**SHARE TRANSFER CONTRACT****For****FUGONG XINENG POWER DEVELOPMENT CO., LTD.****(LATUDIHE HYDROPOWER STATION)**
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**CONTENTS**     **CHAPTER I DEFINITIONS**  **5**      Article 1Definitions  5      **CHAPTER II SALE EQUITY STAKE**  **7**      Article 2Sale Equity Stake  7 Article 3Share Transfer Price  8 Article 4Conditions Precedent for the Payment of the Transfer Price  8 Article 5Payment  9 Article 6Taxes Payable under the Transfer of the Sale Equity Stake  12      **CHAPTER III REPRESENTATIONS AND WARRANTIES BY BOTH PARTIES**  **12**      Article 7Representations and Warranties by both Parties  12      **CHAPTER IV DISCLOSURES, REPRESENTATIONS AND WARRANTIES BY THE TRANSFEROR**  **13**      Article 8Disclosures, Representations and Warranties by the Transferor  13 Article 9General Representations and Warranties by the Transferor  15 Article 10Ownership  15 Article 11The Company and the Hydroelectric Project  17      **CHAPTER V DISCLOSURES, REPRESENTATIONS AND WARRANTIES BY TRANSFEREE**  **27**      Article 12Disclosures, Representations and Warranties by Transferee  27      **CHAPTER VI DELIVERY**  **27**      Article 13Delivery  27      **CHAPTER VII DEBT ARRANGEMENT AND EMPLOYEES RELOCATION**  **31**      Article 14Debts Arrangement  31 Article 15Relocation of Employees  32      **CHAPTER VIII CONFIDENTIALITY**  **33**      Article 16Confidentiality  33      **CHAPTER IX BREACH OF CONTRACT**  **34**      Article 17Liability for Breach of a Representation or Warranty  34 Article 18Liability for Breach of Contract  34      **CHAPTER X*****FORCE MAJEURE***  **36**      Article 19Force Majeure  36      **CHAPTER XI RESOLUTION OF DISPUTES**  **36**      Article 20Arbitration  36 Article 21Validity of the Arbitration Award  37 Article 22Continuation of Rights and Obligations  37      **CHAPTER XII APPLICABLE LAW**  **37**      Article 23Applicable Law  37      **CHAPTER XIII MISCELLANEOUS**  **37** 
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     Article 24Waiver  38 Article 25Transfer  38 Article 26Amendment  38 Article 27Severability  38 Article 28Language  38 Article 29Validity of the Text and Appendices  39 Article 30Notification  39 Article 31The Entire Agreement  40      **APPENDIX I CONDITIONS PRECEDENT**  **42**      **APPENDIX II DEBTS OF THE COMPANY**         **APPENDIX III EXISTING SECURITIES OF THE COMPANY**         **APPENDIX IV LIST OF REAL ESTATE AND MOVABLE ASSETS**    
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**SHARE TRANSFER CONTRACT**This Share Transfer Contract (hereinafter referred to as “**this Contract**”) is executed by andbetween the following Parties in Xiamen, China on April 14, 2010.(1) **Party A: Fujian Huabang Hydroelectric Investment Co., Ltd.**(hereinafter referred to as the“**Transferee**”), a wholly foreign owned enterprise registered and established in accordance withthe laws of the People’s Republic of China, with its registration number of 350000400003598and registered address at the 3rd Floor of East Building A, No. 349, Guangda Road,Taijiang District, Fuzhou City, the legal representative of which is John Douglas Kuhns, whoseposition is chairman and nationality is the United States of America; (2) **Party B: Yunnan Minhe Hydroelectric Investment Co., Ltd.**(hereinafter referred to as the“**Transferor**”), a limited liability company registered and established in accordance with thelaws of the People’s Republic of China, with its registration number of 530100100027478 andits registered address at Rm. 211-212 Tower A, Block 1, Yunnan Overseas Student InnovationPark, No. 18, Middle Haiyuan Road, High-Tech District, Kunming, the legal representative ofwhich is Zhang Zimin, whose nationality is the People’s Republic of China.The Transferor and the Transferee are hereinafter collectively referred to as “**both Parties**” aswell as each of the Transferor and the Transferee is hereinafter referred to as the “**Party**”.**WHEREAS**:(1) Fugong Xineng Power Development Co., Ltd. (hereinafter referred to as the “**Company**”) is acompany incorporated in China for the purpose of hydropower generation and hydropowerdevelopment, which currently owns and operates Latudihe Hydropower Station; (2) Party B owns one hundred percent (100%) of the equity stake of the Company, and can exerciseall of its full rights as a shareholder;
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(3) Subject to the terms and conditions set out in this Contract, Party B is willing to transferone hundred percent (100%) of the equity stake of the Company held by it to the Transferee; (4) The Transferee is willing to acquire one hundred percent (100%) of the equity stake of theCompany from the Transferor subject to the terms and conditions set out in this Contract.     For this purpose, after friendly consultations, on the principles of equality and mutualbenefit, both Parties to this Contract have reached the following agreement in accordance with theprovisions of the *Company Law of the People’s Republic of China, Contract Law of the People’sRepublic of China*and other relevant laws and regulations of the PRC:**Chapter I Definitions****Article 1 Definitions**Unless otherwise prescribed, the following terms used in this Contract shall have the meanings setforth as follows:**The “Company”**refers to Fugong Xineng Power Development Co., Ltd., a limited liability companyregistered and established in accordance with the laws of the PRC, with its registration numberbeing 533323100000145, registered capital (paid-up capital) being RMB 27,000,000 and registeredaddress at Latudi Village, Shangpa Town, Fugong County.**The “Hydroelectric Project”**refers to the Latudihe Hydroelectric Project with the total installedcapacity of 18.9 MW which is legally owned and operated by the Company.**“Sale Equity Stake”**refers to one hundred percent (100%) of the equity stake of the Companytransferred by the Transferor to the Transferee.
