MASTER ACQUISITION AGREEMENT

 

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MASTER ACQUISITIONAGREEMENT

 

THIS MASTER ACQUISITION AGREEMENT (the “Agreement”) is made on 5th June 2012

 

by and between

 

SHALA ENERGY shpk

 

TIRANE TIRANE TIRANE BULEVARDI DESHMORET e KOMBIT,TWIN TOWER II,KATI 11

 

and

 

3 POWER ENERGY GROUP Inc.

P.O.Box 50006,Dubai, UAE

 

 

 

 

MASTER ACQUISITION AGREEMENT

 

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Preamble,

 

Based on a consensual and mutual trust relations between the parties and the
best trade practices, as well as based on the “Cooperation Agreement”, made on
December 30th 2011attached in ANNEX 1 of this agreement and the “Extension
Notice Term”made on April 5th 2012,attached in ANNEX 2 of this agreement and in
conformity with the concessionary contract BOT No. 3722 Rep, No. 488 Kol, dated
02 June 2009, Parties hereby covenant and agree to made this Master Acquisition
Agreement on the following terms and conditions:

 

Article 1
The Project

The Company SHALA ENERGY shpk, has signed a Concession Agreement, BOT form, with
Ministry of Economy, Trade and Energy of Republic of Albania for the
construction of a hydropowr plant cascade on Shala River,in north part of
Albania.

 

The Concession Agreemet it is approved with the Council of Ministers Decision of
Republic of Albania No. 698, dated 11.06.2009 and enetered into force on 24
August 2009(date of publication of the CMD on approval of the Concession
Agreement in the Official Gazzete of Albania).

 

Pursuant to the Albanian legislation and Concession Agreement terms, the Company
SHALA ENERGY shpk holds all concession rights for 35 years (including Free
Enjoyment) on construction and operation of the hydropower plant cascade on
Shala River.

 

The scheme of utilization of Shala River preview constuction of a hydropower
plants cacscade with total instalation capacity for 127,6 MW and average energy
production for about 530,350,000 kWh/year.

 

The Company SHALA ENERGY shpk, pursuant to article 8.2 of the Concession
Agreement, has presented the project implementation to the Ministry of Economy,
Trade and Energy of Republic of Albania for its approval. The project
implementation it is submited for approval within deadline defined in the
Concession Agreement.

 

Article 2
SHALA ENERGY shpk Shareholders Structure

 

The Company SHALA ENERGY shpk is the Concessionaire Company established under
the Albanian legislation and definition in the Article 8.1 of the Concession
Agreement. The Company it is established on 18.09.2009 and it is registered at
National Registration Center of Albania with Identification Number K 92118003C.

 

The stucture of shareholders of the Company SHALA ENERGY shpk, is as follow:

  

1. INTERENERGO ALBANIA shpk 90% of shares 2. POTEZA SKUPINA dd 5% of shares 3.
SGP POMGRAD dd 5% of shares

 

With letter No. 269/1, dated 10.02.2011 of the Ministry of Economy, Trade and
Energy of Republic of Albania, that acts in the name of Albanian Government as
Contracting Authority, it is approved Share transfer respectively; 5% of POTESA
SKUPINA and 5% of SGP POMGRAD to the Company INTERENERGO ALBANIA shpk.

 

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Article 3

Subject Matter

 

The subject of this contract is a commitment of the SHALA ENERGY shpk to
transfer to 3 POWER ENERGY GROUP Inc.75% of SHALA ENERGY shpk shares including
the titel of the concession that SHALA ENERGY Shpk owns over hydropower plants
cascade on Shala River as for the material and technical conditions specified in
this Contract.

 

The Company SHALA ENERGY shpk and 3 POWER ENERGY GROUP Inc.,wish to transfer
75%of Shares of Concessionaire Company SHALA ENERGY shpk to 3 POWER ENERGY GROUP
Inc.,and thus the respective percentage of all concession right (including
licenses and permits) that SHALA ENERGY shpk holdsthrough the Concession
Contract signed with Albanian Government, under condition of the Concession
Agreement and conditions specified in this Agreement.

 

Article 4

Share Transfer

 

The transfer of the Shares shall be made in compliance with all applicable laws
and regulations in force in Republic of Albania.

 

Mr. Ekrem LUKA, the company administrator with sole signatory power, is properly
authorized with a notarized power of attorney (as per Annex 1 attached to this
agreement) by the shareholders to transfer the Title of 75% of the company
shares (Hereinafter is referred to as “Acquisition Shares and/or The Shares “to
3 Power Energy Group.

