2
million;
(i) any unbudgeted expense exceeding RMB1,500,000 and any unbudgeted
monthly expense exceeding 10% of average monthly expenses for the twelve (12)
months immediately preceding the incurrence of such expense;
(j) any transfer or disposal of material intangible property, including
without limitation transfer and licensing of any existing and future patents and
trademarks;
(k) any capital expenditures;
(l) any joint ventures, strategic alliances, partnerships or similar
arrangement with any third party;
(m) any loan exceeding RMB30 million in any one transaction, or any net
debt to equity ratio in excess of a ratio of 1.5:1 (net debt is defined as
interest bearing debt less cash and cash equivalent);
(n) any related party transaction with any shareholder, director, officers
or Affiliates of the Company or its Subsidiaries and their respective Affiliates
exceeding RMB100,000 in one transaction;
(o) any guarantee or similar obligation by the Company or any Subsidiary
relating to Indebtedness of any Person;
(p) any liquidation, dissolution or winding up of the Company or any
Subsidiary;
(q) any recapitalization, merger, asset swap, sale or transfer of
substantially all of the rights to intellectual properties or assets, or other
extraordinary transaction;
(r) conclusion or amendment of any contract or other contractual
arrangement with a value exceeding RMB30 million;
(s) adoption, amendment, or approval of any strategic plan, annual business
plan, the annual budget, mid-year budget and year-end accounting;
(t) any appointment and change of the Chief Executive Officer, the Chief
Financial Officer and Chief Operating Officer of the Company and any change in
their rights and obligations;
(u) declaration of dividends and other distributions;
(v) change in the number of directors, removal of director, representative
director or auditor;
(w) material changes of compensation and incentive policies;
(x) any incurrence or creation of pledge, lien, mortgage or any other types
of securities interest on the building, plant, office facilities or other fixed
assets or equipment of the Company or any Subsidiary exceeding RMB10 million;
(y) amendment to the Articles of Incorporation or any other constitutional
documents, including without limitation increase and decrease in the
capitalization of the Company or any Subsidiary;
(z) changes of external auditor or any material change in accounting
policies;
(aa) an initial public offering (the "IPO") and IPO related matters, except
that with respect to the currently proposed IPO of the Company, unanimous
written consent of the Investors will not be required for any matters that do
not affect the Investors' rights and obligations hereunder or the transactions
contemplated by this Agreement and other Transaction Documents, and that if at
an appropriate time prior to the road show by the Company in connection with the
currently proposed IPO the board of directors of the Company establishes a
steering committee, which shall include at least one director to be nominated by
CVCI and one director to be nominated by Legend, in each case in accordance with
the Shareholders Agreement, to be in charge of matters relating to the proposed
IPO and whose resolution will require the affirmative vote of a majority of the
members of the committee, including at least the director designated by CVCI and
the director designated by Legend, unanimous written consent of the Investors
will no longer be required for such IPO-related matters;
(bb) initiation and settlement of any litigation with a claim that exceeds
US$1,000,000;
(cc) any waiver of a material right or of a material debt;
(dd) any satisfaction or discharge of any lien, claim or encumbrance or
payment of any obligation by the Company or any Subsidiary, except in the
ordinary course of business and that is not material to the assets, properties,
financial conditions, operating results or business of the Company and the
Subsidiaries as currently conducted and proposed to be conducted; and
(ee) entry into any agreement or understanding to do any of the foregoing.
5.3 REGULATORY AND OTHER APPROVALS. The Company shall, the Company shall
cause each Subsidiary to, and the Founder and the Controlling Shareholder shall
cause the Company and each Subsidiary to, as promptly as practicable (a) take
all steps necessary or desirable to obtain all consents, approvals or actions
of, make all filings with and give all notices to Government Authorities or any
other Person required of the Company or any Subsidiary to consummate the
transactions contemplated hereby and by each other Transaction Document,
including those described in Schedule 3.7 and (b) provide such other information
and communications to such Government Authorities or other Persons as Investors
or such Government Authorities or other Persons may reasonably request in
connection therewith. The Company shall provide prompt notification to the
Investors when any such consent, approval, action, filing or notice referred to
in clause (a) above is obtained, taken, made or given, as applicable, and will
advise the Investors of any communications (and, unless precluded by Law,
provide copies of any such communications that are in writing) with any
Government Authority or other Person regarding any of the transactions
contemplated by this Agreement or any other Transaction Document.
5.4 ACCESS. Between the date of this Agreement and the Closing, upon at
least two (2) days' prior notice to the Company, the Company shall, and shall
cause its Subsidiaries and their respective Representatives to (and the Founder
and the Controlling Shareholder shall cause the Company, its Subsidiaries, and
their respective Representatives to) (a) afford the Representatives of the
Investors and their Affiliates designated by the Investors, during normal
business hours, reasonable access at all reasonable times to its officers,
employees, auditors, legal counsel, properties, offices, plants and other
facilities and to all books and records, (b) furnish the Investors and such
Affiliates with all financial, operating and other data and information as the
Investors or such Affiliate, through their respective Representative, may from
time to time reasonably request and (c) afford the Investors and such Affiliates
the opportunity to discuss the affairs, finances and accounts of the Company and
its Subsidiaries with the officers of the Company and its Subsidiaries from time
to time as the Investors or such Affiliate may reasonably request, and to make
proposals, recommendations and suggestions to the Company or its Subsidiaries
relating to the business and affairs of the Company or its Subsidiaries. The
Company and/or such Subsidiary shall, and the Founder and the Controlling
Shareholder shall cause the Company and/or the Subsidiaries to, consider in good
faith all legitimate proposals, recommendations and suggestions made by the
Investors or such Affiliate pursuant to this Section 4.04.
5.5 ALTERNATIVE TRANSACTIONS. Except for the transactions contemplated by
the Transaction Documents, between the date of this Agreement and the Closing,
the Company, its Subsidiaries, the Founder and the Controlling Shareholder and
their respective officers and directors will not, and each of the Company, its
Subsidiaries, the Founder and the Controlling Shareholder will cause its other
Representatives not to, directly or indirectly, (i) solicit or initiate any
proposal (a "PROPOSAL") relating to (A) direct or indirect acquisition or
purchase of any securities of the Company or any Subsidiary, (B) a merger,
amalgamation, share exchange or consolidation, (C) a sale of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole, or (D) any other transaction that may have a material adverse effect on
the transactions contemplated hereunder; (ii) participate in any discussions or
negotiations regarding or furnish to any Person any information or otherwise
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Proposal (other than a modified Proposal
of the Investors, if any); or (iii) authorize or enter into any agreement or
understanding with respect to any Proposal. The Company, the Subsidiaries, the
Founder and the Controlling Shareholder will immediately advise the Investors
of, and inform the Investors of the terms of, and the identity of the Person
making any Proposal that the Company, any of its Subsidiaries, the Founder, the
Controlling Shareholder or any of their Representatives may receive during the
period from the date of this Agreement to the Closing.