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**“New Articles of Association”**refers to the new Articles of Association of Fugong Xineng PowerDevelopment Co., Ltd. after the completion of the share transfer contemplated in this Contract,which has been approved by the Examination and Approval Authority.**The “PRC”**or **“China”**refers to the People’s Republic of China, and insofar as this Contract isconcerned, shall exclude Hong Kong, Macao and Taiwan.**“Claims”**refers to claims, actions, demands, proceedings judgments liabilities, damages amounts,costs and expenses (including but not limited to attorney fees) whatsoever and howsoever arising.**“Signing Date”**refers to the date on which this Contract is signed.**“Encumbrance”**refers to any mortgage, assignment, lien, charge, pledge, title retention, right toacquire, security interest, option, pre-emptive right, and any other restriction or conditionswhatsoever including, without limitation: (1) any interest or right granted or reserved in or over or affecting the SaleEquity Stake; or  (2) the interest or right created or otherwise arising in or over the SaleEquity Stake under a fiduciary transfer, charge, lien, pledge, power of attorney orother form of encumbrance; or  (3) any security over the Sale Equity Stake for the payment of a debt or anyother monetary obligation or the performance of any other obligation.**“Examination and Approval Authority”**, refers to the relevant PRC governmental department having theauthority to examine and approve this Contract, the New Articles of Association of the Company andto grant approval for the share transfer contemplatedin this Contract pursuant to the provisions for the examination and approval of projects which haveinvestments by foreign investors in the PRC.
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**“Material Adverse Change”**refers to: (1) investigations (which may cause the Company to be punished) and penaltiesupon the Company by relevant governmental authorities;  (2) involvement with any litigation, arbitration or any other judicialproceedings by the Company which may have impact on the legal existence of theCompany and/or the Hydroelectric Project;  (3) any change which may have impact on the legal existence of the Companyand/or the Hydroelectric Project.**“RMB” or “Renminbi”**refers to the legal currency of the PRC.“**Payment Date**” refers to the date when the Transferee has fully paid the Transfer Price to theTransferors in accordance with Article 5.2 hereof.**“Transferor’s Bank Account**” refers to, for the purpose of this Contract, the bank account opened byParty B under its own name for receiving the Transfer Price (as defined in Article 3.1 below).**“Delivery Completion Date”**refers to the date provided by Article 13.5 hereunder.**“Third Party”**refers to any natural person, legal entity, or other organization or entity, otherthan the parties to this Contract.**“Working Day”**refers to the statutory working day provided by the State Council of the PRC.**Chapter II Sale Equity Stake****Article 2 Sale Equity Stake**
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Pursuant to the terms and conditions stipulated in this Contract, the Transferor agrees totransfer to the Transferee and the Transferee agrees to accept from the Transferor the SaleEquity Stake being one hundred percent (100%) of the equity stake of the Company with all therights and obligations of and attaching to the Sale Equity Stake for transfer including,without limiting the generality thereof, all the rights to receive dividends and to receive orsubscribe for shares (if any) declared, paid or issued by the Company and free of any Claimsor Encumbrances.**Article 3 Share Transfer Price** 3.1 The Transferor and the Transferee after consultations have finally determined thatthe price for the Sale Equity Stake shall be agreed at RMB 31,250,000 (hereinafterreferred to as the “**Transfer Price**”).**Article 4 Conditions Precedent for the Payment of the Transfer Price** 4.1 Under this Contract, the conditions precedent for the payment of the Transfer Priceby the Transferee are set out as follows: (1) The Transferor has completed all conditions precedent set out inAppendix I to this Contract;  (2) This Contract, the New Articles of Association and the transfer ofthe Sale Equity Stake in this Contract have been approved in writing by theExamination and Approval Authority, and the certificate of approval forestablishment of foreign invested enterprises has been issued;  (3) The alteration registration with the competent administration forindustry and commerce for the Sale Equity Stake has been completed and the SaleEquity Stake has been registered under the name of the Transferee;  (4) The business license for foreign invested enterprises of the Companyhas been issued;