 

The “Acquisition Shares” shall be transferred to the 3 POWER ENERGY GROUP Inc.
upon the registration of the transaction in the National Registration Center,
and the Shares shall be sold and purchased together with all rights and benefits
attached or accruing to them at the moment of registration in the National
Registration Center (including the right to receive all dividends, distributions
or any return of capital declared, paid or made by the SHALA ENERGY shpk)

 

Article 5

Termination of the Share Transfer prior to the execution of the payment

 

This Agreement may be terminated prior to the execution of the full payment:

 

·by mutual agreement of the Parties; or

 

·by any Party by written notice communicated to the other Party if the Precedent
Conditions are not fulfilled or waived; or

 

·at any time by the SHALA ENERGY shpk, by written notice communicated to the 3
POWER ENERGY GROUP Inc., if the 3 POWER ENERGY GROUP Inc. is in material breach
of any of its obligations under this Agreement; or

 

·at any time by the 3 POWER ENERGY GROUP Inc. by written notice communicated to
the SHALA ENERGY shpk if the SHALA ENERGY shpk is in material breach of any of
its obligations under this Agreement (including a breach of the Warranties); or,
   

·eat any time by the 3 POWER ENERGY GROUP Inc. by written notice to the SHALA
ENERGY shpk, if the registration of the 3 POWER ENERGY GROUP Inc. as the owner
of 75% of Shares of Concessionaire Company at the National Registration Centre
has not occurred on pursuant to the terms of this agreement.

 

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Article 6

Share Transfer Agreement Closing Documentation and Milestones

 

6.1. Closing Docuemntation :

 

3 POWER ENERGY GROUP Inc declares that it completed its technical due diligence
on the project and is in the process of the legal due diligence completion which
is subject to obtaining the documents listed below in article 6.2. and in a form
and contents satisfactory to 3 POWER ENERGY GROUP Inc:

 

6.1.1.SHALA ENERGY shpk Company undertake to provide immediately and latest 30th
June to 3 POWER ENERGY GROUP Inc following documents in form and content
satisfactory (hereinafter is referred to as “the Closing Documents”:

 

(i)Company audited financials for the years 2010, 2011;

 

(ii)Copy of the Company updates commercial registry;

 

(iii)Management accounts 1st January – 30th May 2012;

 

(iv)Certified copy or an official extract from the Ministry of Economy, Trade
and Energy of Republic of Albania for the concession contract;

 

(v)Copy from the letter of guarantee (Hereinafter is referred to as “Concession
LG” provided by the SHALA ENERGY shpk company to the Ministry of Economy, Trade
and Energy of Republic of Albania concerning the concession performance.

 

(vi)Certified copy or an updated letter from the Ministry of Economy, Trade and
Energy of Republic of Albania accepting the replacement of the “Concession LG”
with the insurance bond(hereinafter is referred to as “ Insurance Bond”)attached
in Annex 2 of this agreement and provided by EUROSIG Sha, Albanian Insurance
Company and Reinsured by American Assurance Underwriters Group, AAUG Insurance
Company, LTD, UK.

 

(vii)Certified Copies from the “Insurance Bond” contract and related document.

 

(viii)All concession Titles and related documents as set in Annex 3 attached to
this agreement.

 

(ix)Corporate due diligence documents as set in Annex 4 attached to this
agreement.

 

6.2. Closing Milestones And Dates:

 

The Parties agree on transfer of 75% of Shares of the Concessionaire Company
SHALA ENERGY shpk to the Company 3 POWER ENERGY GROUP Inc., under following
conditions:

 

  6.2.1.3 POWER ENERGY GROUP Inc agrees that, within 10 days from the submission
of the complete required documentation, but no later than 15 June 2012 (Closing
Date) shall complete the legal due diligence report on SHALA ENERGY shpk and the
company partners according to their shares in this company.

 

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  6.2.2.SHALA ENERGY Shpk Company shall provide 3 POWER ENERGY GROUP Inc with
all the necessary documents in form and content satisfactory to 3 POWER ENERGY
GROUP Inc within one week from the signing of this Agreement. Should the
requested documentation be not made available, SHALA ENERGY Shpk will provide
its best efforts to secure it. The required documentation shall be made
available at the earliest convenience, no later than 5 June 2012.

 

  6.2.3.Upon satisfactory DD results, 3 POWER ENERGY GROUP Inc undertakes to pay
the insurance company the first year premium of the Insurance bond as per the
Insurance Bonds contract provided that the following documents are submitted to
3 POWER ENERGY GROUP Inc latest 10th June:

 

i.SHALA ENERGY Shpk Company provides 3 POWER ENERGY GROUP Inc latest 10th June
an updated letter from the Ministry of Economy, Trade and Energy of Republic of
Albania accepting the replacement of the “Concession LG “.

ii.An invoice from the Insurance company to SHALA ENERGY Shpk Company for the
premium amount.

