UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 22, 2014

 

SOLAR POWER, INC.
(Exact name of registrant as specified in its charter)

 

California
(State or other jurisdiction of incorporation or organization)

000-50142
(Commission File Number)

20- 4956638
(I.R.S. Employer Identification No.)

 

3400 Douglas Boulevard, Suite 285
Roseville, California 95661-3875
(Address and telephone number of principal executive offices) (Zip Code)

 

(916) 770-8100
(Registrant's telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[  ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On October 22, 2014, Solar Power, Inc. (the “Company”)’s wholly owned subsidiary, SPI Solar Power Suzhou Co., Ltd. (“SPI Meitai Suzhou”), a company incorporated under the laws of the People’s Republic of China (“PRC”), entered into a cooperation framework agreement (“GD Solar Framework Agreement”) with GD Solar Co., Ltd. (“GD Solar”), a company incorporated under the laws of PRC and wholly owned by Guodian Technology & Environment Group Corporation Limited, also a company incorporated under the laws of PRC whose issued shares are listed on the Hong Kong Stock Exchange under stock code 1296, whereby (i) GD Solar agreed to grant SPI Meitai Suzhou a right of first refusal to purchase projects under construction from GD Solar, (ii) SPI Meitai Suzhou and GD Solar agreed to cooperate to develop an additional 500 megawatts (“MW”) of PV projects in China each year from 2015 to 2017, for a total of 1.5 gigawatts (“GW”), and (iii) SPI Meitai Suzhou agreed to develop, finance and hold the equity interests in the new PV projects and GD Solar agreed to provide EPC and related services to the new projects, subject to the terms and conditions under GD Solar Framework Agreement.

 

On October 22, 2014, SPI Meitai Suzhou entered into a share purchase agreement (“Jinchang Purchase Agreement”) with China Energy Power Group Operation and Maintenance Management Jiangsu Co., Ltd. (“China Energy Power Jiangsu”), a company incorporated under the laws of PRC and an affiliate of GD Solar, whereby SPI Meitai Suzhou agreed acquire 100% equity interest in Jinchang Hengji Electric Power Development Co., Ltd. from China Energy Power Jiangsu, for an aggregate purchase price of RMB960 million consisting of RMB930 million in cash and RMB30 million worth of the Company’s ordinary shares at a per share price equal to the 5-day average trading price immediately prior to the closing day of the transactions contemplated under Jinchang Purchase Agreement, subject to the terms and conditions thereunder.

 

On October 22, 2014, SPI Meitai Suzhou entered into a share purchase agreement (“Chaoyang Purchase Agreement”) with Liaoning Xinda New Energy Investment Co., Ltd. (“Liaoning Xinda”), a company incorporated under the laws of  PRC and an affiliate of GD Solar, whereby SPI Meitai Suzhou agreed acquire 100% equity interest in Chaoyang Tianhua Sunshine New Energy Investment Co., Ltd. from Liaoning Xinda, for an aggregate purchase price of RMB100 million to be settled in cash, subject to the terms and conditions of Chaoyang Purchase Agreement.

 

On October 22, 2014, SPI Meitai Suzhou entered into a share purchase agreement (“Xinghe Purchase Agreement,” together with GD Solar Framework Agreement, Jinchang Purchase Agreement and Chaoyang Purchase Agreement, the “GD Solar Agreements”) with Beijing Taihedafang Investment Development Co., Ltd. (“Taihedafang”), a company incorporated under the laws of the PRC and an affiliate of GD Solar, and Xinghe Chaerhu Development Co., Ltd. ("Xinghe"), a company incorporated under the laws of PRC and owned by Taihedafang, whereby SPI Meitai Suzhou agreed acquire 100% equity interest in Xinghe Chaerhu Hairun Ecological Photovoltaic Power Generation Co., Ltd. from Taihedafang and Xinghe, for an aggregate purchase price of RMB515 million consisting of RMB50 million in cash, RMB360 million in the form of financial lease and RMB105 million worth of the Company’s ordinary shares, the number of which shall be determined at a per share price equal to the 5-day average trading price immediately prior to the closing day of the transactions contemplated under Xinghe Purchase Agreement, subject to the terms and conditions thereunder.

 

The foregoing summary of the terms and conditions of the GD Solar Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the translations of the agreements attached hereto as Exhibits 10.1, Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4 and which are hereby incorporated herein by reference.

 

 

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

 

Exhibit No.

Exhibit Description

     
  10.1 Translation of Cooperation Framework Agreement by and between SPI Solar Power Suzhou Co., Ltd. and GD Solar Co., Ltd. dated October 22, 2014
     
  10.2 Translation of Share Purchase Agreement by and between SPI Solar Power Suzhou Co., Ltd. and China Energy Power Group Operation and Maintenance Management Jiangsu Co., Ltd. dated October 22, 2014
     
  10.3 Translation of Share Purchase Agreement by and between SPI Solar Power Suzhou Co., Ltd. and Liaoning Xinda New Energy Investment Co., Ltd. dated October 22, 2014
     
  10.4 Translation of Share Purchase Agreement by and between SPI Solar Power Suzhou Co., Ltd., Beijing Taihedafang Investment Development Co., Ltd. and Xinghe Chaerhu Development Co., Ltd. dated October 22, 2014

 

 

 

 

SIGNATURE

 

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

 

 

 

SOLAR POWER, INC.

a California Corporation

 
     
Dated: October 23, 2014 /s/ Amy Jing Liu  

 

Name: Amy Jing Liu

 
  Title: Chief Financial Officer  

 

 

 

 

 

 

4

 

Exhibit 10.1

 

 

 

 

 

SPI Solar Power Suzhou  Co. , Ltd.

 

 

 

GD Solar Co. , Ltd .

 

 

 

 

 

Cooperation Framework Agreement

 

 

 

 

 

 

 

 

 

 

 

Place of Agreement: Shanghai

 

Date of Agreement: October 22, 2014

 

 

 

 
 

 

 

Party A: SPI Solar Power Suzhou Co., Ltd.

 

Party B: GD Solar Co., Ltd.

 

Whereas:

 

In order to meet the needs of the development of new energy industry, both parties decided to construct a comprehensive strategic cooperative partnership in the photovoltaic power plant investment, development, construction and operation based on the principle of honest cooperation, complementary advantages, resource sharing, equality and mutual benefit. Therefore the two parties reached cooperation framework agreement as follows:

 

Without any special declaration, "Party A" in this framework agreement  can be understood as "Party A and / or its relevant Company"; "Party B" can be understood as "Party B and / or its relevant Company and / or its relevant business partners”. According to this framework agreement, the relevant company refers to the directly or indirectly controlling companies and the companies directly or indirectly controlled.  Here “control" refers to one party’s guiding rights or powers of policy management and administrative affairs to the other party through contract, the equity or equity arrangement. Both parties confirm they have separately gained its relevant company’s  authorization on signing the framework agreement.

 

 
 

 

 

1. Strategic planning and cooperation mode

 

1.1 Both parties confirm they shall have joint cooperation in developing, investing and constructing  photovoltaic power station in the nationwide scale. From 2015 to 2017 the total capacity is expected to be 1.5GW. In 2015, it is expected to be 500MW, and 500MW in 2016 and 2017 respectively. As for the in-depth development of cooperation in the future, the two parties will further expand scope, size and depth of cooperation.

 

1.2 Both parties  can choose the following cooperation mode in power plant investment and development:

 

(1)  Party A is responsible for drafting photovoltaic power plant investment, investment guidelines, profitability requirement standard and development plans. After both parties confirm the development strategy and determine the specific implementation plan, Party B shall be responsible for the  on-the-spot investigation of the project at early stage. After preliminary assessment from both parties, the relevant companies of Party B are responsible for registration of project company and begin preparatory work, which includes but is not limited to facilitating project company to obtain legal project land use rights, getting access to relevant "pass" issued by competent department , the filing notice or gaining approval of power access by Power Grid Corp in province / autonomous region. Afterwards Party B is responsible for general contracting construction of EPC. Prices and other specific matters are agreed upon by both parties. After the completion and operation of the project and meeting investment profits of Party A, Party A shall purchase 80%-100%  equity of Party B’s relevant cooperative companies and negotiate the price.

 

 
 

 

 

(2) Projects developed solely by Party A: In the premise of compliance with the provisions of relevant laws and regulations, Party B is given priority to be entrusted for the EPC general contractor construction in accordance with fair market price and mode. Concrete matters shall be agreed upon by both parties.

 

(3) In compliance with the provisions of the relevant laws and regulations such as the premise of the normative documents, Party A is entitled to a right of first refusal to purchase or cooperate with respect to projects developed or constructed by Party B under the same conditions.

 

(4) The projects in the construction or having been completed held by relevant cooperative companies of Party B shall have the priority to be transferred to Party A with the premise of the legal provisions. After the completion of the internal review in Party A, Party A shall purchase the project company 80% - 100% equity, and equity transfer price is determined by the project IRR principle.

 

 
 

 

 

2.  Confidential Responsibility

 

(1) The parties acknowledges and agrees that during and before signing the framework agreement, business, financial condition and all information (regardless of the media) revealed by one party to the other should be confidential information (hereinafter referred to as "confidential information"). Unless the Parties agreed otherwise in writing, receiving (notifying) party should keep confidential of the confidential information. Except for the two parties’ purpose to determine the development of cooperation projects or the need of abiding by the relevant laws and regulations, it is forbidden to use or disclose the confidential information to any third party. The two parties’ confidentiality obligations are still valid under this clause during the validity of this framework agreement expires within one year.

 

3.  The execution and termination

 

The agreement should come into effect upon being signed and sealed by both parties. This agreement shall be valid for three years. This framework agreement shall terminate under any of the following circumstances:

 

(1) Both parties agree to terminate this framework agreement only in writing;

 

(2) When one party breaches confidentiality obligations or cause this framework agreement fail to achieve its purpose, the other party can terminate this framework agreement.

 

 
 

 

 

4. The effectiveness of the termination

 

After termination of this framework agreement , one party shall return confidential data and information of the other party. Information which is unable to be returned should be promptly destroyed.

 

5. Dispute resolution

 

All matters concerning signing, explaining and implementing the agreement shall apply to laws in the People's Republic of China (excluding Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan). All disputes between the parties during the execution of this framework agreement shall be settled by both parties through friendly consultation; if no settlement can be reached, the parties shall submit the dispute to the people's court where the plaintiff is located.

 

This agreement has six copies, and each party keeps three copies with the same effect.