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 (5) The competent foreign exchange administration authority has approvedthe transfer of the Transfer Price from the capital account of the Transferee tothe Transferor’s Bank Account; and  (6) From the Signing Date to the Payment Date, there has been no MaterialAdverse Change to the Company. 4.2 In the event that any of the conditions set out in the aforesaid Article 4.1 hasnot been fulfilled or satisfied, and the Transferee has not indicated its waiver of thesaid conditions or any one of them in writing, the Transferee shall not be obliged to paythe Transfer Price to the Transferor which shall not be deemed as breach of contract.  4.3 The Transferor and the Transferee agree that they shall use their best efforts toprocure the timely approvals of this Contract, the New Articles of Association and thetransfer of the Sale Equity Stake contemplated herein by the Examination and ApprovalAuthority and to procure the certificate of approval for establishment of foreigninvested enterprises and the business license of foreign invested enterprise.**Article 5 Payment** 5.1 Prior to the signing of this Contract, the Transferee has paid a deposit in theamount of RMB25,000,000 to the Transferor, of which, RMB6,250,000 shall be served as thedeposit for the Sale Equity Stake contemplated hereunder; the Transferee agrees to payadditional deposit in the amount of RMB25,000,000 to the Transferors as the deposit forthe Sale Equity Stake within five (5)Working Days from the Signing Date. Thus, to acquire the Sale Equity Stake, theTransferee has paid the deposit in the total amount of RMB31,250,000 to the Transferors.  5.2 The Payment Date shall be within five (5) Working Days after all conditionsprecedent set out in Article 4.1 hereof have been completed. The Transferors shall refundthe deposit in the amount of RMB31,250,000 to the bank account
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   designated by theTransferee within three (3) working days from the Payment Date.  5.3 The Transferor shall, within five (5) Working Days after the Signing Date of thisContract, provide the Transferee in written form with the detailed information inrelation to the Transferor’s Bank Account, otherwise, in the event that the Transfereecannot pay or cannot pay as scheduled the Transfer Price due to the Transferor’s failureto provide the detailed information of the Transferor’s Bank Account in a timely fashion,or due to the reason of the opening bank of the Transferor’s Bank Account, the Transfereeshall not assume any liability arising therefrom.  5.4 The Transferor shall issue to the Transferee the legal document evidencing thereceipt of the Transfer Price within three (3) Working Days after receiving eachinstalment of the Transfer Price paid by the Transferee. In the event that the Transferorfails to issue the said document within the prescribed time limit to the Transferee, theTransferee shall be entitled to correspondingly delay its payment of the followingpayable instalment of the Transfer Price, which shall not be deemed as breach ofcontract. In the event that the said legal document issued by the Transferor is not incompliance with the PRC laws and regulations which cause the Transferee and/or theCompany to suffer from any damage or loss, the Transferor shall assume liability for thecompensation on the Transferee and/or the Company.  5.5 Both Parties hereby confirm that all the profit of the Company shall be enjoyed bythe Transferee from the Payment Date (inclusive).  5.6 The Transferors shall remit RMB4,290,250 to the bank account designated by theTransferee within three (3) Working Days from the arrival date of the Transfer Price paidby the Transferee at the Transferor’s Bank Account, which shall be served as theguarantee fund (hereinafter referred to as “**Guarantee Fund**”) for the performance of allthe obligations of the Transferors under this Contract. The guarantee duration shallcommence from the arrival date of such Guarantee Fund at the bank account designated bythe Transferee and
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   terminate when all obligations provided in Article 5.7 hereof havebeen fulfilled by the Transferors. Upon the expiration of the guarantee duration, theTransferee shall remit the balance of the Guarantee Fund (if any) to the bank accountdesignated by Transferor without paying any interests.  