 

  6.2.4.SHALA ENERGY Shpk Company Undertakes to transfer to 3 POWER ENERGY GROUP
Inc owner the “Acquisition Shares” pursuant to the terms of this agreement
within maximum two working days from the Payment by 3 POWER ENERGY GROUP Inc
ower of the first year premium for the Insurance Bond Premium issued in favor of
the Contracting Authority (Ministry of Economy, Trade and Energy of Republic of
Albania) in Replacement of the current existing Bank guarantee issued in favor
of Contracting Authority(Ministry of Economy, Trade and Energy of Republic of
Albania) for the Shala River Concession Agreement, in amount of
7,230,315.00(seven million and two hundred and thirty thousand and thirty
hundred and fifteen) Euro,

 

Article 7

Share Transfer Payment Consideration

 

7.1.The “Concession Predevelopment Work“ already performed by SHALA ENERGY shpk
and the market value of the concession titel(Hereain after is referred to as
Concession Value)are estimated to the amount of twelve million EUR (12,000,000
EUR).

 

7.2.The SHALA ENERGY Shpk Company accepts to consider its „“Concession
Predevelopment Work“ and the CONCESSION VALUE“ as in kind contribution in the
company to the extent of ten million EUR (10,000,000 EUR) to be converted in 25%
shares in the SHALA ENERGY Shpk and Concessionaire company.The outstanding value
for two million EUR (2,000,000 EUR) will be paid to the present owner of
Concessionaire Company as Success Fee upon connection to the grid of first HPP.

 

7.3.SHALA ENERGY Shpk Company further undertakes in consideration of retaining
25% of the Company shares, obtaining of further permits and licenses for the
project aconstruction and connection to the national Grid, and will make every
effort to facilitate the implementation of the project.

 

7.4.3 POWER ENERGY GROUP Inc ower Company undertakes to perform the following
work at its own cost as an inkind contribution for 75% of SHALA ENERGY Shpk
Company,

 

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7.4.1.The Company 3 POWER ENERGY GROUP Inc., undetake to complete the bankable
feasibility study for the project, raise the capital required to cover the
project equity and long term financing to cover the full Investment Cost for
construction of Shala River hydro power plant cascade, including but not limited
to civil works, equipments, project design, expropriation and commisioning,
including all the payable taxes, pursuant to the Albanian legislation.

 

7.4.2.3 POWER ENERGY GROUP Inc OWER undertakes to mobilise within 6 weeks from
the “Closing Date“ its engineering team in Albania and rent offices for starting
the operation.

 

7.4.3.Payment of the Insurance Bond Premium Contracting Authority (Ministry of
Economy, Trade and Energy of Republic of Albania) in Replacement of the Contract
Security issued in favor of Contracting Authority(Ministry of Economy, Trade and
Energy of Republic of Albania) for the Shala River Concession Agreement, in
amount of 7,230,315.00(seven million and two hundred and thirty thousand and
thirty hundred and fifteen) Euro,

 

7.5.SHALA ENERGY Shpk Company registered shares 1000 as per the company
registered incoporation documents. The ratio of share holding post acquisition
completion will to be as follow:

 

a.The 3 POWER ENERGY GROUP Inc., will hold 75% of shares of Concessionaire
Company equal to 750 shares.

 

b.The Interenergo Albania shpk will hold 25% of shares of Concessionaire Company
equal to 250 shares.

 

The transfer of shares will realised by fulfilment of Precedent Conditions by
each Party of this Agreement as per Article 6 and 7

 

Article 8

Company Management, Constitution, Articles of Incorporation and Memorandum of
Association

 

8.1.SHALA ENERGY Shpk company articles of Incorporation and memorandum of
association documets are attached in Annex 4 of this agreement.

 

8.2.SHALA ENERGY Shpk Company and 3 POWER ENERGY GROUP Inc. agree to accept the
new Articles of incorporation and Memorandum of association attached in Annex 5
of this agreement as the only bylaws of the company regulating the shareholders
relation and company management.

 

8.3.The Company will be managed by 3 board of directors, two of the three board
memebers are appointed by 3 POWER ENERGY GROUP Incower and one board member is
appointed by SHALA ENERGY Shpk shareolders.

 

8.4.The SHALA ENERGY Shpk company CEO and executive management will be appointed
by 3 POWER ENERGY GROUP Incower.

 

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Article 9

Representations and Warranties of SHALA ENERGY shpk

 

9.1 Warranties

 

The SHALA ENERGY shpk represents and warrants to the benefit of 3 POWER ENERGY
GROUP Inc.that the following representations and warranties (the "Warranties")
are true and accurate as of the date hereof and will be true and accurate as at
the Signing Date of this Agreement.

 

9.2 Right, Power, Authority and Actions

 

This Agreement constitutes a legal, valid and binding obligation of the SHALA
ENERGY shpk in accordance with its terms. The SHALA ENERGY shpk has the
authority, and capacity to execute and deliver this Agreement to perform its
obligations hereunder.

 

9.3 Breaches

 

The execution, delivery and performance by the SHALA ENERGY shpk of this
Agreement and the obligations hereunder will not conflict with any law,
regulation, agreement, court order, contract or other restriction under which
the SHALA ENERGY shpk is obligated and will not result in a breach of any
provision of the charters of the Parties.

