Document:

EXHIBIT 4.8

 

LONG-TERM SUPPLY AGREEMENT

 

Hemlock Semiconductor Pte. Ltd., a Singaporean Private Limited Company with its principal place of business at 101 Thomson Road, #26-03 United Square, Singapore 307591, and JA Solar Technology Yangzhou Co., Ltd., a Chinese limited corporation with its principal place of business at No.1 Jianhua Rd., Yangzhou, Jiangsu, China hereby enter into this Long-Term Supply Agreement.

 

WHEREAS, Buyer desires to purchase and Seller desires to sell Products pursuant to the terms and conditions of this Agreement for use by Buyer in the solar industry; and

 

WHEREAS, subject to the terms and conditions herein, Buyer will purchase from Seller specified amounts of Products at specific prices per kilogram over the Term of this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.             Definitions.  The terms defined in this Section 1 shall have the meanings specified in this Section 1.  Other terms in this Agreement that are not defined in this Section 1 shall have the meanings ascribed to them elsewhere in this Agreement.

 

(a)                                  “Affiliate” of either Buyer or Seller means an entity that controls, is controlled by, or is under common control or common ownership with Buyer or Seller, as the case may be.  For purposes of this definition, “control” and “controlled” mean the possession of the power to direct or cause the direction of the management and policies of such an entity, whether through the ownership of voting securities, by contract, by management agreement or otherwise.

 

(b)                                 “Agreement” means this Long-Term Supply Agreement.

 

(c)                                  “Buyer” means and JA Solar Technology Yangzhou Co., Ltd.

 

(d)                                 “Buyer Group” means Buyer and all Affiliates of Buyer.

 

(e)                                  “Effective Date” means the date of Seller’s execution of this Agreement.

 

(f)                                    “Gross Price” for each Product means the Gross Price per kilogram for each year of this Agreement as set forth in Section 4 hereof and Tables II A and B, and Tables III A - B, of Exhibit B, subject to the adjustments set forth in this Agreement.

 

(g)                                 “Net Price” for each Product means the Gross Price per kilogram minus the Advance Payment per kilogram for each year of this Agreement set forth in Table I of Exhibit B, subject to the adjustments set forth in this Agreement.

 

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(h)                                 “Net Remaining Advance Payment Balance” means the portion of the Advance Payment which has not yet been applied as a credit against the Gross Price of the Products that Buyer is required to purchase during the Term of this Agreement pursuant to Section 6, which amount for each calendar year is set forth in Table I of Exhibit B.

 

(i)                                     “Seller” means Hemlock Semiconductor Pte. Ltd., a Singaporean Private Limited Company.

 

2.             Products.  As used in this Agreement, “Product” or “Products” means solar grade polycrystalline silicon as described in the specifications for the respective Product set forth in Exhibit A (the “Product Specifications”).  Buyer shall utilize the Products for its manufacturing purposes in solar applications only and shall not, without the prior written consent of Seller, resell or transfer the Products to anyone or use the Products other than in Buyer’s solar manufacturing applications, subject to the following exceptions:

 

(a)                                  Buyer may transfer the Products without prior written consent of Seller to Affiliates of Buyer for Buyer’s manufacturing purposes in solar applications only, and for no other purpose; and

 

(b)                                 Buyer may transfer the Products without prior written consent of the Seller to persons who have entered into supply agreements with Buyer Group members to produce ingots and/or wafers from such Products for such Buyer Group member, for Buyer’s manufacturing purposes in solar applications.  Within ten (10) business days following the date of such transfer of Products, Buyer shall (i) provide written notice to Seller of each such transfer, (ii) provide copies of the Buyer Group transfer agreements upon entering into such agreements and (iii) notify Seller upon termination of such agreements.

 

If so requested by Buyer, Seller may, in its sole discretion, agree to deliver Products to carriers that are shipping to Buyer Group members or persons who have entered into supply agreements with Buyer Group members (as described in Sections 2(a) and 2(b) hereof) for the limited purposes cited above, and any such deliveries shall constitute delivery to Buyer under this Agreement.  Seller further agrees that any Products sold to Buyer or Buyer Group members shall be manufactured in the United States of America.

 

Buyer acknowledges that the Products bearing Product Codes HSC DMS-L and HSC 840 (for which prices are set forth in Tables III A — B, in Exhibit B) may not be available to Buyer for purchase under this Agreement unless and until Seller, in its sole discretion, elects to offer one or more of such Products for sale to Buyer; and, if Seller so elects, it shall be in Seller’s sole discretion to determine the timing and quantity of any such sales.  Notwithstanding the preceding sentence, Buyer further acknowledges and agrees that Seller, in its sole discretion, may fill Buyer orders for Products bearing Codes HSC DMS and HSC SGB (for which prices are set forth in Tables II A — B) with any combination of Products, including any of the products listed in the first sentence of this paragraph (and priced in Tables III A — B).

 

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From time to time during the Term of this Agreement, Seller may notify Buyer in writing of (a) changes to the Product Specifications, together with any corresponding modification to the Gross Price of the affected Product(s), (b) the availability of additional products that (i) Seller may, if applicable, substitute for existing Products and/or (ii) Buyer may order pursuant to this Agreement, in each case together with corresponding Gross Prices for any such new products and/or (c) the availability of new packaging options for existing Products, together with the Gross Price for each such new option.  Buyer shall have 30 days from the date of delivery of Seller’s notice to object in writing to any of the items in Seller’s notice.  If Buyer timely delivers to Seller an objection notice, Buyer and Seller will negotiate in good faith regarding an amendment to this Agreement reflecting such changes as Buyer and Seller shall agree.  If Buyer fails to deliver an objection notice within such 30-day period, Buyer shall be deemed to have accepted each item in Seller’s notice, and this Agreement shall be deemed amended as of the end of such 30-day period, without any further action by either Party, to reflect each such new item.

 

3.             Term.  The term of this Agreement shall commence on the Effective Date and (subject to Sections 11 and 17 hereof) shall continue through December 31, 2020 (the “Term”).  Subject to Sections 11 and 17 hereof, the Term may be extended, at Seller’s sole discretion, for a period not to exceed 180 days (i.e., not beyond June 29, 2021) so as to enable Seller to cure any default of its obligations under this Agreement.  Negotiations of the terms and conditions of a new supply agreement may begin on or before December 31, 2018 to address Product purchases after the Term of this Agreement has expired.  Should the parties successfully negotiate terms and conditions of supply continuing after December 31, 2020, the execution of a new supply agreement shall be required.

 

4.             Price.  The Gross Price per kilogram for each Product for each calendar year shall be fixed at the respective prices set forth in Tables II A and B, and Tables III A — B, of Exhibit B, and is subject only to adjustments for Cost Structure Adjustments (as provided in Section 8 hereof and Exhibit C) and Taxes or other charges (as provided in Section 16 hereof).  The Gross Price per kilogram does not include the cost of shipping.  All costs of shipping shall be borne by Buyer.

 

5.             Contract Quantity.  “Contract Quantity” means the quantities of Products that Buyer is obligated to purchase from Seller in each calendar year and in the aggregate during the Term of this Agreement.  The Contract Quantity is set forth in the aggregate and allocated by calendar year of purchase in Table I of Exhibit B.  The Contract Quantity for each calendar year shall be fulfilled based upon Buyer’s purchases among any of the respective Products in that year.

 

6.             Non-Refundable Advance Payment.  Buyer shall make a non-refundable, unconditional, irrevocable advance payment to Seller in the amount of *** (the “Advance Payment”), provided however, that Buyer’s obligation to pay the Advance Payment on the schedule set forth below shall be subject to, at Seller’s sole discretion, either: (i) delivery to Buyer of a guarantee, in substantially the form annexed hereto as Exhibit D and executed by a shareholder or an Affiliate of Seller with at least $1 billion in assets (a “Guaranty”), of Seller’s obligations under Section 11(a) hereof to refund an amount up to the Net Remaining Advance Payment Balance, or (ii) assignment by Seller of this Agreement to an Affiliate of Seller with at least $1 billion in assets, one of which must occur no later than June 30, 2011.  Thereafter, ***.