5.6 FULFILLMENT OF CONDITIONS. Each of the Company, the Founder, the
Controlling Shareholder and the Investors shall execute and deliver at the
Closing each document that it is required hereby to execute and deliver as a
condition to the Closing, shall take all steps necessary or desirable and
proceed diligently and in good faith to satisfy each other condition to the
obligations of the Investors or of the Company, as applicable, contained in this
Agreement and shall not, and the Company shall not permit any Subsidiary to,
take or fail to take any action that could reasonably be expected to result in
the nonfulfillment of any such condition.
ARTICLE VI
POST-CLOSING COVENANTS
6.1 USE OF PROCEEDS. The Company is committed to invest (a) US$23 million
to build 4 solar cells production lines, 2 solar module production lines, and a
5,000 m(2) super-clean workshop and its auxiliary facilities; (b) US$15 million
in upstream silicon plants to be approved by the Investors; (c) US$15 million to
purchase necessary raw materials; and (d) US$3 million to establish a R&D center
or a joint research lab. All proceeds from the sale of the Closing Shares shall
be deposited in a designated account of the Company and be used for the purposes
specified above and may not be used for non-operating expenses or operating
expenses unrelated to the Company's photovoltaic business. If the amount
required to complete the projects specified above exceeds the amount of proceeds
from the sale of the Closing Share, the Company shall be responsible for
obtaining any additional financings that may be required. Any material change to
the uses of the proceeds from the sale of the Closing Shares shall be made only
with the written consent of the Investors.
6.2 EMPLOYEE STOCK OPTION PLAN. The Company shall implement an employee
stock option plan (the "EMPLOYEE STOCK OPTION PLAN") with terms and conditions
to be approved by the board of directors and the Investors in accordance with
this Agreement and the Shareholders Agreement. The employee stock option plan
shall consist of no more than 6% of total outstanding shares on an as-converted
and fully diluted basis, including the Closing Shares, and the option shall vest
in a period of no less than five (5) years and no more than 20% on each
anniversary of its grant.
6.3 APPOINTMENT OF CHIEF FINANCIAL OFFICER. Within three (3) months
following the Closing Date, the Company shall, and the Founder and the
Controlling Shareholder shall take, or cause to be taken, all actions and shall
do, or cause to be done, all things that are necessary, desirable or appropriate
to cause the Company to, appoint a Chief Financial Officer of the Company, who
is of international and professional standard and mutually acceptable to the
Company and the Investors.
6.4 MAINTENANCE OF LICENSES. The Company shall, the Company shall cause its
Subsidiaries to, and the Founder and the Controlling Shareholder shall cause the
Company and its Subsidiaries to, procure that all Licenses of or granted to or
obtained by the Company and its Subsidiaries are, and will remain, in full force
and effect at all times following the Closing Date.
6.5 RESERVATION OF CONVERSION SHARES. At all times following the Closing
Date, the Company shall, and the Founder and the Controlling Shareholder shall
cause the Company to, at all times reserve and keep available for issuance such
number of its authorized but unissued Ordinary Shares as shall be sufficient to
permit the issuance of all of the Ordinary Shares issuable upon conversion of
the Closing Shares at the then effective conversion price.
6.6 FURTHER ASSURANCES. At any time or from time to time after the Closing,
the Company, the Founder and the Controlling Shareholder shall execute and
deliver to the Investors such other documents and instruments, provide such
other materials and information and take such other actions as the Investors may
reasonably request to more effectively vest title to the Closing Shares in the
Investors, and otherwise to fulfill each of its obligations under this Agreement
and each other Transaction Document to which it is a party.
6.7 RELATED PARTY TRANSACTION. The Company shall, the Company shall cause
its Subsidiaries to, and the Founder and the Controlling Shareholder shall cause
the Company and its Subsidiaries to, procure that (i) the total purchase by the
Company and its Subsidiaries of silicon ingot and wafer from a Related Party
other than the Investors and their Affiliates in any fiscal year following the
Closing Date shall not be more than five percent (5%) of their total purchase of
silicon ingot and wafer for such fiscal year and (ii) the value of other
transactions with a Related Party other than the Investors and their Affiliates
in any fiscal year shall not exceed RMB1 million in the aggregate. The terms and
conditions in connection with any transaction with a Related Party shall be no
less favorable to the Company or its Subsidiaries than the terms and conditions
negotiated on an arm's length basis. The Company shall, the Company shall cause
its Subsidiaries to, and the Founder and the Controlling Shareholder shall cause
the Company and its Subsidiaries to, procure that none of the Company and the
Subsidiaries will be a party to any transaction with a Related Party other than
the Investors and their Affiliates immediately prior to the IPO.
6.8 LABOR LAW COMPLIANCE. The Company shall, the Company shall cause its
Subsidiaries to, and the Founder and the Controlling Shareholder shall cause the
Company and its Subsidiaries to, procure that at all times following the Closing
Date the Subsidiaries will comply with all applicable Laws of the PRC relating
to employment of labor and will enter into employment agreement in the form
attached hereto as Exhibit G with their employees and duly perform their
respective legal obligations to make social insurance and housing fund
contribution for their employees in full and on time.
6.9 PRODUCT CERTIFICATIONS. The Company shall, the Company shall cause its
Subsidiaries to, and the Founder and the Controlling Shareholder shall cause the
Company and its Subsidiaries to, procure that all product certifications
obtained by the Company and its Subsidiaries are, and will remain, in full force
and effect at all times following the Closing Date and that all product
certifications necessary to permit the Company and its Subsidiaries to sell its
solar cells or solar module will be obtained prior to sale of such products.
6.10 PRODUCT WARRANTY. The Company shall, and the Founder and the
Controlling Shareholder shall cause the Company and its Subsidiaries to maintain
reasonably sufficient reservation on its balance sheet for product warranties
undertaken by the Company or its Subsidiaries in its sale contracts as is
generally maintained by responsible companies in the same industry.