 

9.4 Transfer of the Shares

 

The SHALA ENERGY shpk is registered and sole owner of the Shares and is entitled
to transfer them to any person or entity without any restriction.

 

The Shares are free of any Encumbrances.

 

All procedures necessary to execute the transfer of the Shares will duly
performed by the SHALA ENERGY shpk in compliance with all applicable laws and
regulations.

 

9.5 No Conflict and Absence of Negative Effect

 

The execution, delivery and performance of this Agreement will not:

(i)result in the acceleration of payment, suspension, modification or
re-negotiation of any of financing facilities;

(ii)result in any early termination, suspension, modification or re-negotiation
of any material agreement to which the SHALA ENERY shpk is a party;

(iii)result in the modification, suspension, non-renewal, cancellation or
revocation of the authorizations;

(iv)result in the payment of any financial penalty;

 

9.6 Off-Balance Sheet Liabilities and Guarantees

 

No guarantee, pledge, sponsorship, comfort letter or similar commitments, and no
off-balance sheet liabilities of any nature given or incurred by the SHALA
ENERGY shpk is in effect and will be in effect on the Signing Date of this
Framework Agreement.

 

9.7 Profit-Sharing Agreement

 

The SHALA ENERGY shpk is neither a party nor has agreed to be a party to any
agreement giving any third party any right to share in whole or in part in the
profits of the CompanySHALA ENERGY shpk.

 

9.8 Litigation

 

9.8.1The SHALA ENERGY shpk is not engaged in any judicial, criminal,
administrative or arbitral proceedings, as plaintiff or defendant, in which the
risk of loss exceeds ALL 1.

 

9.8.2In particular, the Company SHALA ENERGY shpk is not a party to, and has not
been threatened with, any lawsuit brought by customers or third parties.

 

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9.8.3Furthermore, there has been no court or administrative decision or order,
and no time limit given by a professional organization or supervisory authority,
imposing on the Company SHALA ENERGY shpk, an obligation which might in the
future have unfavorable consequences on the normal course of their business.

 

9.9 Tax and Other Returns

 

9.9.1.The SHALA ENERGY shpk has regularly and timely filed all required Taxes
and social security returns; and

 

9.9.2.The SHALA ENERGY shpk has paid or provided for all Taxes and social
Security charges, including any interest, fines or penalties relating thereto.
Said provisions are sufficient to pay all Taxes and/or social security charges
which may become due after the date hereof with respect to any period prior to
the Signing Date of this Framework Agreement.

 

Article 10

Representations and Warranties of the 3 Power Energy Group Inc.

 

The 3 Power Energy Group Inc. represents and warrants to the SHALA ENERGY shpk
that the following representations and warranties are true and accurate as of
the date hereof and will be true and accurate as at the Signing Date of this
Framework Agreement:

 

(i)the 3 POWER ENERGY GROUP Inc., is duly organized and validly existing and in
good standing under the laws of the State of United States of America;

 

(ii)this Agreement constitutes a legal, valid and binding obligation for the 3
POWER ENERGY GROUP Inc., enforceable against the 3 POWER ENERGY GROUP Inc., in
accordance with its terms. The 3 POWER ENERGY GROUP Inc., has the authority and
capacity to execute and deliver this Framework Agreement and to perform its
obligations hereunder;

 

(iii)the execution, delivery and performance of this Agreement by the 3 POWER
ENERGY GROUP Inc., has been duly and validly authorized by all necessary
corporate actions of the 3 POWER ENERGY GROUP Inc., in accordance with its
governing documentation and does not and will not result in any breach or
default under any arrangements, agreements or judgments to which the 3 POWER
ENERGY GROUP Inc., is a party or by which the 3 POWER ENERGY GROUP Inc., is
bound and the enforcement of which would adversely affect the 3 POWER ENERGY
GROUP Inc's ability to perform the terms of the Framework Agreement;

 

(iv)has financial and technical capacities for implementation of the project.

 

Article 11

Precedent Conditions for SHALA ENERGY shpk

 

The obligations of the SHALA ENERGY shpk, pursuant to this Framework
Agreementare subject to, and conditional upon the following conditions having
been fulfilled:

 

(i)all Warranties shall be true and correct in all material respects as of
Signing Date, with the same force and effect as if such Warranties had been made
on the date of the execution of Share Transfer and full payment (except those
representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time, which need only be true and
accurate as of such date or with respect to such period);

 

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(ii)the SHALA ENERGY shpk shall have performed all obligations arising under
this Framework Agreement;

 

(iii)all required authorizations from the Albanian administrative authorities,
as well as any other authorization or consent necessary under Albanian law to
execute the transaction contemplated herein shall have been duly obtained
without any unduly burdensome condition which the 3 POWER ENERGY GROUP Inc.,
would refuse to accept or, on the condition that the Albanian authorities have
not opposed the transaction within legal time limits;

 

(iv)the SHALA ENERGY shpk has adopted and issued the necessary resolutions,
pursuant to the legislation in force to approve the transaction;

 

(v)has realized share transfer of shareholders of the SHALA ENERGY shpk to only
one company. The Share transfer has to be realized and certified by the National
Registration Center of Albania.