 

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Seller understands and acknowledges that Buyer is making the Advance Payment to secure the availability of the Contract Quantity of Products.  Buyer acknowledges and agrees that, except as provided in Section 11, there are no circumstances or occurrences that will require Seller to refund to Buyer all or any portion of the Advance Payment.  The Advance Payment shall be applied as a credit against the Gross Price of the Products that Buyer is required to purchase during the Term of this Agreement, at the times and in the amounts per kilogram shown on Table I of Exhibit B.

 

7.             Take or Pay Agreement.  This Agreement is a take or pay agreement such that, in addition to making the Advance Payment required under Section 6, Buyer is absolutely and irrevocably required to pay the Net Price per kilogram for the Contract Quantity per calendar year over the Term of this Agreement.  In the event that Buyer fails to order or take delivery of the Contract Quantity for a calendar year then Seller shall invoice Buyer for the difference between the quantity of Products ordered in that calendar year and the Contract Quantity of Product for that calendar year at the Net Price in effect for HSC DMS for that calendar year (subject to any price adjustment provided for in this Agreement, including without limitation under Section 8 or Section 16), and Buyer shall pay the same in accordance with Section 9 hereof.

 

8.             Cost Structure Adjustments.  The prices described in Section 4 and set forth in Tables II A and B, and Tables III A — B, of Exhibit B are subject to price adjustments based upon the prior years’ cumulative cost increases or decreases in accordance with the formulae set forth in Exhibit C (“Cost Structure Adjustments”).  The parties acknowledge and understand that the indices used in calculating the Cost Structure Adjustments for electricity, labor and silicon metal (as referenced in Exhibit C) for each of the respective calendar years during the Term of this Agreement, beginning with 2013, will not be available until the following year.  Based on past experience, the parties anticipate that the indices for labor and silicon metal will be published in the first quarter of the following year, and for electricity in the fourth quarter of the following year.  Irrespective of the dates that any of the indices are published, commencing in 2013, as soon as is reasonably practicable after Seller learns of the first index to be published, Seller shall determine the Cost Structure Adjustment, if any, attributable to that particular index, and shall notify Buyer of any such adjustment to the Gross Price of each Product, and such adjustment shall be effective retroactively to January 1 of that year.  Additional adjustments may be made during that year as the remaining indices are published and the data applied to the formulae in Exhibit C.  All price adjustments made in a given year shall be cumulative, and all price adjustments shall remain in effect until the respective Cost Structure Adjustment calculations are performed in the following year.  If, in the following year, the calculation of a particular Cost Structure Adjustment determines that no price adjustment is triggered for that cost index, or a price adjustment of a different amount is triggered, then Seller shall, within 30 days of performing such Cost Structure Adjustment, so notify Buyer and issue a credit or debit to Buyer, if applicable, which (a) in the case of a credit, shall be applied against future purchases required under this Agreement, and (b) in the case of a debit, shall be due thirty (30) days following Seller’s notification of such adjustment to Buyer, each of (a) and (b) in the amount of the Cost Structure Adjustment for that particular cost index, during a period in which no adjustment or a different adjustment applied.

 

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For example, if cost increases for labor and silicon metal give rise to upward price adjustments for calendar year 2015, then Seller shall be entitled, in April 2015, to payment for the full price increases for labor and silicon metal retroactive to January 1, 2015.  If, thereafter in October 2015, the cost of electricity gives rise to an upward price adjustment, then Seller shall be entitled, in October 2015, to payment for the full price of the electricity increase, retroactive to January 1, 2015.  The upward price adjustments for each of these three cost components will remain in effect until Seller performs the next annual Cost Structure Adjustment calculations in 2016.  If, upon performing the calculation for labor and silicon metal in, for example, April 2016, no upward price adjustment is triggered (which would have been effective retroactive to January 1, 2016), then, within 30 days, Seller shall issue a credit to Buyer to be applied against future purchases, in the amount of the applicable 2015 upward adjustment (e.g. for labor, silicon metal or electricity) per kilogram that Buyer paid from January 1, 2016 until Seller gives such notice.  If, instead, upon performing the respective Cost Structure Adjustment calculations in 2016, one or more upward price adjustments are triggered, they will be effective retroactive to January 1, 2016.

 

Any Cost Structure Adjustment applicable under this Section 8 shall be in addition to and cumulative with any other price adjustments under this Agreement, including without limitation taxes or other charges provided for in Section 16 hereof.

 

Buyer acknowledges that, should any of the cost indices referenced in Exhibit C that are components of the Cost Structure Adjustment formulae no longer be published as anticipated, or the data presentation, data provided, or data preparation be changed such that Seller, in its sole discretion, determines that the purpose of this Cost Structure Adjustment provision has or will fail to achieve its purpose, then Seller shall select a replacement index or benchmark, which shall be binding upon Buyer’s written agreement, which consent shall not be unreasonably withheld.

 

9.             Payment.  Payment terms are net *** days from the date of the invoice.  Finance charges of ***% per month (***% per annum) shall be assessed on payments past due from the payment due date to the date payment is received.  Failure to pay invoices when due or finance charges when assessed may result in delayed or cancelled shipments.  No deductions, setoffs, defenses or counterclaims from invoices are permitted.  Delay or cancellation by Seller of shipments resulting from Buyer’s non-payment will not relieve Buyer from any obligation set forth in this Agreement.

 

10.           Freight Terms, Title and Risk of Loss.

 

(a)                                  Subject to Section 10(b), all shipments of Products shall be made to destinations outside the United States , and freight terms for the shipment of such Products shall be DAP (Incoterms 2010) at the first non-United States destination for delivery, which destination shall be mutually agreed by Buyer and Seller.  Title and risk of loss of such Products shall pass to Buyer upon delivery at such non-United States destination.  Seller shall insure all shipments until title and risk of loss pass to Buyer.  Seller shall select the mode of shipment and shall select and engage the carrier(s) and otherwise arrange for shipment to such non-United States destination; provided however (and notwithstanding anything in DAP (Incoterms 2010) to the contrary), Buyer shall reimburse Seller for all costs and expenses of shipping such Product from Seller’s plant to the non-United States destination.  Seller shall invoice 

 

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Buyer for such charges and expenses.  Seller shall use all commercially reasonable efforts available to Seller to obtain competitive rates for shipping, and Seller shall advise Buyer, no later than November 30 of each calendar year during the Term, of its best estimate of the shipping rates expected to apply during the following calendar year.

 

(b)                                 Buyer may direct that Products sold for use, consumption or disposition in the United States by Buyer have a shipping destination within the United States.  Freight terms for the shipment of such Products with a shipping destination within the United States shall be FCA (Incoterms 2010) from any of Seller’s designated shipping points, and title to such Products shall pass to Buyer upon delivery to carrier at Seller’s designated shipping point.

 

11.           Termination and Damages.  The parties acknowledge that it is their express intent that Buyer is obligated to purchase and Seller is obligated to supply the Contract Quantity over the Term of this Agreement, and that the basis and circumstances under which the parties may terminate this Agreement prior to the expiration of the Term of this Agreement are expressly limited to the terms of this Section 11.

 

(a)                                  Default by Seller: Failure to Supply Product.  Upon default by Seller of its obligation to supply a material amount of the Contract Quantity of Product listed on Table I of Exhibit B, provided such failure is not, in full or in part, the result of a Force Majeure Event as defined in Section 17 or any default by Buyer, Buyer may serve a written notice of default upon Seller.  Seller shall have 135 days (commencing on the date written notice is received by Seller) to cure such default.  If such default is not cured within 135 days, and provided there is no uncured Buyer default, Buyer may at its option elect to terminate this Agreement by a second written notice provided to Seller within 30 days following the end of such 135 day period.  If Buyer elects to terminate, Buyer’s sole remedy and damages against Seller in connection with this Agreement will be a refund, payable by Seller within thirty (30) days of Seller’s receipt of Buyer’s written election to terminate this Agreement, of the Net Remaining Advance Payment Balance, without interest.

