Unassociated Document


    EXHIBIT
      4.16


    A-Power
      Energy Generation Systems Ltd.
      

    2007
      Equity Plan 

    NOTICE
      OF GRANT OF STOCK OPTION

    (U.S.
      Participants)

    


    The
      Participant has been granted an option (the “Option”)
      to
      purchase certain shares of Stock of A-Power
      Energy Generation Systems Ltd. (the “Company”) pursuant to the Company’s (or its
      predecessor’s) 2007 Equity Plan (the “Plan”),
      as
      follows:

    


    
      	
              Participant:

            	 
	 	 
	
              Date
                of Grant:

            	 
	 	 
	
              Number
                of Option Shares:

            	 
	 	 
	
              Exercise
                Price:

            	 
	 	 
	
              Initial
                Vesting Date:

            	 
	 	 
	
              Option
                Expiration Date:

            	
              The
                date five (5) years after the Date of Grant

            
	 	 
	
              Vested
                Shares:

            	
              Except
                as provided in the Stock Option Agreement, the number of Vested Shares
                (disregarding any resulting fractional share) as of any date is determined
                by multiplying the Number of Option Shares by the “Vested
                Ratio”
                determined as of such date as follows:

            
	 	 	 
	 	 	
              Vested
                Ratio

            
	 	 	 
	 	
              Prior
                to Initial Vesting Date

            	 
	 	 	 
	 	
              On
                Initial Vesting Date, provided the Participant’s Service has not
                terminated prior to such date

            	 
	 	 	 
	 	
              Plus

            	 
	 	 	 
	 	
              For
                each additional full month of the Participant’s continuous Service from
                Initial Vesting Date until the Vested Ratio equals 1/1, an
                additional

            	 


    

    


    The
      Participant is urged to consult with his or her own tax advisor regarding the
      tax consequences of the Option.

    


    By
      their
      signatures below, the Company and the Participant agree that the Option is
      governed by this Grant Notice and by the provisions of the Plan and the Stock
      Option Agreement, both of which are attached to and made a part of this
      document. The Participant acknowledges receipt of copies of the Plan and the
      Stock Option Agreement, represents that the Participant has read and is familiar
      with their provisions, and hereby accepts the Option subject to all of their
      terms and conditions.

    
      

        
          	
                  A-POWER
                    ENERGY GENERATION SYSTEMS LTD.

                	 	
                  PARTICIPANT

                	 
	 	 	 	 	 
	 	 	 	 	 
	
                  By: 
                    

                	  
	 	   
	 
	 	 	 	
                  Signature

                	 
	
                  Its:

                	  
	 	   
	 
	 	 	 	
                  Date

                	 
	
                  Address:

                	 	  
	 
	 	 	 	
                  Address

                	 
	 	 	 	   
	 


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

      (For
        US Participants)

      
 

    

    THE
      SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
      INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
      DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
      EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
      SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
      SECURITIES ACT OF 1933.

    


    


    A-POWER
      ENERGY GENERATION SYSTEMS, LTD.

    2007
      EQUITY PLAN

    STOCK
      OPTION AGREEMENT

    


    


    A-Power
      Energy Generation Systems, Ltd. has granted to the Participant named in the
      Notice
      of Grant of Stock Option
      (the
“Grant
      Notice”)
      to
      which this Stock Option Agreement (the “Option
      Agreement”)
      is
      attached an option (the “Option”)
      to
      purchase certain shares of Stock upon the terms and conditions set forth in
      the
      Grant Notice and this Option Agreement. The Option has been granted pursuant
      to
      and shall in all respects be subject to the terms and conditions of the A-Power
      Energy Generation Systems, Ltd. 2007 Equity Plan (formerly known as the Chardan
      South China Acquisition Corporation 2007 Equity Plan) (the “Plan”),
      as
      amended to the Date of Grant, the provisions of which are incorporated herein
      by
      reference. By signing the Grant Notice, the Participant: (a) acknowledges
      receipt of and represents that the Participant has read and is familiar with
      the
      Grant Notice, this Option Agreement and the Plan, (b) accepts the Option
      subject to all of the terms and conditions of the Grant Notice, this Option
      Agreement and the Plan and (c) agrees to accept as binding, conclusive and
      final all decisions or interpretations of the Committee upon any questions
      arising under the Grant Notice, this Option Agreement or the Plan.

    


    


    1. Definitions
      and Construction.

    


    1.1 Definitions.
      Unless
      otherwise defined herein, capitalized terms shall have the meanings assigned
      to
      such terms in the Grant Notice or the Plan.