6.11 ENVIRONMENTAL COMPLIANCE. The Company shall, the Company shall cause
its Subsidiaries, and the Founder and the Controlling Shareholder shall cause
the Company and its Subsidiaries to, obtain and maintain in full force and
effect all Licenses which are required under applicable Environmental Laws in
connection with the conduct of the business or operations of the Company or such
Subsidiary and to comply with the terms and conditions of all such Licenses and
with any applicable Environmental Law, including but not limited to the
re-registration of environmental impact in the event that the scale of solar
cell module production line of Solarfun Jiangsu increases.
6.12 POST-CLOSING RESTRUCTURING. The Company, the Founder and the
Controlling Shareholder shall cause the Post-Closing Restructuring to be duly
completed within three (3) months after the Closing in accordance with
applicable Laws and relevant transaction documents. The Company, the Founder and
the Controlling Shareholder shall be responsible for obtaining such financing as
required to complete the Restructuring and may not use any proceeds from the
sale of the Closing Shares for the purposes of the Restructuring in any way.
6.13 2006 FINANCIAL STATEMENTS. The Company, the Founder and the
Controlling Shareholder shall use their reasonable efforts to cause the 2006
Financial Statements to be completed by March 31, 2007, and in any event before
April 30, 2007.
6.14 GOOD ENERGIES DIRECTOR. The Parties hereby agree to take the steps
necessary to elect a representative to be designated by Good Energies to the
board of directors of the Company as soon as reasonably possibly after such
director is named by Good Energies.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE INVESTORS
The obligation of the Investors to proceed with the Closing is subject to
the fulfillment, at or before the Closing, of each of the following conditions
(all or any of which may be waived in whole or in part by the Investors in their
sole discretion):
7.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Company, the Founder and the Controlling Shareholder in
this Agreement shall be true and correct on in all material respects and as of
the Closing Date as though such representation or warranty was made on and as of
the Closing Date, except that any such representations and warranties shall be
true and correct in all respects where such representation and warranty is
qualified with respect to materiality.
7.2 PERFORMANCE. Each of the Company, the Founder and the Controlling
Shareholder shall have performed and complied with each agreement, covenant and
obligation required by this Agreement and each other Transaction Document to be
so performed or complied with by it at or before the Closing.
7.3 ORDERS AND LAWS. There shall not be in effect on the Closing Date any
Order or Law restraining, enjoining or otherwise prohibiting or making illegal
(i) the consummation of any of the transactions contemplated by this Agreement
or any other Transaction Document or (ii) which could reasonably be expected to
otherwise result in a material diminution of the benefits of the transactions
contemplated by this Agreement or any other Transaction Document to the
Investors, and there shall not be pending or, to the knowledge of the Company,
the Founder and the Controlling Shareholder, threatened on the Closing Date any
Action or Proceeding in, before or by any Government Authority which could
reasonably be expected to result in the issuance of any such Order or the
enactment, promulgation or deemed applicability to the Investors, the Company,
any Subsidiary, the Founder, the Controlling Shareholder or the transactions
contemplated by this Agreement or any other Transaction Document of any such
Law.
7.4 REGULATORY CONSENTS AND APPROVALS. All consents, approvals and actions
of, filings with and notices to any Government Authority necessary to permit
each of the Parties to perform its obligations under this Agreement and each
other Transaction Document to which it is a party and to consummate the
transactions contemplated hereby and thereby, including those listed on Schedule
3.7 hereto, (a) shall have been duly obtained, made or given, (b) shall not be
subject to the satisfaction of any condition that has not been satisfied or
waived and (c) shall be in full force and effect, and all terminations or
expirations of waiting periods imposed by any Government Authority necessary for
the consummation of the transactions contemplated by this Agreement and each
other Transaction Document shall have occurred.
7.5 THIRD PARTY CONSENTS. All consents (or in lieu thereof waivers) to the
performance by each Party of each of its obligations under this Agreement and
each other Transaction Document to which it is a party or to the consummation of
the transactions contemplated hereby and thereby, including without limitation
the Restructuring, as are required under any Contract to which any Party is a
party or by which any of their respective Assets and Properties are bound,
including those listed on Schedule 3.6 hereto, (a) shall have been duly
obtained, (b) shall not be subject to the satisfaction of any condition that has
not been satisfied or waived and (c) shall be in full force and effect.
7.6 OPINION OF COUNSEL. The Investors shall have received the opinion of
Shearman & Sterling LLP, special New York counsel to the Company, Xxxxxx and
Xxxxxx, special Cayman Islands counsel to the Company, and Grandall Legal Group,
special PRC counsel to the Company, each dated the Closing Date, in the forms
attached hereto as Exhibits X-0, X-0 and D-3.
7.7 FINANCIAL STATEMENTS. The Investors shall have received the Financial
Statements audited by Ernst & Young and prepared in accordance with IFRS without
any qualification and the Investors shall have been satisfied in its sole
discretion with the Financial Statements.
7.8 DUE DILIGENCE. The Investors shall have been satisfied in their good
faith with the results of its business, environmental, health and safety,
operational, technical, legal, financial and accounting due diligence review and
management review of the Company.
7.9 TRANSACTION DOCUMENTS. Each party to each Transaction Document shall
have executed and delivered each of the Transaction Documents to which it is a
party in the forms attached hereto.
7.10 ARTICLES OF INCORPORATION. The Articles of Incorporation shall have
been amended and restated in substantially the form attached as Exhibit E to
this Agreement and filed with the Cayman Islands Registrar of Companies.
7.11 DIRECTORS. The directors nominated by the CVCI and Legend, the names
of whom are set forth on Schedule 7.11, shall have been duly elected to the
board of directors of the Company with terms of office effective as of the
Closing.
7.12 OFFICERS AND KEY EMPLOYEES. Each of the officers and key employees of
the Company and its Subsidiaries listed in Schedule 7.12 shall have delivered to
the Company an executed employment agreement in the form attached as Exhibit I
hereto, and such employment agreements shall be in full force and effect as of
the Closing Date.
7.13 PROCEEDINGS. All necessary corporate action to be taken on the part of
the Company, the Founder and each Subsidiary in connection with the transactions
contemplated by the Agreement and other Transaction Documents, including without
limitation the Restructuring, shall have been taken, and the Investors shall
have received copies of all such documents and other evidences as the Investors
may reasonably request in order to establish the taking of all necessary
corporation action by the Company, the Founder and each Subsidiaries in
connection therewith.
7.14 INVESTMENT COMMITTEE APPROVAL. The investment committee of each
Investor shall have approved the entry by such Investor into this Agreement and
each other Transaction Document to which such Investor is party.