 

Article 12

Precedent Conditions for 3 POWER ENERGY GROUP Inc.

 

The obligations of the 3 POWER ENERGY GROUP Inc, pursuant to this Agreement are
subject to, and conditional upon the following conditions having been fulfilled:

 

(i)All Warranties shall be true and correct in all material respects as of
Signing Date, with the same force and effect as if such Warranties had been made
on the date of the execution of Share Transfer and full payment (except those
representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time, which need only be true and
accurate as of such date or with respect to such period);    

(ii)Payment of the Insurance Bond Premium Contracting Authority (Ministry of
Economy, Trade and Energy of Republic of Albania) in Replacement of the Contract
Security issued in favor of Contracting Authority(Ministry of Economy, Trade and
Energy of Republic of Albania) for the Shala River Concession Agreement, in
amount of 7,230,315.00(seven million and two hundred and thirty thousand and
thirty hundred and fifteen) Euro,

 

Article 13

The Shares Transfers

 

13.1.The Parties undertakes to conclude the shares transfer latest on 15th June
2012.

 

13.2.The Company SHALA ENERGY shpk, undertakes to submit to the 3 POWER ENERGY
GROUP Inc., latest on 5th June all documents and information necesary for 3
POWER ENERGY GROUP Inc., to conclude terms of STA.

 

13.3.If SHALA ENERGY shpk fails to submit documents and information, the 3 POWER
ENERGY GROUP Inc., has the right to terminate this Agreement without any
obligation or penallty.

 

13.4.If the 3 POWER ENERGY GROUP Inc., fails to conclude this agreement terms
and/or withdraw form this Agreement pursuant to, 3 POWER ENERGY GROUP Incower
undertakes to return to the SHALA ENERGY shpk, all submited documents and
information.

 

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Article 14

Miscellaneous provisions

 

14.1 Confidentiality

 

14.1.1.14.1.1 No Party shall, without the prior written consent of the other
Parties, disclose to any person, or make a public announcement of any
information concerning any provision of this Framework Agreement and/or the
contemplated transaction.

 

14.1.2.When any of the Parties reasonably determines that a disclosure or
announcement of the type mentioned above is required by the law or regulations
or by any other authority to which a Party is subject, the disclosure or the
announcement shall, to the extent permitted by the law and provided that it is
reasonably feasible, be made after consultation with the other Parties.

 

14.2 Entire Agreement and Amendments

 

14.2.1.The Agreement constitutes the entire agreement and supersedes any
previous agreement between the Parties relating to the subject matter of this
Framework Agreement.

 

14.2.2.Any amendment to this Agreement is valid only if it is in writing and
signed by or on behalf of each Party and specifically refers to this Agreement.

 

14.3 Costs

 

14.3.1.14.3.1 Each Party shall bear its costs incurred in connection with the
negotiation, entering into and conclusion of legally binding documentation for
the sale and purchase.

 

14.3.2.Any transfer or stamp duties that may become due as a result of the
signing of this Agreement and the transfer of the Shares shall be borne by the
SHALA ENERGY shpk.

 

14.4 Severability

 

If at any time any provision of this Agreement is or becomes invalid or
unenforceable, then such provision will be deemed to be severed from this
Framework Agreement and if possible replaced by a lawful provision which carries
out, as closely as possible, the intention of the Parties under this Framework
Agreement and where permissible that shall not affect or impair the validity or
enforceability of any other provisions of this Agreement.

 

14.5 Rights and Other Matters

 

14.5.1.The rights, powers, privileges and remedies provided in this Framework
Agreement are cumulative and are not exclusive of any rights, powers, privileges
or remedies provided by law or otherwise.

 

14.5.2.No failure to exercise nor any delay in exercising any right, power,
privilege or remedy under this Framework Agreement shall in any way impair or
affect the exercise thereof or operate as a waiver thereof in whole or in part.

 

14.5.3.No single or partial exercise of any right, power, privilege or remedy
under this Framework Agreement shall prevent any further or other exercise
thereof or the exercise of any other right, power, privilege or remedy.

 

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14.5.4.The Parties agree that this Agreement does not provide for the exclusion
of any of the Parties from any work the Parties could be assigned as
contractors, in the course of the execution of the Projects, according to the
Final Financing Structure terms and conditions and the concession agreement.

 

14.6 Language

 

This Agreement has been drawn up in the English language in four copies and then
translated into Albanian. The Parties will execute counterparts in Albanian but
in case of any discrepancies the English text language shall prevail.