 

(no text hereafter)

 

 
 

 

 

(The signing page)

 

 

 

 

 

 

 

Party A:   SPI Solar Power  Suzhou   Co. , Ltd.

 

The authorized person: (seal)

 

October 22, 2014

 

 

 

 

 

 

Party B:   GD Solar Co. , Ltd .

 

The authorized person: (seal)

 

October 22, 2014

 

Exhibit 10.2

 

Share Purchase Agreement

Commercial Confidential

 

 

Share Purchase Agreement

 

This Share Purchase Agreement is made and entered into in Shanghai, China as of the 22nd October, 2014 by and between:                  

Party A (Transferee): SPI Solar Power Suzhou Co., Ltd.

Party B (Transferor): China Energy Power Group Operation and Maintenance Management Jiangsu Co., Ltd.

Target Corp: Jinchang Hengji Electric Power Development Co., Ltd. 

Party C (Equity Pledgee) : GD Solar Co., Ltd.

 

Whereas each Party, adhering to the principle of cooperation, equality and mutual benefit and through friendly consultation, the Parties hereto do hereby agree on the Stock Share Purchase Agreement as follows:

 

 

Transferee

SPI Solar Power S uzhou Co., Ltd., or its designated affiliate party, for any "person", the affiliated party in this agreement means directly or indirectly controls or is controlled by, or is under common control with any other company or entity.

   

Transferor

China Energy Power Group Operation and Maintenance Management Jiangsu Co., Ltd., or related parties of transferor directly or indirectly possessing target company’s stock equity after its reconstruction domestically and overseas. Stock Share Purchase Agreement is made and entered into on 1 st September, 2014 by and between China Energy Power Group Operation and Maintenance Management Jiangsu Co., Ltd. the original target company shareholder Zhangjiagang Jiyang New Energy Co., Ltd., and Hengji Investment Development Co., Ltd. They agreed that Zhangjiagang Jiyang New Energy Co., Ltd and Hengji Investment Development Co., Ltd. shall transfer their target company’s 100% stock equity to China Energy Power Group Operation and Maintenance Management Jiangsu Co., Ltd. And in accordance with provisions of the agreement and the supplementary agreement, the settlement of aforementioned 100% stock equity shall be completed when China Energy Power Group Operation and Maintenance Management Jiangsu Co., Ltd. pay first transfer amount of RMB15 million to Zhangjiagang Jiyang New Energy Co., Ltd. and Hengji Investment Development Co., Ltd. The transferor shall inherit all rights and obligations of the 100% stock equity, and the transfer of stock equity shall not be affected by change of registration of Ministry of Industry and Commerce and relevant departments.

 

 

 
1

 

 

Share Purchase Agreement

Commercial Confidential

 

Target company/project company

Jinchang Hengji Electric Power Development Co., Ltd.: founded on 14 th June, 2012, 100% of its stock equity was possessed by Jiangsu Co., Ltd. of China Energy Power Group Operation and Maintenance Management Jiangsu Co., Ltd., legal representative is Li Weilian, registered capital/paid-in capital is RMB172 million. Company registered address is located in No.56 of Guilin Road, Jinchuan district, Jinchang, Gansu province. Business scope of company: photovoltaic power generation; investment, consulting, construction, operation, equipment manufacturing of photovoltaic industry chain; tourism development. (The above-mentioned business scope involving regulations laws, administrative regulations and the state council must be reported for approval before the registration of the project, and they are not allowed to operate before being approved. )

   

Equity Pledgee

Equity Pledgee is the general contractor of the EPC project. As The target project has been completed with acceptance and connected to the grid, to guarantee the outstanding EPC service payables, etc that the target project should pay to Party C , the transferor agrees to pledge its 100% of stock equity to the pledgee, and the equity transfer of priority repay equity pledgee outstanding EPC service payables. Equity pledgee agrees to comply with relevant equity procedures in accordance with the provisions of this agreement.

 

 
2

 

 

Share Purchase Agreement

Commercial Confidential

 

On special provisions of the

target company

To achieve the purpose of share purchase in this agreement, the target company needs domestical and oversea reconstruction. After the completion of reconstruction, Party A or affiliate party designated by Party A shall purchase stock equity of target company or oversea shareholders of target company in order to achieve the purpose purchase of the target company. Costs and expenses of target company’s setting up overseas shall be borne by Party B.

   

Delivery

It shall refer to a 100% of stock equity of the target company (hereinafter referred to as "Target Stock Equity"), which all directly or indirectly register in the acquiring party’s name (the completion day is “Delivery Day"). Delivery Day shall fall on within ten working days of the transferor and transferee’s confirmation of delivery condition.

   

The examination and approval 

of agreement’s signature

Transferee confirms that when sign in this agreement, it has obtained all necessary internal examination and approval and consent except that price of issuing shares as payment remains to be approved by the general meeting of shareholders. As for share-based payment agreed in this agreement, it shall be ensured that Party A or its affiliate party vote for in the resolution of general meeting of shareholders. The transferor confirms that it has obtained all necessary internal examination and approval and consent when signing in this agreement, and ensures that the target company has acquired all necessary internal examination and approval and consent.

   

Purchase Price

Subject to the conditions specified in this agreement, in accordance with information, representation and warranties provided by the transferor, the whole amount of target stock equity’s transfer shall be RMB 960 million. Price of stock equity transfer shall be RMB50 million; and the other RMB910 million shall be paid directly to the target company by Party A to the target company to repay outstanding payables related to EPC services.

   
 

All expense, cost, payables, debt and/or contingent liabilities of relevant approval procedures on all PV station project possessed by target company should be paid by the target company before delivery day. If it is unpaid and results the target company bear payment obligations after the delivery day, Party A shall have the right to deduct price of equity transfer or recourse on Party B. Party A and the target company shall not undertake any debts and/or contingent liabilities occurred prior to the delivery of the target company, and Party B shall undertake such obligations. if the target company for reimbursement, Party A shall have the right to deduct price of equity transfer or recourse on Party B.

 

 
3

 

 

Share Purchase Agreement

Commercial Confidential

 

Payment Method

The consideration to be paid by the Transferee to procure stock equity of the target company is RMB960 million, among which RMB930 million shall be paid in cash, and the remaining RMB30 million shall be paid by an equal worth of Solar Power Inc. ("SPI")'s ordinary shares.

Among them:

 

1. The first phase of payment in cash: The deposit of RMB100 million in cash shall be paid by transferee or the third party designated by transferee on and before 10 th November, 2014. Among which, RMB30 million, the equity transfer price, shall be paid to Party B directly by Party A; another RMB70 million shall be paid to the target company by Party A to pay target company’s outstanding payables related to EPC services.

 

2.The second phase of payment in cash: After receiving the deposit, the transferor should cooperate with the transferee or the third party of intermediary agency designated by the transferee to conduct due diligence. After the day of due diligence and confirmation of delivery conditions, the transferee or the third party of intermediary agency designated by the transferee shall credit RMB600 million into the bank account of transferee or condominium account by the third party and transferor designated by the transferee before 20 th December, 2014. Within 5 working days after the aforementioned payment being credited into the condominium account, the transferor and/or target company should comply with target equity delivery, industry and commerce alteration registration procedures. Within three working days after the target company receiving the new business license, Party A shall pay RMB580 million outstanding payables related to EPC services, and RMB20 million of equity transfer price. After these payments being paid, handover of target company shall be conducted by Party A and B. In the event of Party B and/or the target company do not conduct the equity delivery on time, transferee shall use the funds at their disposal in accordance with the agreement since the date of the expiration of the agreed time limit.

 

3. The remaining RMB 260 million, of which RMB 30 million shall be paid by an equal amount of SPI's ordinary shares,and RMB 230 million shall be paid in cash. Closing date of cash payment is from Jan.1, 2015 to Dec. 31, 2016, the payment in the first year is RMB100 million calculated at a 6.55% annual rate of interest (from January 1, 2015), and payment in the second year is RMB130 million calculated at the same rate of interests (from January 1, 2015). Equity payment shall be transferred to the Transferor or its nominated third party by the Transferor with RMB30 million worth of the SPI shares, the stock price is determined by the 5-day average trading price before the closing date of the transaction contemplated hereunder (the "closing date"). Payment deadline falls within 15 working days after the closing date. In the event  Party A cannot obtain sufficient SPI's shares through issuance, Party B shall have the right to choose payment in cash from 5 working days after Party B’s notice of choice of cash payments.

 

 
4

 

 

Share Purchase Agreement

Commercial Confidential

 

Due Diligence

The transferee or its designated agency shall conduct legal due diligence, business due diligence and financial due diligence on the target company, the transferor shall provide necessary cooperation and assistance.

 

The transferee shall promptly complete due diligence, to ensure the schedule of this Share Purchase Agreement.

   
Representations and Warrants

The transferor, target corporate hereby jointly and respectively represents and warrants to the purchasers (The following content that "have been disclosed to Party A situation" see Annex 1 "disclosure letter")

 

1.Party B is validly and legally obtain target equity, in addition to the disclosure of this Agreement, the target equity does not exist any pledge, guarantee or other third party’s rights restrictions, obstacles and other defects. If the equity of the target corporate exist other pledge, guarantee or other third party’s rights restrictions. Party B shall terminate the target equity’s pledge, guarantee or other third party’s rights restriction before the delivery. Or the parties shall be sign the agreement to deal with such rights restrictions , in order to achieve the purpose of this Agreement.

 

2.There shall not exist the contracts, agreements or other arrangements related to the target equity under this Agreement signed by Party B or target corporate and may cause significant adverse effects to the equity transfer or Party A.

 

3. In addition to the case that have been disclosed to Party A, there is no other financing documents related to the target corporate and other shareholders' rights conventions agreement or documents All previous financing documents of the target corporate shall not exist the clauses that have or will have adverse effects on the purchase and if the target company has obtained the consent of the relevant rights holders.

 

 
5

 

 

Share Purchase Agreement

Commercial Confidential

 

 

4. Party B hereby has been finished the financing contribution timely and completely according to the provisions of the articles of corporation. And since the completion of financing, it has maintained the integrity of its contribution and has no behavior of withdrawing the registered funds or transferring assets.

 

5. Parties transactions hereby under this Agreement shall not violate any applicable laws, regulations, or orders, and have obtained or will obtain all the necessary government authorities for approval or for the record registration. Such deals shall not violate any Contract, Agreement or other documents with Party B and the target corporate as object or as party one or have binding on the assets. And has obtained all necessary third party consents.