7.15 PRE-CLOSING RESTRUCTURING. The Pre-Closing Restructuring shall have
been duly completed to the satisfaction of the Investors in their sole
discretion and that no Government Authority objects to any aspect of the
Restructuring.
7.16 NO MATERIAL ADVERSE CHANGE. Prior to and on the Closing Date, there
shall have been, in the sole discretion of the Investors, (i) no material
adverse change in the business or prospects of the Company and its Subsidiaries,
and (ii) no material adverse change in the PRC and the United States, including
its financial markets and regulatory environment.
7.17 FEES AND EXPENSES. On the Closing Date, the Company shall have paid
all Out-of-Pocket Expenses incurred by and on behalf of the Investors in
accordance with Section 14.10(b) hereof.
7.18 ENVIRONMENTAL COMPLIANCE. A Pollutant Emission Permit that allows
Solarfun Jiangsu to discharge exhaust gas and wastewater produced during its
manufacturing process shall have been duly obtained from relevant environmental
authority of the PRC and the Investors shall have received a copy of such
permit. In addition, the re-registration of environmental impact in respect of
change of location of Solarfun Jiangsu shall have been duly completed and the
Investors shall have received a copy of such registration or other evidence to
establish the completion of the re-registration.
7.19 ANNUAL INSPECTION. Solarfun Jiangsu shall have duly completed 2005
annual inspection and the Investors shall have received a copy of Solarfun
Jiangsu's business license evidencing the completion of the 2005 annual
inspection.
7.20 COMPLIANCE CERTIFICATE. A certificate dated as of the Closing, signed
on behalf of the Company, the Founder and the Controlling Shareholder,
certifying that the conditions set forth in Sections 7.1, 7.2, 7.3, 7.4 and 7.15
have been satisfied, shall have been delivered to the Investors.
7.21 SHARE CHARGE. The Controlling Shareholder and the Founder shall have
entered into a Charge and Assignment of Shares, a form of which is attached
hereto as Exhibit J, for the benefit of the Investors to pledge the Founder's
shares in the Company to the Investors to guarantee the Company's obligation to
redeem the Series A Convertible Preference Shares held by the Investors as set
forth in the Articles of Incorporation.
7.22 CALL OPTION AGREEMENT. The Controlling Shareholder and his Affiliate
Qidong City Huahong Electronics Co. Ltd. (CHINESE CHARACTERS) ("HUAHONG") shall
have entered into a Call Option Agreement, a form of which is attached hereto as
Exhibit K, for the benefit of the Investors, pursuant to which the Investors
shall have the right to acquire Huahong's equity interest in Jiangsu Linyang
Electronics Co., Ltd. (CHINESE CHARACTERS), a limited liability company
organized under the laws of the PRC ("LINYANG ELECTRONICS"), in the event that
the Company fails to perform its redemption obligations with respect to the
Series A Convertible Preference Shares held by the Investors as set forth in the
Articles of Incorporation, and shall have obtained all consents, including
without limitation consents by shareholders of Linyang Electronics, and
governmental approvals and registration necessary or required for such option
agreement. To the extent that the Company's obligation to redeem the Series A
Convertible Preference Shares held by the Investors are satisfied through the
Investors' exercise of their rights under the Call Option Agreement, the Company
shall be relieved of such obligation.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligation of the Company to proceed with the Closing is subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Company in its sole
discretion) set forth in Sections 8.1 to 8.4. The obligation of the Company to
proceed with the Second Closing is subject to the fulfillment, at or before the
Second Closing, of the condition set forth in Section 8.5.
8.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by each Investor in this Agreement shall be true and correct in
all material respects on and as of the Closing Date as though such
representation or warranty was made on and as of the Closing Date.
8.2 PERFORMANCE. Each Investor shall have performed and complied with, in
all material respects, each agreement, covenant and obligation required by this
Agreement to be so performed or complied with by such Investor at or before the
Closing.
8.3 ORDERS AND LAWS. There shall not be in effect on the Closing Date any
Order or Law that became effective after the date of this Agreement restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement or of any other Transaction
Document.
8.4 TRANSACTION DOCUMENTS. Each party to each Transaction Document shall
have executed and delivered each of the Transaction Documents to which it is a
party in the forms attached hereto.
8.5 GOOD ENERGIES' SECOND CLOSING. Good Energies shall have, within three
(3) months from Closing, (i) used reasonable endeavors to assist the Company
with procuring supplies of silicon or solar wafers at market terms; and/or (ii)
used reasonable endeavors to effect introductions of parties (including but not
limited to REC ASA) who may be able to procure supplies of silicon or solar
wafers at market terms to the Company; and/or (iii) contributed to the long-term
growth of the Company, in each or more than one of the cases (as the case
maybe), to the sole satisfaction of the Controlling Shareholder.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding any right
of the Investors (whether or not exercised) to investigate the affairs of the
Company and the Subsidiaries, the Investors shall have the right to rely fully
upon the representations, warranties, covenants and agreements of the Company,
the Founder and the Controlling Shareholder contained in this Agreement. Each of
the representations and warranties contained in this Agreement shall survive the
Closing for a period of three (3) years.
ARTICLE X
INDEMNIFICATION AND CONTRIBUTION
10.1 INDEMNIFICATION.
(a) The Company, the Founder and the Controlling Shareholder shall jointly
and severally indemnify the Investor Indemnified Parties and hold the Investor
Indemnified Parties harmless from and against any Losses (including any
diminution in the value of any Shares then held by the Investor Indemnified
Parties due to any breach of the representations, warranties or covenants or
agreement by the Company, the Founder or the Controlling Shareholder contained
in this Agreement) that the Investor Indemnified Parties may incur or suffer as
a result of, arising out of or in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, including, without limitation, (i) any breach of any
representation or warranty of the Company, the Founder and the Controlling
Shareholder contained in this Agreement, (ii) the non-fulfillment of or failure
to perform any covenant or agreement on the part of the Company, the Founder and
the Controlling Shareholder in this Agreement, (iii) any liabilities of the
Company or any Subsidiary arising from, relating to or in connection with all
periods prior to the Closing Date, to the extent that such liabilities are not
provided for in the Financial Statements of the Company and its Subsidiaries
provided to the Investors in connection hereof, and such liabilities shall
include but not limited to (1) any Taxes assessed against the Company or any
Subsidiary, (2) any claim relating to noncompliance by the Company or any
Subsidiary of applicable Laws relating to the employment, including but not
limited to provisions thereof relating to wages, hours, housing funds, social
welfare, social insurance contribution, (3) any Environmental Claim against the
Company or any Subsidiary, and (4) any claim for breach of Contract by the
Company or any Subsidiary, and (iv) the enforcement of this indemnity, and agree
to reimburse each such Investor Indemnified Party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such Loss; provided that the Investor Indemnified Parties will not
have the right to be indemnified pursuant to this Section 10.1(a) unless and
until, with respect to any single claim, the Investor Indemnified Parties shall
have suffered, incurred, sustained or become subject to Losses when aggregated
exceeding US$50,000, or with respect to any claims, the Investor Indemnified
Parties shall have suffered, incurred, sustained or become subject to Losses
when aggregated exceeding US$150,000, after
which the Investor Indemnified Parties shall be entitled to indemnity under this
Section 10.1(a) for all Losses without regard to the US$50,000 or US$150,000
basket, as applicable.