5.7 Under this Contract, when all the following obligations have been fulfilled by theTransferor, the Transferee shall refund the balance of the Guarantee Fund (if any) to thebank account designated by Transferor within five (5) Working Days after all suchobligations have been fully fulfilled: (1) During the guarantee duration, the Hydroelectric Project does not haveany quality problem and the Transferor does not have any behaviours or situationsviolating any provisions of this Contract;  (2) The Transferor shall, on its own expenses, procure the Water DrawingPermit registered under the name of the Company, and deliver the original of theWater Drawing Permit to the Transferee;  (3) The Transferor shall, on its own expenses, enter into the Grid Connectionand Dispatching Agreement for Latudihe Hydropower Station in the name of the Companywith competent power grid corporation, and deliver the original of such executedGrid Connection and Dispatching Agreement to the Transferee;  (4) The Transferor shall, on its own expenses, procure the Social InsuranceRegistration Certificate under the name of the Company, and deliver the original ofthe Social Insurance Registration Certificate to the Transferee;  (5) The Transferor shall, on its own expenses, procure Yunnan ProvinceSpecial Equipments Safe Use Permit in the name of the Company and deliver theoriginal of the same to the Transferee; and  (6) The Transferor shall, on its own expenses, complete the tax clearance ofthe Company in accordance with law before June 30, 2010 and deliver
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   relevantsupporting documents for such full payment of relevant taxes in accordance with law.   The Transferor hereby confirms and warrants that, in the event that the Transferee and/or the Company incurs any fees or expenses or suffers from any loss or damage due to anyof the above-mentioned issues, the Transferee is entitled to directly deduct thecorresponding amount from the Guarantee Fund, which shall not be required to be refundedto the Transferor; in addition, such compensation shall not prejudice any other rights ofthe Transferee and/or the Company to claim for damages against the Transferor inaccordance with other provisions hereof and the laws and regulations of the PRC.  5.8 The obligations of the Transferee shall be deemed as having been fully accomplishedupon the remittance of the Transfer Price to the Transferor’s Bank Account and theTransferee shall not take any responsibilities or obligations thereafter.**Article 6 Taxes Payable under the Transfer of the Sale Equity Stake**Any taxes or fees arising out of and payable pursuant to the fulfilment of the terms of thisContract by each of the Transferor and Transferee shall be payable by the respective Partyliable for the taxes or fees under the provisions of relevant laws and regulations of PRC.**Chapter III Representations and Warranties by Both Parties****Article 7 Representations and Warranties by Both Parties** 7.1 Prior to the signing of this Contract, the signing Party shall provide a power ofattorney which authorizes its representative to sign this Contract to the other Party.  7.2 At the time of signing this Contract, the Transferor and the Transferee herebystate that the documents and information provided to the other Party or its
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   agencies(including, without limitation, the lawyers, valuers, financial advisers, *et*c.) prior tothe Signing Date are still valid and authentic and confirm that, should discrepanciesappear between the latter and the terms of this Contract, this Contract shall prevail.  7.3 The Transferor and the Transferee hereby agree that the contracts or documentspertaining to the transfer of Sale Equity Stake entered into by both Parties prior tothis Contract shall lapse automatically upon this Contract coming into effect.  7.4 Both Parties to this Contract agree to strive jointly in coordinating all the workpertaining to the transfer of the Sale Equity Stake, including but not limited toapplication for approvals, registration and filing for record, *etc.,*and the expensesarising therefrom shall be borne by the Company.  7.5 Both Parties hereby confirm that: in the event that the Sale Equity Stake is notsuccessfully transferred to the Transferee due to the Transferee’s reasons, then theTransferor shall be entitled not to refund the deposit in the amount of RMB31,250,000 tothe Transferee; in the event that the Sale Equity Stake is not successfully transferredto the Transferee due to the Transferor’s reasons, the Transferor shall refund twice ofthe deposit in the amount of RMB31,250,000 to the bank account designated by theTransferee within five (5) Working Days from the occurrence of such reason; in the eventthat theSale Equity Stake is not successfully transferred to the Transferee due to the reasonsof the Examination and Approval Authority, the Transferor shall refund the deposit inthe amount of RMB31,250,000 to the bank account designated by the Transferee within five(5) Working Days from the occurrence of such reason.**Chapter IV Disclosures, Representations and Warranties by the Transferor****Article 8 Disclosures, Representations and Warranties by the Transferor**
