EXTENSION NOTICE TERMS

FOR DECEMBER 30th,2011 COOPERATION AGREEMENT

 

 

This Extension Notice Terms is made today, on April 5th 2012, according to the
deliberations held on march 21, 2012, in Tirana and in Cooperations Agreement
made on Decembre 30-th, 2011

 

Between:

1)3Power Energy Group, Inc. (OTCBB:PSPW) (Frankfurt:PSD), a company incorporated
under the law of the Unitet States of America, having its headquaters at: 100
Wall Street, 21-th Floor, New York, 10005. (Hereinafter referred to as: "3P")

 

and,

 

2)"SHALA ENERGY" sh.p.k, (the Concessionaire Company) a company incorporated
under the laws of the Republic of Albania, (established under definition in the
Concession Agreement signed with Albanian Government, that holds all concession
rights over the project). The Company it is registered in the National
Registration Center with NIPT (Identification Number) K92118003C, having its
headquarters at: Blv "Deshmoret e Kombit", Twin Towers, Kulla 2,11/2, Tirana,
Albania. (Hereinafter referred to as: "SHALA")

 

(Hereinafter 3P and SHALA are collectively referred to as "The Parties")

 

The Parties hereby covenant and agree to the following terms and conditions:

 

1.The Parties agree that 3P shall undertake the development of the Projects,
upon completion of a satisfying Due Diligence of the Project is concluded by 3P
within 4 weeks from the date of signing this Extension Notice .

 

2.The Parties agree that within 4 weeks from the signing date of this Agreement
but , Parties will sign a contract ("the Main Agreement"), according to the
terms and conditions determinded in this agreement and in Cooperation Agreement
made on Decembre 30-th, 2011.

 

3.3P will undertake a Legal Due Diligence process in order to assess the
Projects' feasibility, SHALA must provide 3P all necessary documents in form and
substance satisfactory to 3P within one week from the signing of this Additional
Agreement. In case the requested document is not available, SHALA will provide
best effort to secure those documents. The Legal Due Diligence process cannot go
beyond 25th April, 2012.

 

4.The Parties agree that SHALA will provide 3P with audited financials for the
past 3 years within one week from the signing of this Extension Notice..

 

SHALA ENERGY sh.p.k. – 3POWER ENERGY GROUP Inc.

 

 

 

 

EXTENSION NOTICE TERMS

FOR DECEMBER 30th,2011 COOPERATION AGREEMENT

 

 

5.The Parties agree that upon signing this agreement, 3P shall provide Shala
with a draft of definitive acquisition agreement ("the Main Agreement"), which
parties intend to close within 4 weeks from signing this Extension Notice..

 

6.3P has full authorization by SHALA to assign its rights, interests or
obligations resulting from this Extension Notice.and the Cooperational
Agreement.

 

7.The Parties agree to the new deadlines as set in this Extension notice
substiuting the deadlines in the 30th December 2011 agreement.

 

8.SHALA undertakes to provide 3P with the Minstry of Energy and/or relevant
government authorities Concession Validity Extension Confirmation Letter within
10 days from the date of signing the Main Agreement.

 

9.Parties understand that the concession terms will oblige to start project
construction within 12 (twelve) months from the date of Validity Extension
Confirmation Letter and the project will have to be connected to the grid within
28 (twentyeight) months from the construction start and should be reflected on
the program of works Concessionary Agreement 2009, in an additional agreement to
be signed by the Representative of the Contracting Authority and the
representative of the temporary joint venture of the companies, which will make
available to 3P upon closing of a definitive agreement.

 

10.The performance garantee letter issued by the Solvenian Bank will be replaced
by a performance bond issued by an insurance company according to a written
proposal which will be received to 3P.

 

11.The predevelopment work and concession license is valued at 10 (ten) Milion
Euro.The amount will be converted into equity for Shala Energy in the project
but not exceeding 25% (twenty-five) for SHALA of the Project concession
rights.The equity coonversion will be related to the amount of cash equity
provided by 3P.A Cash equity is understood to be all funds paid by 3P into Shala
from the date of Main agreement.To avoid any doubt, if the sum of the Cash
equity provided by 3P is USD 100 then SHALA shareholders equity will be 12% of
the Shala company.

 

12.Shala river will further receive a bonus of EUR 2 milion upon the
successfully grid connection of the plant. SHALA will receive this Bonus as a
compensation for their future work in lobbying and local support with government
and different authorities.

 

SHALA ENERGY sh.p.k. – 3POWER ENERGY GROUP Inc.

 

 

 

 

EXTENSION NOTICE TERMS

FOR DECEMBER 30th,2011 COOPERATION AGREEMENT

 

 

13.3P will finance the work required to complete a bankable feasibility study,
raise funds for project equity and arrange the long term debt finance.

 

14.3P will pay the Euro 176k fees required to replace the EUR 7.230.315 (seven
milion two hundred and thirty thousand three hundred and fifteen) BG issued by
SHALA from the Slovenian Bank in favor of the Albanian government.

 

This Additional Agreement is an integral part of the Cooperation Agreement made
, on December 30th, 2011 and shall be executed in two (2) counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

Place/Date: Greece on, 28/03/2012

 

3Power Energy Group, Inc. SHALA ENERGY sh.p.k. Name: Mr. U.Balasubramania Name:
Mr. Ekrem LLuka CEO Administrator     Name: Mr. Sharif Rahman Name: Mr.Anton
Papez CEI Administrator     Witness hereof:   Name: Mr. Hany Salem   Name: Mr.  
Name: Mr.  

 

SHALA ENERGY sh.p.k. – 3POWER ENERGY GROUP Inc.