Definition“Blue”: Blue Corporation in Arbitria“Brown”: the deputy general manager of the international department ofBlue“Red”: Red Corporation in Negoland“Orange”: Assistant Director General of Negoland Energy Agency

Overall Strategy
We will try to reach win-win agreement with Red to maintain and improve
our business relationship in a long run by pursuing our mutual benefits. We
will try to seek for solutions to fulfill both of our interests.

2I. Disputes Regarding Payments
We will try to settle the pending disputes through this negotiation. Since
Blue is financially more stable and the Negoland market is very attractive, wewill focus on building future relationship with Red instead of immediatepayment.
In case we could not reach an agreement, we will leave the payment issues
to the arbitration as our BATNA. This negotiation should be done “withoutprejudice”.
1. Regarding payments
1.1 US$9 million(1) Top line
Red will pay US$4.5 million.
(2) Bottom line
Red will pay US$3 million and show regret.
1.2 Upfront payment(1) Top line
Red will refund US$0.75 million.
(2) Bottom line
Red will not refund (However, we would like to avoid it in order to keep
Brown at his position).
2. Strategy
Blue would like Red to pay US$4.5 million; however, we could consider theoffer of financial support in exchange of exclusive right for all kinds of credit
purchase. The amount of support depends on negotiation.
Concerning upfront payment, Blue would like Red to refund half.

3II. Future Business Relationships
We will try to reach an agreement regarding proportion of the stake, thepricing of credits issued by 2012, credit purchase after 2013 and anypossibilities of joint projects.
In case we could not reach an agreement with Red, we will terminate therelationship with Red as BATNA.

1. Proportion of the stake(1) Top line
Blue would allow Red to change proportion of the stake as long as Art.6.2of the Joint Venture Agreement remains the same, requiring unanimous voteof the shareholders of Green for the important corporate actions.
(2) Bottom line
If Red does not accept our suggestion, Blue could accept that Red will takethe majority of control except for the control of technology.
(3) Strategy
If Red wishes to change not only proportion of the stake but also otherfactors that would affect the balance of power, Blue would accept the change,with condition that Blue maintains its actual control.

2. Credit until 2012
2.1 Biomass credit until 2012
(1) Top line
US$8 per 1 ton(2) Bottom line
US$10 per 1 ton(3) Strategy
First, we will emphasize that purchasing CER credits is one of our main
purposes of involving in the biomass project. Therefore, it will be against
win-win solutions if Green sell the credits for other company.
4Second, Green should sell the credits to us as far as the price andconditions offered by another company are the same, since Green is ourventure company.
2.2 Hydro-electric power credit until 2012
(1) Top line
US$8 per ton(2) Bottom line
US$10 per ton(3) Strategy
To get Red’s acceptance of the pricing of US$10 per ton, we can give up
part of US$ 1.5 million.
Moreover, we can suggest Red to give our assistance regardinghydro-electric power generation technology.

3. Credits after 2013
(1) Top line
Blue would like to agree on securing an exclusive right for negotiation withRed regarding emissions rights issued by biomass and hydro-electric projects
under a bilateral agreement. Also, we would like to agree on starting
discussion regarding new joint projects such as wind and nuclear power
generation.
(2) Bottom line
We would like to agree on a right for negotiation with Red.
(3) Strategy
As for the introduction of Blue’s technology, we will propose that teaming
up with Blue is the best way to seek mutual interest. We are planning tosuggest new joint projects.

4. Relationship with Orange5

(1) Top line
We would like to keep good relationship with Orange without any bribery.
(2) Bottom line
We will not give Orange anything that may constitute a bribe. However, wemay compromise with other pending issues.
(3) Strategy
We will emphasize that building a great relationship with Orange isimportant. However, we will not involve in anything that is against the law.
We will welcome any good ideas from Red that can restore relations withOrange other than bribing.

III. The Agreement
1. The Basic Agreement (Exhibit 4) is invalid
We believe the Basic Agreement is invalid because it is out dated.
2. Conclusion of a letter of intent
Blue believes it is necessary to conclude a letter of intent regarding all theagreements we have reached upon negotiation for our future relationship.

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