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The Transferor hereby represents and warrants to the Transferee that: 8.1 All information and facts relating to the Company that is in the possession of theTransferor or is known to the Transferor which will have a substantive effect on theTransferor’s abilities to fulfil any of its obligations in this Contract or whendisclosed to the Transferee shall have a substantive effect on the willingness of theTransferee to sign and fulfil its obligations under this Contract, have been disclosed tothe Transferee and the information provided by the Transferor to the Transferee does notcontain any representation that is untrue or misleading.  8.2 No lawsuits, arbitrations, or other legal or administrative proceedings orgovernmental investigations are on-going against the Transferor that will materiallyaffect its abilities to sign this Contract or fulfil its obligations under this Contract.  8.3 Up to the Signing Date, the Transferor has informed the whole matter of thetransfer of the Sale Equity Stake to all Third Parties relating to the Sale Equity Stake,the Company and the Hydroelectric Project; in case of requiring the consent of such ThirdParty, the Transferor has procured the written consent from the Third Party.  8.4 The Transferor hereby undertakes that it will not take any action after the SigningDate that will cause any adverse impact on the Company and/or the Hydroelectric Project.  8.5 Regarding the documents and information provided by the Transferor to theTransferee and/or the Transferee’s agencies (including, without limitation, the lawyers,valuers, financial advisers, *etc*.) prior to the Signing Date, the Transferor herebyundertakes that: (1) all copies made from original documents are true and complete andthat such original documents are authentic and complete;
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 (2) all documents supplied to the Transferee and/or the Transferee’sagencies as originals are authentic and complete;  (3) all signatures (stamps) appearing on documents supplied to theTransferee and/or Transferee’s agencies as originals or copies of originals aregenuine; and  (4) The Transferor has drawn to the attention of Transferee and/orTransferee’s agencies all matters that are material for the Transferee to proceedwith the transaction as contemplated in this Contract. 8.6 At any moment upon the request by the Transferee, the Transferor shall, on its ownexpenses, carry out and/or conduct in a way which is satisfactory to the Transferee, orto impel the Third Party to carry out and/or conduct in a way which is satisfactory tothe Transferee, any action and/or document which the Transferee reasonably deemsrequisite, in order to realize the full effectiveness and implementation of thisContract.**Article 9 General Representations and Warranties by the Transferor** 9.1 Party B is a legal entity that has been duly established according to the laws andregulations of China and it is validly and legally in existence and alsooperating normally in accordance with the laws and regulations of China. Signing thisContract and fulfilling all of its obligations stipulated herein by Party B shall notcontravene or result in the violation of or constitute a failure to fulfil or aninability to fulfil any of the stipulations in any laws, regulations, stipulations, anyauthorization or approval from any government body or department or the stipulations ofany contract or agreement that Party B is a party to or is bound by.**Article 10 Ownership** 10.1 The Transferor undertakes and warrants that: the Transferor is the legal owner ofthe Sale Equity Stake and has full authority and right to transfer the Sale Equity Staketo the Transferee and the Sale Equity Stake does not involve any
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   state-owned assets andinterests. In case that the Transferee and/or Company suffer from any loss or damage dueto the involvement of any state-owned assets and interests in the Sale Equity Stake, theTransferor shall fully compensate the Transferee and/or the Company.  10.2 The Transferor undertakes and warrants that: up to the Delivery Completion Date(inclusive), the Sale Equity Stake is not subject to any Claims or Encumbrances(including but not limited to any form of option, acquisition right, mortgage, pledge,guarantee, lien or any other form of Third Party rights); and there is no interestpresent and no agreement or undertaking in existence that may result in or create anyClaim or Encumbrance on the Sale Equity Stake (including but not limited to the aforesaidoption, acquisition right, mortgage, pledge, guarantee, lien or any other form of thirdparty rights and interest).  10.3 The Transferor undertakes and warrants that: all obligations as the shareholder ofthe Company which shall be assumed by the Transferor for the benefit of the Company andthe Third Party have been fully fulfilled by the Transferor. Any Third Party or any levelof the governmental authorities of the PRC shall not, due to the Transferor’s failure tofulfil its due obligations as the shareholder of the Company, claim for rights againstthe Company or theTransferee or adopt administrative acts which are unfavourable to the Company or theTransferee, including but not limited to imposing fine, revoking the business license,requiring to make supplemental payment for the taxes or compelling to stop production,*etc*.  10.4 The Transferor undertakes and warrants that: no lawsuits, arbitrations, or otherlegal or administrative proceedings or governmental investigations are on-going againstthe Transferor that will materially affect the Transferor’s abilities to sign thisContract or fulfil the Transferor’s obligations under this Contract.  10.5 The Transferor undertakes and warrants to provide all relevant materials whichshould be provided by the Transferor and are requisite for procuring the