 

6.The register of shareholders hereby provided by target corporate to Party A is true, accurate, and complete reflection of all shareholders and the equity of the Target corporate status.

 

7. Operating conditions and the risk of target corporate hereby has been fully and completely disclosed to Party A, and there shall not exist any potential item or risk that will lead to Party A’s damage.

 

8. The documents, data and information hereby provided by target corporate for the implementation of this Agreement is true, complete and accurate reflection of the target corporate financial situation and operating results in the corresponding period.

 

9.The target corporate hereby is the legal enterprises that established according to conditions and procedures of Chinese law. Its establishment has been made all the necessary government approvals and permits and survival in accordance with the law.

 

10. In addition to the case have disclosed Party A, no other affiliated corporate did not disclosed to Party A. 

 

11. In addition to the case have disclosed Party A, no other subsidiary corporate did not disclosed to Party A. The target corporate shall be entitled to enjoy the property of their respective claims and full ownership fully and completely.

 

 
6

 

 

Share Purchase Agreement

Commercial Confidential

 

 

12.Target corporate have been made in the use of patent, trademark, non-patented technology and all other intellectual property rights of ownership and used in practice. And the target corporate have right to use all of or part of its intellectual property through the way of implementation, use, licensing, license implementation and assignment to obtain commercial interests.

 

13. The intellectual property such as patent, trademark, non-patented technology hereby used by the target corporate shall not infringe any third party. There is no any individual or entity make any claims on the use of intellectual property rights, or question or doubt the Legality and validity of any license or agreement. Target corporate will be able to continue to have or use its now owned all the intellectual property rights.  

 

14.The target corporate hereby does not exist significant debt affect its daily business to carry out normally and contingent liabilities.

 

15. Since its inception to delivery completion date, the target corporate always comply with the tax laws and regulations. All the tax authorities definitely require the payment of taxes and fees have been fully paid. It didn’t receive a reminder file issued by tax or any other authority department, and didn’t receive any adverse effects on the transaction form of punishment because of tax problems. Also it didn’t exist unsettled tax investigation or dispute that pose adverse affect to this transaction.

 

16. Target corporate hereby has no illegal conduct, and didn’t receive any judicial or administrative penalty by the relevant competent departments or any other authorities.

 

17. Target corporate hereby are no contract pending against or threats to target corporate and may prohibit this agreement or otherwise affect the validity of this agreement or the execution of litigation, arbitration or other proceedings in any court, arbitration tribunal or administrative authority. Party B and target corporate also do not know the present existence of any litigation, arbitration or the administrative punishment that may cause procedure disputes or illegal behavior.

 

 
7

 

 

Share Purchase Agreement

Commercial Confidential

 

 

18. Target corporate hereby has complied with all the provisions of the relevant Chinese laws on labor employment, housing accumulation fund management,. timely pay specified amount of wages and other remuneration, and pay all social insurance premiums and housing accumulation fund and all related expenses as an employer shall pay for the employee's, and there is no non-payment or overdue behavior.

 

19. By the end of this Agreement, the target corporate and its employees or former employees does not exist any pending labor dispute arbitration or litigation.

 

20. The target corporate hereby has been to maintain the normal operation of its business within the scope of any license required, franchise(if any), government approval of such permit, franchise (if any), approved by the Government has always maintained its full force, Party B and target corporate guarantee that there are no possible causes are not disclosed to the party or to cause any such license, franchise or effectiveness of government approved by the impairment of the subject. Party B shall ensure the target corporate that the 100MW PV power station project held to obtain all necessary relevant approval procedures and operating procedures, including but not limited to: project for the record registration approval documents, project documents,, documents of project construction stage, operation stage grid-connected or documents.

 

21. In addition to the case that have already disclosed to Party A , the target corporate did not reach or sign any loans contract (including corporate bonds related contract) and other debt or debt contract.

 

24. In addition to the case that have already disclosed to Party A ,the target corporate did not reach or sign any contract or commercial arrangements associated with any related party.

 

23. The target corporate hereby did not reach or form any loan or lending arrangement with its respective directors and senior managers.

 

24. Matters without the written consent of Party A lead to the loss or damages in lawsuits of the target corporate, shall be borne by Party B.

 

 
8

 

 

Share Purchase Agreement

Commercial Confidential

 

 

25. Property damage of the target corporate caused by fire or other Force Majeure before the delivery date , shall be borne by Party B.

 

26. Party B guarantees that the target corporate shall comply with all applicable environmental laws and did not violate any laws in any major aspects, and holding the legally required environmental permits operation obtained and not any of the license violation in any major aspect.

 

27. Unless otherwise expressly agreed upon in the other provisions of this Agreement, the foregoing of each representations and warranties shall be deemed to be reiterated in the sign and delivery date of this agreement.

 

28. The Transfor hereby guarantee to settle the debt (including but not limited to accounts payable, taxes) of the target corporate and its subsidiary holding corporate before the delivery date, if the target corporate or its subordinate holding corporate existing liabilities or contingent liabilities and fails to settle by the delivery day, shall be borne by the Transfor’s debt obligations.

 

29. The related debts and liabilities involved in the representations and warranties, except the outstanding EPC service payables that have been disclosed to the acquiring firm in this Agreement.

   

Conditions of the Equity Assignment

(1) The representations and warranties with respect to this Agreement stimulated by Party B and the Target Company are still valid and accurate, and Party A does not find any significant misrepresentations by Party B or the Target Company;

 

(2) Any transactions under this Agreement have approvals when they need registration/local government approval, registration, record and report and any other procedures (if necessary)

 

( 3) Party A and Party B have abtained all relative formal approvals(if necessary) about the transfer of shares of the Target Company by relevant authorities(including board of director/board of shareholders/superior responsible organization, etc.)

 

 
9

 

 

Share Purchase Agreement

Commercial Confidential

 

 

(4) Party A has completed due diligence in connection with the Target Company, and has responsibly investigated Party B and the Target Company’s representations and warranties, and does not find any significant adverse effects of event or situation in the respect of legal registration, licensing, intellectual property, assets and liabilities, business management, financial taxation, project construction and environmental protection. If Party A has considerate difference between the due diligence result of the target company and the representations, warranties of Party B and the target company, Party B shall be entitled to adjust the transfer of shares or require Party B and the target company  shall make corrections within a time limit so that there may not be any significant differences between their representations and warranties.

 

(5) The target company possesses all necessary relative approval operating procedures of the PV station project, including but not limited to, project for the record registration approval documents, project documents, project construction phase documents, grid-connected or operating stage documents, etc. The project shall be legal.

 

(6) All necessary legal documents of the Equity Assignment signed by both Parties.

 

(7) Other conventions consented by both Parties in formal trade documents, and terms of delivery that are not in conflict with or will be in conflict with this Agreement.

 

 
10

 

 

Share Purchase Agreement

Commercial Confidential

 

Protective Terms

The transitional period since the day this Agreement being signed to the delivery date, during which, Party B may designate personnel to the target company, participating and acquainting the operation of the target company. Party B is obliged to supervise and urge the directors and senior managers of the nominated target company to continue to perform its duty of loyalty and diligence obligations. Meanwhile, it shall have Party A’s prior written consent, if the target company, prior to the closing date, has the following major events:

 

(1)   Revision of Chapter

 

(2)    Merger and acquisition, reorganization, liquidation, dissolution or dissolution

 

(3)   Asset sale, mortgage, guarantee, leasing, transfer or dispose, in connection with the transfer of foreign investment, management, intellectual property rights or license( except this Agreement has been signed and Party A has been informed, or necessities of daily operation)

 

(4)   Transfer of shares to other investors except Party A or permission of other investors to subscribe for new registered capital to hold the target company shares.

 

(5)   Distribution of profits.

 

(6)   The sale of indirect/direct shares of the target company held by existing shareholders.

 

(7)   The new PV power station.

 

(8)   Acquisition of or participation in photovoltaic power station shares

 

(9)   Capital increase in existing company involved in photovoltaic power station project

 

(10) Related party transaction

 

(11) Providing loans to directors, senior management personnel, employees or shareholders

 

(12) Producing more than RMB 1 million lending or guarantee(including the value per se)

 

(13) Buying or leasing the value of real estate and other fixed assets over RMB1 million (including the value per se)

 

(14) Buying a listed company or unlisted company's shares or equity

 

(15) Alteration of the seats of the board of directors

 

(16) The adoption, alteration of big business and operation plan, and strategic direction or significant alteration in the business are not in conformity with the current business plan

 

 
11

 

 

Share Purchase Agreement

Commercial Confidential

 

 

(17) The annual budget

 

(18) Technology transfer or permission to other party

 

(19) Modification of auditors or any major alteration in accounting system and policy

   

Taxes and Expenses

The expenses incurred in relation to this transaction, including but not limit to attorneys’ fees and financial fees, etc. shall be absorbed by both parties. After equity transfer paid by Party A, Party B and the target company shall pay taxes at the competent tax authority in accordance with relative tax regulations. If Party A or the target company is deducted by tax authority due to unfinished tax payment obligations of Party B and the target company, Party A has the right to recourse to the Party B and to deduct from due equity transfer to Party B and reserved default deposit of Party A.

   

Liability for breach of Contract

1. Unless otherwise specified in this agreement, any party violates any guarantees, promises and any other regulations under the Contract, thus causes the other party to bear any costs, liabilities or suffer any direct economic loss, so the default party shall compensate to the other party about any of the above costs, liability or loss. The compensation shall be equal to the actual loss which is suffered by the non defaulting party for default behavior and deprived of all the vested interest.

 

2. Because the Party A fails to pay the consideration of the share transfer according to this agreement’s promise, the Party B has the right to choose to terminate this Contract; at the same time, the Party B shall return the relevant funds which has paid by Party A.

 

3. The occurrences of one of the following circumstances, Party A shall have the right to request Party B to return the full amount of advance payment of principal and prepayment of principal generated by bank loans over the same period the rate of interest:

 

 
12

 

 

Share Purchase Agreement

Commercial Confidential

 

 

(1) After Party A pays the prepayment to the Party B, or within the extended time limit upon this agreement’s promise, the Party B requires to cancel the Share Purchase Agreement for the reason which is not attributable to Party A and stops this target share’s acquisition.

 

(2) Since the Party A pays the prepayment, or within the extended time limit upon this agreement's promise, the two parties satisfy the terms of delivery, but the Party B rejects to handle the registration of change of shareholder then casing the absent of delivery.