(b) The maximum liability of the Company, the Founder and the Controlling
Shareholder, collectively, under this Agreement shall be an amount equal to the
Aggregate Purchase Price paid by the Investors at the Closing hereunder and the
aggregate purchase price paid by Good Energies at the Second Closing, if the
Second Closing takes place on the terms and conditions hereof.
10.2 CONTRIBUTION. Subject to Section 10.1(b), in the event that the
indemnity provided in Section 10.1 hereof is unavailable to or insufficient to
hold harmless an Investor Indemnified Party for any reason, the Company and the
Controlling Shareholder agree, jointly and severally, to make the maximum
contribution permissible under applicable Laws to the payment and satisfaction
of any Losses (including any diminution in the value of any Shares then held by
the Investor Indemnified Parties) incurred or suffered as a result of, arising
out of or in connection with the execution, delivery and performance of this
Agreement or any other Transaction Document or the consummation of the
transactions contemplated hereby or thereby and to any legal or other expenses
reasonably incurred in connection with investigating or defending any such
Losses.
10.3 NO PREJUDICE. The right of the Investors under this Articles X shall
not prejudice any additional rights such Investors have under applicable Law.
ARTICLE XI
TERMINATION
11.1 PRE-CLOSING TERMINATION. Prior to the Closing, this Agreement may be
terminated, and the transactions contemplated hereby may be abandoned:
(a) by mutual written agreement of the Parties;
(b) by the Investors, in the event of a breach hereof by the Company, the
Founder and/or the Controlling Shareholder which has a Material Adverse Effect
and is not cured within ten (10) days following notification thereof by the
Investors;
(c) by the Investors or the Company, if there shall be any Law that makes
consummation of the transactions contemplated by this Agreement or any other
Transaction Document illegal or otherwise prohibited or if consummation of the
transactions contemplated by this Agreement or any other Transaction Document
would violate any Order;
(d) by the Investors, if the Company, the Founder and/or the Controlling
Shareholder has become subject to a Bankruptcy Event;
(e) at any time after December 31, 2006, by the Investors upon notification
to the Company if the Closing shall not have occurred on or before such date and
such failure to consummate is not caused by a breach of this Agreement by the
Investors; or
(f) at any time after the first anniversary of the date of this Agreement,
by the Company upon notification to the Investors if the Closing shall not have
occurred on or before such date and such failure to consummate is not caused by
a breach of this Agreement by the Company, the Founder or the Controlling
Shareholder.
11.2 EFFECT OF TERMINATION AND SURVIVAL. If this Agreement is validly
terminated pursuant to Section 11.1, this Agreement shall forthwith become null
and void, and there shall be no further liability or obligation on the part of
the Company or the Investors (or any of their respective Representatives);
provided, that any right, provision or obligation of this Agreement that by its
nature should survive thereafter shall survive following any such termination,
including without limitation the Company's obligations to pay 50% of the
Investors' Out-of-Pocket Expenses under Section 14.10(a) hereof; provided that
such termination is not the result of the Investors' breach of this Agreement.
Notwithstanding any other provision in this Agreement to the contrary, upon any
termination of this Agreement pursuant to Section 11.1, the Company shall remain
liable to the Investors for any breach of this Agreement by the Company existing
at the time of such termination, and the Investors may seek such remedies in
accordance with Article XIII with respect to any such breach as are provided in
this Agreement or as are otherwise available at Law or in equity.
ARTICLE XII
COVENANTS RELATED TO CONFIDENTIALITY
12.1 CONFIDENTIALITY. Each Party who has received Confidential Information
from another Party (such other Party, the "DISCLOSING PARTY") undertakes that
neither it or any of its Representatives nor any Representative of any of its
Affiliates shall reveal to any other Person such Confidential Information
without the prior written consent of the Disclosing Party, provided that, such
undertaking shall not apply to:
(a) disclosures of Confidential Information that is or has become generally
available to the public other than as a result of disclosure by or at the
direction of a Party or a Party's Representatives or the Representatives of any
Affiliate of any Party in violation of this Agreement;
(b) disclosures of Confidential Information by a Party to its
Representatives to whom it is necessary or helpful for such Confidential
Information to be disclosed;
(c) disclosures of Confidential Information to the extent necessary or
required under any applicable Law or the rules of any stock exchange or in
connection with any judicial process regarding any legal action, suit or
proceeding arising out of or relating to this Agreement or any other Transaction
Document, after giving prior written notice to the other Parties to the
extent practicable under the circumstances, and subject to having undertaken any
reasonably available arrangements to protect confidentiality;
(d) disclosure of Confidential Information to the Permitted Transferees and
any partner or investors in the Permitted Transferee; provided that, each of
such Permitted Transferee agrees to keep such information that is not publicly
available strictly confidential; or
(e) disclosure of Confidential Information to legal counsels, accountants
and other professionals subject to confidentiality obligations retained by the
Parties for the purposes of an IPO.
The obligations under this Section 12.1 shall survive the Closing or the
termination of this Agreement.
12.2 RESTRICTION ON ANNOUNCEMENTS. Each Party shall, and shall cause each
of its Representatives and each Representative of each of its Affiliates, not to
make any public announcement about the subject matter of this Agreement or
regarding the Company or any of its business and operating plans from time to
time, whether in the form of a press release or otherwise, without first
consulting with the other Parties and obtaining the other Parties' written
consent to make such announcement, save as required by applicable Law or the
rules of any stock exchange on which such Party or any Affiliate of such Party
is listed or registered. If disclosure is so required, the other Parties shall
be given a reasonable opportunity to review and comment on any such required
disclosure.