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   writtenapprovals to this Contract, New Articles of Association, the transfer of the Sale EquityStake stipulated in this Contract from the Examination and Approval Authority,certificate of approval for establishment of foreign invested enterprises, and businesslicense for foreign invested enterprises of the Company, and conducting the alterationregistration of the Sale Equity Stake under the name of the Transferee with the competentadministration for industry and commerce.  10.6 In the event that the Transferee fails to procure the approvals issued by theExamination and Approval Authority within the time limit prescribed in Article 12.4hereof due to the reasons of the Examination and Approval Authority, the Transferoragrees to give thirty-day grace period so as to enable the completion of the approvalwith the Examination and Approval Authority by the Transferee.**Article 11 The Company and the Hydroelectric Project**     The Transferor hereby represents and warrants to the Transferee that: 11.1 The Company is a legal entity that has been duly established according to the lawsof PRC and it is validly and legally in existence and also operating normally inaccordance with the laws and regulations of PRC.  11.2 The registered capital of this Company has been fully paid up on schedule. TheTransferor has completed its full obligations to contribute, and has procured validverifications for its contributions according to PRC laws. There is no withdrawal of theregistered capital by the Transferor.  11.3 The Company is the legal owner of the Hydroelectric Project, and has the full andcomplete ownership, operation right and right to profit over the Hydroelectric Project.  11.4 The development, construction and operation of the Hydroelectric Project have beenduly granted by relevant governmental authorities all requisite approvals and are fullycomplied with the PRC laws and regulations and the approvals
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   and permits of relevantgovernmental authorities, in no violation of PRC laws and regulations and approvals andpermits of relevant governmental authorities, without any condition that leads to or mayleads to the revocation or withdrawing of such approvals and permits. In the event thatTransferee and/or the Company suffer from any damage or loss arising out of any violationand /or revocation and/or withdrawing, the Transferor shall be liable for the fullcompensation on the Transferee and/or the Company.  11.5 Up to the Delivery Completion Date, every aspect of the Hydroelectric Project,including but not limited to the hydrology, geology, water flow, water diversion canal,water retaining dam, hydroelectric generator units and the affiliated facilitates,pressure pipes, pressure forebay, power generation workshop, step-up substation, *etc*., iscomplied with the requirements of power generation under normal situations and is freefrom any defect or any other problem provided of the loss due to normal operation andusage. In the event that Transferee and/or the Company suffer from any damage or lossarising out of any defect or any other problem which already existed beforethe Delivery Completion Date, the Transferor shall fully compensate the Transfereeand/or the Company.  11.6 Up to the Delivery Completion Date, the Company has never suffered and is notcurrently suffering from any administrative investigations, prosecutions, arbitrations,disputes, claims or other proceedings (ongoing, pending or threatened), nor the Companyhas been punished or the Transferor can foresee any punishment to be made by anyadministrative authorities of the PRC for the issues already existed before the sharetransfer. Up to the Delivery Completion Date, the Transferor has fully disclosed to theTransferee all information in respect of environmental protection, water and soilpreservation, flood prevention plan, utilization of land (woodland), wood cutting, powergeneration, fire-prevention and work safety, *etc*. In addition, the Transferor herebywarrants that all fees (including, without limitation, water resources fees, landrequisition and compensation fees, water and soil preservation facility compensationfees, *etc*.), charges, penalties and expenses payable to or being required to pay to anyPRC governmental authority have
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   been paid in full, and, as of the Delivery CompletionDate, there is no arrears of such fees, charges, penalties and expenses, nor is there anyarrears of costs and/or expenses being required by any PRC governmental authority to bepaid for any purpose of correcting defects and/or inappropriate actions of the Company.In the event that the Transferee and/or the Company suffer from any penalty, damage,loss, etc. due to any such administrative investigations, prosecutions, arbitrations,disputes, claims, penalties and/or other proceedings which existed before the DeliveryCompletion Date, the Transferor shall fully compensate the Transferee and/or the Company.  