 

(3) If after Party A pays the prepayment, Party B fails to meet all conditions of delivery, the two parties agree and confirm that automatically to give party b a certain time in order to meet the delivery conditions, if in the automatic extension period, Party B still can not meet the delivery conditions and lead to delay to handle the equity alteration registration or no delivery (unless further appropriate delay due to technical reasons), in addition to the Party A agrees further delay so that the Party B meets the delivery conditions or exempts for Party B to satisfy all/part delivery conditions or the Party A agrees Party B further to handle the shareholding modification registration (in which case the party b shall continue to perform according to requirements of the party a under the share purchase agreement obligations, including delivery), party a shall be entitled to require party b to return the advance payment in full of the principal and the advance payment of the principal produced in the same period bank loans interest rate of interest.

 

(4) Since the Party A pays the prepayment, or within the extended time limit upon this agreement's promise, for the reason of force majeure which causing the two parties are unable to perform or continue to perform this agreement which will make purpose can not be carried out under this agreement, either party shall have the right to demand termination of this agreement and terminate the target share purchase, at the same time, party a shall be entitled to require party b to return the prepayment in full of the principal and the advance payment of the principal produced in the same period bank loans interest rate of interest

 

 
13

 

 

Share Purchase Agreement

Commercial Confidential

 

Confidential clause

The fact of the existence of this agreement, in the terms and conditions described in this agreement, and any materials provided in the independent due diligence, constitutes the confidential information (hereinafter referred to as "confidential information"). Unless the parties agree that for related audit (review), valuation, negotiation and implementation of this agreement described transaction or shall have the right of jurisdiction of the government departments, ministries, or stock exchange requires disclosure, the parties will not use or disclose any confidential information to a third party.

   

General Clause

1. This Agreement shall be governed by the laws of China.

 

2. The dispute arising out of this agreement shall be settled through friendly consultations by the two parties, if can not be solved, any party can institute legal proceeding to the People Court in the plaintiff’s place.

   

The completeness of the Contract

This Contract is a complete Contract which is a consensus of all parties. It supersedes all previous or homochronous oral or written information, proposals, representations and warranties. There are any conflicts about the quotation, order, receipt, or the other communications’ contents for the purpose of this contract between the parties with this contract, all the content of this Contract shall prevail

   
Force Majeure In this Contract, force majeure means any objective circumstance which is unforeseeable, unavoidable and insurmountable, includes: war, fire, flood, typhoon, earthquake, policy changes, or other events of force majeure. Appearing the above force majeure, the party suffering from force majeure shall promptly notify the other parties. And shall be provided within 15 days after the incident to eliminate the proof of the competent department. After one party provides the proof of force majeure, not be liable for breach of Contract.
   
Divisibility Any provision of this Contract for any reason in whole or in part invalid, the other provisions of this contract retain the original effectiveness , shall perform.

 

 
14

 

 

Share Purchase Agreement

Commercial Confidential

 

Title The title of the Contract is only for easy reading, does not affect any interpretations of the terms.
   
Others Signature and seal of this agreement by the parties, in duplicate, each party holding two copies which have the same legal effect.

 

 
15

 

 

Share Purchase Agreement

Commercial Confidential

 

 (This page is signature page)

Party A: SPI Solar Power Suzhou Co., Ltd.

Legal representative or Authorised representative

October 22, 2014 (seal)

 

 

 

Party B: China Energy Power Group Operation and Maintenance Management Jiangsu Co., Ltd.

Legal representative or Authorised representative

October 22, 2014 (seal)

 

 

 

Target Company: Jinchang Hengji Weiye Power Development Co., Ltd.

Legal representative or Authorised representative

October 22, 2014 (seal)

 

 

 

Party C: GD Solar Co., Ltd.

Legal representative or Authorised representative

October 22, 2014 (seal)  

 

Exhibit 10.3

 

Share Purchase Agreement

Confidential

 

Share Purchase Agreement

 

This Share Purchase Agreement (hereinafter referred to as “the Agreement”) is entered into and executed by and between the following parties in Shanghai, China on October 22 nd , 2014:

 

Party A (Purchaser): SPI Solar Power Suzhou Co., Ltd.

 

Party B (Transferor): Liaoning Xinda New Energy Investment Co., Ltd.    

 

Target company: Chaoyang Tianhua Sunshine New Energy Investment Co., Ltd.

Party C (Share Pledgee): GD Solar Co., Ltd.

 

Whereas:

1. Target company Chaoyang Tianhua Sunshine New Energy Investment Co., Ltd. hereinafter referred to as “project company”, which is funded by Party B on May 29 th , 2013 with registered capital of 10 million RMB and paid-in capital of 10 million RMB, Party B has fulfilled the investment obligation and holds 100% stocks of the targeted company. The company is located in High-tech Park of Chaoyang City; legal representative: Zhang Jianhua; business scope: new energy project investment and development, electric power project investment management, agent and sale for crystalline silicon and other photovoltaic materials (materials limited or banned by state is not allowed; materials that shall obtain approval, license or qualification from relevant sectors are not allowed before obtaining, materials can only be permitted by valid approval, license and qualification).

 

 

 
 

 

 

Share Purchase Agreement

Confidential

 

2. Party C is the general contractor of project engineering procurement construction (EPC) who shall guarantee project completion acceptance has been finished and combined to the grid and warrant project company will pay outstanding EPC service payables to Party C, Party B is voluntary to pledge Party B’s 100% shareholdings of the targeted company to Party C.

 

3. Party B is willing to transfer 100% shareholdings of target company to Party A according to clauses as stipulated in the Agreement, Party B is willing to purchase the above transferred shares and share under conditions as stipulated in the Agreement, Party C agrees to purchase 100% shareholdings of Party B according to clauses as stipulated in the Agreement, Party B shall give priority to pay oustanding EPC project payables for Party C by gained share transfer considerations.

 

Hereby, according to Corporation Law , Contract Law , the parties hereto reach an agreement on share purchase as follows through friendly consultations on the principle of mutual cooperation and mutual benefit:

 

Article 1 Definitions

 

Words and Terms in this Agreement shall have the same meaning as follows, unless otherwise stipulated in the Agreement:

 

1.1 “Agreement” or “the Agreement” refers to this Share Purchase Agreement.

 

1.2 “Target share” refers to 100% shareholdings of target company that held by Party B and Party A plans to purchase.

 

1.3 “share Transfer” refers to target share purchased by Party A from Party B under terms and conditions as stipulated in the Agreement and target share transfer action performed by Party B to Party A under terms and conditions as stipulated in the Agreement.

 

1.4 “Delivery Completion Date” refers to the date that obtains the transferring business license after completing delivery of targeted shareholdings and target company and finishing transference registration of shareholder, new border director in industrial and commercial bureau at the original company registration place according to clauses of the Agreement. Delivery Completion Date shall be took place within 10 days since Party A and Party B have confirmed the qualified delivery date.

 

 
 

 

 

Share Purchase Agreement

Confidential

 

1.5 “Target Company Transfer” refers to complete transfer all and any original copy of materials related to capitals and business on target company operation management including the administrative official seal, special financial seal, special contract seal, all seal impressions of all departments (if have), all industrial and commercial business licenses, materials related to human resources, administration, finance, project information and technical literature, together with all the contracts to Party A. Party B shall be borne to all and any responsibilities arising from sealing without confirming with and registration by Party A after transferring seals of target company to Party A.

 

1.6 “Related Party” refers to any company or entity that controls a “person ”directly or indirectly, or that controlled by this “person”, or that mutual control or controlled with or by this “person” for any “person”. Term “control” used herein this agreement for any person refers to (1) this person holds over fifty percent (50%) issued capital stock; (2) votes to pass this person holds over fifty percent (50%) votes or voting proxy that passes this person holds over fifty percent (50%) votes; (3) pass through board of directors or most members of similar institutions that is entitled to appoint this person, or (4) capable of controlling the management or decision of this person through contract or other ways.

 

1.7 “Third Party” refers to any natural person or legal person that with the exception of all parties involving in the Agreement.

 

1.8 “All Parties” refers to all the parties of this Agreement, including Party A, Party B, Party C and target company.

 

Article 2 Terms of Delivery

 

2 Party A shall consider the following requirements for purchasing target share:

 

2.1 Party B and the target company guarantee the following states under this agreement are (and always will be) truthful, accurate, complete and non-misleading;

 

2.2 The transactions related to this Agreement shall have obtained required approval and permitted documents before finishing registration of all parties and approval, registration, record, report and other procedures by local government (if necessary);

 

 
 

 

 

Share Purchase Agreement

Confidential

 

2.3 Party A and Party B have obtained formal approval (if necessary) of related issues on target company share transfer from relevant authorities (including but not limited to border of directors, border of shareholders, higher authority sectors, etc. ); 

 

2.4 Party B shall have finished due diligence of target company and conduct due diligence of statements and guarantees of Party B and target company shall have no significant variance; and no events or circumstances that shall or could have significant adverse effect towards legal registration, business permit, intellectual property, asserts and liabilities, business operation, account tax, project construction, environmental protection or other aspects have occurred; Party A is entitled to adjust share transfer considerations or require Party B and target company to amend within a limited time, so as to ensure no significant variance occurs in statements and guarantees after amendment if due diligence of target company conducted by Party A has significant variance with statements and guarantees of party B and target company;

 

2.5 Party B shall guarantee that the10MW photovoltaic power station project of the project company have obtained necessary related approval process and operation process, including but not limited to: registration documents of project approval and record, project determination documents, project documents of construction stage, documents of grid-connection and operation, etc.;

 

2.6 Legal documents needed for signing delivery by both parties;

 

2.7 share pledge or limitation of rights of target company has been released.

 

Article 3 share transfer arrangement and considerations

 

Both parties agree the following terms on the basis of consensus:

 

3.1 Party B agrees to transfer to party A, Party A agrees to assign target share, and Party C agrees to cooperate on handling formalities of shares custody for the convenience of finishing share delivery and industrial and commercial transfer registration formalities successfully and in time by Party A and Party B. Party A, Party B and Party C all agree to finish target share delivery, industrial and commercial transfer registration formalities and target company transfer in accordance with clause 3.5.2 after signing this Agreement, Party A shall pay Party B in accordance with terms of payment as stipulated in the Agreement.