    


    1.2 Construction.
      Captions
      and titles contained herein are for convenience only and shall not affect the
      meaning or interpretation of any provision of this Option Agreement. Except
      when
      otherwise indicated by the context, the singular shall include the plural and
      the plural shall include the singular. Use of the term “or” is not intended to
      be exclusive, unless the context clearly requires otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2. Compliance
      with Local Law.

    


    The
      Participant agrees that the Participant will not acquire shares pursuant to
      the
      Option or transfer, assign, sell or otherwise deal with such shares except
      in
      compliance with the laws and regulations of the US and British Virgin Islands
      (collectively, “Local Law”).

    


    3. Administration.

    


    All
      questions of interpretation concerning this Option Agreement shall be determined
      by the Committee. All determinations by the Committee shall be final and binding
      upon all persons having an interest in the Option as provided by the Plan.
      Any
      Officer shall have the authority to act on behalf of the Company with respect
      to
      any matter, right, obligation, or election which is the responsibility of or
      which is allocated to the Company herein, provided the Officer has apparent
      authority with respect to such matter, right, obligation, or
      election.

    


    4. Exercise
      of the Option.

    


    4.1 Right
      to Exercise.
      Except
      as otherwise provided herein, the Option shall be exercisable on and after
      the
      Initial Vesting Date and prior to the termination of the Option (as provided
      in
      Section 6)
      in an
      amount not to exceed the number of Vested Shares less the number of shares
      previously acquired upon exercise of the Option. In no event shall the Option
      be
      exercisable for more shares than the Number of Option Shares, as adjusted
      pursuant to Section 9.
      

     

    4.2 Method
      of Exercise.
      Exercise
      of the Option shall be by means of electronic or written notice (the
“Exercise
      Notice”)
      in a
      form authorized by the Company. An electronic Exercise Notice must be digitally
      signed or authenticated by the Participant in such manner as required by the
      notice and transmitted to the Company or an authorized representative of the
      Company (including a third-party administrator designated by the Company).
      In
      the event that the Participant is not authorized or is unable to provide an
      electronic Exercise Notice, the Option shall be exercised by a written Exercise
      Notice addressed to the Company, which shall be signed by the Participant and
      delivered in person, by certified or registered mail, return receipt requested,
      by confirmed facsimile transmission, or by such other means as the Company
      may
      permit, to the Company, or an authorized representative of the Company
      (including a third-party administrator designated by the Company). Each Exercise
      Notice, whether electronic or written, must state the Participant’s election to
      exercise the Option, the number of whole shares of Stock for which the Option
      is
      being exercised and such other representations and agreements as to the
      Participant’s investment intent with respect to such shares as may be required
      pursuant to the provisions of this Option Agreement. Further, each Exercise
      Notice must be received by the Company prior to the termination of the Option
      as
      set forth in Section 6
      and must
      be accompanied by full payment of the aggregate Exercise Price for the number
      of
      shares of Stock being purchased. The Option shall be deemed to be exercised
      upon
      receipt by the Company of such electronic or written Exercise Notice and the
      aggregate Exercise Price. 

     

    4.3 Method
      of Payment.
      Payment
      of the aggregate Exercise Price shall be by any of the following, or a
      combination thereof, at the election of the Participant: 

    


    (a) cash;
      

     

    
      
        
        

      

      
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    (b) check;
      

    


    (c) cash
      equivalent by tender to the Company, or attestation to the ownership, of shares
      of Stock owned by the Participant having a Fair Market Value not less than
      the
      Exercise Price; or

    


    (d) such
      other consideration as may be approved by the Committee from time to time to
      the
      extent permitted by Local Law.

    


