Exhibit 10.4

 

Mortgage Agreement

 

 

 

Contract No:

 

Location: the Hi-Tech Zone, Urumqi, China

 

 

 

Party A: TBEA Xinjiang Sunoasis Co., Ltd.

 

Legal Representative: Fei Jia

 

Address: 399 Changchun Nanlu, Urumqi, Xinjiang 

 

Business License No:

 

Party B: Gonghe County Xinte Photovoltaic Co., Ltd.

 

Legal Representative: Jianxin Zhang

 

Address:

 

Business License No:

 

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

 

Legal Representative:

 

Address:

 

Business License No:

 

RECITALS:

 

1.

Whereas, TBEA Xinjiang Sunoasis Co., Ltd. (hereinafter called “Party A”) and its
wholly-owned subsidiary Xinjiang Sangou Solar Equipment Co., Ltd. are the
original shareholders of Gonghe County Xinte Photovoltaic Co., Ltd. (hereinafter
called “Party B”), and Party A and Party B entered into a Share Purchase
Agreement (Reference no: 2014110602086) (hereinafter called “the Purchase
Agreement”) with SPI Solar Power (Suzhou) Co., Ltd. (hereinafter called “Party
C”)on November 6, 2014, and completed the business registration procedures with
regard to the change of shareholding thereafter on December 23, 2014.

 

2.

Whereas, in July 2013, Part A and Party B entered into an Engineering,
Procurement and Construction contract (the “EPC contract”) for the 20MWp Xinte
Gonghe Solar Farm, pursuant to which Party B should pay to the Party A at a
fixed payment of RMB206 million pursuant to the EPC contract.

 

3.

Whereas, to facilitate the payment transfer by Party B to Party A under the
Purchase Agreement, Party A, Party B and Party C entered into a three-party
factoring agreement (hereinafter the “Factoring Agreement”) (Reference No:
2014110702088) on November 6, 2014, pursuant to which Party A acquired a
factoring financing secured by its bank line of credit of RMB144.2 million for
the EPC contract price.

 

4.

Whereas, to ensure the execution of the Purchase Agreement, EPC Contract and the
Factoring Agreement, Party B agrees to hereby mortgage, pledges, charges and
grants to Party A a security interest in all the assets of the 20MWp solar farm
to Party A, and thereafter all concerned parties shall complete the assets
pledge registration procedures at the local industrial and commercial bureaus.

 

 
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1.

NOW, THEREFORE, in consideration of these premises, the mutual covenants and
agreements herein contained and for other good and valuable consideration, in
accordance with the laws and rules of PRC, all parties hereto agree as follows:
The Pledged Assets

 

 

1.1

The Pledged Assets (“Pledged Assets”) defined in the agreement refers to all
assets of the 20MWp Xinte Gonghe solar farm (the “Solar Farm”). Please refer to
the attachment for all details.

 

 

1.2

Party B and Party C are both due owners and rightful parties of disposition of
the Pledged Assets

 

2

The Pledge of Assets

 

 

2.1

Party B and Party C warrant and represent that they hereby mortgage, pledge,
charge and grant to Party A a security interest in the Pledged Assets, as a
general and continuing collateral security for the payment of the RMB175.1
million as defined in the Purchase Agreement as well as the factoring financing
expenses, interest costs and damage incurred by performing the Factoring
Agreement (such transaction, the “Pledge of Assets”).

 

 

2.2

Party B and Party C warrant and represent that they shall provide full supports
to Party A to complete the relevant registration of the Pledge Assets at the
local industrial and commercial bureau within 10 working days from the date of
signing the Purchase Agreement. After the registration of the Pledge Asset at
the local industrial and commercial bureau, Party A shall transfer all the
documents as listed in the attachment of the Purchase Agreement as per the terms
of the Agreement.

 

 

2.3

All the parties agree that during the term of Pledge of Assets, Party B and
Party C shall not dispose (including but not limited to the form of
transferring, granting and pledging) in any form for all or part of the Pledged
Assets without prior written consent from Party A.

 

 

2.4

All the signatory parties agree that during the term of Pledge of Asset, Party B
shall not terminate the operation of the Solar Farm, sell, transfer, deliver or
convey the Solar farm, nor provide guarantee with the Pledged Assets without the
prior written consent of Party A.

 

3

The Scope of the Pledge of Assets

 

 

3.1

The Scope of the pledge

 

 

3.2

The Scope of the Share Pledge includes (1) the contract price of RMB175.1
million that Party B and Party C are obligated to pay as defined in the Purchase
Agreement; and (2) and the factoring commission fee and interest occurred due to
the factoring financing for the RMB 144.2 million as defined in the Factoring
Agreement.