 

If Buyer elects not to terminate this Agreement under the default circumstances set forth above, then Buyer and Seller shall negotiate in good faith toward a new delivery schedule and the quantities to be supplied pursuant to that schedule (“Modified Anticipated Delivery Agreement”).  Under these circumstances, Buyer’s sole remedy and damages against Seller will be a refund of that portion of the Net Remaining Advance Payment Balance, without interest, which is to be calculated by multiplying the difference between (i) the Contract Quantity remaining to be delivered on the date the Modified Anticipated Delivery Agreement is signed by Seller and (ii) the quantity of Product to be delivered in the future by Seller under the Modified Anticipated Delivery Agreement, by the Advance Payment per kilogram set forth in Table I of Exhibit B.

 

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Seller will not be required to deliver Product which was not previously delivered by Seller and for which the Net Remaining Advance Payment Balance has been refunded by Seller to Buyer.  Delay or cancellation by Seller of shipments resulting from Buyer’s non-payment shall not provide Buyer any termination rights or rights to damages set forth in this Section 11.

 

(b)                                 Default by Seller: Non-Conforming Products.  If Buyer claims that the Products received by Buyer are not compliant with the Limited Warranty set forth in Section 14, Buyer shall deliver written notice thereof to Seller within 90 days after delivery by Seller, and Seller shall have a reasonable opportunity to examine the Products relating to such claim.  Buyer agrees that its sole and exclusive remedy against Seller, in the event of a breach of the Limited Warranty set forth in Section 14, shall be limited, at Seller’s sole discretion, to either: (i) the revision, repair or replacement of Products that are not compliant with Section 14 or (ii) refund payment not to exceed the purchase price (including any Advance Payment applied to purchases of such Products) of the specific non-compliant Products.  In the event that Seller elects to remedy any breach of the Limited Warranty under section (ii) of the preceding sentence, any quantity of Product for which the purchase price has been refunded will reduce Seller’s obligation to supply Product and Buyer’s obligation to purchase Product hereunder by an equivalent amount.  Buyer further acknowledges and agrees that in the event that Seller elects to refund payments as provided in the alternate remedy (ii) above, this exclusive remedy provision shall not have failed of its essential purpose.  Any replacement or refund is conditional on Seller receiving written notice from Buyer during the 90 day period specified above, and failure by Buyer to deliver such notice within such period shall constitute a waiver by Buyer of all rights or claims under this Agreement with respect to any claim of defect of the Products.  No claim by Buyer against Seller shall be allowed after Products have been processed in any manner or transferred to any third party pursuant to Section 2 or otherwise.  If requested by Seller, all unconsumed Products alleged by Buyer to be other than as warranted in Section 14 shall be returned to Seller freight collect.

 

(c)                                  Limitation of Buyer’s Remedies.  EXCEPT AS PROVIDED IN SECTION 11 AND SECTION 13 HEREOF, NO OTHER REMEDY (INCLUDING, BUT NOT LIMITED TO, INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR LOST PROFITS, LOST SALES, INJURY TO PERSON OR PROPERTY, OR ANY OTHER INCIDENTAL OR CONSEQUENTIAL LOSS) SHALL BE AVAILABLE TO BUYER.

 

(d)                                 Limitation of Buyer’s Damages.  THE DAMAGE LIMITATION FOR BREACH OF THE LIMITED WARRANTY OF SECTION 14 IS AS SET FORTH IN SECTION 11(b) ABOVE.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, SELLER’S MAXIMUM AGGREGATE LIABILITY FOR ANY OTHER CLAIMS ARISING OVER THE TERM OF THIS AGREEMENT, IF ANY, FOR ALL DAMAGES, INCLUDING WITHOUT LIMITATION CONTRACT DAMAGES AND DAMAGES FOR INJURIES OR DEATH TO PERSONS OR PROPERTY, WHETHER ARISING FROM SELLER’S BREACH OF 

 

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CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, PRODUCT LIABILITY, STRICT LIABILITY, OR OTHER TORT, IS LIMITED TOTHE AGGREGATE OF THE GROSS PRICE RECEIVED BY SELLER , (AS SET FORTH IN TABLES II A AND B, AND TABLES III A — B OF EXHIBIT B) AT THE TIME SUCH LIABILITY IS DETERMINED.  IN NO EVENT SHALL SELLER BE LIABLE FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL, OR SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST REVENUES AND PROFITS.  THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF THE LIMITED REMEDY OR ANY OTHER REMEDY SET FORTH IN THIS AGREEMENT.  BUYER ACKNOWLEDGES THAT UNDER NO CIRCUMSTANCE WILL BUYER BE ENTITLED TO RECOVER DAMAGES COLLECTIVELY FROM SELLER AND/OR ANY GUARANTOR OF SELLER, AS APPLICABLE, THAT ARE GREATER THAN THE AMOUNT BUYER COULD HAVE OTHERWISE RECOVERED FROM SELLER ALONE UNDER THIS AGREEMENT.

 

(e)                                  Default by Buyer: Payments, Take-or-Pay, Use of Products and Representations and Warranties.  Upon default by Buyer of its obligation to:

 

(i)                                     pay any installment of the Advance Payment; or

 

(ii)                                  comply with its purchase or take-or-pay obligations; or

 

(iii)                               make payment for the Products; or

 

(iv)                              use the Products (including any use of the Products by Buyer Group members or persons who have entered into supply agreements with a Buyer Group member (as described in Sections 2(a) and 2(b) hereof)) only for Buyer’s manufacturing purposes in solar applications;

 

Buyer shall have 135 days to cure such default.  If such default continues for more than 135 days after Buyer received notice thereof, or if any of Buyer’s representations and warranties in this Agreement (including, without limitation, in Section 20) were not true and accurate as of the Effective Date or become untrue or inaccurate during the Term of this Agreement, Seller may, at its option, terminate this Agreement by written notice to Buyer, and Seller will have no further obligation to supply Product to Buyer, and Seller will thereupon be entitled, in addition to any other remedies and damages available to Seller at law and equity, to the following damages:

 

A.                                   payment by Buyer to Seller of all Advance Payment amounts due under Section 6 and not yet paid by Buyer to Seller; and

 

B.                                     retention of any Net Remaining Advance Payment Balance; and

 

C.                                     payment by Buyer to Seller for all Product delivered; and

 

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Buyer acknowledges and agrees that damages suffered by Seller in connection with any of the defaults of Buyer set forth in this Section 11(e) would be difficult to calculate and that the payments made by Buyer under this Section 11(e) constitute liquidated damages and do not constitute a penalty.

 

Buyer acknowledges and agrees that the 135-day cure period provided in this Section 11(c) is not intended to and shall not extend the payment terms beyond those set forth in Section 9 hereof.

 

(f)                                    Default by Buyer: Confidentiality and Trade Secrets.  In the event of a breach or a threatened breach by Buyer of Section 12, Buyer acknowledges and agrees that Seller will face irreparable injury which cannot be completely or adequately remedied by monetary damages and that Seller shall be entitled, in addition to remedies otherwise available at law or in equity, to a temporary restraining order, a preliminary injunction, and a final injunction enjoining such breach or threatened breach

 

(g)                                 Termination for Seller’s Failure to Comply with Section 6 Obligations.  If Seller fails to either deliver a Guaranty or assign this Agreement, in either case as provided in Section 6 hereof, by June 30, 2011, Buyer shall be entitled to terminate this Agreement by written notice to Seller and, upon such termination, neither party shall have any further obligations to the other party under this Agreement, except for each party’s obligations under the provisions contained in this Agreement that expressly survive termination of this Agreement.

