Cooperation Agreement
Party A: Xu Ji Wind Energy Technology Company
Address: No.1225, Xu Ji Avenue, Xuchang City, He Nan Province, 461000
Legal representative: Li Fusheng      Position: President
Contact person: Lu Ying       Position: Manager of Strategic Technology Dept
Tel: 13837413222                Email: yinglu@xjgc.com
Fax: 0374-3211122

Party B: Harbin SQ Wind Power Ltd.
Address: No.2, Hai Bin Road, Bin Xi Economic Development Zone, Hei Longjiang
Province, 150431
Legal representative: Sun Shouquan      Position: President
Tel: 13313641199                                Email:sunsq@sqwind.com
Fax: 0451-56150072

Based on the principle of voluntariness, equality, fairness, honesty and
credibility, Party A and Party B (“Two Parties”) came to the following agreement
( “Agreement”) through friendly negotiation:
 
1.
CooperationObjective

 
Under the circumstances of China developing low carbon, energy saving and
emission reduction economy and advancing green energy, the Two Parties agree
that a long-term and inseparable strategic cooperation partnership should be
established between them due to their competitive advantage and industrial
resource advantage in wind power related areas. The Two Parties shall achieve
win-win in their respective area through their integration and cooperation.
 
2.
Cooperation Approach

 
Party B should provide wind resources and complete the earlier work of approval
procedure including wind measurement, exploration, feasibility study,
environmental assessment and land use. Party A should handle the examination
formalities for grid integration. Based on this Agreement, Party B shall assist
Party A in negotiating cooperation program with power generation company. Power
generation company shall be in charge of constructing wind farm, using turbines
of Party A and blades of Party B. Party B shall provide early stage resources
for 1000-2000 MW wind farm including reconnaissance, site selection, erecting
electric tower and data acquisition. Party A guarantees to use blades provided
by Party B during their cooperation period and in the wind fields where they
work for together.
 
3.
Time of Cooperation

 
The time of cooperation is ten years from March 3rd, 2010 till March 9th, 2020.
 
4.
Cooperation Program

 
4.1
Cooperation on wind field resources

 
4.1.1
Party B owns wind resource of 2000 MW. The earlier work of 100MW of the 200MW
wind field in Yang Muqiao area in Hei Longjiang province has been completed.
Party B should finish the earlier work of the remaining 100MW wind resource as
soon as possible. Party A should complete the approval formalities of grid
integration. The two parties should make the work of 200MW wind field as the
starting point of cooperation. Earlier approval formalities refer to all
procedures except grid integration examination and approval.

 
4.1.2
The Two Parties cooperate on wind resources, grid integration examination,
approval and sale. They distribute responsibilities and coordinate, jointly
developing wind turbine and blade industry. Specifically, Party B handles all
the earlier approval formalities except grid integration examination and
approval. Party A integrates resources and plays a leading role in completing
the grid integration approval procedure of this 200MW wind filed with the
coordination of Party B. After getting the approval, Party A and Party B share
the wind field equity with the ratio of 45:55, with Party B owning 55% equity
and Party A owning 45% equity. Keeping this ratio in mind, the Two Parties shall
sign “Wind Resource Joint Ownership Agreement” and handle relevant formalities.
These equities include but not limited to:

 
⑴ Wind field ownership
⑵ Wind field transfer income
⑶ The discourse power in negotiating with power generation company
⑷ The decision making authority in wind field disposition
 
 
1

--------------------------------------------------------------------------------

 
 
4.1.3
Party B shall bear the expenses incurred in the earlier approval procedure of
the wind field which include investigation and site selection, wind measurement
instrument, wind measurement tower, transportation, care, maintenance, FSR
compilation, environmental assessment, water conservation, geo-hazard, overlaid
geology and mineral, and management expenses. Party A shall bear the expenses
incurred in grid integration examination and approval.

 
4.1.4
When Party A handles grid integration examination and approval of the 200MW wind
filed, Party B shall establish contact with power generation company. On the
basis of the power generation company using Party A’s turbines and Party B’s
blades, Party B shall arrange tripartite talks. The Two Parties agree that the
approved wind field should be transferred to the power generation company to
develop.

 
4.1.5
After the 200MW wind field is approved, the Two Parties shall transfer the wind
field to the power generation company according to the agreement signed with the
power generation company. The Two Parties share the transfer income by the ratio
of 45:55.

 
4.1.6
The wind resource cooperation between the Party A and Party B extends to other
wind resource besides Yang Muqiao’s 200MW wind field. The cooperation approaches
can be the same with the approaches in this Agreement. The Two Parties can
request for change in the Agreement when environment varies on the basis of
friendly negotiation. Without the mutual consent, change by one of the Two
Parties is of no effect.

4.2
Cooperation on Blade

 
In order to meet the assemble requirements of Party A’s wind generator hosts,
Party A shall provide the drawings of blade techniques, including aerodynamic
configuration, aerodynamic and load calculation, layering, structure and
intensity calculation. Party B produces blades according to the above technical
requirements and provides the blades for Party A’s generator hosts. (A
confidentiality agreement will be signed. ) Party A owns the intellectual
property.
 
4.2.2
Party B can provide the blades according to Party A’s production capacity
requirement. When Party A’s two suites of blades attain the operating standards
on Party B’s prototypes, the Two Parties agree to sign a purchasing agreement
specifying the quantity, price, acceptance test and payment mode of each lot of
blades.

 
4.2.3
Party B agrees that the price of the blades provided by Party B to Party A is no
higher than that of similar products in the market. In order to improve the
technical content of Party A’s host wind generator hosts, Party B agrees to
provide blades with centralized intelligent systems which monitors dynamic
balance, fracture, damage, ice covering and so on. The Two Parties shall jointly
make technical assessment on this technique. Party B also agrees not to increase
price when providing this kind of products.

 
4.2.4
In the wind fields the Two Parties jointly worked for, Party A guarantees to use
blades produced by Party B. In other wind fields, Party A preferentially use
blades produced by Party B, on the basis that the blades meet the requirements.

 
4.2.5
Party A guarantees that the supply scope of Party B’s blades for Party A covers
East Mongolia area and the whole Northeast three provinces.

 
5.
Cooperation on Equity

 
On the basis of wind resource and blade supply cooperation, to ensure the Two
Parties’ long term collaboration and common interest, the Two Parties agree that
equity cooperation will be considered at the right time. Equity cooperation
approaches include but not limited to Party B issuing new shares to Party A to
make Party A take the controlling position gradually.
 
6.
Validity and Dispute

 
6.1
The Two Parties shall consult with each other and mediate any disputes which may
arise about this Agreement. Without consultation, neither Party can release this
Agreement.

 
6.2
Other agreements relevant to this Agreement are supplemental agreements, having
the same validity with this Agreement.

 
6.3
This Agreement should be in printed type and the written one is of no effect.
This Agreement is valid with the signature and seal of the Two Parties.

 
 
2

--------------------------------------------------------------------------------

 
 
6.4
If no settlement can be reached by consultation, the Two Parties agree to turn
to People’s Court of Beijing for litigation where the Agreement is signed.

 
6.5
This Agreement is in quadruplicate with the same validity. Party A and Party B
hold two respectively.

Party A (seal):
 
Xuchang Xu Ji Wind Energy Technology Company

Legal Representative (signature): Li Fusheng

Party B (seal):
 
Harbin SQ Wind Power Ltd.

Legal Representative (signature): Sun Shouquan

Signed at: Beijing

March 10th, 2010
 
3