 

 
 

 

 

Share Purchase Agreement

Confidential

 

3.2 All expenses, costs, dues, debts or/and existing debts related to all relevant approval formalities of photovoltaic power station project of target company that the target company shall be borne to the target company, if it fails to pay before the stipulated delivery date and result in target company still have to bear the payment obligation after delivery date, Party B agrees Party A to deduct the expense from share transfer considerations paying to Party B or Party B shall make compensation for Party A. Target company and Party A shall not be responsible to debts or/and existing debts before delivery, Party B shall be responsible for bearing debt obligations of such matters. Party A is entitled to deduct the expense from share transfer considerations paying to Party B or Party B shall make compensation for Party A if target company take the payment loan. Party A shall cooperate if requires to sign relevant credit and debt transfer agreement with any third party. Assets, credits and labor relation with employees of target company are still remained unchanged in the target company.

 

3.3 Party A enjoys corresponding stockholder's right according to its target share after transfer and take corresponding stockholder’s obligations since delivery date. Investment and shareholdings of stockholder in target company before and after transferring target share are as follows:

 

Stockholder’s name

Shareholdings before transfer

Shareholdings after transfer

Party B

100%

0%

Party A

0

100%

Total

100%

100%

 

3.4 Target share transfer consideration. Target share transfer consideration. Subjected to this agreement's conditions, according to the information disclosed by Target B and the agreement's representations and warranties, the transfer amount in this agreement is RMB100 million (amount in words: RMB0.1 billion) which among it the consideration for shares is RMB10 million; In order to repay the target company's oustanding EPC project payables, the rest of RMB90 million should be paid to target company by Party A.

 

 
 

 

 

Share Purchase Agreement

Confidential

 

3.5 Terms of payment:

 

3.5.1 Party A shall pay RMB10 million in ten days after this agreement be signed;

 

3.5.2 After Party B receive the advance payment, Party B shall cooperate with Party A or the third party intermediary appointed by Party A to do the investigation (law, business aspects and so on). After 10 working days which the purchaser complete the investigation and the second agreed preconditions in this agreement has been confirmed, Party C shall aid in transact share release so that Party A and Party B can accomplish the target alternation registration formality and target company handover. After the delivery finished, Party A shall pay RMB80 million in cash on December 20,2014;

 

3.5.3 Within one year from the date of the completion of this transaction settlement, if the target company or/and transferor without violation of this agreement’s statement and guarantee, Party A finished the transaction within one year, Party A should pay the spare money RMB10 million to the transferor’s appointed account.

 

3.6 Before final payment of the cash amount, if the target company and/or breach this Agreement and the transfer of "representations, warranties" clause, and cause actual losses to the purchaser, the purchaser is entitled to unpaid consideration payable directly deductible the amount of loss, and the balance will be paid after deduction of the loss to the transferor at the time specified accounts receivable final payment of the cash payments. Party to meet the unpaid price is insufficient to pay for damage caused to the Party, the transferor shall bear the corresponding liability. Above compensation for Party Party does not affect any other rights enjoyed under the applicable laws and this Agreement or relief, without prejudice to any rights of other parties except the responsible party under this Agreement or relief enjoyed.

 

3.7 Both parties should be required on the basis of Chinese law, Each Party is fully liable for the payment of all taxes and other fees related to this Agreement. Party B and target company should pay the taxes according to relevant tax rules to competent tax authorities. If party b and target company didn’t pay the tax and tax authorities enforce party A or target company to pay its tax, party A has the right to make recovery from the party B’s share transfer consideration.

 

 
 

 

 

Share Purchase Agreement

Confidential

 

Article 4 Statement and Guarantee

 

4.1 In order to fulfill the purpose of this agreement, Party B and the target company should make statement and warrants to Party A respectively and separately as follows (contents of situation that have disclosure to Party A are shown in appendix 1 “Disclosure Letter” ):

 

4.1.1 Party B valid target equity acquisition, in addition to the protocol disclosure, target equity does not exist any pledge, guarantee or other third party right restrictions, obstacles and other defects; if there are other Target Corp equity pledge, guarantee or other third party rights restriction, Party B shall, before the closing from the target equity pledge, to guarantee or other third party rights restriction, or agreement the parties signed an agreement on the rights restrictions for processing, in order to achieve the purpose of this Agreement

 

4.1.2 There exists no contract, agreement or other arrangement that under this agreement by Party B or target equity related Target Corp as a signed, the transfer of ownership or Party A that may have a significant adverse impact;

 

4.1.3 In addition to Party A disclosure cases, there exists no other financing files about Target Corp and related agreement of other shareholder rights or documents, which would adversely affect the acquisition of or possible terms and if a Target Corp has obtained the consent of the consent of the relevant obliges Target Corp does not exist in previous financing documents

 

4.1.4 According to the provisions of the articles of association of the company, Party B should finish invest timely and complete. And maintained its integrity in addition to do not show any drawing or transfer of assets behavior;

 

4.1.5 Parties to this Agreement does not violate any of the applicable laws, regulations, rules or orders, and have received or will receive all the necessary government authorities for approval or registration / filing; such transactions also does not violate any to Party B, Target Corp as an object or Party B, Target Corp for any contract, a party or the assets of a binding agreement or other documents, and have obtained agree with all required third party

 

 
 

 

 

Share Purchase Agreement

Confidential

 

The 4.1.6 Unless otherwise expressly agreed, provisions agreement of each of the representations and warranties shall be deemed to the signing of this agreement, the delivery date and delivery on the date of completion was reiterated

 

4.2 To fulfill the purposes of this agreement, Party B and the Target Corp jointly to the party represent and warrants as follows

 

4.2.1 Target Corp provides Party A with the authenticity, accuracy and integrity of the register of shareholders to reflect all the shareholders and the equity of the Target Corp status.

 

4.2.2 Target Corp has fully and completely disclosed business operation status and its risk to Party A, and there is no any other things that will damage Party A or put it at risk.

 

4.2.3 For the implementation of this agreement, Target Corp need to provide the documents, data and information are true, complete and accurate reflection of the Target Corp's financial situation and operating results in the corresponding period.

 

4.2.4 Target Corp establishes its enterprise according to the conditions and procedures prescribed by Chinese legally, and make sure its establishment and survive has\obtained all necessary government approvals and permits

 

4.2.5 Unless specified disclosure cases to Party A otherwise, the Target Corp has no other non-disclosed Associate Companies to Party A

 

4.2.6 Unless specified disclosure cases to Party A otherwise, the Target Corp has no other not disclosed subsidiary company to Party A. Target Corp has complete and sufficient ownership under its name property and debt. Target Corp does not have any form of guarantee has not set up the property mortgage, pledge, lien, a deposit or other real right for security, also does not exist any form of the common right of ownership or other third party

 

4.2.7 Target Corp have made use in the management of patent, trademark ownership and use, non-patented technology and other intellectual property rights. Target Corp have the right to use, through the implementation of, licensing, license implementation, transfer any lawful means to obtain commercial interests by Target Corp all or part of the intellectual property rights

 

 
 

 

 

Share Purchase Agreement

Confidential

 

4.2.8 Target Corp use patent, trademark, non-patent technology of any intellectual property does not infringe the rights of any third party, without the presence of any use of the individual or entity company of intellectual property rights make any claim, or any related license or agreement, effective legal question or doubt, Target Corp will continue to have / use it now owns and / or the use of all the intellectual property rights

 

4.2.9 Target Corp without any significant debt that will affect their daily business develop normally and contingent liabilities

 

4.2.10 Target Corp should always comply with the tax laws, tax and tax departments since its inception to the completion date, clear pay all fees and make sure it has been paid in full, not received tax or any other authority department issued a collection of documents, and not because of tax problems by any adversely affect the punishment to the transaction, not there are unsettled to this transaction and adversely affected tax investigation or dispute

 

4.2.11 Target Corp does not have illegal acts, not under judicial or administrative punishment to the relevant competent departments or any other organs of power

 

4.2.12 Target Corp that in any court, arbitration tribunal or the administrative organs are not open to or threaten Target Corp and may prohibit the formation of this agreement or otherwise affect the validity of this agreement or the execution of litigation, arbitration or other proceedings; Party B and Target Corp do not know any existing litigation, arbitration or administrative procedure of punishment that may dispute illegal behavior

 

4.2.13 Target Corp has complied with all the provisions of the Chinese laws relating to employment, housing provident fund management, timely and full payment of wages and other remuneration, and pay all as an employer shall pay for the employee's social insurance and housing provident fund and other related costs, does not exist for non-payment or outstanding behavior

 

 
 

 

 

Share Purchase Agreement

Confidential

 

4.2.14 Up to the date of signing of this agreement, the Target Corp and its employees or former employees does not exist any pending labor dispute arbitration or litigation

 

4.2.15 In order to maintain normal operation, Target Corp has maintained its business within the scope of business license, any concession (if any), approved by the government, such licenses, franchise (if any), approved by the government always retains its full effect, Party B and Target Corp should ensure there is no any not disclosed to Party A which may cause any such license, concession or government approved the validity of impaired causes. Party B guarantees that the item company holds a 10 MW photovoltaic power plant project has obtained all necessary relevant approval procedures and operating procedures, including but not limited to: project archival filing registration approval document, project documents, documents of project construction stage, grid or operations of phase instruments books, the project construction of legal compliance

 

4.2.16 In addition to Party A disclosure of the case, the Target Corp has not reached or sign any loans (including corporate bonds and other debt related contract) or debt contract

 

4.2.17 In addition to Party A disclosure of the case, the Target Corp is not associated with any party to reach or sign any contract or commercial arrangements

 

4.2.18 Target Corp doses not have the deal between respective directors and senior managers or form any loans or loan arrangement

 

4.2.19 loss or damages in lawsuits that damages Target Corp due to lack of the written consent from Party A shall be borne by Party B

 

4.2.20 Losses due to fire or other majeure force caused to the Target Corp property before delivery completion date shall be borne by Party B.