ARTICLE XIII
GOVERNING LAW AND RESOLUTION OF DISPUTES
13.1 GOVERNING LAW. This Agreement and any disputes, claims or
controversies arising from, related to or in connection with this Agreement
shall be construed in accordance with the Laws of the State of New York.
13.2 DISPUTE RESOLUTION FORUM.
(a) If there is any dispute, claim or controversy arising from, related to
or in connection with this Agreement, or the breach, termination or invalidity
hereof, the Parties shall first attempt to resolve such dispute, controversy or
claim through friendly consultations. If the dispute, claim or controversy is
not resolved through friendly consultations within thirty (30) days after a
Party has delivered a written notice to another Party requesting the
commencement of consultation, then the dispute, claim or controversy shall be
finally settled by arbitration conducted by the International Chamber of
Commerce (the "ICC") in accordance with the Arbitration Rules of the ICC then in
effect and as may be amended by the rest of this Section 13.2 (the "RULES").
There shall be three (3) arbitrators of whom the Investors shall nominate one
(1) arbitrator, and the Company, the Founder and the Controlling Shareholder
shall jointly nominate one (1) arbitrator, in accordance with the Rules. The two
(2) named arbitrators shall nominate the third arbitrator within thirty (30)
days of the nomination of the second arbitrator. If any arbitrator has not been
named within the time limits specified in the Rules,
such appointment shall be made by the International Court of Arbitration of the
ICC upon the written request of either Party within thirty (30) days of such
request. The arbitration shall be held and the award shall be rendered in
Singapore. The arbitration proceeding shall be conducted and the award shall be
rendered in the English language. Each Party shall cooperate in good faith to
expedite (to the maximum extent practicable) the conduct of any arbitral
proceedings commenced under this Agreement.
(b) The award shall be final and binding upon the Parties, and shall be the
exclusive remedy between the Parties regarding any claims, counterclaims,
issues, or accountings presented to the arbitral tribunal. To the fullest extent
allowed by applicable Law, each Party hereby waives any right to appeal such
award. Judgment upon the award may be entered in any court having jurisdiction
thereof, and for purposes of enforcing any arbitral award made hereunder, each
Party irrevocably submits to the jurisdiction of any court sitting where any of
such Party's material assets may be found. Any arbitration proceedings,
decisions or awards rendered hereunder shall be governed by the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June
10, 1958, as amended, and the Parties agree that any award rendered hereunder
shall not be deemed a domestic arbitration under the laws of any jurisdiction.
(c) By agreeing to arbitration, the Parties do not intend to deprive any
court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral
attachment or other order in aid of arbitration proceedings and the enforcement
of any award.
(d) The costs of the arbitration, as defined in the Rules, shall be
allocated between the Parties by the arbitrators and shall be set forth in the
arbitral award. Any amounts subject to the dispute, controversy or claim that
are ultimately awarded to a Party under this Section 13.2 shall bear interest at
the rate of six percent per annum from the earlier of (i) the date of the
request for arbitration and (ii) the date such amount would have become due and
owing but for the dispute, controversy or claim until the date the arbitral
award is paid in full.
13.3 SPECIFIC PERFORMANCE. Each Party hereby acknowledges that the remedies
at law of the other Parties for a breach or threatened breach of this Agreement
would be inadequate and, in recognition of this fact, any Party, without posting
any bond, and in addition to all other remedies that may be available, shall be
entitled in accordance with Section 13.2(c) to seek equitable relief in the form
of specific performance, injunctions or any other equitable remedy.
13.4 WAIVER OF IMMUNITIES. Each Party irrevocably waives any right that it
has or may hereafter acquire, in any jurisdiction, to claim for itself or its
revenues, assets or properties, immunity from service of process, suit, the
jurisdiction of any court, an interlocutory order or injunction or the
enforcement of the same against its property in such court, attachment prior to
judgment, attachment in aid of execution of an arbitral award or judgment
(interlocutory or final) or any other legal process.
13.5 PERFORMANCE PENDING DISPUTE RESOLUTION. Unless otherwise terminated in
accordance with the terms hereof, this Agreement and the rights and obligations
of the Parties hereunder shall remain in full force and effect during the
pendency of any proceeding under Section 13.2.
13.6 SURVIVAL. Unless otherwise terminated in accordance with the terms
hereof, this Article XIII shall survive the termination or expiration of this
Agreement.
ARTICLE XIV
MISCELLANEOUS
14.1 ENTIRE AGREEMENT. This Agreement (together with the other Transaction
Documents) constitutes the whole agreement among the parties hereto and thereto
relating to the subject matter hereof and thereof and supersedes all prior
agreements or understandings both oral and written among all of the parties
hereto and thereto relating to the subject matter hereof and thereof.
14.2 BINDING EFFECT; BENEFIT. This Agreement shall inure to the benefit of
and be binding upon the Parties and their respective heirs, successors, legal
representatives and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the Parties, and their
respective heirs, successors, legal representatives and permitted assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
14.3 ASSIGNMENT.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns permitted
hereby; provided that neither the Company, the Founder nor the Controlling
Shareholder may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Investors (and any attempted
assignment or transfer by the Company without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Related Parties of the Lender) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Without prejudice to the foregoing clause (a), each Investor shall be
entitled in its absolute discretion to transfer any or all of its rights
hereunder to or for the benefit of (i) any Affiliates of such Investor; (ii) any
fund, collective investment scheme, trust, partnership (including any
co-investment partnership), special purpose or other vehicle or any subsidiary
or Affiliate of any of the foregoing, in which any Affiliate of such Investor is
a general or limited partner, shareholder, investment manager or advisor, member
of a management or investment committee, nominee, custodian, trustee or unit
holder; and (iii) in the case of any entity included in clause (ii), any
partners, members, directors, officers, employees or investors (either directly
or indirectly through any investment partnerships of entities of such
entity) who are distributees of investments held by such entity pursuant to bona
fide liquidation of such entity in which securities held by such entity are
distributed to such distributees (all of the above in clause (i), (ii) and (iii)
in this paragraph are together referred to as the "PERMITTED TRANSFEREES").
(c) Each Investor shall effect a transfer pursuant to this Section 14.3 by
delivering a written notice of the transfer to the Company. Such written notice
shall specify the name and address of the transferee, the consideration for the
transfer, if applicable, and the effective date of the transfer.
14.4 AMENDMENT; WAIVER.
(a) This Agreement may not be amended, modified or supplemented except by a
written instrument executed by each of the Parties.