 

Article 15

Notices

 

Except as otherwise agreed, all notices and communications addressed to any
Party shall be made in writing in the English language and will be either:
(i) delivered personally, or (ii) sent by registered mail, (iii) sent by
telecopy confirmed by registered mail or (iii) sent by courier, to the addresses
specified herein or to another address indicated in writing:

 

(i)For the 3 POWER ENERGY GROUP Inc.:

 

In attention to:              Mr.       : Mr.Sharif Rahman,P.O.Box
50006,Dubai,UAE

 

E-mail  : s.rahman@3powerenergy.com

 

Tel:      : 00971506242475

 

ii)For the SHALA ENERGY shpk:

 

In attention to:              Mr.        :Mr. Ekrem Lluka

 

E-mail   :elluka@dukagjinigroup.com

 

Tel:       :+38649500948

 

Notices will be considered received by the addressed Party: (i) on the day of
delivery, if delivered personally or by courier, or (ii)  on the date when the
receipt confirmation is signed, for registered mail transmission or (iii) on the
date of reception of the telecopy (transmission report shall be sufficient
evidence of delivery), for telecopy confirmed by registered mail.

 

Article 16 

Governing Law and Disputes

 

16.1 Governing Law

 

This Agreement is governed by, and shall be construed in accordance with the
Albanian Law.

 

16.2 Disputes

 

The parties to this Agreement have endeavoured to settle amicably any question,
dispute or controversy between them relating to the existence, interpretation
and performance of this Framework Agreement or in connection with this
Agreement. To this end, at the initiative of either party, the other party has
met promptly with the initiating party to discuss the question, dispute or
controversy and if requested by the initiating party in writing has replied in
writing to any written submission made by the initiating party concerning the
question, dispute or controversy. If any further question, dispute or
controversy or any claim relating hereto cannot be amicably settled as provided
for in this article, the parties shall refer the dispute to the Competent
Courts.

 

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Article 17

Force Majeure

 

17.1.The failure of a Party to fulfil any of its obligations under this
Agreement has not been considered to be a breach of, or a non-fulfilment of this
Agreement, if such failure has arisen from an event of Force Majeure, provided
that the Party affected by such an event (a) has taken all reasonable
precautions, due care and reasonable alternative measures in order to carry out
the provisions and terms of this Agreement, and (b) has informed the other Party
as soon as possible about the occurrence of such an event.

 

17.2.Any period, within which a Party has completed any action or task pursuant
to this Agreement, was extended for a period equal to the time during which such
a Party have been unable to perform such an action as a result of Force Majeure.

 

Article 18

Entering into force

 

This Agreement enters into force at Signing Date.

 

Signed today, on 06thJune 2012

  

For and on behalf of3 POWER ENERGY GROUP Inc.       Signed by,           Mr. 
Sharif Rahman   CFO   3POWERENERGY       For and on behalf of SHALA ENERGY shpk
  Signed by,           Mr. Ekrem LLUKA   Administrator  

  

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 Annex 1

 

REPUBLIC OF ALBANIA

 

NOTARIES CHAMBER OF TIRANA

 

No._________Rep.

 

No._________Kol.

 

POWER

POWER OF ATTORNEY

 

In Tirana, this __________2012, in front of me Notary Public
______________________, appeard personaly 1.Mr.Anton Papez,____________,
Slovanian citizen ______________, _________________________________and 2.Mr.
_______________________________, Kosovo citizen, holder of passport
no.K00242121, resident at the address: Rruga Fehmi Agani, nr.16, Peja Kosovo,
both administrators of the company “SHALA ENERGY” shpk, a limited liability
company registered in National Registration Center (NRC), dated 18.09.2009, with
business no.(NIPT) K92118003C, with legal seat at the address: Blv.Deshmoret e
Kombit, Twin Tower II, Kati 11, Tirana, Albania, on whose identity I become
aware of the passports, presented to me, both majors and with full capacity to
understand and act, who pursuant to the resolution of shareholders of the
company date __________2012, declared the following:

 

We the undersigned, in our quality of administrators of the Company, pursuant to
the resolution of shareholders meeting of the Company dated __________2012 and
based on our powers deriving from our office and the said resolution, hereby
constitute and appoint

 

Mr. Ekrem Luka, Kosovo citizen, holder of passport no.K00242121, resident at the
address: Rruga Fehmi Agani, nr.16, Peja Kosovo as the representative of the
Company and authorize him to sign on behalf of the shareholders of the company
SHALA ENERGY shpk the “Acquisition Shares” to transfer the Title of the 75% of
the company shares to 3 POWER ENERGY GROUP Inc. as well as any document , deed
or act to be adopted by the Acquisition Shares and necessary to rendering
effective the signature and entry into force this agreement. The administrator
of SHALA ENERGY shpk may authorize and delegate to any third part as they deem
appropriate the above powers.