    4.4 Tax
      Withholding.
      Regardless of any action taken by the Company or any other Participating Company
      with respect to any or all income tax, social insurance, payroll tax, payment
      on
      account or other tax-related withholding (the “Tax
      Obligations”),
      the
      Participant acknowledges that the ultimate liability for all Tax Obligations
      legally due by the Participant is and remains the Participant’s responsibility
      and that the Company (a) makes no representations or undertakings regarding
      the treatment of any Tax Obligations in connection with any aspect of the
      Option, including the grant, vesting or exercise of the Option, the subsequent
      sale of shares acquired pursuant to such exercise, or the receipt of any
      dividends and (b) does not commit to structure the terms of the grant or
      any other aspect of the Option to reduce or eliminate the Participant’s
      liability for Tax Obligations. At the time of exercise of the Option, the
      Participant shall pay or make adequate arrangements satisfactory to the Company
      to satisfy all withholding obligations of the Company and any other
      Participating Company. In this regard, at the time the Option is exercised,
      in
      whole or in part, or at any time thereafter as requested by the Company or
      any
      other Participating Company, the Participant hereby authorizes withholding
      of
      all applicable Tax Obligations from payroll and any other amounts payable to
      the
      Participant, and otherwise agrees to make adequate provision for withholding
      of
      all applicable Tax Obligations, if any, by each Participating Company which
      arise in connection with the Option. Alternatively, or in addition, if
      permissible under applicable law, including Local Law, the Company or any other
      Participating Company may (i) sell or arrange for the sale of shares
      acquired by the Participant to satisfy the Tax Obligations, and/or
      (ii) withhold in shares, provided that only the amount of shares necessary
      to satisfy the minimum withholding amount required by applicable law, including
      Local Law, is withheld. Finally, the Participant shall pay to the Company or
      any
      other Participating Company any amount of the Tax Obligations that any such
      company may be required to withhold as a result of the Participant’s
      participation in the Plan that cannot be satisfied by the means previously
      described. The Company shall have no obligation to process the exercise of
      the
      Option or to deliver shares until the Tax Obligations as described in this
      Section have been satisfied by the Participant.

    


    4.5 Beneficial
      Ownership of Shares; Certificate Registration.
      The
      Participant hereby authorizes the Company, in its sole discretion, to deposit
      for the benefit of the Participant with any broker with which the Participant
      has an account relationship of which the Company has notice any or all shares
      acquired by the Participant pursuant to the exercise of the Option. Except
      as
      provided by the preceding sentence, a certificate for the shares as to which
      the
      Option is exercised shall be registered in the name of the Participant, or,
      if
      applicable, in the names of the heirs of the Participant.

     

    
      
        
        

      

      
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    4.6 Restrictions
      on Grant of the Option and Issuance of Shares.
      The
      grant of the Option and the issuance of shares of Stock upon exercise of the
      Option shall be subject to compliance with all applicable requirements of United
      States federal or state or Local Law with respect to such securities. The Option
      may not be exercised if the issuance of shares of Stock upon exercise would
      constitute a violation of any applicable federal, state or foreign securities
      laws, including Local Law, or other law or regulations or the requirements
      of
      any stock exchange or market system upon which the Stock may then be listed.
      In
      addition, the Option may not be exercised unless (i) a registration
      statement under the Securities Act shall at the time of exercise of the Option
      be in effect with respect to the shares issuable upon exercise of the Option
      or
      (ii) in the opinion of legal counsel to the Company, the shares issuable
      upon exercise of the Option may be issued in accordance with the terms of an
      applicable exemption from the registration requirements of the Securities Act.
      THE PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE
      FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE PARTICIPANT MAY NOT BE
      ABLE
      TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The
      inability of the Company to obtain from any regulatory body having jurisdiction
      the authority, if any, deemed by the Company’s
      legal
      counsel to be necessary to the lawful issuance and sale of any shares subject
      to
      the Option shall relieve the Company of any liability in respect of the failure
      to issue or sell such shares as to which such requisite authority shall not
      have
      been obtained. As a condition to the exercise of the Option, the Company may
      require the Participant to satisfy any qualifications that may be necessary
      or
      appropriate, to evidence compliance with any applicable law or regulation and
      to
      make any representation or warranty with respect thereto as may be requested
      by
      the Company.

    


    4.7 Fractional
      Shares.
      The
      Company shall not be required to issue fractional shares upon the exercise
      of
      the Option.

    


    5. Nontransferability
      of the Option.

    


    During
      the lifetime of the Participant, the Option shall be exercisable only by the
      Participant or the Participant’s guardian or legal representative. The Option
      shall not be subject in any manner to anticipation, alienation, sale, exchange,
      transfer, assignment, pledge, encumbrance, or garnishment by creditors of the
      Participant or the Participant’s beneficiary, except transfer by will or by the
      laws of descent and distribution. Following the death of the Participant, the
      Option, to the extent provided in Section 7,
      may be
      exercised by the Participant’s
      legal
      representative or by any person empowered to do so under the deceased
      Participant’s
      will or
      under the then applicable laws of descent and distribution.

     

    6. Termination
      of the Option.

    


    The
      Option shall terminate and may no longer be exercised after the first to occur
      of (a) the close of business on the Option Expiration Date, (b) the
      close of business on the last date for exercising the Option following
      termination of the Participant’s
      Service
      as described in Section 7,
      or
      (c) a Change in Control to the extent provided in Section 8.