 

12.           Confidentiality and Trade Secrets.

 

(a)                                  Seller and Buyer acknowledge and agree that certain information each party has received or may receive from the other party or from the other party’s Affiliates in connection with this Agreement, including information regarding research, technology, technical specifications, product developments, marketing plans or conditions, products, business strategies, and the like, constitutes “Confidential Information” of the other party and shall be deemed disclosed by the other party to the receiving party.  The purpose for exchanging Confidential Information is to allow the parties to use Confidential Information solely for the purpose of meeting their obligations and responsibilities under this Agreement.  The party receiving any Confidential Information, and its employees, attorneys, financial advisors, officers, directors, shareholders and members who receive Confidential Information, shall not, except with the prior written consent of the disclosing party, (i) use Confidential Information for any purpose other than those purposes permitted under this Agreement, whether for itself or for the benefit of another, or (ii) divulge, disclose, publish or communicate, to any person, firm, corporation or entity, in any manner whatsoever, the terms of this Agreement or any Confidential Information of the disclosing party; provided, however, that (i) Seller may use, divulge, disclose or communicate the terms of this Agreement or Confidential Information of the disclosing party to its Affiliates, members, and/or shareholders, and Affiliates of those entities, on a “need-to-know” basis, subject to the provisions of this Section 12, without first obtaining Buyer’s written consent; and (ii) Buyer may use, divulge, 

 

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disclose or communicate the terms of this Agreement or Confidential Information of the disclosing party to Buyer Group members on a “need-to-know” basis, subject to the provisions of this Section 12, provided that Seller has consented in writing in advance to such disclosure, which consent shall not be unreasonably withheld.  Each party further agrees, for itself and for any person to whom a disclosure is permitted and made, to use the same degree of care to maintain as confidential and to avoid non-permitted use or disclosure of the Confidential Information disclosed to it under this Agreement as it employs with respect to its own confidential information, but at all times shall use at least reasonable care to protect against a non-permitted use or disclosure.  Confidential Information does not and shall not include information that:

 

(i)                                     was already known to the receiving party at the time such Confidential Information is disclosed by the other party;

 

(ii)                                  was or became publicly known through no wrongful act of the receiving party;

 

(iii)                               was rightfully received from a third party without restriction;

 

(iv)                              was independently developed by the receiving party; or

 

(v)                                 was required for legal or financial reporting purposes to be disclosed; provided, however, that the party being required to disclose shall, if circumstances permit, provide advance notice to the other party and shall allow the other party a reasonable opportunity to oppose such disclosure, if appropriate.

 

The obligations not to use and not to disclose Confidential Information received by a party under this Agreement shall continue during the Term of this Agreement and for a period of 10 years thereafter, and thus survive the termination or expiration of this Agreement.

 

(b)                                 The parties further acknowledge and agree that certain of the Confidential Information that has been or will be provided to Buyer in connection with this Agreement concerns technical information related to the Products, the design, composition, performance, characteristics, manufacture, and use of the Products, and applications for the Products, including research, test results, and test methodologies, and also constitutes or reflects trade secrets of Seller or an Affiliate of Seller (herein collectively “Seller’s Trade Secrets”).  Buyer acknowledges and agrees that Seller’s Trade Secrets are owned by Seller or an Affiliate of Seller, are secret, are being provided to Buyer in confidence, are the subject of reasonable efforts by Seller to keep them secret, and that Seller has derived value because of their secrecy, as evidenced by, among other things, the parties entering into this Agreement.  Buyer agrees for itself and any person to whom a disclosure is permitted and made, to use the same degree of care to

 

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maintain as confidential and to avoid any non-permitted use or disclosure of Seller’s Trade Secrets as it employs with respect to its own trade secret information, but at all times shall use at least reasonable care to protect Seller’s Trade Secrets against non-permitted use or disclosure.  The obligations not to use and not to disclose Seller’s Trade Secrets shall continue during the Term of this Agreement and, with respect to each Seller Trade Secret, for so long thereafter as Seller and/or Seller’s Affiliate maintains such Trade Secret as a trade secret, and thus survive the termination or expiration of this Agreement.

 

(c)                                  Buyer will be liable for any breach of this Section 12 by any Buyer Group member or any person to whom Buyer is permitted to disclose Seller’s Confidential Information and/or Seller’s Trade Secrets.

 

13.           Patents.  If any suit is brought against Buyer for infringement of any United States Letters Patent, alleging that the Products manufactured by Seller, or an Affiliate of Seller, infringe any United States Letters Patent, Seller shall, at its own expense, and at the option of Seller, either procure for Buyer the right to continue using the infringing Product, replace the same with non-infringing materials which conform to the available specifications, modify such Product in a manner acceptable to Seller so it becomes non-infringing, or defend the suit.  To the extent that Seller elects to defend the suit, Seller shall defend and control the suit against these allegations only, and shall pay any award of damages assessed against Buyer in the suit only to the extent that the damages are awarded in connection specifically with a final adjudication, with all appeals as of right exhausted or waived, that the Product infringes a valid, enforceable patent claim, provided that Buyer (or any Buyer Group member or supplier who has entered into an agreement with a Buyer Group member) (a) has not materially changed the Product; (b) gives Seller prompt notice in writing of the institution of the suit; (c) fully cooperates with Seller in connection with Seller’s defense or settlement of the suit; and (d) to the full extent of Buyer’s power to do so, Buyer permits Seller to defend and control the suit against these allegations.  The above fully expresses Buyer’s exclusive remedy and Seller’s sole responsibility with respect to infringement of any patent by the Products, and Seller EXPRESSLY DISCLAIMS ANY OTHER WRITTEN OR UNWRITTEN, EXPRESS OR IMPLIED, WARRANTY AGAINST INFRINGEMENT with respect to the Products.  Seller does not warrant that use of any Products delivered hereunder will not infringe any claim or claims of any patent or warrant against infringement by reason of the use thereof in combination with other material or in the operation of any process.  In no circumstance shall Seller be liable to defend or pay any award of damages assessed against Buyer in any suit or cause of action alleging that the use of the Products infringes any patent.

 

14.           Limited Warranty.  Buyer acknowledges and agrees that Seller warrants only that: (i) upon delivery to the carrier, the Products will meet the applicable Product Specifications, as set forth in Exhibit A and (ii) the Products will be delivered free from any security interest, lien or encumbrance.  THIS LIMITED WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ARISING FROM COURSE OF PERFORMANCE OR COURSE OF DEALING, ALL SUCH OTHER WARRANTIES BEING EXPRESSLY DISCLAIMED.  Seller does not warrant that the Products will not cause any health or safety hazards or risks.

 

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15.           Exclusion and Waiver of Remedies, Liability and Damages As Against Seller’s Affiliates.  Subject to Section 6, Section 28 and the Guaranty (if a Guaranty is delivered), Buyer acknowledges and agrees that any and all potential claims, remedies, liabilities or damages sought by Buyer against Seller arising directly or indirectly from Seller’s performance under this Agreement may be asserted by Buyer against Hemlock Semiconductor Pte. Ltd. only and not against any other Affiliates of Hemlock Semiconductor Pte. Ltd. or any directors, officers, employees, agents or representatives of Hemlock Semiconductor Pte. Ltd. or its Affiliates.  Buyer further acknowledges and agrees that, subject to Section 6, Section 28 and the Guaranty (if a Guaranty is delivered), only Hemlock Semiconductor Pte. Ltd will be answerable at law or in equity for the obligations of Seller to perform under this Agreement and Buyer hereby forever waives any and all claims that it might seek to assert against any other Affiliate of Hemlock Semiconductor Pte. Ltd.  and any directors, officers, employees, agents or representatives of Hemlock Semiconductor Pte. Ltd.  or its Affiliates relating directly or indirectly to this Agreement.

