Stock Code：600401 Security Name：ST Hareon Solar NO.：2016-031
Hareon Solar Technology Co., Ltd.
Deed of Assignment wasSigned with United PV and GLOBAL HIGH GROWTH INDUSTRIES FUND SERIES SPC
All the members of the board of directors ensure the content of bulletin does not false record or misrepresentation. The content is true, accurate and complete, and they bearthe individual and joint and several liability of it.
Hareon Solar Technology Co., Ltd.（hereinafter referred to as company）
Deed ofAssignment（hereinafter referred to as Agreement） was Signed with United PV and
Independent Foundations and Investment Corporation of Global High-Growth Industry.
Details as follows:
First party: United PV
Second party: Independent Foundations and Investment Corporation of Global High-Growth Industry
Third party: Hareon Solar Technology Co., Ltd.
Ⅰ. Brief introduction of Parties
1. United Photovoltaics Group Limited(hereinafter referred to as United PV or First party)
Corporate Name：United Photovoltaics Group Limited
Enterprise Nature：Limited Liability Company
Main Office Location：Room1012, 10th Floor,West Wing of Shun Tak Centre No.168-200, Connaught Road Central, Hong Kong
Registered Capital：Not Applicable
Main business：Development, investment, operation andmanagement of PV power station
Corporate Representative：Not Applicable（Chairman and CEO - Mr. Yuan Li, theconcept of corporate representative not popular in Bermuda or HongKong）
Principal Shareholder or Actual Controller：The Subsidiary of CMNEG
2. Independent Foundations andInvestment Corporation of Global High-Growth Industry（hereinafter referred to as SPC or Secondparty）
Corporate Name：GLOBAL HIGH GROWTH INDUSTRIES FUNDSERIES SPC，hereinafter referred to as SPC）, CHINA HUACAI FINANCE EQUITY INVESTMENTFUND SP- sub fund of SPC, basic situation of SPC as follows:
Registered Address：Cayman Islands
Registered Capital: HKD300,000
Main business：Investment Holding
Corporate Representative/ Director：Xing Guangshun；Guo Hong
Principal Shareholder or Actual Controller：Wisebrain Holdings Limited; XingGuangshun; Guo Hong
First Party or Second Party has beendetected no association with our company.
Ⅱ. The background of signed agreement
1.Framework Agreement - investment cooperation for 930MW PV power station joint signed with United PV and the relevant supplementary agreement（both hereinafter referred to as Cooperation Agreement） was signed between Hareon and United PV on May 13, 2015.First Party (Including designated related party, similarly hereinafter) have already total paid HKD500 million advance payment forproject acquisition in installments(hereinafter referred to as advancepayment for acquisition)
2. Second Party intends tobe assignee, and First Party intends to transfer all its rights,responsibilities, right of compensation, and other means of redress to recover debts under Cooperation Agreement. Third Party also agrees the transfer of relevant rights, responsibilities, an dobligation under cooperation agreement from First Party to Second Party.
3. Section 3.1 of Framework Agreement - investment cooperation for 930MW PV power station joint signed with United PV contentsrelated that First Party issues valued HKD1 billion convertible bonds toThird Party, do not have any execution condition, with the reason that the twoparties did not have a further negotiation. After undertaking all the rightsand obligations, second Party and Third Party reach decision throughconsultation, that is, as funds, Second Party will not issue any convertiblebonds mentioned in Section 3.1 to Third Party
Ⅲ. Related details of Deed of Assignment
No.1. Second Party intends to be assigned all First Party’s rights, responsibilities, right of compensation, and other means ofredress to recover debts under Cooperation Agreement (include principal HKD500 million advancepayment for project acquisition and cost of funds). Moreover, Second Partyagreed arranges as follows, pay HKD500 million transfer consideration in threetimes.