 

4.2.21 Party B guarantees that the project 10MW generating capacity of not less than 14.08 KWH in the first year, Party B shall assume joint responsibility to ensure that the power output and income

 

4.2.22 Party B guarantees that company complies with all applicable environmental laws and shall not be in violation of any of the law in any of the major aspects, and holds the legally required environmental permits operation obtained and not any of the license violation in any major aspect

 

 
 

 

 

Share Purchase Agreement

Confidential

 

4.2.23 Unless otherwise expressly agreed of this Agreement, each of the representations and warranties shall be deemed to the signing of this agreement, the delivery date and completion date was reiterated

 

4.3 The parties promise that since the date of signing of this agreement, each party shall promptly disclose in writing to the other party once aware of any violation of the provisions of this Agreement and any representations and warranties

 

4.4 It is defined as a transition period since the date of signal to the date of completion. During this period, Party A can be sending personnel to the Target Corp, began to participate in the field to understand the Target Corp management, continue to perform the duty of loyalty and duty of diligence, the Target Corp of Party B shall have the obligation to supervise the nomination and appointment to the Target Corp's directors and senior management at the same time, prior to delivery finish date, without Party A's prior written consent or requirements, the Target Corp shall not engage in or a commitment to engage in the following activities:

 

4.4.1 Any increase, reduce, transfer, pledge or other disposition, or authorize any options or rights of any equity interests, or the occurrence of debt convertible into equity in registered capital;

 

     4.4.2 Any merger, sale of assets or overall transfer of businesses, suspend operations or other similar acts which can cause any significant change to the company's organization and operation;

 

     4.4.3 Any acquisitions of equity or assets or make any disposition or change to its existing assets or investments;

 

     4.4.4 Any borrowing, debt obligations or external security behavior;

 

4.4.5 Declare or pay any dividend or distribute profits in any other way or pay high compensation or other high remuneration to the directors, supervisors and senior management personnel;

 

4.4.6 Any sale, lease, transfer, or set the mortgage, pledge, lien and any other security interest or any other manner dispose of the target company's assets or business;

 

     4.4.7 Compromise, reconciliation, relief, relieve or mediation with the target company of any related litigation, arbitration or other proceedings, thereby increasing the burden on the target company or liabilities;

 

4.4.8 Take any other actions of conflict or violation of this agreement or that may affect the completion of this transaction or the actions subsisting;

 

 
 

 

 

Share Purchase Agreement

Confidential

 

     4.4.9 Except for this Agreement any other modification of the articles of association or other organizational documents;

 

4.4.10 Change board seats;

 

4.4.11 Any significant change on audit firm or any accounting system and policies.

 

Article V Confidentiality clause

 

     5.1 In addition to the party providing the information to the contrary written statements, both for the performance of this contract, or to allow the other party to the other party knows the information is confidential information belonging to the party.

 

     5.2 Regardless of the reasons why public information, the information which has been disclosed to the public, from the date of disclosure will no longer belongs to confidential information.

 

     5.3 Without any written permission one opposition party should not reveal any confidential information to any third part, including contract itself; Except for the performance of its obligations under this contract, any party should not use another party’s confidential information.

 

5.4 Each party shall be responsible for the same should bound its employees to fulfill all the obligations under the contract of agreed confidentiality duty.

 

     5.5 Any party disclosure under the following circumstances or use of confidential information of the other party should not be considered as violation of the obligation of confidentiality provisions of this article:

 

(1) In order to fulfill obligations of this contract;

 

     (2) Any party is entitled to disclose in accordance with national laws, regulations, or under the requirement of powered state organs;

 

     (3) The written permission of the other party to a third party disclosure.

 

      5.6 After termination of the contract the terms still have legal force.

 

Article VI Agreement termination and Violation responsibility

 

     6.1 Except for any other agreement, any party in violation of any of its guarantee under this Agreement, or any other provision of the agreement, thereby causing the other party for any costs, liability or suffered any direct economic losses, the defaulting party shall compensate for any of the above costs, liability or damages to other parties. The compensation shall be equal to the actual loss occurs due to the non-breaching party suffered breach and all deprived deserved benefits.

 

 
 

 

 

Share Purchase Agreement

Confidential

 

6.2 If Party A fails unjustified payments on time under this Agreement, Party B agreed to give ten (10) business days of payment grace period ("grace period"), if Party A has not yet pay within the grace period, since the starting date of the grace period, Party B is entitled to a daily late fee by three times of bank loan interest rate Until all deal with payment. In the above-mentioned grace period, if the Party A has not yet paid the sums due, Party B has the rights to terminate this contract; Meanwhile, Party B will return the relevant funds which have been paid. Except for the failure of completing the period of this agreement out of the party B or the target company’s reason.

 

6.3 If one of the following situations occurs, Party B is entitled to request a full refund of interest on bank loans over the same period in prepayments of principal and interest arising from prepayments of principal calculated:

 

(1) After the advance payment to Party B, or within the extension period of the term of this Agreement, Party B remove the "Equity Purchase Agreement" and terminate this goal tender offer out of reasons not attributable to the Party A's request to.

 

(2) Since prepayment from Party A, or according to the extension of the term of this agreement, the two parties meet the closing conditions but refuse to apply the equity change registration which causes no delivery.

 

(3) If, after advance payment from the Party, Party B fails to satisfy all closing conditions, the parties agree and acknowledge that automatically gives some time to Party B to satisfy closing conditions. If Party is still unable to meet the closing conditions within this period, and lead to delay or change of registration or failure of stake delivery (unless further appropriate postponed for technical reasons), in addition to Party B agreed to further delay in order to satisfy closing conditions or exemptions Party meet all or part of the closing conditions or Party B agrees to further extension handle equity change of registration outside (in this case in accordance with the requirements of Party B shall continue to fulfill its obligations, including delivery, including under "Equity purchase Agreement" entry), Party B is entitled to request a full refund of the prepayment of principal and prepayments interest generated by the gold bank lending rate calculation.

 

(4) Since advance payment from Party B, or in accordance with the extension of the term of this Agreement, this Agreement is unable to perform due to force majeure reason or continue to perform under this Agreement will enable the purpose can not be achieved , either party shall be entitled to demand the lifting of this Agreement and the termination of this equity acquisition targets, while Party B is entitled to request a full refund with interest rates for bank loans and prepayments of principal prepayments calculations generated by the principal.

 

 
 

 

 

Share Purchase Agreement

Confidential

 

Article VII Law application and dispute resolution

 

    7.1 This contract is applicable to People's Republic of China law, and subject to its jurisdiction.

 

   7.2 Agreement dispute shall be resolved through friendly consultations within parties. If it can not be resolved, either party may apply to the people's court has jurisdiction over the location of the plaintiff's lawsuit.

 

7.3 During the lawsuit proceedings, the uncontroversial terms of the contract will still be fulfilled.

 

Article VIII General Conditions

 

8.1 Contract Integrity

 

     This is a consensual contract of parties. It supersedes all prior or contemporaneous oral or written communications, proposals, representations and warranties. The relevant quote, order, acknowledgment, or other communication between the parties on this contract in the contents has any conflict with this contract, are all in accordance with this contract.

 

8.2 Force Majeure

 

     In this contract, force majeure means unforeseeable, unavoidable and insurmountable objective conditions, including: war, fire, floods, typhoons, earthquakes, policy changes or other events of force majeure. After the above force majeure, the party affected by force majeure shall notify the other parties immediately. And the party affected by force majeure shall provide proof of the competent authorities within 15 days after the incident eliminated. After providing proof of the foregoing, force majeure party does not bear the liability of violation.

 

8.3 Severability

 

     If any provision of this contract as a result of any causes in whole or in part invalid, the other provisions of this contract remains the original effect and should be fulfilled.

 

8.4 Title

 

     The title of this contract for convenience only and shall not affect the interpretation of any provision of this contract.

 

 
 

 

 

Share Purchase Agreement

Confidential

 

Article IX Others

 

   This agreement is signed and sealed by the parties and has six copies. Both Parties A and B hold two copies. The Target Company, Party C hold one copy respectively. All these copies have the same legal effect.

(No text below)

 

 

(This is the signature page)

 

Party A: SPI Solar Power Suzhou Co., Ltd.

Legal representative or authorized representative:

October 22, 2014 (seal)

 

B: Liaoning Xinda New Energy Investment Co., Ltd.

Legal representative or authorized representative:

October 22, 2014 (seal)

 

Target Company: Chaoyang Tinahua Solar New Energy Investment Co., Ltd.

Legal representative or authorized representative:

October 22, 2014 (seal)

 

Party C: State Energy Photovoltaic Co., Ltd.

Legal representative or authorized representative:

October 22, 2014 (seal)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex I: Disclosure Letter

 

Exhibit 10.4

 

Equity Purchase Agreement

Confidential

 

 

Equity Purchase Agreement

 

This Equity Purchase Agreement (hereinafter referred to as “The Agreement”) is signed on Oct. 22 th , 2014 in Shanghai by and between the following two parties.

 

Party A( the acquirer ): SPI Solar Power Suzhou Co., Ltd.

 

Party B1(the Transferor I ) : Beijing T aihedafang Investment Development Co., Ltd.

Party B2(the Transferor II): Xinghe Chaerhu Development Co. , Ltd.

The following Party B1 Party B2 shall jointly be referred to Party B; Transferor I and Transferor II shall be jointly referred to as Transferors.

 

Target company: Xinghe Chaerhu Hairun Ecological Photovo ltaic Power Generation Co. , Ltd.

Party C(Equity pledgee): GD Solar Co., Ltd.

 

The parties, with friendly consultation, based on mutual cooperation and benefit, reach this Agreement on purchase of shares as follows:

 

Acquirers:

SPI Solar Power Suzhou Co., Ltd. or resigned related parties. In this Agreement, related parties the one directly or indirectly control this person, or being controlled by this person, or co-control/being co-controlled any companied or entities/or by any companies.

   

Transferors:

Beijing Taihedafang Investment Development Co., Ltd. and Xinghe Chaerhu Development Co. , Ltd. (a wholly owned subsidiary of Beijing Taihedafang Investment Development Co., Ltd.), or stock rights, which are reorganized by both abroad and home, directly or indirectly possess the stock rights by the target company.

   

Target/Project company:

Xinghe Chaerhu Hairun Ecological Photovoltaic Power Generation Co., Ltd., was founded on July 17 th 2013. Beijing Taihedafang Investment Development Co., Ltd. holds 95% stock, Xinghe Chaerhu Development Co., Ltd. Holds 5% stock, and the legal representative Ma zhanbo with registered capital RMB180 million. Target company is located in yamenhao, guan Town, xinghe County with business scopes as photovoltaic power generation, solar thermal power generation, wind and solar power generation, high-tech, environmental protection industry and new energy industry, new energy industry technical services, information consulting, agriculture, animal husbandry consulting. (Legally approved projects can only be allowed to run business with the approval of relevant departments.)

 

 

 

 

Equity Purchase Agreement

Confidential

 

Equity pledgee:

Equity pledgee of the project is the EPC general contractor. The target project has been completed, accepted and grid-connected. To guarantee that the party C should be paid the outstanding EPC service payables. The transferor agrees to pledge the 100% equity of the target company which he has hold to the equity pledgee, and the priority of equity transfer is to refund the equity pledgee the EPC project with the earning equity. Equity pledgee agrees to conduct equity sign procedures complying with this agreement.