     

    7. Effect
      of Termination of Service.

     

    7.1 Option
      Exercisability. The
      Option shall terminate immediately upon the Participant’s termination of Service
      to the extent that it is then unvested and shall be exercisable after the
      Participant’s termination of Service to the extent it is then vested only during
      the applicable time period as determined below and thereafter shall
      terminate.

     

    
      
        
        

      

      
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    (a) Disability.
      If the
      Participant’s
      Service
      terminates because of the Disability of the Participant, the Option, to the
      extent unexercised and exercisable for Vested Shares on the date on which the
      Participant’s
      Service
      terminated, may be exercised by the Participant (or the Participant’s
      guardian or legal representative) at any time prior to the expiration of twelve
      (12) months after the date on which the Participant’s
      Service
      terminated, but in any event no later than the Option Expiration
      Date.

    


    (b) Death. If
      the
      Participant’s Service terminates because of the death of the Participant, the
      Option, to
      the
      extent unexercised and exercisable for Vested Shares on
      the
      date on which the Participant’s Service terminated, may be exercised by the
      Participant’s legal representative or other person who acquired the right to
      exercise the Option by reason of the Participant’s death at any time prior to
      the expiration of twelve (12) months after the date on which the Participant’s
      Service terminated, but in any event no later than the Option Expiration Date.
      The Participant’s Service shall be deemed to have terminated on account of death
      if the Participant dies within three (3) months after the Participant’s
      termination of Service.

     

    (c) Termination
      for Cause.
      If the
      Participant’s Service is terminated for Cause or if, following the Participant’s
      termination of Service and during any period in which the Option otherwise
      would
      remain exercisable, the Participant engages in any act that would constitute
      Cause, the Option shall terminate in its entirety and cease to be exercisable
      immediately upon such termination of Service or act. “Cause”
      means,
      unless otherwise defined by the Participant’s contract of employment or service,
      any of the following: (i) the Participant’s theft, dishonesty, willful
      misconduct, breach of fiduciary duty for personal profit, or falsification
      of
      any Participating Company documents or records; (ii) the Participant’s
      material failure to abide by a Participating Company’s code of conduct or other
      policies (including, without limitation, policies relating to confidentiality
      and reasonable workplace conduct); (iii) the Participant’s unauthorized
      use, misappropriation, destruction or diversion of any tangible or intangible
      asset or corporate opportunity of a Participating Company (including, without
      limitation, the Participant’s improper use or disclosure of a Participating
      Company’s confidential or proprietary information); (iv) any intentional
      act by the Participant which has a material detrimental effect on a
      Participating Company’s reputation or business; (v) the Participant’s
      repeated failure or inability to perform any reasonable assigned duties after
      written notice from a Participating Company of, and a reasonable opportunity
      to
      cure, such failure or inability; (vi) any material breach by the
      Participant of any employment or service agreement between the Participant
      and a
      Participating Company, which breach is not cured pursuant to the terms of such
      agreement; or (vii) the Participant’s conviction (including any plea of
      guilty or nolo contendere) of any criminal act involving fraud, dishonesty,
      misappropriation or moral turpitude, or which impairs the Participant’s ability
      to perform his or her duties with a Participating Company.

    


    (d) Other
      Termination of Service. If
      the
      Participant’s Service terminates for any reason, except Disability, death or
      Cause, the Option, to the extent unexercised and exercisable for Vested Shares
      by the Participant on the date on which the Participant’s Service terminated,
      may be exercised by the Participant at any time prior to the expiration of
      twelve (12) months after the date on which the Participant’s Service terminated,
      but in any event no later than the Option Expiration Date.

     

    
      
        
        

      

      
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    7.2 Extension
      if Exercise Prevented by Law or Insider Trading Policy.
      Notwithstanding the foregoing, other than termination of Service for Cause,
      if
      the exercise of the Option within the applicable time periods set forth in
      Section 7.1
      is
      prevented by the provisions of Section 4.6
      or a
      sale of shares pursuant to a Cashless Exercise of the Option would violate
      the
      provisions of the Insider Trading Policy, the Option shall remain exercisable
      until thirty (30) days after the date such exercise or sale, as the case may
      be,
      would no longer be prevented by such provisions, but in any event no later
      than
      the Option Expiration Date.