11.7 The Company legally owns all requisite real estate (including but not limited toland, buildings, water retaining dam, water diversion canal, pressure pipes, pressureforebay, booster station, power transmission lines, structures and affiliated facilities)and moveable assets (including but not limited to machines, equipments, vehicles,furniture and office supplies), and such real estate and movable assets shall be not lessthan those real estate and movable assets listed out in Appendix IV to this Contract. TheCompany does notprovide any other security (including but not limited to mortgage, pledge and lien) orother restrictions on the real estate and movable assets, except for those listed out inAppendix III to this Contract. Up to the Delivery Completion Date, all material aspectsof the buildings, structures, machines and equipments, vehicles and other assets ownedby the Company are in good, secure and operational conditions (excluding the reasonableusage damage), which are anticipated not to need to be repaired (excluding the dailyrequisite repairs), replaced or supplemented within twelve (12) months after the SigningDate due to the issues before the Delivery Completion Date. The Transferor warrants andundertakes that commencing from the Signing Date, the above real estate and movableassets will not suffer from any loss or damage resulting from the actions of theTransferor or any Third Party. In case of any loss or damage suffered by the real estateand movable assets due to the above mentioned causes, the Transferor shall fullycompensate Transferee and/or the Company.
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 11.8 The production, operation, construction and business of the Company are fullycomplied with all the relevant PRC laws and regulations, including but not limited tothose laws and regulations in relation to hydropower generation, environmentalprotection, water and soil preservation, flood prevention plan, design and constructionof water resource project, invitation and submission of bids, utilization of woodland,wood cutting, fire-prevention, work safety and relocation. The Transferor warrants thatthe environmental protection authorities, water resource authorities, power regulatoryauthorities, construction authorities, forestry authorities, fire-prevention authorities,planning authorities, safe production authorities, development and reform authorities andother governmental authorities will not punish the Company for the problems ofenvironmental protection, water and soil preservation, water fetching, flood preventionplanning, design and construction of water resources projects, invitation and submissionof bids, power generation, utilization of woodland, wood cutting, fire-prevention, worksafety and relocation, etc. which already existed before the Delivery Completion Date. Inthe event that the Company suffers from any loss or damage due to the punishment by localgovernment, environmental protection authority, waterresources authority, electricity regulatory authority, forest authority, constructionauthority, fire-prevention authority, planning authority, work safety authority,development and reform authorities or other governmental authorities, the Transferorshall fully compensate the Transferee and/or the Company so as to hold the Transfereeand/or the Company harmless.  11.9 The fire-prevention design of all construction projects of the Company are compliedwith all PRC relevant laws and regulations and national fire-prevention standards.  11.10 Prior to the signing of this Contract, the Transferor has already disclosed allinformation of the banking debts of the Company. As of the Payment Date, such informationis still complete, liable, accurate and true. As of the Signing Date, all banking debtsof the Company have been indicated in Appendix II to this Contract and as of the DeliveryCompletion date, all due principal and interests of the banking debts set out in AppendixII hereto have been fully
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   paid off. The Transferor shall assume compensation liabilitiesfor any undisclosed debts of the Company and any unpaid due principal and interests so asto hold the Transferee and/or the Company harmless.  11.11 The Company can legally own the land use right and building ownership for all theland and buildings and structures currently occupied and used by the Company, and couldnot be involved in any legal action, arbitration, penalty or suffer from any other damageor loss due to the land and/or building and/or structure issues. In the event that theTransferee and/the Company suffer from any penalty, damage or loss, *etc*. due to the useof land or building, the Transferor shall fully compensate Transferee and/or the Company.  11.12 The land use right (granted) currently occupied and procured by the Company withthe State-owned Land Use Right Certificate (the serial number of which is: Fu Guo Yong[2008] No. 360) has covered all the land needed by the Company and the HydroelectricProject, and the procurement of such land use right has been fully in compliance with theregulations of PRC laws and regulations, and relevant fees and taxes (including but notlimited torequisition compensation fees and land grant premium) have been fully paid off inaccordance with law. In the event that the Transferee and/or the Company suffer from anypenalty, damage or loss, *etc*. due to such land, the Transferor shall fully compensatethe Transferee and/or the Company.  11.13 When relevant governmental authorities begin to carry out the business of BuildingOwnership Certificate, the Transferor shall, on its own expenses, procure the BuildingOwnership Certificates for all buildings of the Hydroelectric Project registered underthe name of the Company and deliver the originals of the same to the Transferee.  11.14 The Building Lease Contract entered into by the Company and Yang Yinxiu on March18, 2010 has been in full compliance with the provisions of PRC laws and regulationswithout any violation, and all due rental has been fully paid off. The Transferorwarrants that the Company will not suffer from any fines or any other administrativepenalties by relevant governmental authorities due