   

Specific procedures of Target company:

To achieve the goal of buyout in this agreement, the target company is required to regroup both at home and abroad. After the regrouping, the related party assigned by the party A and B is responsible for the takeover of target company and the equity of its shareholder abroad to finish the buyout of the company as well as its foreign investment and projects in construction.

The cost and expense of the target company in setting up the overseas architecture shall be borne by party B.

   

Target Date:

100% stock of the target company (target stock as following) is required to be registered in the name of the acquirer totally directly or indirectly (the date of completion is Closing Date).

Closing Date should occur in ten working days counted from the satisfaction of closing conditions confirmed by transfers and acquirers.

   

Approval must be obtained by the time of signing the agreement

The acquirer confirms that during the signing of this agreement, it has obtained all the necessary internal approval and consent for completing this transaction except that the issues about the outstanding ordinary shares as the consideration of payment need the approval of the general meeting of the shareholders. As for the appointed payment of stock in the agreement, party A ensures that he and his affiliated party will vote in favor of the payment.

The transferor confirms that during the signing of this agreement, it has obtained all the necessary internal approval and consent for completing this transaction, and ensures that the target company has obtained all the necessary internal approval and consent for completing this transaction.

 

 

 

 

Equity Purchase Agreement

Confidential

 

Procurement price

Subject to the conditions of the agreement, according to the materials, statement and guarantee provided by the transferor, the transfer amount of the target equity is RMB515 million among these payment, the consideration for shares is RMB180 million; the other RMB335 million is directly paid by party A to the target company, so as to repay the outstanding EPC project payables. When all the unpaid fees, costs, payables, debts and/or contigent liabilities in the related approval process of all the related photovoltaic power station hold by the target company which should have been paid by the target company before the settlement has lead the target company to still assume the responsibilities after the settlement, party B agree with party A to deduct the fee from the consideration of share transfer which should be paid to party B or to claim the compensation from party B. Party B will assume the responsibility of paying the debts or contigent liabilities which the target company and party A didn’t pay before the settlement. If the target company pays for party B, party B shall be entitled to deduct the fee from the consideration of share transfer which should be paid to party B or to claim the compensation from party B.

   

Payment method

The purchase price of the target company's consideration is RMB515 million, of which RMB50 million shall be paid in cash, RMB360 million shall be paid in the form of financial leases, and the remaining amount shall be settled with RMB105 million worth of Solar Power Inc.'s ordinary shares. Among them:

 

1.    The first payment of cash: After signing this Agreement within 10 working days to pay RMB20 million in cash as an advance payment.

 

2.     The second payment of cash: Transferor shouldl cooperate with the Offeror or a third party designated agency acquirers to conduct due diligence after receiving advance payment. The acquirers to complete due diligence and the two parties confirmed after the date of delivery conditions to satisfy, within 10 working days, the pledgee shall cooperate with the stock solution and formalities of equity, And both parties to complete the target equity settlement, change of business registration and transfer of the target company. Party A should pay RMB30 million in cash before December 20, 2014 after the Closing Date.

 

 

 

 

Equity Purchase Agreement

Confidential

 

 

3 .    The third payment: RMB360 million shall be paid in the form of financial leases. The transferor shall assist acquirer to obtain the financial leases and acquirer shall repay amounts under the financial lease as consideration hereunder; the surplus, if any, shall belong to the project company.

 

4.    The remaining amount shall be paid by RMB105 million worth of Solar Power Inc.'s ordinary shares. Acquirer shall, or designate a third party to pay RMB105 million worth of Solar Power, Inc.'s ordinary shares, the number of which shall be determined by 5-day average trading price immediately prior to closing date. Payment deadline for delivery is within 15 working days after completion.

   

Due diligence

Of the acquiring firm itself or its designated agency legal due diligence, operational due diligence and financial due-diligence work to be necessary cooperation and assistance.

   
Representations and Warranties

Transferor and the target company are jointly make the following representations and warranties (the hereinafter content which “Party A has disclosed” are seen in Annex --the “Disclosure Letter”) to the Offeror were:

 

1 The target stock equity are validly obtained by Party B , except for the disclosure of this Agreement, there are no any pledge, guarantee or other third party rights restrictions , obstacles and other defects of the goal equity; If there are other collateral, guarantees or other third party rights restrictions of the stake in the target company, Party B should remove to the target equity pledge, guarantee or other third party rights restrictions before delivery, or negotiate to sign separate agreement to handle the restricted circumstances be treated, so as to achieve the purposes of this Agreement.

 

2. There are no contacts, agreements or other arrangements signed by party B or the target company,and may cause significant adverse effects on the equity transfer or party A related to the target equity.

 

3.Except for the case disclosed by party A,there are no other financing documents related to the target company as well as agreements or other documents which constrains company shareholders' rights,there are no agreements that may be harmful to the purchase terms in all previous finance files of the target company ,and if there were such agreements ,the target company would have got the permission of the holder of the relevant .

 

 

 

 

Equity Purchase Agreement

Confidential

 

 

4. Party B has to finish the founds timely and completely in accordance with the provisions of the articles of association of the company.and keep the contribution integrity without pumping back and transfer.

 

5. The trades under this agreement between two parties do not violate any any of the applicable laws, regulations, rules or orders,and have received or will receive all the necessary government authorities for approval or registration / filing;besides, such transactions do not violate any contract with Party B, or any asset- binding agreement or document, and has obtained all necessary consents of the third party.

 

6.Target Corp need provide Party A with the authenticity, accuracy and integrity of the register of shareholders lists which reflects all the equity of the Target Corp status.

 

7. Business situation and  risk  of the Target Corp  has been fully  and completely disclosed to Party A , and there is no any items or risk which will damage to party A .

 

8. The documents,data and information which are provided by the target company all should truly, completely and accurately reflect its financial situation and the consequence during its operating period order to fulfill the agreement.

 

9. According to the terms and procedures under the Chinese law, the enterprises which are legally established by the target company can be lawfully existed as long as they have gained all the necessary approvals and permissions of the government.

 

10. In addition to the case which have been disclosed to Party A, the target company does not have other affiliated companies which are not disclosed to the party

 

11. Except for the cases Party A has disclosed, the target company does not have other subsidiaries which are not disclosed to Party A. Target companies enjoy a full ownership to their entitled properties and claims. The Target company has not established any form of guarantee on the property, mortgage, pledge, lien, deposit or other security interests, nor is there any form of total ownership or other rights of third party .

 

12. The target company has obtained a patent, trademark, patent technology and the ownership and usage of other intellectual property used in the operation, and the target company is entitled to use all or part of the intellectual property rights of the Target Company through the implementation, use, license, license enforcement, transfer and any lawful means, so as to obtain commercial interests.

 

13. Any target companies use intellectual property patents, trademarks, and other non-patent technology without infringing any third party's rights. If there is no individual or entity make any claims of the use the company’s intellectual property rights, or question or doubt the validity of the target company’s related license or agreement , the target company can continue to have / or use of its now owns and / or the aforementioned use of all intellectual property rights.

 

 

 

 

Equity Purchase Agreement

Confidential

 

 

14. There is no significant debts or  liabilities which would impact on the target company  to carry out their normal daily business.

 

15. Since target company establishment of completion of the delivery day, it always adhere to the tax laws and regulations, all the payment of taxes and fees that tax department definitely required have been fully paid. Not received tax or any other authority department issued a reminder file, and not because of tax problems disciplined by any pose adverse effect to the transaction, there is no has not yet been settled pose adverse effect to the transaction tax investigation or dispute.

 

16. Target company shall has no illegal operations and has not received any administrative Punishment from the competent department or any judicial penalty from authority department.

 

Target company.

 

17. Target company shall have no unsettled Litigation, arbitration or any other procedure which against and threatened the target company or might forbid the signing and the effectiveness of this contract;party B and target company shall have no ideal about any discrepancy or illegal operation which might lead to litigation,arbitration of any other procedure that have been mentioned above.

 

18. Target company shall obey all the rules about labor employment and housing accumulation fund management on the laws,pay the salary fully and on time,and pay the social insurance premiums , housing fund and any other related expenses which the employer should pay for his employees,do not pay overdue or not pay at all.

 

19. Up to the day this agreement is signed,there shall be no unsettled labor dispute arbitration or litigation between the target company and its previous or former employees.

 

20. The Target Corp has obtained any license, concession (if any), government approval, such licenses, franchise (if any), full efficacy approved by the government, which are required to maintain its normal operation within the scope of its business, the transferor and the Target Corp should guarantee that there is no event that is disclosed to Party A and of which any kind of license, concession or government approved efficacy may be impaired. The transferor should ensure that the 50MW photovoltaic power station project held by the Target Corp can obtain all the necessary and relevant approval procedures and operating procedures, which include but not limit to: project archival filing registration approval documents, project establishing documents, project construction stage documents, grid or operation phrase documents, etc.

 

 

 

 

Equity Purchase Agreement

Confidential

 

 

21. In addition to the situations which are already disclosed to Party A, the Target Corp did not conclude or sign any contact of debts, loans (including relevant contacts of debebture) and other debt payment.

 

22. In addition to situations disclosed to Party A, the Target Corp did not reach or sign any contact or commercial arrangement with any related party.

 

23. The target companies do not reach or form any arrangements of loans or debts among each board directors and senior managers.

 

24. The losses and damages caused by the issues without the written form by Party A consenting arose in litigation will be borne by Party B.

 

25. Before the delivery date force majeure,like fire accidents, causing financial damages of the target company will be borne by Party B.

 

26. Party B should guarantee that current generating capacity of the target company is over 81,850,000kwh and it should reach 500 gigawatts in the first year and take the obligations of joint liability for the Power generation and profits.

 

27. Party B should guarantee that all target companies comply with all applicable environmental laws and never violate any laws in the material respect,and hold the environmental permission laws demanded to operate and never violate in any material respect about such permissions.

 

28. Unless other provisions of this Agreement expressly agreed, the foregoing understatements and warranties of each item should be regarded as reaffirmation on the date of signing and delivery date.

 

29. The transferred party should guarantee settle the liabilities of the target companies before the delivery date (including, but not limiting to the payable and revenues). But the target companies can not settle the liabilities or can not manage it in the barely time before the deadline, the liabilities should be borne by the transferred party.

 

 

 

 

Equity Purchase Agreement

Confidential

 

T erms of delivery

( 1 )

Representations and warranties of Party B or the target company in the agreement is still valid and accurate in the delivery date, and Party A is failed to find significant misrepresentations in Party B or the target company.

