GCL Poly Energy : Announcements and Notices - Continuing Connected Transaction - Framework Agreement in Relation to Supply of Wafer Products

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GCL-POLY ENERGY HOLDINGS LIMITED

保 利 協 鑫 能 源 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 3800) CONTINUING CONNECTED TRANSACTION FRAMEWORK AGREEMENT IN RELATION TO SUPPLY OF WAFER PRODUCTS FRAMEWORK AGREEMENT

The Board is pleased to announce that on 6 January 2017, GCL-Poly Suzhou and GCL System Integration entered into the Framework Agreement, pursuant to which GCL-Poly Suzhou agreed to supply the Wafer Products to GCL System Integration from 1 January 2017 to 31 December 2017.

LISTING RULES IMPLICATIONS

As at the date of the Framework Agreement, approximately 22.40% and 28.19% of the issued shares in GCL System Integration is held by the Zhu Family Trust and Mr. Zhu Yufeng, respectively. As Mr. Zhu Gongshan and Mr. Zhu Yufeng are both Directors and therefore connected persons of the Company and GCL System Integration is an associate of them, GCL System Integration is therefore a connected person of the Company. Accordingly, the transactions contemplated under the Framework Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios in respect of the Annual Cap are more than 5%, the Framework Agreement, the transactions contemplated thereunder and the Annual Cap are subject to the reporting and announcement and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

The Independent Board Committee has been established to advise the Independent Shareholders in respect of the terms of the Framework Agreement and the transactions contemplated thereunder (including the Annual Cap). The Company has appointed the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the fairness and reasonableness of the Framework Agreement and the Annual Cap.

GENERAL

The EGM will be convened by the Company for the Independent Shareholders to consider and, if it thought fit, approve the Framework Agreement, the transactions contemplated under thereunder and the Annual Cap.

A circular containing, among other things, (i) further information on the Framework Agreement and the Annual Cap; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders; (iii) the advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; and (iv) a notice of the EGM, will be despatched to the shareholders on or before 27 January 2017.

FRAMEWORK AGREEMENT

The Board is pleased to announce that on 6 January 2017, GCL-Poly Suzhou and GCL System Integration entered into the Framework Agreement, the details of which are set out below:

Date

6 January 2017

Parties

1. GCL-Poly Suzhou, as supplier

2. GCL System Integration, as customer

   Term

   The term of the Framework Agreement is for the period of one year commencing from 1 January 2017 and ending on 31 December 2017.

   Subject matter

   GCL-Poly Suzhou has agreed to supply (by itself or through its subsidiaries or affiliates), and GCL System Integration has agreed to purchase (by itself or through its subsidiaries) the Wafer Products, being polysilicon and monocrystalline wafers, during the term of the Framework Agreement.

   The Framework Agreement serves as a framework agreement between the parties pursuant to which delivery notice for the Wafer Products may be agreed between GCL-Poly Suzhou and GCL System Integration during the term of the Framework Agreement. In the event of conflict between the terms of the Framework Agreement and any delivery notice, the terms of the Framework Agreement shall prevail.

   Purchase quantity

   Under the Framework Agreement, and subject to the Annual Cap, the estimated total quantity of the Wafer Products to be supplied by GCL-Poly Suzhou (or its subsidiaries or affiliates) during the Term is 600,000,000 pieces per annum (the "Estimated Purchase Quantity").

   The actual volume of the Wafer Products to be supplied by GCL-Poly Suzhou from time to time shall be determined by both parties based on the delivery notices agreed between GCL-Poly Suzhou and GCL System Integration, subject to the following:

3. the maximum monthly purchase quantity shall be 115% of 50,000,000 pieces;

4. the maximum total purchase quantity during the Term shall be 115% of the Estimated Purchase Quantity; and

5. the minimum total purchase quantity during the Term shall be 85% of the Estimated Purchase Quantity (the "Minimum Purchase Quantity").

If GCL System Integration fails to purchase the Minimum Purchase Quantity on or before the end of the Term ("Year End Date") (other than due to the failure by GCL-Poly Suzhou to deliver the required Wafer Products), GCL System Integration shall within one month after the Year End Date ("Buyer Grace Period") purchase such quantity of Wafer Products as equals to the shortfall between the Minimum Purchase Quantity and the actual quantity purchased by GCL System Integration ("Buyer Shortfall Quantity"). GCL System Integration shall state in each delivery notice given during the Buyer Grace Period whether the purchase under such notice shall count towards reducing the Buyer Shortfall Quantity.

If GCL System Integration fails to reduce the Buyer Shortfall Quantity to zero during the Buyer Grace Period, GCL System Integration shall pay GCL-Poly Suzhou a default payment. Such default payment shall be an amount equals to 0.05% of the value (determined based on the average price of the Wafer Products supplied by GCL-Poly Suzhou during the Term (the "Average Price")) of the Buyer Shortfall Quantity of Wafer Products as at the end of the Buyer Grace Period, multiplied by the number of days comprised in the Buyer Grace Period. Such default payment is subject to a cap of 10% of the total Average Price of the Buyer Shortfall Quantity.

If GCL System Integration has requested the required quantity of Wafer Products in its delivery notices to meet the Minimum Purchase Quantity but GCL-Poly Suzhou fails to deliver any of the requested Wafer Products, GCL-Poly Suzhou shall within one month after the Year End Date ("Seller Grace Period") deliver such quantity of Wafer Products as equals to the shortfall between the Minimum Purchase Quantity and the actual quantity delivered to GCL System Integration ("Seller Shortfall Quantity"). GCL-Poly Suzhou shall state in each delivery notice given during the Seller Grace Period whether the delivery shall count towards reducing the Seller Shortfall Quantity.

If GCL-Poly Suzhou fails to reduce the Seller Shortfall Quantity to zero during the Seller Grace Period, GCL-Poly Suzhou shall pay GCL System Integration a default payment. Such default payment shall be an amount equal to 0.05% of the value (calculated based on the Average Price) of the Seller Shortfall Quantity of Wafer Products as at the end of the Seller Grace Period, multiplied by the number of days comprised in the Seller Grace Period. Such default payment is subject to a cap of 10% of the total Average Price of the Seller Shortfall Quantity.