Transfer consideration refers to:(1) Equivalent to principal of HKD500 million acquisitions of advance payment;with the addition of (2) First Party’s cost of funds of above-mentioned advancepayment (7.5% annualize), calculate according to the actual number of days.
The first payment within the day of thisdeed of assignment signed, refers to the earnest (advance payment) Second Partyhad paid HKD150 million to First Party.
The second payment should be paid within20 days after this deed of assignment go into effect, second party pay HKD100million transfer consideration to First Party. After First Party receive HKD250million (include the first payment) from Second Party and after receive thecost mentioned in Section 8 from Third Party, within five working days(after First Party receive all above-mentioned funds from Second Party andThird Party, if come across Spring Festival holiday, the allotted timelengthen into 15 days ), First Party should submit application to CIETAC towithdraw the arbitration caused by Third Party of cooperation agreement, andsubmit application to Wuxi, Jiangsu intermediate people's court to revocation/withdraw property preservation (except if Third Party putsforward counterclaim).
The third payment should be paid, (1)within 40 days after this deed of assignment go into effect, (2) moreover FirstParty should submit application to CIETAC to withdraw the arbitration caused by Third Party of cooperation agreement, and submit application to Wuxi,Jiangsu intermediate people's court to revocation/withdraw property preservation, the aforesaid times the laterone should be followed if meets conflict, Second Party pay HKD250 million and First Party’s cost of funds to First Party.
No.2. After First Party received the payment mentioned in No.1 and the cost mentioned in Section 8(the later time should befollowed if meets conflict), within 20 workdays (Third Party do notcooperate or other reasons, First Party cannot completed custody as the followin time, processing time for First Party should be extended appropriately). Thecustody about share distribution of 4 project companies include Hetian XinrunPV power generation Co., LTD should be cooperatively completed. Relieve pledgeof above 4 project companies’ stock rights and meanwhile transfer pledge ofstock rights of project companies to Second Party. Third Party would promise tocooperate and assist in the process of relieve and transfer pledge of stockrights to Second Party.
No.3. After First Party received the payment mentioned in No.1and the cost mentioned in Section 8(the later time should befollowed if meets conflict),Preliminary Acquisition Agreement –Keping Haixin Power Co., Ltd., Hareon Haixin Aksu Keping PhaseⅡ30MW Grid-ConnectedPV Power Generation Project and Supplemental Agreement of PreliminaryAcquisition signed inOctober 2015, Preliminary Acquisition Agreement – MengziAltusvia Power Co., Ltd., Xibeile MengziPV Power Generation Project and Supplemental Agreement of PreliminaryAcquisitionsigned inOctober 2015, Preliminary Acquisition Agreement – HetianXinrun Power Co., Ltd., Shisishipishan Farm(PhaseⅠ) 20MW Grid-Connected PV Power GenerationProject and Supplemental Agreement of PreliminaryAcquisition signed inOctober 2015 by First Party affiliated company and Second Party affiliatedcompany will be broken off(preliminary agreement acquisition andsupplemental agreement hereinafter referred to as preliminary agreementacquisition ). First Party and Third Party should make sure the dissolutionagreement of preliminary agreement acquisition to be signed by their respectiveaffiliated party.
No.4. Third Partyaffirms: Third Party bears total cost of actual arbitration,preservation, and counsel fee related with cooperation agreement according toSection 8 of deed of assignment.
No.5. Unless otherwiseagreed of deed of assignment, instead of First Party, Third party shall be inaccordance with cooperation agreement to perform its responsibilities,obligations and rights for Second Party. Third party will have no right torequest any right from First Party or request First Party to perform anyresponsibility or obligation according to cooperation agreement.