     
  ( 2 ) The required permission or approval document has received, provided that transactions involved in this agreement need to finish registration by the parties/local government approval, registration, record, report and other procedures (if necessary) in accordance with the applicable law.
     
  ( 3 ) The Party A, Party B have received formal approval about the target company’s equity transfer issues (if needed) from related authorities (including but not limited to the board of directors/shareholders/supervisor organization, etc.).
     
  ( 4 ) Party A has completed due diligence on the target company and there is no significant difference between the due diligence and representations and warranties of Party B or the target company representations and warranties, and prior to the delivery date, any event or circumstance did not happen which shall or might have significant, adverse effect on the target company's legal registration,, business permit, intellectual property, assets and liabilities, business operation, financial taxation, project development, environmental protection, or other important areas; If there are significant differences between Party A’s due diligence on the target company and the representations and warranties results of Party B or the target company, Party A has the right to choose a corresponding adjustment to the equity transfer price or request Party B, the target company to correct its its representations and warranties within a limited time to make sure that there are no significant differences between its its representations and warranties.
     
  ( 5 ) Photovoltaic power plant project held by the target company has obtained all the necessary approval procedures and operation procedures, including, but not limited to project record, approval and registration documents, the project in such instruments,  project establishment documents,the project construction phase instruments and grid connected or operational phase instruments,etc., then the project is legal and compliant.
     
  ( 6 ) The two parties sign the legal documents necessary for delivery.
     
  ( 7 ) The target company’s equity pledge or right limitation has been lifted.
     
  ( 8 ) T erms of delivery   in   other conventions agreed by two parties in formal transaction documents and this agreement does not exist conflict or will lead to conflict or will make a substantial change to conventions in the agreement.

 

 

 

 

Equity Purchase Agreement

Confidential

 

Protective provisions

The transitional period is from he signing date of this agreement to the delivery date, during which Party A can sent personnel settled in the target company, to participate and to learn about the target company operation, and Party B has the right to urge directors and senior managers of his nomination and appointment of the target company to continue to fulfill faithful obligations and due diligence obligations of the target company , while prior to the delivery date, if the following significant events occur in the target company, written consent of Party A must be received in advance :

 

( 1 ) Prospectus changes;

 

( 2 ) Acquisition, merger, reorganization, liquidation, dissolution or disintegration;

 

( 3 ) Major asset sale, mortgage, guarantee, lease, transfer or disposal, and related foreign investment, franchise, intellectual property transfer or license (except for recent signing of this Agreement has occurred and has informed the Party A, or daily business activities necessary);

 

( 4 ) Transfer shares to other investors outside the Party A or allow other investors to hold the target company’s shares by means of subscribing for new shares in the registered capital, etc.;

 

( 5 ) Distribution of profits;

 

( 6 ) Existing shareholders sell their indirect / direct shares in the target company;

 

( 7 ) Establish new photovoltaic power stations;

 

( 8 ) Acquisition or equity participation of photovoltaic power stations;

 

( 9 ) Boost capital for the existing photovoltaic power station project companies;

 

( 10 ) Related transactions;

 

( 11 ) Provide loans to directors, officers, employees or shareholders;

 

( 12 ) Produce loan or guarantee (including the number) which is more than RMB1 million;

 

( 13 ) The value of purchasing or leasing fixed assets such as real estate is more than RMB1 million (including the number);

 

( 14 ) Purchase shares or equity of listed companies or unlisted companies;

 

( 15 ) Change seats on the Board of Directors;

 

 

 

 

Equity Purchase Agreement

Confidential

 

 

( 16 ) Adoption and alteration of company's major business and operational plans, as well as significant change of the strategic direction or business inconsistent with the existing business plan;

 

( 17 ) Annual budget;

 

( 18 ) The transfer of technology or technical permission granted to other parties.

 

Tax and Fees

Each of the parties bears the costs of the transaction, including but not limited to attorneys' fees, finance charges.

 

After the transfer of shares shall be paid by Party A, Party B and the target company should be based on the relevant tax provisions to the tax authorities to pay their own taxes; if the tax authorities enforce tax deductions for the Party A or the target company because Party B and the target company do not fulfill tax obligations, P is entitled to carry out recovery from Party B and should be deducted from equity transfer price paid to Party B or breach margin reserved by party A.

   

Default loss deduction

1. Before final cash payment, if the target company and / or transferor breach "representations, warranties" clause in this agreement, and cause the actual loss to the offeror, the offeror is entitled to deduct loss amount directly from unpaid consideration, and when the final payment is finished, the balance of the cash payment after deduction of the loss will be paid to the transferor designated collection account. Party A’s unpaid consideration is not sufficient to deal with or can not pay for losses caused by Party A, the transferor shall bear the corresponding compensation liability. Compensation above for the offeror does not affect any other rights or remedies of the offer or in accordance with applicable laws and this Agreement, and shall not affect any rights or remedies of the other parties except the responsible party under this Agreement entitled.

 

 
10 

 

 

Equity Purchase Agreement

Confidential

 

Liability for breach

1.    Except as otherwise stipulated in this Agreement, any party in violation of any of its guarantee,convention or other provisions under this Agreement, thereby causing the other party for any costs, liability or suffered any direct economic losses, the defaulting party shall compensate for other parties based on any costs, liability or damages above. The compensation shall be equal to non-breaching party’s actual loss due to the breach and all deserved bereft benefits.

 

2.    If Party A fails unjustified payments on time under this Agreement, Party B agrees to give ten (10) business days of payment grace period ("grace period"), if within the grace period, the Party A has not yet paid, then from the starting date of the grace period, Party B is entitled to get a daily late fee by three times of bank lending rate of Party A’s unpaid funds until the entire due amount is paid. In the above-mentioned grace period, the Party has not yet paid the sums due, Party B has the option to terminate this contract; Meanwhile, Party B will return the relevant funds having paid by Party A but in addtion to the part because of the Party B and / or the target company failing to complete delivery within the period stipulated in this agreement.

 

3.    Occurred the following circumstances, party A shall be entitled to require party B to return the advance payment in full of the principal , and the advance payment of the principal of the same period in the same period bank loans interest rate of interest:

 

( 1 ) After the advance payment to party B, or according to the extension of the term of this Agreement, party B for reasons not attributable to the party's request to lift the Equity Purchase Agreement   and the termination of target equity acquisition .

 

( 2 ) Since party A has paid advance payment, or under this agreement within the time limit extension, the two parties meet delivery condition but party B refuses to go through the equity alteration registration and cause no delivery .

 

( 3 ) If after party A has paid advance payment, party B fails to meet all conditions of delivery, the parties agree and confirm that automatically to give party B a certain time in order to meet the delivery conditions, if during the automatic extension of the period, party B cannot meet the delivery conditions, and lead to delay to handle the equity alteration registration or no delivery (Unless further appropriate delay due to technical reasons), unless party A agrees to further delay in order to meet the delivery conditions or exemption from party B to satisfy all/part of delivery condition, or party A agrees that party B has further extension handle equity change registration. ( In this case, party B shall, in accordance with requirements of the party A continue to perform the share purchase agreement under Equity Purchase Agreement entry in this case), Party a has the right to require party B to return the advance payment in full of the principal , and the advance payment of the principal produced in the same period bank loans interest rate of interest .

 

 
11 

 

 

Equity Purchase Agreement

Confidential

 

  ( 4 ) Since party A to pay advance payment, or pursuant to this agreement, within the time limit delay due to force majeure cause unable to perform or continue to perform this agreement will make purpose cannot be carried out under this agreement, either party shall have the right to demand termination of this agreement and terminate the target equity acquisition, at the same time, party A shall be entitled to require party B to return the advance payment in full of the principal, and the advance payment of the principal to the same period bank loans interest rate of interest.
   

Confidentiality clause

This agreement is the fact Described in the terms and conditions of this agreement, and any materials provided in the independent due diligence, constitutes confidential information (hereinafter referred to as "confidential information"). Parties agree, unless the relevant government departments to audit (review), valuation, negotiation and implementation of the transaction described in this Agreement shall have jurisdiction or, ministries or stock exchange requirements for disclosure, the parties will not be used or to the first tripartite disclose any confidential information.

   

General terms and conditions

( 1 ) This Agreement is governed by Chinese law.

 

( 2 ) Disputes arising from this Agreement shall be resolved through friendly consultations of the parties, if it can not be resolved, any party may apply to the people's court, and has jurisdiction over the location of the plaintiff's lawsuit.

   

Integrity of contract

This is a complete contract by all parties. It supersedes all prior or contemporaneous oral or written communications, proposals, representations and warranties. The relevant quote, order, acknowledgment, or other communication between the parties on this contract in the contents of any conflict with this contract, are in this contract shall prevail.

 

 
12 

 

 

Equity Purchase Agreement

Confidential

 

Force majeure This contract, force majeure means unforeseeable, unavoidable and insurmountable objective conditions, including: War, fire, flood, typhoon, earthquake, policy changes or other events of force majeure. After the above force majeure, the party affected by force majeure shall notify the other parties immediately. And shall provide proof of the competent authorities within 15 days after the incident eliminated. After one party provides the proof of force majeure, doesn’t bear the contract.
   
Separability Any provision of this contract as a result of any cause in whole or in part invalid, the other provisions of this contract remains the original effect, should be fulfilled.
   
Title The title of this contract is only for easy reading, do not affect any provision of this contract.
   
Others Signature and seal of this agreement by the parties, six copies, party A holds two copies, the remaining parties holds one, has the same legal effect.

 

 
13 

 

 

Equity Purchase Agreement

Confidential

 

 

 

(This is the signature page)

 

Party A: SPI Solar Power Suzhou Co., Ltd.

Legal representative or authorized representative:

October 22, 2014 (seal)

 

Party B1: Beijing T aihedafang Investment Development Co., Ltd.

Legal representative or authorized representative:

October 22, 2014 (seal)

 

Party B2: Xing he Chaerhu Development Co. , Ltd.

 

Legal representative or authorized representative:

October 22, 2014 (seal)

 

Target company: Xing he Chaerhu Hairun Ecological Photovo ltaic Power Generation Co. , Ltd.

Legal representative or authorized representative:

October 22, 2014 (seal)

 

Party C: GD Solar Co. , Ltd.

Legal representative or authorized representative:

October 22, 2014 (seal)

 

 

 

 

Attachment 1: disclosure letter

 

 

14