(b) No waiver of any provision of this Agreement shall be effective unless
set forth in a written instrument signed by the Party waiving such provision. No
failure or delay by a Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of the same preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. Without limiting the foregoing,
no waiver by a Party of any breach by any other Party of any provision hereof
shall be deemed to be a waiver of any subsequent breach of that or any other
provision hereof. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
14.5 NOTICES. Each notice, demand or other communication given or made
under this Agreement shall be in writing and delivered or sent to the relevant
Party at its address or fax number set out below (or such other address or fax
number as the addressee has by five days' prior written notice specified to the
other Parties). Any notice, demand or other communication so addressed to the
relevant Party shall be deemed to have been delivered (a) if delivered in person
or by messenger, when proof of delivery is obtained by the delivering Party; (b)
if sent by post within the same country, on the third day following posting, and
if sent by post to another country, on the fifth day following posting, and (c)
if given or made by fax, upon dispatch and the receipt of a transmission report
confirming dispatch. The initial address and facsimile for the Parties for the
purposes of this Agreement are:
If to the Investors, to:
Citigroup Venture Capital International Growth Partnership, L.P.
c/o Citigroup Venture Capital International Asia Pacific Limited
00/X, Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx Xxxx, Xxxxxxx
Xxxx Xxxx
Facsimile No.: (000) 0000-0000
Attn: Xxxxxxx Xxxxx and Xxxxxxx Xxx
Citigroup Venture Capital International Co-Investment, L.P.
c/o Citigroup Venture Capital International Asia Pacific Limited
00/X, Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx Xxxx, Xxxxxxx
Xxxx Xxxx
Facsimile No.: (000) 0000-0000
Attn: Xxxxxxx Xxxxx and Xxxxxxx Xxx
Hony Capital II L.P.
7F, Tower A, Raycom Info Tech Park
Xx. 0 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxxxxx
Xxxxxxx, XXX 000000
Facsimile No.: (8610) 6250-9181
Attn: Xx. Xxxx Xihong
LC Fund III L.P.
x/x Xxxxxx Xxxxxxx Xxxxxxx,
00xx Xxxxx, Xxxxx A
Raycom Info. Tech Center
No. 2 Ke Xxx Xxxx Xxx Xx
Xxxxx Xxxx Cun Xxxxxxx Xxxxxxxx
Xxxxxxx 000000, Xxxxx
Facsimile No.: (8610) 6250-9100
Attn: Xx. Xxx Xxxxx
Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Yar Khan
SEDCO
7th Floor, National Commercial Bank Building
Khalidiya Branch
XXX Xxxxxx Xxxx
X X Xxx 0000
Xxxxxx 00000
Xxxxxxx of Saudi Arabia
Facsimile No.: _______________
with a courtesy copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
3007 Xxxxxxxx Xxxxx
00 Xxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Facsimile No.: x000-0000-0000
Attn: Xxxxxx Sun, Esq.
If to Good Energies, to:
Good Energies Investments Limited
0 Xxxx Xxxxxx, Xx. Xxxxxx
Xxxxxx, Xxxxxxx Xxxxxxx
XX0 0XX
Facsimile No.: 44 1534 754 510
Attn: Xxxx Xxxxxxx
with a courtesy copy to:
Linklaters
Xxxx 00
Xxxxx 00 China World Tower 1
No. 1 Xxxx Xxx Men Wai Avenue
Beijing, PRC
Facsimile No.: x00 (00) 0000-0000
Attn: Xxxx Xxxx and Xxxxxx Xxxxx
If to the Founder, to:
Yonghua Solar Power Investment Holding Ltd.
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (000) 0000-0000
Attn: Xxxxxxx Xx (CHINESE CHARACTERS)
If to the Controlling Shareholder, to:
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Facsimile No.: x00 (000) 0000-0000
Attn: Xxxxxxx Xx (CHINESE CHARACTERS)
If to the Company, to:
Solarfun Power Holdings Co., Ltd.
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (00) 0000-0000
Attn: Min Cao (CHINESE CHARACTERS)
with a courtesy copy to:
Shearman & Sterling LLP
2318 China World Tower 1
Xx. 0 Xxxx Xxx Xxx Xxx Xxxxxx
Xxxxxxx, XXX 000000
Facsimile No.: x00 (00) 0000-0000
Attn: Xxxx Seem, Esq.
If to the Other Existing Shareholders, to:
Forever-brightness Investments Limited
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Facsimile No.: x00 (00) 0000-0000
Attn: Min Cao (CHINESE CHARACTERS)
WHF Investment Co., Ltd.
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (000) 0000-0000
Attn: Xxxxxx Xxxx (CHINESE CHARACTERS)
Yongqiang Solar Power Investment Holding Ltd.
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (00) 0000-0000
Attn: Rongqiang Cui (CHINESE CHARACTERS)
Yongliang Solar Power Investment Holding Ltd.
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (00) 0000-0000
Attn: Yongliang Gu (CHINESE CHARACTERS)
Yongfa Solar Power Investment Holding Ltd.
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (000) 0000-0000
Attn: Xxxxxxx Xx (CHINESE CHARACTERS)
Yongxing Solar Power Investment Holding Ltd.
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (000) 0000-0000
Attn: Xxxxxxx Xxxx (CHINESE CHARACTERS)
Yongguan Solar Power Investment Holding Ltd.
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (000) 0000-0000
Attn: Xxxxxx Xxxx (CHINESE CHARACTERS)
If to the Other Controlling Individuals, to:
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (00) 0000-0000
Attn: Min Cao (CHINESE CHARACTERS)
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (000) 0000-0000
Attn: Xxxxxx Xxxx (CHINESE CHARACTERS)
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (00) 0000-0000
Attn: Rongqiang Cui (CHINESE CHARACTERS)
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (00) 0000-0000
Attn: Yongliang Gu (CHINESE CHARACTERS)
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (000) 0000-0000
Attn: Xxxxxxx Xx (CHINESE CHARACTERS)
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (000) 0000-0000
Attn: Xxxxxxx Xxxx (CHINESE CHARACTERS)
Xx. 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
XXX
Xxxxxxxxx No.: x00 (000) 0000-0000
Attn: Xxxxxx Xxxx (CHINESE CHARACTERS)
14.6 COUNTERPARTS. This Agreement may be signed in any number of
counterparts including counterparts transmitted by facsimile, each of which
shall be deemed an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
14.7 SEVERABILITY. If any provision contained in this Agreement shall for
any reason be determined to be partially or wholly invalid, illegal or
unenforceable by any court of competent jurisdiction, such provision shall be of
no force and effect to the extent so determined, but the invalidity, illegality
or unenforceability of such provision shall have no effect upon and shall not
impair the validity, legality or enforceability of any other provision of this
Agreement.