 

16.           Taxes and Other Charges.  In the event that any governmental authority (federal, state, local or otherwise) imposes, levies or assesses a tax, surcharge, assessment or any other additional charge on the production, sale, use, transportation, shipment, conveyance or delivery of the Products, Seller may (at its sole option), in accordance with applicable law, add up to *** percent (***%) of such tax, surcharge, etc., to the Gross Price of the Products.  This tax, surcharge, etc., shall include (but not be limited to):  charges associated with environmental factors (e.g., carbon charges, charges associated with green-house gases), emission fees, and charges required for the purchase of carbon or emission off-sets and credits.  The price may be adjusted upward regardless of whether such charges are incurred directly by Seller or imposed indirectly upon it (e.g., charges imposed on an energy provider and billed indirectly to Seller).

 

17.           Force Majeure.  Seller shall not be liable for delays or failures in performance of an order or default in delivery arising out of or resulting from causes beyond its control, including, but not limited to, acts of God, acts of the government or the public enemy, natural disasters, fire, flood, epidemics, quarantine restrictions, strikes, freight embargoes, severe weather, war or acts of terrorism (each, a “Force Majeure Event”).  In the event of any such delay of Seller’s performance, Buyer shall continue to honor its obligations hereunder that existed as of the time of the delay, and thereafter shall honor its obligations hereunder if and when Seller resumes performance.  The Term of this Agreement may be extended so as to complete the purchase and delivery of Product affected by a Force Majeure Event (“Affected Product”).  Seller will provide Buyer with notice of the delivery schedule for the Affected Product prior to delivery as well as notice of its extension of the Term of this Agreement.

 

In addition, if due to a Force Majeure Event or any other cause, Seller is unable to supply sufficient goods to meet all demands from customers and internal uses, Seller shall have the right to allocate supply among its customers and internal uses in any manner in which Seller, in its sole discretion, may determine.

 

18.           No Third Party Beneficiary Rights; No Rights or Remedies To Buyer Group.

 

This Agreement establishes no third party beneficiary rights in any persons or entities not parties hereto, including without limitation any Buyer Group member or persons who have entered into supply agreements with a Buyer Group member (as described 

 

12

 

in Sections 2(a) and 2(b) hereof); and, subject to Section 28, no provision in this Agreement shall be construed or deemed in any way to inure to the benefit of any persons or entities not parties hereto, including, but not limited to, any person or entity described in Sections 2(a) and 2(b), so as to constitute any such person or entity as a third party beneficiary of any or all of this Agreement or otherwise give rise to any cause of action to such third party.

 

No Buyer Group members or other persons who have entered into supply agreements with a Buyer Group member (as described in Sections 2(a) and 2(b) hereof) shall have any rights or remedies against Seller under any provision of this Agreement, and Buyer shall indemnify Seller pursuant to Section 19 hereof for any claim asserted against Seller by any such person or entity.

 

19.           Indemnification.  Except as provided in Section 13 hereof, Buyer shall defend, indemnify and hold harmless Seller, its owners, members, Affiliates, officers, directors, employees and agents (collectively the “Seller Indemnitees”) from and against any and all liabilities, losses, claims, and expenses (including reasonable attorneys’ fees) as a result of third party claims or actions arising out of (a) Seller’s performance under this Agreement, (b) negligence of a Seller Indemnitee, or (c) the sale or use of the Products or the handling or further processing thereof following delivery by Seller hereunder; provided, however, that Buyer shall have no obligation to indemnify the Seller Indemnitees for any liability, loss, claim, or expense (including attorneys’ fees) to the extent established in a final judgment by a court of competent jurisdiction to have resulted from a Seller Indemnitee’s gross negligence or willful misconduct.

 

20.           Representations and Warranties.  Each of Buyer and Seller hereby represents and warrants to the other as follows:

 

(a)                                  Organization and Good Standing.  Such party is a corporation or limited liability company, as applicable, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite corporate or limited liability company, as applicable, power and authority to own, lease and operate its properties and to carry on its business as now conducted.  Such party is not in default under or in violation of any provisions of its organizational documents.

 

(b)                                 Authority and Enforceability.  Such party has all corporate or limited liability company, as applicable, power and authority to execute and deliver this Agreement and perform its obligations hereunder.  The execution and delivery by such party of this Agreement and the performance by such party of the transactions contemplated hereby have each been duly and validly authorized by all necessary corporate or limited liability company, as applicable, action.  This Agreement has been duly executed and delivered by such party and, assuming due execution and delivery by the other party, constitutes a valid and binding obligation of such party, enforceable against it in accordance with its terms.

 

(c)                                  No Conflicts; Consents.  The execution and delivery of this Agreement by such party, the performance by it of its obligations hereunder, and the compliance by it with the terms and conditions hereof, will not: (i) violate any 

 

13

 

provision of its organizational documents, or (ii) violate any law, rule, regulation, accounting principle, financial disclosure obligation, or order of any court or governmental authority or agency that is applicable to or binding on such party.  The execution and delivery by such party of this Agreement and the performance by such party of its obligations hereunder do not require: (a) any authorization, consent or approval of, or notice to, any person or entity under any contract or agreement to which such party is party; or (b) any authorization, consent, approval, certification, license or order of, or any filing with or notice to, any governmental entity.

 

(d)                                 Legal Proceedings.  There are no legal proceedings pending or, to the knowledge of such party, threatened before any governmental department, commission, board, agency, or instrumentality that would prevent the execution and delivery by such party of this Agreement, the consummation of the transactions contemplated hereby or the performance by such party of its obligations hereunder, or that would otherwise adversely affect the validity or enforceability of this Agreement, nor, to the knowledge of such party, is there any reasonable basis for any such proceeding.

 

21.                                 Notice.  Any notice, demand or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed delivered to a party (i) when actually received by the representatives designated below to receive notices, or (ii) (a) when delivered to the designated recipients’ addresses listed below (addressed to the designated recipients) by certified or registered mail (return receipt requested) and (b) when delivered by confirmed facsimile to the recipients’ numbers designated below.  Either party may change its addresses or representatives for receiving notices upon notice to the other.

 

If to Seller to:                                                                         Hemlock Semiconductor Pte. Ltd.
 101 Thomson Road
 #26-03 United Square
 Singapore 307591
 Attn.: Corporate Secretary
 Fax No.: 65-6253-6070

 

With a copy to:                                                             Hemlock Semiconductor Pte. Ltd.
 101 Thomson Road
 #26-03 United Square
 Singapore 307591
 Attn.: General Counsel/Legal Department
 Fax No.: 65-6253-6070

 

If to Buyer to:                                                                      JA Solar Technology Yangzhou Co., Ltd
 No.1 Jianhua Rd., Yangzhou , Jiangsu, China 
 Attn.: Corporate Procurement Department
 Fax No.: +86-21-6096-5727

 

14

 

22.           Choice of Law.  This Agreement is made in, and shall be governed and controlled in all respects by the laws of, the State of New York, U.S.A. (specifically disclaiming the United Nations Convention on Contracts for the International Sale of Goods), and all disputes, including those related to interpretation, enforceability, validity, and construction, shall be determined under such laws, all without giving any effect to any choice or conflict of law provision or rule that would cause application of the laws of any jurisdiction other than that set forth in this section.

 

23.           Choice of Forum; Time Period.  The parties submit to the exclusive jurisdiction of the state and federal courts of the State of New York, U.S.A. for all disputes and actions arising, directly or indirectly, out of this Agreement, the performance of this Agreement, or the breach of this Agreement.  Any action arising, directly or indirectly, out of this Agreement must be commenced within two (2) years after the cause of action has accrued.

 

24.           Waiver.  Seller’s failure to exercise a right or remedy, or Seller’s acceptance of a partial or delinquent payment, shall not operate as a waiver of any of Seller’s rights or Buyer’s obligations under the Agreement and shall not constitute a waiver of Seller’s right to declare an immediate or a subsequent default.

 

25.           Severability.  If one or more of the provisions of this Agreement shall be found by the court with jurisdiction to be illegal, invalid or unenforceable, it shall not affect the legality, validity or enforceability of any of the remaining provisions of this Agreement.  The parties agree to attempt to substitute for any illegal, invalid or unenforceable provision a legal, valid or enforceable provision that achieves to the greatest extent possible the economic objectives, allocation of responsibility, or limitation of warranties and damages of the illegal, invalid or unenforceable provision.