No.6. After Deed ofAssignment comes into effect, if the first payment fails to be paid-up in timefrom Second Party to First Party according to Deed of Assignment, Second Partywill be considered as grave breach of contract, unless First Party agree with aseparately written consent, if not, Deed of Assignment will be broken offautomatically, Second Party would agree that First Party occupy the firstpayment as liquidated damages, because of Second Party’s grave breach ofcontract result in deed of assignment have been broken off. In this case,Second Party could not request any right or obligation undercooperation agreement, the transfer under Deed of Assignment would be voidbefore the fact. Unless otherwise expressly agreed upon in Deed of Assignment,all three Parties permit First Party that all its rights, right ofcompensation, and other means of redress torecover debts under Cooperation Agreement wouldnot be damage, moreover, the payment have been occupied by First Party, couldnot be regarded as any obligation and responsibility that Third Party shouldprovide to First Party reduced or exempted. On the contrary, After FirstParty receive HKD250 million from Second Party, within five working days (ifcome across Spring Festival holiday, the allotted time lengthen into 15days ), First Party have not submitted application to CIETAC to withdraw thearbitration, or have not submitted application to Wuxi, Jiangsu intermediate people'scourt to revocation/withdraw property preservation (except if Third Party putsforward counterclaim), First Party should return back HKD250 million which havebeen paid by Second Party.
No.7. Third Party has confirmed and agreed the terms and draftresolutions of Deed of Assignment, and is willing to be restricted by them.
No.8. Third Party agree to bear the costs of preservation,arbitration and counsel fee with real payment documents which has been spent byFirst Party for CIETAC’s arbitration (arbitration fee approximated RMB3,380,515; attorney fees approximated RMB 2,200,000), after First Party providepaying voucher of the costs of preservation, arbitration and counsel fee, ThirdParty should paid above-mentioned expense to First Party within 10 workdays. Iffinal expenses of preservation, arbitration andcounsel fee exceed above-mentioned amount of money, Third Party shouldbear actual expenses of arbitration, preservation,counsel fee, and others, and immediate payment when First Party provide therelated paying voucher. On the contrary, if the payment specific to presentsection provided by Third Party to First Party exceeds amount of relatedpaying voucher provided by First Party, or arbitration committee returnssome arbitration fees, First Party should return back excess amount toThird Party within 5 workdays. If Third Party do not pay above-mentioned costsin time, pay interest of 500 / million each overdue day. IfThird Party authenticated has been paid the costs of arbitration, preservation,counsel fee, and others to the subsidiary company of First Party, deemed ashave paid to First Party.
Ⅳ. Deliberation results by board of directors
The presentagreement has been deliberated and approved by Company Fourth-meeting(temporary) of Sixth-board of directors.
According torelevant regulations, the present case should be submitted to Companystockholders' meeting agenda.
Ⅴ. The effects to Company and Risk Tips
1. According to the agreement, if ThirdParty actualizes as contracted, United PV will withdraw the arbitrationapplication, the default risk of HKD200 million provisional estimated inarbitration application will be avoided, therefore the uncertainty effect ofarbitration to Company will be avoided.
2. According to the agreement, Companyagrees to bear the expenses of arbitration, preservation,counsel fee with real payment documents have paid by United PV to CIETAC due tothe cooperation agreement, arbitration fee approximated RMB 3,380,515; attorneyfees approximated RMB 2,200,000. After above-mentioned to be put into effect,the profit impacts to Company current or after date amountapproximate RMB5,580,515( the exact amount and allottedtime of Counting and Drawing will be affirmed by Company actual payment andthe accountants’ computation ).
3. Up to the date of declaration, deed ofassignment had beensigned, but the allotted time stipulated by deed of assignment payment to United PV has not beenexceeded, it has not match condition of United PV withdraw thearbitration application, there are still uncertainty in progress of thearbitration.
4. Company will pay attention to thesubsequent progress of above-mentioned agreement, furthermore, performdecision-making procedure and obligation of information disclosure in time inaccordance with prescribed procedures. To wish all the investors could evaderisk of investment.
Ⅵ. Documents Available for Inspection
Announcement is hereby given.
By order of the Board
Hareon Solar Technology Co., Ltd.
27 January 2016