 

 

3.3

The scope also includes all the damages and loss of Party A and its wholly-owned
subsidiary Xinjiang Sangou Solar Equipment Co., Ltd arising from Party B and
Party C’s breach of the Purchase Contract and Factoring Agreement as well as the
other contract liabilities of Party B and Party C and travel expense, attorney’s
fees and other necessary fees incurred for Party A’s cause of action. .

 

 
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4

The Implementation of the Pledge Right

 

All the signatory parties agree that:

 

 

4.1

In the event that Party B fails to perform its payment obligations pursuant to
the Purchase Agreement and the Factoring Agreement and fails to cure its
defaults in the extended period, Party A shall have the right to dispose the
Pledged Assets in accordance with relevant laws and regulations.

 

 

4.2

In the event that the proceed of the Pledged Shares is less than the total
amount of damage and fees guaranteed by the Pledged Assets, Party A shall have
the right of recourse to Party B and Party C which are jointly and severally
liable .

 

5

The Termination of the Pledge Right

 

6

All the parties that in the event that one of the followings arises, the right
of pledge shall terminate immediately: As far as Party B and Party C perform
their contractual obligations as well as advancing payment under Article 3 of
the Acquisition Agreement in accordance with the Purchase Agreement and
Factoring Agreement, the right of pledge shall automatically terminate. Within
10 working days from the date of payment, Party A shall provide full support to
Party B and Party C to remove the shares pledge registration at the local
industrial and commercial bureau. The Representation and Warranties

 

 

6.1

Each of the parties warrants and represents that all the signatories have
obtained all necessary consents, approvals and authorizations from their
companies upon signing the agreement (including but not limited to government
approval, the authorization and resolutions of the Board of Directors and
Shareholders ). After the signing the agreement, neither party should declare
the agreement is null and void for the failure to secure authorization in
entering into the Agreement.

 

 

6.2

Each of the parties warrants and represents that by signing and executing of the
Agreement, it will not violate its duties and obligations to any of other
contracts, agreements thereunder of which it is a party.

 

 

6.3

Once the Agreement comes into effect, no party shall declare the agreement is
null and void or refuse to perform the obligation under the Agreement for the
reason that the conclusion of the Agreement is without authorization or the
Agreement is contradictory to other agreement or contracts of which it is a
party.

 

7

Default Liability

 

 

7.1

At any time after the Agreement becomes enforceable, each party shall duly
perform its contractual obligation, and violating any of the articles of the
Agreement shall constitute breach of contract, and the breaching party shall
indemnify any damage and loss of the non-breaching party and pay to the
non-breaching party the penalty in the amount of 3% of RMB 175 million within
the scope of pledge The damage and penalty shall not prevent each party from
continuing their performance of any obligation thereunder. Within 10 working
days of the signing the Agreement, Party B shall provide necessary documents and
full support to Part A and Party C to complete the pledged assets registration
at the local industrial and commercial bureau. In the event that the
registration process cannot be completed within 10 working days of the date of
signing the agreement due to Party B’s delay, Party B shall pay the penalty in
the amount of 0.01% of RMB175.1 million within the scope of pledge on a per day
basis.

 

 
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8

Upon Party B and Party C perform their contractual obligations pursuant to the
Purchase Agreement and Factoring Agreement and the payment obligation under
Article 3 Scope of Pledge of the Agreement and in the event that Party B fails
to coordinate with Party B and Party C in completing the registration for the
Pledge Assets due to Party A’s own reason, Party B shall pay the penalty in the
amount of 0.01% of RMB175.1 million within the scope of pledge in a per day
basis. The Dispute Resolution

 

 

8.1

Each Party hereby irrevocably submits to the exclusive jurisdiction of the
residence of plaintiff for the adjudication of any dispute hereunder or in
connection herewith or with the signing, effect, amendment, termination or other
actions that cause disputes herein.

 

 

8.2

If one or more provisions of this Agreement are held to be unenforceable in the
legal proceeding, such provision(s) shall be excluded from this Agreement and
the balance of this Agreement shall be shall be enforceable in accordance with
its terms and each of the parties shall continue to perform.

 

9.

Signing, Effectiveness and the Miscellaneous.

 

The Agreement is enforceable once signed by legal representatives and stamped
with each party’s company seal. The Agreement has 8 copies each of which shall
be deemed an original. Each of the parties holds two copies. Two copies shall be
used for pledged assets registration at the local industrial and commercial
bureau.

 

 

(Signature pages to follow)

 

 
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Party A (pledgee): TBEA Xinjiang Sunoasis Co., Ltd.

 

Legal Person (or authorized representative): (corporate seal affixed)

 

Date: 

 

 

 

Party B (pledgee): Gonghe County Xinte Photovoltaic Co., Ltd.

 

Legal Person (or authorized representative): (corporate seal affixed)

 

Date: 

 

 

 

Party C (Investor): SPI Solar Power (Suzhou) Co., Ltd.

 

Legal Person (or authorized representative): (corporate seal affixed)

 

Date: 

 

 

 

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