 

26.           Merchants/Sophisticated Parties.  Seller and Buyer acknowledge and agree that: (i) both are sophisticated business entities with expertise and experience in all matters relating to this Agreement; (ii) Buyer and Seller are both “merchants,” and this Agreement is “between merchants,” as those terms are defined and used in the laws of the State of New York; (iii) there was equal bargaining power between the parties in their negotiation and execution of this Agreement; (iv) neither party acted under any duress, economic or otherwise, when considering and entering into this Agreement; and (v) both parties had a full opportunity, and did, consult with their respective counsel before entering into this Agreement.

 

27.           Integration.  This Agreement and the Exhibits attached hereto, constitute the entire understanding between the parties with respect to the subject matter of this Agreement and supersede any prior discussions, representations, negotiations, agreements, memoranda of understanding, drafts and the like.  In future communications, Seller and Buyer may employ their standard forms, but nothing in those forms will be construed to modify or amend the terms and conditions of this Agreement, and, in the case of any conflict with the terms of this Agreement, the terms and conditions of this Agreement will control.  Additional or different terms contained in any Buyer document (including, without limitation, any purchase order, estimate, order acknowledgement, payment 

 

15

 

remittance, or other correspondence) shall not be binding, and shall not create, nor be construed to create any modification of Buyer’s or Seller’s rights or obligations under this Agreement.  Modifications to this Agreement may be made only in a writing signed by each party or as specified in Section 2.

 

28.           Assignments.  No assignment of this Agreement or of any right or obligation under this Agreement shall be made by Buyer without the prior written consent of Seller.  Seller may at any time and for any reason assign this Agreement and/or any right or obligation under this Agreement, in whole or in part, to any Affiliate of Seller without the prior written consent of Buyer, including the right to sell Product to Buyer in the event Buyer requests a shipping destination in the United States pursuant to Section 10(b) hereof.  In the event of a proper assignment, the Agreement shall be binding upon and inure to the benefit of the assigning party’s successors and assigns; and, in the event of a default by the assignee, the assignor will remain liable.

 

29.           Dollars.  All references to monetary amounts shall be in U.S. Dollars.

 

30.           Captions.  Captions and section headings in this Agreement are for reference purposes only and are not intended to be substantive terms of this Agreement between the parties.

 

31.           Attorney Fees and Costs.  In the event of Seller’s seeking to enforce any terms or conditions in this Agreement, Buyer shall be liable to Seller for all costs, including attorney fees, incurred by Seller in seeking to enforce the Agreement and in seeking to collect any sums owed by Buyer to Seller. Notwithstanding the foregoing, Buyer shall not be liable for such fees and costs to the extent such fees and costs arise from a matter that is established by final judgment by a court of competent jurisdiction to have been caused by Seller.

 

32.           Agreement Preparation.  This Agreement shall be considered for all purposes as prepared through the joint efforts of the parties and shall not be construed against one party or the other as a result of the manner in which this Agreement was negotiated, prepared, drafted or executed.

 

33.           Execution Deadline; Effective Date.  This Agreement must be executed by Buyer and returned to Seller before May 6, 2011.  If the Agreement is not executed and returned to Seller by that date, Seller’s offer to enter into this Agreement shall be revoked and shall be considered never to have been made.

 

16

 

ACCEPTED AND AGREED:

 

 

	
JA Solar Technology Yangzhou Co., Ltd.
    	
 
    	
HEMLOCK SEMICONDUCTOR PTE. LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Jian Xie
    	
 
    	
By:
    	
/s/   Jim Stutelberg
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Printed Name:
    	
Jian   Xie
    	
 
    	
Printed Name:
    	
Jim   Stutelberg
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
COO
    	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
May   4, 2011
    	
 
    	
Date:
    	
May   4, 2011
    
							

 

17Exhibit 4.9

 

Framework Agreement on Repayment of Prepayment

 

Among

 

JingAo Solar Co., Ltd

 

JA Solar Holdings Co., Ltd

 

JA Solar Hong Kong Limited

 

And

 

M.Setek Co.,Ltd.

 

Hebei Ningjin Songgong Semiconductor Co., Ltd

 

Shanghai, China

March 8, 2012

 

 

This Framework Agreement on Repayment of Prepayment (this “Agreement”) was entered into in Shanghai on March 8, 2012 by and among:

 

JingAo Solar Co., Ltd (“JA Hebei”), a limited liability company incorporated under the laws of the People’s Republic of China, with its registered address at Jinglong Avenue, Ningjin County, Hebei Province, China;

 

JA Solar Holdings Co., Ltd (“JA Solar”), a company incorporated under the laws of Cayman Islands, with its registered address at Cricket Square, Hutchins Drive, PO Box 2681 GT, Geroge Town, Grand Cayman, British West Indies;

 

JA Solar Hong Kong Limited (“JA HK”), a company incorporated under the laws of Hong Kong, with its registered address at Unit 2209, 22/F, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong;

 

M.Setek Co.,Ltd. (“M.Setek”), a company incorporated under the laws of Japan, with its registered address at 6-16, Yanaka 3-Chome, Taito-Ku, Tokyo, Japan; and

 

Hebei Ningjin Songgong Semiconductor Co., Ltd (“Ningjin Songgong”), a limited liability company incorporated under the laws of China, with its registered address at High and New Technology Development Zone, Ningjin County, Hebei Province.

 

Whereas:

 

A.                JA Hebei and M.Setek entered into a Long-term Silicon Wafer Supply and Prepayment Agreement and its amendments (the “Supply Agreement”) on June 5, 2007 whereby JA Heibei has made a prepayment in the amount of US$100 million to M.Setek, of which *** was paid by JA Solar on behalf of JA Hebei.

 

B.                  The Supply Agreement has expired on December 31, 2011, while M.Setek has an unused prepayment in the amount of *** (the “Unused Prepayment”).

 

C.                  Ningjin Songgong is a Sino-foreign joint venture company jointly established by M.Setek and the Labor Union Committee of Hebei Ningjin Songgong Semiconductor Co., Ltd (Chinese shareholder), with M.Setek holding 65% equity interest in Ningjin Songgong. The Chinese shareholder has waived its right of first refusal with respect to M.Setek’s transfer of equity interest.

 

 

D.                 M.Setek has not repay the Unused Prepayment. The Parties wish to repay the Unused Prepayment with M.Setek’s dividends and equity interest in Ningjin Songgong and the continued supply in a manner to be agreed by and among the Parties according to the terms and conditions provided herein.

 

In consideration thereof and the terms, covenants, representations and warranties contained herein, the Parties hereby enter into the following agreement:

 

1.              Definition and Interpretation

 

1.1                       “Affiliate”: any company under direct or indirect control of, or under common control with a Party, or controlling such Party; “Control” shall mean having the power to elect or appoint a majority of Board directors or to direct the company’s management.

 

1.2                       “Agreement”: this agreement, including the exhibits as amended and supplemented pursuant to the terms hereof.

 

1.3                       “Government”: any government at home or abroad, whether it is a federal, provincial, state, regional, local, area, municipal government or with other political jurisdiction, and any agency or authority, body, court, adjudication office, board of directors, committee, bureau, arbitrator, arbitration tribunal or other adjudication body or any quasigovernment or other entities, as long as acting in legislative, judicial, governing, administrative, tax-levying capacity, or otherwise exercising governmental or government-related functions.

 

1.4                       “Laws”: the laws, administrative regulations and government documents of the People’s Republic of China.

 

1.5                       “Business”: the business scope mentioned in a Party’s business license or commercial registry certificate or other similar documents.

 

1.6                       “GAAP”: Generally Accepted Accounting Principles in China.

 

 

1.7                       “Independent Valuator”: the independent valuator determined pursuant to Article 3.2 to valuate the equity.

 

1.8                       “Then-Current Rate”: the exchange rate published by the People’s Bank of China on the actual occurrence day.