     

    8. Effect
      of Change in Control.

    


    In
      the
      event of a Change in Control, except to the extent that the Committee determines
      to cash out the Option in accordance with Section 10.1(c) of the Plan, the
      surviving, continuing, successor, or purchasing entity or parent thereof, as
      the
      case may be (the “Acquiror”),
      may,
      without the consent of the Participant, assume or continue in full force and
      effect the Company’s rights and obligations under all or any portion of the
      Option or substitute for all or any portion of the Option a substantially
      equivalent option for the Acquiror’s stock. For
      purposes of this Section, the Option or any portion thereof shall be deemed
      assumed if, following the Change in Control, the Option confers the right to
      receive, subject to the terms and conditions of the Plan and this Option
      Agreement, for each share of Stock subject to such portion of the Option
      immediately prior to the Change in Control, the consideration (whether stock,
      cash, other securities or property or a combination thereof) to which a holder
      of a share of Stock on the effective date of the Change in Control was entitled;
      provided, however, that if such consideration is not solely common stock of
      the
      Acquiror, the Committee may, with the consent of the Acquiror, provide for
      the
      consideration to be received upon the exercise of the Option, for each share
      of
      Stock subject to the Option, to consist solely of common stock of the Acquiror
      equal in Fair Market Value to the per share consideration received by holders
      of
      Stock pursuant to the Change in Control. The
      Option shall terminate and cease to be outstanding effective as of the time
      of
      consummation of the Change in Control to the extent that the Option is neither
      assumed or continued by the Acquiror in connection with the Change in Control
      nor exercised as of the date of the Change in Control.

     

    9. Adjustments
      for Changes in Capital Structure.

    


    Subject
      to any required action by the stockholders of the Company, in the event of
      any
      change in the Stock effected without receipt of consideration by the Company,
      whether through merger, consolidation, reorganization, reincorporation,
      recapitalization, reclassification, stock dividend, stock split, reverse stock
      split, split-up, split-off, spin-off, combination of shares, exchange of shares,
      or similar change in the capital structure of the Company, or in the event
      of
      payment of a dividend or distribution to the stockholders of the Company in
      a
      form other than Stock (excepting normal cash dividends) that has a material
      effect on the Fair Market Value of shares of Stock, appropriate and
      proportionate adjustments shall be made in the number, Exercise Price and kind
      of shares subject to the Option, in order to prevent dilution or enlargement
      of
      the Participant’s rights under the Option. For purposes of the foregoing,
      conversion of any convertible securities of the Company shall not be treated
      as
“effected without receipt of consideration by the Company.” Any fractional share
      resulting from an adjustment pursuant to this Section shall be rounded down
      to
      the nearest whole number, and the Exercise Price shall be rounded up to the
      nearest whole cent. In no event may the Exercise Price be decreased to an amount
      less than the par value, if any, of the stock subject to the Option. The
      Committee in its sole discretion, may also make such adjustments in the terms
      of
      the Option to reflect, or related to, such changes in the capital structure
      of
      the Company or distributions as it deems appropriate. All adjustments pursuant
      to this Section shall be determined by the Committee, and its determination
      shall be final, binding and conclusive.

     

    
      
        
        

      

      
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    10. Rights
      as a Stockholder, Director, Employee or Consultant.

    


    The
      Participant shall have no rights as a stockholder with respect to any shares
      covered by the Option until the date of the issuance of the shares for which
      the
      Option has been exercised (as evidenced by the appropriate entry on the books
      of
      the Company or of a duly authorized transfer agent of the Company). No
      adjustment shall be made for dividends, distributions or other rights for which
      the record date is prior to the date the shares are issued, except as provided
      in Section 9.
      If the
      Participant is an Employee, the Participant understands and acknowledges that,
      except as otherwise provided in a separate, written employment agreement between
      a Participating Company and the Participant, the Participant’s
      employment is “at will” and is for no specified term. Nothing in this Option
      Agreement shall confer upon the Participant any right to continue in the Service
      of a Participating Company or interfere in any way with any right of the
      Participating Company Group to terminate the Participant’s
      Service
      as a Director, an Employee or Consultant, as the case may be, at any
      time.

    


    11. Representations
      and Warranties.

    


    In
      connection with the receipt of the Option and any acquisition of shares upon
      the
      exercise thereof (collectively, the “Securities”),
      the
      Participant hereby agrees, represents and warrants as follows:

    


    11.1 Investment
      Intent.
      The
      Participant is acquiring the Securities solely for the Participant’s own account
      for investment and not with a view to or for sale in connection with any
      distribution of the Securities or any portion thereof and not with any present
      intention of selling, offering to sell or otherwise disposing of or distributing
      the Securities or any portion thereof in any transaction other than a
      transaction exempt from registration under the Securities Act. The Participant
      further represents that the entire legal and beneficial interest of the
      Securities is being acquired, and will be held, for the account of the
      Participant only and neither in whole nor in part for any other
      person.