 

I the undersigned Notary Public do hereby certify that Mr._________ and
Mr.____________ acting on behalf of Interenergo Albania, Mr.____________, acting
on behalf of POTEZA SKUPINA dd, Mr.______________________ acting on behalf of
SGP POMGRAD d.d whose name are signed to the foregoing instrument, acknowledged
before me on this day that, being informed of the contents of said instrument,
executed the same voluntarily on the day the same bears date and I Notary
certify it according to the law in force.

 

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DECLARANTS

 

     

 

Notary Public

 

Annex 2

 

Guarantee Bond

 

Guaranty No. _____________     Ref. No. ______________     Beneficary: The
Ministry of Economy, Trade and Energy of the Republic  of Albania, METE   Blvd.
Deshmoret e Kombit nr.1001, Tirane, Albania

Tittle of contract: A contract dated the 2nd day of June, 2009 between the
Ministry of Economy, Trade and Energy of the Republic of Albania, and the
Contractor in the form known as a Concession Agreement “BOT” (Build, Operate,
Transfer) for the Construction of works comprising the Design, Financing,
Construction, Ownership, Operation, Maintenance and Transfer of a Hydro-power
Plant Cascade on Shala River, Republic of Albania, (for the original contract
sum of EUR 144,606,305).

The Bond Amount: EUR 7,230,315. The sum of Euros Seven Million Two Hundred and
Thirty Thousand Three Hundred and Fifteen

 

The Guarantee Bond is made as a deed between the following parties:

The Contractor: The Temporary Union of Companies; “Interenergo Albania” sh.p.k,
  “Potenza Skupina” dd and “SGP Pomgrad d.d.”    

The Guarantor:

1.Eurosig Sha., an Albanian Insurance Company, address Rr. Papa Gjon Pali II,
Vila Nr.5, Tirana Albania, represented by Mr. Muharrem BARDHOCI in quality of
General Director, and

2.Reinsured by American Assurance Underwriters Group, AAUG Insurance Company,
LTD. UK

 

WHEREAS

 

The Temporary Union of Companies; “INTERENERGO”, Composed by the companies
“Potenza Skupina” dd and “SGP Pomgrad d.d, by a contract dated the 2nd June,
2009 between the Ministry of Economy, Trade and Energy of the Republic of
Albania, and the Contractor in the form known as a Concession Agreement “BOT”
(Build, Operate, Transfer) for the Construction of works comprising the Design,
Financing, Construction, Ownership, Operation, Maintenance and Transfer of a
Hydro-power Plant Cascade on Shala River, Shkoder Region, Republic of Albania,
(for the original contract sum of EUR 144,606,305), the Contractor has agreed
with the METE to execute works upon to the terms and conditions therein set out,
NR.2335/18 Prot, date 16 February 2009.

 

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MASTER ACQUISITION AGREEMENT 

 

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Eurosig Sha., Albanian Insurance Company, has agreed to issue this Guarantee, at
the request of the Contractor to guarantee the performance of the obligations of
the Contractor under the Contract upon the terms and conditions of this
Guarantee Bond subject to the limitation set out in clause 2.

 

NOW THIS DEED WITNESSES as follows:

 

1. The Eurosig Sha guarantees to the METE that in the event of a breach of the
Contract by the Contractor, the Guarantor shall subject to the provisions of
this Guarantee Bond satisfy and discharge the damages sustained by the Employer
as established and ascertained pursuant to and in accordance with the provisions
of or by reference to the Contract and taking into account all sums due or to
become due to the Contractor.

 

2. The maximum aggregate liability of the Guarantor and the Contractor under
this Guarantee Bond shall not exceed the sum EUR 7,230,315 (Euro seven million
two hundred and thirty thousand three hundred and fifteen) but subject to such
limitation and to clause 4 the liability of the Guarantor shall be co-extensive
with the liability of the Contractor under the Contract.

 

3. The Guarantor shall not be discharged or released by any alteration of any of
the terms, conditions and provisions of the Contract or in the extent or nature
of the Works and no allowance of time by the Employer under or in respect of the
Contract or the Works shall in any way release, reduce or affect the liability
of the Guarantor under this Guarantee Bond.

 

4. Whether or not this Guarantee Bond shall be returned to the Guarantor the
obligations of the Guarantor under this Guarantee Bond shall be released and
discharged absolutely upon expiry date, save in respect of any breach of the
Contract which has occurred and in respect of which a claim in writing
containing particulars of such breach has been made upon the Guarantor before
Expiry.

 

5. The Contractor having requested the execution of this Guarantee Bond by the
Guarantor undertakes to the Guarantor (without limitation of any other rights
and remedies of the Employer or the Guarantor against the Contractor) to perform
and discharge the obligations on its part set out in the Contract.

 

6. This Guarantee Bond and the benefits thereof shall not be assigned without
the prior written consent of the Guarantor and the Contractor.

 

7. The parties to this Guarantee Bond do not intend that any of its terms will
be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999 or
otherwise, by any person not a party to it.