 

1.9                       “Taxes”: all the taxes and fees collected by any Government authority.

 

1.10                 Exhibits

 

After the execution of this Agreement and under the framework of its terms, the Parties will set out to draft and execute the following agreements, which, upon the execution, shall become an indispensable component of this Agreement:

 

(a)                                  Share Transfer Agreement on the transfer of 65% equity interest in Ningjin Songgong;

 

(b)                                 Agreement on Offsetting Prepayment with Supply of Solar Grade Polysilicon Products; and

 

(c)                                  Statement on Waiver of Right of First Refusal executed by Labor Union Committee of Hebei Ningjin Songgong Semiconductor Co., Ltd (Chinese shareholder of Ningjin Songgong)

 

2.              Parties

 

2.1                The Parties hereto are:

 

(a)                                  JingAo Solar Co., Ltd, a limited liability company incorporated under the laws of the People’s Republic of China, with its registered address at Jinglong Avenue, Ningjin County, Hebei Province, China;

 

Registry No: 130000400002040, Registered Capital: RMB 1 billion

 

Legal Representative: JIN Baofang, Nationality: Chinese

 

(b)                                 JA Solar Holdings Co., Ltd, a company incorporated under the laws of Cayman Islands, with its registered address at Cricket Square, Hutchins Drive, PO Box 2681 GT, Geroge Town, Grand Cayman, British West Indies;

 

Legal Representative: JIN Baofang, Nationality: Chinese

 

(c)                                  JA Solar Hong Kong Limited, a company incorporated under the laws of Hong Kong, with its registered address at Unit 2209, 22/F, Wu Chung

 

House, 213 Queen’s Road East, Wanchai, Hong Kong;

 

Company No.: 1193548

 

Authorized signatory: XIE Jian, Nationality: Chinese

 

 

(d)                                 M.Setek Co.,Ltd., a company incorporated under the laws of Japan, with its registered address at 14F Shinagawa EAST ONE TOWER, 2-16-1, Kounan, Minato-ku, Tokyo, Japan;

 

Company Incorporation No.: 0104-01-088716

 

Legal Representative: XIE Shngjie, Nationality: Taiwanese

 

(e)                                  Hebei Ningjin Songgong Semiconductor Co., Ltd, a limited liability company incorporated under the laws of China, with its registered address at High and New Technology Development Zone, Ningjin County, Hebei Province.

 

Registry No.: 130000400000492, Registered Capital: RMB 275 million

 

Legal Representative: SAITO Hiroyuki, Nationality: Japanese

 

3.              Repayment Plan of Unused Prepayment

 

The Parties hereto confirm that the Unused Prepayment in the amount of ***  owed by M.Setek will be repaid to JA Hebei and JA Solar in the following manner:

 

3.1                Dividends (after tax)

 

Both Parties agree to hire ZhongXingCaiGuangHua CPA Office Co., Ltd, Xingtai Office to conduct a special audit on Ningjin Songgong’s undistributed profits as of January 31, 2012. M.Setek shall cause Ningjin Songgong’s board of directors or all its shareholders to distribute the undistributed profits according to the special audit report on undistributed profits. The dividends thus distributed to M.Setek shall be used to repay the Unused Prepayment to JA Hebei after deducting the taxes and fees according to relevant Chinese Laws.

 

3.2                Share Transfer

 

The Parties confirm and agree to hire a qualified professional valuator to evaluate the equity interest in Ningjin Songgong held by M.Setek.  M.Setek will, according to the valuation results issued by the Independent Valuator, assign and transfer 65% equity interest in Ningjin Songgong held by it to JA HK (JA Hebei

 

 

shall have the right to determine the assignee of the equity interest and may replace such assignee at any time before the execution of the share transfer agreement). The consideration for such transfer, which is the valuation price, shall offset part of the Unused Prepayment.

 

3.3                Compensation by Supply

 

If there is still an outstanding amount after the  Unused Prepayment has been repaid in the manner mentioned in the above Article 3.1 and 3.2, M.Setek will continue to supply JA Hebei with solar grade polysilicon to offset such remaining amount of the Unused Prepayment. A separate Agreement on Offsetting Prepayment with Supply of Solar Grade Polysilicon will be executed between M.Setek and JA Hebei. JA Hebei shall continue to have right to require M.Setek to repay such remaining amount of the Unused Prepayment before execution of the Agreement on Offsetting Prepayment with Supply of Solar Grade Polysilicon.

 

3.4                Taxes and Fees

 

The Parties shall bear their own taxes and fees under the laws in China or outside China. The corresponding income tax to be borne by the Chinese shareholder of Ningjin Songgong in relation to the dividends distribution shall still be borne by the Chinese shareholder itself.

 

4.              Repayment Schedule of the Unused Prepayment

 

4.1                Subject to the approval of competent Chinese foreign exchange authority, within 30 days upon the execution of this Agreement, Ningjin Songgong shall complete the profit distribution and M.Setek shall pay to JA Hebei the full amount of the dividends (after tax) distributed to it. Both Parties agree to complete the relevant foreign exchange approval procedures required by Laws in good faith, including but not limited to profit remittance, prepayment write-off, etc. M.Setek further agrees to open a necessary foreign exchange supervisory account, at JA Hebi’s request and to the extent permissible by the then-current objective conditions, to make sure that dividends (after tax) distributed to it are fully and completely used to repay the Unused Prepayment.

 

 

4.2                Within 15 days upon the execution of this Agreement, M.Setek and JA Hebei shall jointly authorize the Independent Valuator to assess the value (net asset value) of the equity interest in Ningjin Songgong held by M.Setek, and shall sign an entrusted valuation agreement with the Independent Valuator, which shall issue a valuation report within 30 days upon the execution of this Agreement. If an dispute occurs between M.Setek and JA Hebei with regard to the valuation results, then the Parties shall, at one Party’s request, entrust another Independent Valuator to assess the equity in Ningjin Songgong (net asset value) held by M.Setek. The second valuation report, which shall be issued within 20 days upon the date of entrustment, shall be binding upon both Parties.

 

4.3                Within 7 days upon the issuance of the valuation report, M.Setek and JA HK shall execute the Share Transfer Agreement on transfer of 65% equity interest in Ningjin Songgong, and shall complete the approval and registration at authorities of commerce and administration for industry and commerce within 60 days upon execution of the abovementioned share transfer agreement.

 

4.4                Within 15 days upon the issuance of the valuation report, if there is still a remaining amount of the  Unused Prepayment, M.Setek and JA Hebei will sign a separate Agreement on Offsetting Preayment with Supply of Solar Grade Polysilicon.

 

4.5                Notwithstanding the above provisions, if any delay is caused due to such factors as Chinese restrictive approval procedures regarding foreign investments, or the approval procedures and policies of business concentration declaration, the time period mentioned above will be extended automatically in order to obtain the Government consents or approvals necessary hereunder as required by the Laws. The delay period shall expire on the 10th working day after the required Government consents or approvals are obtained.

 

5.              Representations and Warranties

 

5.1                For the benefits of the other Parties, each Party represents and warrants that:

 

(a)                                  it is a company duly incorporated and organized and existing under the laws of its respective jurisdiction;

 

 

(b)                                 it has necessary legal capacity to execute this Agreement, exercise its rights and perform its obligations hereunder; it has taken all necessary corporate actions or other actions to authorize the performance of this Agreement and the duties hereunder (if relevant), and such actions remain valid; when the other Parties are performing this Agreement, this Agreement shall be legitimate, effective, binding and enforceable against the terms hereof.

 

(c)                                  its execution, delivery and performance of this Agreement and the completion of the contemplation herein will not (i) violate its organizational documents, (ii) violate any Laws applicable to the provisions hereunder, or (iii) require the adoption of any person’s consents or other major acts, constitute a default or cause the termination, cancellation or accelerated performance of any Party’s rights and obligations as required by any agreement or any terms of other documents between the Parties.