    


    11.2 Absence
      of Solicitation.
      The
      Participant was not presented with or solicited by any form of general
      solicitation or general advertising, including, but not limited to, any
      advertisement, article, notice, or other communication published in any
      newspaper, magazine, or similar media, or broadcast over television, radio
      or
      similar communications media, or presented at any seminar or meeting whose
      attendees have been invited by any general solicitation or general
      advertising.

     

    
      
        
        

      

      
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    11.3 Residence.
      The
      Participant’s principal residence is located at the address indicated beneath
      the Participant’s signature on the Grant Notice.

    


    11.4 Information
      Concerning the Company.
      The
      Participant is aware of the Company’s business affairs and financial condition
      and has acquired sufficient information about the Company to reach an informed
      and knowledgeable decision to acquire the Securities. The Participant further
      represents and warrants that the Participant has discussed the Company and
      its
      plans, operations and financial condition with its Officers, has received all
      such information as the Participant deems necessary and appropriate to enable
      the Participant to evaluate the financial risk inherent in acquiring the
      Securities and has received satisfactory and complete information concerning
      the
      business and financial condition of the Company in response to all inquiries
      in
      respect thereof.

    


    11.5 Economic
      Risk.
      The
      Participant realizes that his acquisition of the Securities will be a highly
      speculative investment and that the Participant is able, without impairing
      his
      or her financial condition, to hold the Securities for an indefinite period
      of
      time and to suffer a complete loss on the Participant’s investment.

    


    11.6 Capacity
      to Protect Interests.
      The
      Participant has (i) a preexisting personal or business relationship with the
      Company or any of its Officers, directors, or controlling persons, consisting
      of
      personal or business contacts of a nature and duration to enable the Participant
      to be aware of the character, business acumen and general business and financial
      circumstances of the person with whom such relationship exists, or (ii) such
      knowledge and experience in financial and business matters as to make the
      Participant capable of evaluating the merits and risks of an investment in
      the
      Securities and to protect the Participant’s own interests in the transaction, or
      (iii) both such relationship and such knowledge and experience.

    


    11.7 Restricted
      Securities.
      The
      Participant understands and acknowledges that:

    


    (a) The
      issuance of the Securities to the Participant has not been registered under
      the
      Securities Act, and the Securities must be held indefinitely unless a transfer
      of the Securities is subsequently registered under the Securities Act or an
      exemption from such registration is available, and that the Company is under
      no
      obligation to register the Securities;

    


    (b) The
      Company will make a notation in its records of the aforementioned restrictions
      on transfer and legends.

    


    11.8 Disposition
      Under Rule 144.
      The
      Participant understands that any shares acquired upon exercise of the Option
      will be restricted securities within the meaning of Rule 144 promulgated under
      the Securities Act; that the exemption from registration under Rule 144 will
      not
      be available in any event for at least one year from the date of acquisition
      of
      the shares, and even then will not be available unless (a) a public trading
      market then exists for the Common Stock of the Company, (b) adequate information
      concerning the Company is then available to the public, and (c) other terms
      and
      conditions of Rule 144 are complied with; and that any sale of the shares may
      be
      made only in limited amounts in accordance with such terms and conditions.
      There
      can be no assurance that the requirements of Rule 144 will be met, or that
      the
      shares will ever be salable.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    11.9 Further
      Limitations on Disposition.
      Without
      in any way limiting the Participant’s representations and warranties set forth
      above, the Participant further agrees that the Participant will in no event
      make
      any disposition of all or any portion of any shares which the Participant
      acquires upon exercise of the Option unless:

    


    (a) There
      is
      then in effect a Registration Statement under the Securities Act covering such
      proposed disposition and such disposition is made in accordance with said
      Registration Statement; or

    


    (b) The
      Participant will have notified the Company of the proposed disposition and
      furnished the Company with a detailed statement of the circumstances surrounding
      the proposed disposition, and either:

    


    (i) The
      Participant will have furnished the Company with an opinion of the Participant’s
      own counsel to the effect that such disposition will not require registration
      of
      such shares under the Securities Act, and such opinion of the Participant’s
      counsel will have been concurred in by counsel for the Company and the Company
      will have advised the Participant of such concurrence; or

    


    (ii) The
      disposition is made in compliance with Rule 144 or Rule 701 after the
      Participant has furnished the Company such detailed statement and after the
      Company has had a reasonable opportunity to discuss the matter with the
      Participant.

    


    12. Legends.

    


    The
      Company may at any time place legends referencing any applicable federal, state
      or foreign securities law, including Local Law, restrictions on all certificates
      representing shares of stock subject to the provisions of this Option Agreement.
      The Participant shall, at the request of the Company, promptly present to the
      Company any and all certificates representing shares acquired pursuant to the
      Option in the possession of the Participant in order to carry out the provisions
      of this Section.