14.8 OTHER ENGAGEMENTS AND ACTIVITIES. The investments in the Company being
made by the Investors pursuant to this Agreement, and any subsequent investments
in the Company by the Investors or their respective Affiliates after the date
hereof, are being made notwithstanding any engagement, prior to or subsequent to
the date hereof by the Company of the Investors or any of its Affiliates as
financial advisor, agent or underwriter to the Company. Notwithstanding anything
in this Agreement or the other Transaction Documents to the contrary, neither
the Investors nor any of its Affiliates shall be restricted in any way from
engaging in any brokerage, investment advisory, financial advisory, anti-raid
advisory, financing, asset management, trading, market making, arbitrage and
other similar activities conducted in the ordinary course of its or their
business.
14.9 COSTS AND EXPENSES.
(a) In the event that this Agreement is terminated for any reason before
the Closing, the Company agrees to reimburse the Investors for 50% of the
Out-of-Pocket Expenses incurred by or on behalf of the Investors prior to the
date of such termination.
(b) In the event that the Closing takes place pursuant to the terms and
conditions of this Agreement, all Out-of-Pocket Expenses incurred by or on
behalf of the Investors shall be paid or reimbursed by the Company at the
Closing.
14.10 FURTHER ASSURANCES. Each Party shall give such further assurance,
provide such further information, take such further actions and execute and
deliver such further documents and instruments as are, in each case, within its
power to give, provide and take so as to give full effect to the provisions of
this Agreement.
14.11 SEPARATE OBLIGATIONS. Each Investor's obligations under this
Agreement are several and not joint.
[Signatures follow on the next page.]
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
COMPANY
SOLARFUN POWER HOLDINGS CO., LTD.
By: /s/ Xxxxxxx Xx
--------------------------------------
Name:
Title:
FOUNDER
YONGHUA SOLAR POWER INVESTMENT
HOLDING LTD.
By: /s/: Xxxxxxx Xx
--------------------------------------
Name: Xxxxxxx Xx (CHINESE CHARACTERS)
Title: Director
CONTROLLING SHAREHOLDER
By: /s/: Xxxxxxx Xx
--------------------------------------
Xxxxxxx Xx (CHINESE CHARACTERS)
INVESTORS:
CITIGROUP VENTURE CAPITAL
INTERNATIONAL GROWTH PARTNERSHIP, L.P.
BY: CITIGROUP VENTURE CAPITAL
INTERNATIONAL PARTNERSHIP G.P.
LIMITED, AS GENERAL PARTNER
By: /s/: Xxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
CITIGROUP VENTURE CAPITAL
INTERNATIONAL CO-INVESTMENT, L.P.
BY: CITIGROUP VENTURE CAPITAL
INTERNATIONAL PARTNERSHIP G.P.
LIMITED, AS GENERAL PARTNER
By: /s/: Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
HONY CAPITAL II, L.P.
By: /s/ Xxxxxx Xxxx
--------------------------------------
Name:
Title:
LC FUND III L.P.
By: /s/ Xxxxx Xxx
--------------------------------------
Name:
Title:
By: /s/: Xxxxxxx Xxxxxx Haram
--------------------------------------
Name: Xxxxxxx Xxxxxx Haram
By: /s/: Rasheed Yar Khan
--------------------------------------
Name: Rasheed Yar Khan
GOOD ENERGIES INVESTMENTS LIMITED
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Name:
Title: Director
By: /s/ Xxxx Xxxxxxxx
--------------------------------------
Name:
Title: Director
SECTION 2.5 OF THIS AGREEMENT IS HEREBY AGREED AND ACKNOWLEDGED BY:
OTHER EXISTING SHAREHOLDERS:
FOREVER-BRIGHTNESS INVESTMENTS
LIMITED
By: /s/: Min Cao
---------------------------------------
Name: Min Cao (CHINESE CHARACTERS)
Title: Director
WHF INVESTMENT CO., LTD.
By: /s/: Xxxxxx Xxxx
---------------------------------------
Name: Xxxxxx Xxxx (CHINESE CHARACTERS)
Title: Director
YONGFA SOLAR POWER INVESTMENT
HOLDING LTD.
By: /s/: Xxxxxxx Xx
---------------------------------------
Name: Xxxxxxx Xx (CHINESE CHARACTERS)
Title: Director
YONGGUAN SOLAR POWER INVESTMENT
HOLDING LTD.
By: /s/: Xxxxxx Xxxx
---------------------------------------
Name: Xxxxxx Xxxx (CHINESE CHARACTERS)
Title: Director
YONGLIANG SOLAR POWER INVESTMENT
HOLDING LTD.
By: /s/: Yongliang Gu
-----------------------------------------
Name: Yongliang Gu (CHINESE CHARACTERS)
Title: Director
YONGQIANG SOLAR POWER INVESTMENT
HOLDING LTD.
By: /s/: Rongqiang Cui
-----------------------------------------
Name: Rongqiang Cui (CHINESE CHARACTERS)
Title: Director
YONGXING SOLAR POWER INVESTMENT
HOLDING LTD.
By: /s/: Xxxxxxx Xxxx
-----------------------------------------
Name: Xxxxxxx Xxxx (CHINESE CHARACTERS)
Title: Director
OTHER CONTROLLING INDIVIDUALS:
By: /s/: Min Cao
-----------------------------------------
Name: Min Cao (CHINESE CHARACTERS)
By: /s/: Xxxxxx Xxxx
-----------------------------------------
Name: Xxxxxx Xxxx (CHINESE CHARACTERS)
By: /s/: Xxxxxxx Xx
-----------------------------------------
Name: Xxxxxxx Xx (CHINESE CHARACTERS)
By: /s/: Xxxxxx Xxxx
-----------------------------------------
Name: Xxxxxx Xxxx (CHINESE CHARACTERS)
By: /s/: Yongliang Gu
-----------------------------------------
Name: Yongliang Gu (CHINESE CHARACTERS)
By: /s/: Rongqiang Cui
-----------------------------------------
Name: Rongqiang Cui (CHINESE CHARACTERS)
By: /s/: Xxxxxxx Xxxx
-----------------------------------------
Name: Xxxxxxx Xxxx (CHINESE CHARACTERS)