 

5.2                For JA Hebei’s benefits, M.Setek represents and warrants that:

 

(a)                                  M.Setek legally and beneficially owns 65% equity interest in Ningjin Songgong and all its corresponding rights and interests associated therewith. Such rights and interests are all transferable without any encumbrances.

 

5.3               For JA Hebei’s benefits, Ningjin Songgong represents and warrants that:

 

(a)                                  within the term of this Agreement, it shall continue to carry out its normal day-to-day business, and no shutdown, closure, change of business scope or inappropriate external guarantee or loans shall be allowed;

 

(b)                                 in order to achieve the purpose of this Agreement as soon as possible, it will actively communicate with the Government authorities to obtain the required Government confirmation or approvals.

 

 

(c)                                  after execution of this Agreement, Ningjin Songgong shall inform JA Hebei any and all of its normal business on a real-time basis; it shall not carry out any commercial activities that will cause the reduction of and damage to its assets.

 

(d)                                 all the materials provided to third party professional intermediaries for the purpose of dividends distribution audit and share transfer valuation shall be true, legitimate and valid.

 

(e)                                  its financial statements are all formulated in compliance with the requirements of GAAP and based on the principles consistent with those used in the previous fiscal period, and fairly reflect in all material aspects its assets and liabilities (whether accrued liabilities, absolute or contingent liabilities or otherwise in existence) at the end of the fiscal period specified in the financial statements; as required by GAAP, the financial statements shall normally include any changes in Ningjin Songgong’s results and financial situation during the just-closed fiscal period.

 

5.4                For M.Setek’s benefits, JA Hebei represents and warrants that:

 

(a)                                  in order to achieve the purpose of this Agreement as soon as possible, it will actively communicate with the Government authorities to obtain the required Government confirmation or approvals;

 

(b)                                 The materials provided or the facts disclosed to the other Parties or a third party shall all be true, legitimate and valid.

 

6.              Liability for Breach of Contract and Termination

 

6.1                Any Party hereunder shall indemnify and make sure to protect any other Party from any and all the losses directly or indirectly arising from the following facts:

 

(a)                                  The representations and warranties made by such Party hereunder are untrue;

 

 

(b)                                 Such Party violates or defaults on any agreement, term or covenant made hereunder or that should be complied with or performed, or any other agreement or document delivered as required by this Agreement.

 

6.2                Should the circumstances mentioned in Article 6.1 occur to any Party hereto, the Party thus suffering losses may serve a written notice to the defaulting Party, specifying the nature and scope of such default and requiring the defaulting Party to compensate for any direct and foreseeable losses arising from such default.

 

6.3                This Agreement may be terminated under any of the following circumstances:

 

(a)                                  All Parties agree to terminate this Agreement;

 

(b)                                 his Agreement will be automatically terminated if any Party dissolves, liquidates, terminates, is filed for bankruptcy or subject to similar legal proceedings;

 

(c)                                  if any of the circumstances mentioned in Article 6.1 occurs to any Party, if one Party deems it to be material, such Party may terminate this Agreement with a 30-day prior written notice to the other Parties;

 

6.4                In the event that this Agreement is terminated or expires in advance for any reason whatsoever, or the exhibits mentioned under Article 1.10 fail to be executed in the time period stipulated under Article 4 hereof, this Agreement shall be deemed null and void ab initio (without prejudice to the validity of the agreements already executed or the part already performed under Article 1.10 (a) and/or (b); in this case, the Unused Prepayment shall be adjusted correspondingly according to the actual performance under relevant agreements), and the provisions of the Supply Agreement shall resume to be performed whereby the Parties shall continue to exercise their rights and perform their duties pursuant to the Supply Agreement.

 

 

7.              Miscellaneous

 

7.1                Notices

 

All the notices, requests or other communications of any Party hereto shall be made in written form (including facsimile delivery, followed by a mail re-sent via personal delivery, express delivery or registered mail, etc) and sent to:

 

If sent to JA Hebei, JA Solar or JA HK:

JingAo Solar Co., Ltd

Address: 36 Jiang Chang San Rd, Zhabei District, Shanghai

Post code: 200436

To: Ms YAO Ziran

Fax: 86 21 60955727

 

If sent to M.Setek:

M.Setek Co.,Ltd.

Address: 14F Shinagawa EAST ONE TOWER, 2-16-1, Kounan, Minato-ku, Tokyo, Japan

Post code: 108-0075

To: Mr. XIE Shengjie

Fax: 03-3473-8803

 

If sent to Ningjin Songgong:

Address: No.279, Jinglong Avenue, High and New Technology Development Zone, Ningjin County, Hebei Province

Post code: 055550

To: Mr. SONG Hengmao

Fax: 86 0319 5805524

 

or any other address or fax number designated by a Party in the above manner from time to time. If received by 5 pm of a working day at the recipient location, then all such notices, requests or other communications shall be deemed received by the recipient on the very date of receipt at the recipient address. The notices, requests or other communications otherwise received shall not be deemed received until the next following working day at the recipient address.

 

 

7.2                Expenditures

 

Except otherwise stipulated herein, each Party shall pay its own fees, costs and expenditures in connection with the negotiations of this Agreement and other agreements hereunder, the performance of the duties under this Agreement and other agreements hereunder, and the completion of the transactions contemplated under this Agreement and other agreements hereunder (including but not limited to the fees, costs and expenditures for legal counsels, accountants, valuators or other representatives and consultants as well as the fees, costs and expenditures for valuation). In principle, M.Setek, JA Hebei and Ningjin Songgong will each bear one-third of the service fees payable to attorneys, valuation bodies and other intermediaries for the repayment of the Unused Prepayment, and Ningjin Songgong will first pay the abovementioned relevant costs in advance and get repaid later.

 

7.3                Announcements

 

Except required by the Laws or Government authority (in this case, the other Parties shall be informed 15 days before the announcement), each Party or its respective employees, agents or representatives shall not announce or disclose to the public the existence of this Agreement or the transaction hereunder, unless approved by the Parties in advance.

 

7.4                Applicability

 

The terms of this Agreement shall be binding on and for the benefits of the Parties hereto and their respective inheritors, officers, successors and permitted assigns.

 

7.5                Assignment

 

No Party shall assign its interests or obligations hereunder without the written consent of the other Parties.

 

 

7.6                Applicable Laws and Jurisdiction

 

This Agreement shall be governed by and construed in accordance with the laws of the People’s Republic of China. All disputes and claims arising from or in connection with this Agreement shall be submitted to China International Economic and Trade Arbitration Commission Shanghai Sub-commission for arbitration in accordance with its arbitration rules then in force at the time of application for arbitration.

 

7.7                Entire Agreement

 

This Agreement and the documents referred hereto include the entire agreement by and among the Parties hereto and supersede any of their prior verbal or written agreements or statements. In case of any conflicts between this Agreement and the exhibit agreements, the latter shall prevail.

 

7.8                Amendment

 

Any amendment, modifications or changes to this Agreement shall be made in writing and duly executed by the Parties hereto for confirmation.

 

7.9                Counterparts

 

This Agreement is made in quintuplicate, which will come into effect upon signed and stamped by the Parties (official seal to be affixed for domestic entities, and authorized representative to sign for overseas entities), each Party holding one original.

 

[no body text below]

 

 

In witness hereof, this Agreement has been executed by the Parties in Shanghai on the date first specified herein.

 

 

	
JingAo   Solar Co., Ltd (official seal)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signatory:
    	
/s/ Peng Fang
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
M.Setek   Co., Ltd. (stamp)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signatory:
    	
/s/ Shengjie Xie
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
JA Solar Holdings Co.,Ltd. (official seal)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signatory:
    	
/s/ Peng Fang
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Hebei   Ningjin Songgong Semiconductor Co., Ltd. (official seal)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signatory:
    	
/s/ Authorised   Signatory of Hebei Ningjin Songgong Semiconductor Co., Ltd.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
JA   Solar Hong Kong Limited (official seal)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signatory:
    	
/s/ Peng Fang

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}]]