    


    “THE
      SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
      OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
      ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144
      UNDER
      THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY
      TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
      IS
      EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
      ACT.”

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    13. Miscellaneous
      Provisions.

    


    13.1 Termination
      or Amendment.
      The
      Committee may terminate or amend the Plan or the Option at any time; provided,
      however, that except as provided in Section 8
      in
      connection with a Change in Control, no such termination or amendment may
      adversely affect the Option or any unexercised portion hereof without the
      consent of the Participant unless such termination or amendment is necessary
      to
      comply with any applicable law or government regulation. No amendment or
      addition to this Option Agreement shall be effective unless in
      writing.

    


    13.2 Further
      Instruments.
      The
      parties hereto agree to execute such further instruments and to take such
      further action as may reasonably be necessary to carry out the intent of this
      Option Agreement.

    


    13.3 Binding
      Effect.
      Subject
      to the restrictions on transfer set forth herein, this Option Agreement shall
      inure to the benefit of and be binding upon the parties hereto and their
      respective heirs, executors, administrators, successors and
      assigns.

    


    13.4 Delivery
      of Documents and Notices.
      Any
      document relating to participation in the Plan or any notice required or
      permitted hereunder shall be given in writing and shall be deemed effectively
      given (except to the extent that this Option Agreement provides for
      effectiveness only upon actual receipt of such notice) upon personal delivery,
      electronic delivery at the e-mail address, if any, provided for the Participant
      by a Participating Company, or upon deposit in the U.S. Post Office or foreign
      postal service, by registered or certified mail, or with a nationally recognized
      overnight courier service, with postage and fees prepaid, addressed to the
      other
      party at the address of such party set forth in the Grant Notice or at such
      other address as such party may designate in writing from time to time to the
      other party.

     

    (a) Description
      of Electronic Delivery.
      The Plan
      documents, which may include but do not necessarily include: the Plan, the
      Grant
      Notice, this Option Agreement, the Plan Prospectus, and any reports of the
      Company provided generally to the Company’s stockholders, may be delivered to
      the Participant electronically. In addition, the Participant may deliver
      electronically the Grant Notice and Exercise Notice called for by
      Section 4.2 to the Company or to such third party involved in administering
      the Plan as the Company may designate from time to time. Such means of
      electronic delivery may include but do not necessarily include the delivery
      of a
      link to a Company intranet or the Internet site of a third party involved in
      administering the Plan, the delivery of the document via e-mail or such other
      means of electronic delivery specified by the Company.

     

    (b) Consent
      to Electronic Delivery.
      The
      Participant acknowledges that the Participant has read Section 13.4(a)
      of this
      Option Agreement and consents to the electronic delivery of the Plan documents
      and the delivery of the Grant Notice and Exercise Notice, as described in
      Section 13.4(a).
      The
      Participant acknowledges that he or she may receive from the Company a paper
      copy of any documents delivered electronically at no cost to the Participant
      by
      contacting the Company by telephone or in writing. The Participant further
      acknowledges that the Participant will be provided with a paper copy of any
      documents if the attempted electronic delivery of such documents fails.
      Similarly, the Participant understands
      that the Participant must provide the Company or any designated third party
      administrator with a paper copy of any documents if the attempted electronic
      delivery of such documents fails. The Participant may revoke his or her consent
      to the electronic delivery of documents described in Section 13.4(a)
      or may
      change the electronic mail address to which such documents are to be delivered
      (if Participant has provided an electronic mail address) at any time by
      notifying the Company of such revoked consent or revised e-mail address by
      telephone, postal service or electronic mail. Finally, the Participant
      understands that he or she is not required to consent to electronic delivery
      of
      documents described in Section 13.4(a).

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    13.5 Integrated
      Agreement.
      The
      Grant Notice, this Option Agreement and the Plan, together with any the
      Superseding Agreement, if any, shall constitute the entire understanding and
      agreement of the Participant and the Participating Company Group with respect
      to
      the subject matter contained herein and supersede any prior agreements,
      understandings, restrictions, representations, or warranties among the
      Participant and the Participating Company Group with respect to such subject
      matter. To the extent contemplated herein, the provisions of the Grant Notice,
      the Option Agreement and the Plan shall survive any exercise of the Option
      and
      shall remain in full force and effect.