 

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8. This Guarantee Bond shall be governed by and construed in accordance with the
laws of The Republic of Albania and only the courts of the Republic of Albania
shall have jurisdiction hereunder.

 

Expiry: The issuance of the Certificate of Practical Completion which shall be
conclusive for the purposes of this Guarantee Bond.

 

IN WITNESS whereof the Contractor and the Guarantor have executed and delivered
this Guarantee Bond as a Deed this ________________ 2012

 

EXECUTED AND DELIVERED as a deed by

CONTRACTOR

 

_________________________________________

 

Name ______________________________

 

Position _____________________________

 

EXECUTED AND DELIVERED as a deed by

GUARANTOR

 

EUROSIG SHA

 

MUHARREM BARDHOCI

 

GENERAL MANAGER

 

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MASTER ACQUISITION AGREEMENT 

 

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Annex 3

 

LICENSE / STATE AUTHORIZATIONS / CERTIFICATIONS
 
A. Copy of the concession permit and possible amendments there to and all
licenses, permits, authorizations, other similar concessions, which are listed
below in analytical order but not exhaustive:

 

- The concession contract and the relevant decision of approbation.

- Possible arrangements with METE about determining the conditions for
fulfilling the obligations under the concession contract.

- Permits, for water use, issued by the Water Basin Commission.

- Approval of the executive project by METE (Ministry of Economy, Trade and
Energy) and / or AKBN (National Agency of Natural Resources).

- Construction permits issued by the competent urban planning office (KRRT) CRT
(Council of Territory Adjustment) or KRRTRSH (Council of Regulation of Territory
of the Albania Republic).

- Other types of permits or authorizations as Cultural Monuments, Forestry
Authority, Institute of Terrains, Fireman.

- Act of approval of the TSO (Transmission System Operator) and / or DSO
(Distribution System Operator) to the point and way of connecting with the
national energy transmission network or distribution.

- Licenses or Regulatory Authority Electricity Sector (ERE) decisions;

    o The license for the construction, installation and operation of power
plants and electricity production and / or others.

o Decisions to approve the price of electricity.

o Contract of sale of electric power utility KESH (wholesale public supplier).

 

B. Documentation of usage of forest fund and territories in State ownership
(where necessary).

- Copies of the submission of requests to the authorities for obtaining permits
and / or authorizations.
- Copies of the control acts and / or demands or claims by the authorities to
remedy the infringement or violation of laws and / or regulations.
- Copies of information sent to METE about the progress of the contract
Concession.
- Restrictions related to the concession (e.g. restrictions regarding the
association of water users for irrigation, local authorities etc.).

 

C. Copies of any eventual notification to finding a violation, revocation,
cancellation, denial or renewal of absence of one of the permits, licenses or
concessionary permit issued by a governmental authority, administrative agency
or supervisory authority

 

D. Copy of any contract that implements concessionary permit, authorizations,
permits.

 

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MASTER ACQUISITION AGREEMENT

 

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Annex 4

 

Corporate due diligence documents:

 

1.Statute, act of establishment, capital of the company, decisions of the
partners of the company registered with the [National business Registration
Centre] NRC, extract of the company’s history to date, NUIS [Unique Business
Registration Number] aka NIPT, etc;

 

2.Agreements between the partners and the company. Information on special
investigations by the General Assembly and the partners on the activity of the
company;

 

3.Organizational and legal structure of the company and internal regulation for
its functioning; work relations, collective and individual work contracts;

 

4.Documentation proving that “Shala Energy” shpk does not have outstanding
payments for the taxation, customs, social and health insurance authorities;

 

5.Description of latest controls by the contracting authority (METE) or other
relevant government agencies on potential problems and relevant actions taken by
the company to tackle identified problems;

 

6.List of court cases, decisions, instance, and calculation of provisions;

 

7.List of banks where the company has its accounts and loan contracts, when
applicable;

 

8.Description of conflicts with suppliers or entrepreneurs and measures taken by
the company to resolve them, as well as the legal action pursued by the company;

 

9.Copies of any order, any court order, any decree or any other measure taken by
a governmental authority, administrative agency or supervisory authority over
the last two years.

 

10.Pledge contracts on immovable property when applicable registered in the
Register of Securing Charges;

 

11.Documentation proving that “Shala Energy” shpk does not have outstanding
payments for the taxation, customs, social and health insurance authorities;

 

The execution, delivery and performance of this Agreement will not:

 

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MASTER ACQUISITION AGREEMENT 

 

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(i)result in the acceleration of payment, suspension, modification or
re-negotiation of any of financing facilities;

(ii)result in any early termination, suspension, modification or re-negotiation
of any material agreement to which the SHALA ENERY shpk is a party;

(iii)result in the modification, suspension, non-renewal, cancellation or
revocation of the authorizations;

(iv)result in the payment of any financial penalty;

 

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