    


    13.6 Applicable
      Law.
      This
      Option Agreement shall be governed by the laws of the British Virgin Islands
      as
      such laws are applied to agreements between British Virgin Islands residents
      entered into and to be performed entirely within the British Virgin Islands.
      For
      purposes of litigating any dispute that arises directly or indirectly from
      the
      relationship of the parties as evidenced by this Option Agreement, the parties
      hereby submit to and consent to the jurisdiction of the British Virgin Islands
      and agree that such litigation shall be conducted only in the courts of the
      British Virgin Islands, and no other courts, where this Option Agreement is
      made
      and/or performed.

    


    13.7 Counterparts.
      The
      Grant Notice may be executed in counterparts, each of which shall be deemed
      an
      original, but all of which together shall constitute one and the same
      instrument.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      
        

          (For
            US Participants)

           

        

        
          	
                   Participant: 
                    

                	
                       
                    

                
	
                   

                	
                   

                
	
                  Date: 
                    

                	
                    
                        

                


        

         

         

      

      STOCK
        OPTION EXERCISE NOTICE

      


      


      A-Power
        Energy Generation Systems, Ltd. 2007 Equity Plan

      Attention:
        Stock Administration

      


      Ladies
        and Gentlemen:

      
        


        1. Option.
          I was
          granted an option (the “Option”)
          to
          purchase shares of the common stock (the “Shares”)
          of
          A-Power Energy Generation Systems, Ltd. (the “Company”)
          pursuant to the Company’s
          (or its
          predecessor’s) 2007 Equity Plan (the “Plan”),
          my
          Notice of Grant of Stock Option (the “Grant
          Notice”)
          and my
          Stock Option Agreement (the “Option
          Agreement”)
          as
          follows:


      

      

        
          	
                  Date
                    of Grant:

                	   

	 	 	 
	
                  Number
                    of Option Shares:

                	      

	 	 	 
	
                  Exercise
                    Price per Share:

                	
                  $
                    

                	  



        

      

    

     

    2. Exercise
      of Option.
      I hereby
      elect to exercise the Option to purchase the following number of Shares, all
      of
      which are Vested Shares in accordance with the Grant Notice and the Option
      Agreement:

    
      

        
          	
                  Total
                    Shares Purchased: 

                	      

	 	 	 
	
                  Total
                    Exercise Price (Total
                    Shares X Price per Share)

                	
                  $
                    

                	  



        

      

    

    


    3. Payments.
      I
      enclose payment in full of the total exercise price for the Shares in the
      following form(s), as authorized by my Option Agreement:

    
      

        
          	o
                  Cash:	
                  $
                    

                	  

	 	 	 
	o
                  Check:	
                  $
                    

                	  

	 	 	 
	o
                  Tender of Company Stock:	Contact
                  Plan
                  Administrator
	 	 	 
	
                  o
                    Net Exercise:

                	
                  Contact
                    Plan Administrator 
                    

                


        

      

       

    

    4. Tax
      Withholding.
      I
      authorize payroll withholding and otherwise will make adequate provision for
      the
      federal, state, local and foreign tax withholding obligations of the Company,
      if
      any, in connection with the Option. If I am exercising a Nonstatutory Stock
      Option, I enclose payment in full of my withholding taxes, if any, as
      follows:

    


    (Contact
      Plan Administrator for amount of tax due.)

    
      
        

          
            	o
                    Cash:	
                    $
                      

                  	  

	 	 	 
	o
                    Check:	
                    $
                      

                  	  

	 	 	 
	o
                    Tender of Company Stock:	Contact
                    Plan
                    Administrator
	 	 	 
	
                    o
                      Net Exercise:

                  	
                    Contact
                      Plan Administrator 
                      

                  


          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5. Participant
      Information.

    
      

        
          	
                  My
                    address is:

                	    

	 	 
	 	   



        


        
          	
                  My
                    Tax Identification Number is: 

                	 


        

         

        
          


          6. Binding
            Effect.
            I agree
            that the Shares are being acquired in accordance with and subject to
            the terms,
            provisions and conditions of the Grant Notice, the Option Agreement and
            the
            Plan, to all of which I hereby expressly assent. This Agreement shall
            inure to
            the benefit of and be binding upon my heirs, executors, administrators,
            successors and assigns.


        

      

      

        
          	 	
                  Very
                    truly yours,

                
	 	 
	 	
                     
                    

                
	 	
                  (Signature)

                


        

      

       

      


      Receipt
        of the above is hereby acknowledged.

      


      A-POWER
        ENERGY GENERATION SYSTEMS, LTD.

      

        
          	
                  By:
                    

                	  
	 
	 	 	 
	
                  Title:
                    

                	  
	 
	 	 	 
	
                  Dated:
                    

                	  
	 


        

               

        
          
            
            

          

          
            2