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   to the lease of such building, in theevent the Transferee and/or the Company suffer from any penalty, damage or loss, *etc*. dueto the aforesaid lease of building, the Transferor shall assume the liability to fullycompensate Transferee and/or the Company. Except for the aforesaid lease of building, asof the Delivery Completion Date, the Company does not, neither as lessee nor as lessor,lease any other moveable assets and real estate such as land, buildings equipments andfacilities, *etc*.  11.15 The selection of the entities for the project survey and design, construction,substantial equipments and materials purchases and project supervisor have been incompliance with the regulations of all RPC laws and regulations without any violation,and the competent water resource authority will not impose any administrative penalty onthe Transferee and/or the Company due to such selection. In the event the Transfereeand/or the Company suffer from any penalty, damage or loss, etc. due to such selection ofthe entities for the project survey and design, construction, substantial equipments andmaterials purchases and project supervisor, the Transferor shall fully compensate theTransferee and/or the Company.  11.16 During the period between the Signing Date and the Delivery Completion Date(inclusive), the Transferor shall normally operate and manage the Company and warrantthat there will not be any Material Adverse Change to the operation, business andconditions of the Company.  11.17 As of the Delivery Completion Date, the Company does not have any equityinvestment or other investment in any other companies, enterprises, and other economicorganizations, *etc*. In the event that the Company suffers from any damage or loss due tosuch undisclosed equity investment or other investments, the Transferor shall fullycompensate the Transferee and/or the Company.  11.18 As of the Delivery Completion Date, other than those securities set out inAppendix III to this Contract, the Company’s assets and rights are free from any othersecurity (including but not limited to mortgage, pledge and lien) or
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   any otherrestrictions, neither has the Company provided any security (including but not limited tomortgage, pledge and guarantee, etc.) for any other companies, enterprises, economicentities or any individuals. In the event that the Company suffers from any damage orloss due to such undisclosed securities, the Transferor shall fully compensate theTransferee and/or the Company.  11.19 As of the Delivery Completion Date, the electricity fees charging right of theCompany is free from any pledge or other restrictions. In the event that the Transfereeand/or the Company suffer from any damage or loss sue to such pledge or restriction, theTransferor shall fully compensate the Transferee and/or the Company.  11.20 The Company has effectively completed the taxation registration and obtained thevalid taxation registration certificates, and conducted relevant taxation declaration inaccordance with PRC laws, with all contents declared being real and complete. As of June30, 2010, the Company has fully paid up all taxes required by the PRC laws andregulations, including but not limited toenterprise income tax, value-added tax, urban construction tax, water resource fee andeducational surcharges. The Transferor shall assume compensation liabilities for anyunpaid tax and fine to the Transferee and/or the Company so as to hold the Transfereeand/or the Company harmless.  11.21 All construction projects of the Company have obtained all requisite governmentalapprovals and permits and are strictly complied with and without any violation of theapprovals and permits issued by relevant PRC governmental authorities. In the event thatthe Company is punished or suffers from any damage or loss after the completion of theshare transfer by any governmental authority because of any above issue, the Transferorshall fully compensate the Company and/or the Transferee.  11.22 The effectiveness of this Contract will not cause any Third Party to terminate thecontracts or agreements which are concluded with the Company prior to the effective date(inclusive) of this Contract which are still effective on the
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   effective date of thisContract, and will not create any security or restriction in any other form favourable tothe Third Party on the assets and/or rights of the Company.  11.23 The effectiveness of this Contract will not cause any adverse effect on thedevelopment, operation and assets of the Hydroelectric Project owned by the Company,neither can or will cause the loss of the development right, operation right, ownershipright and right to profit of the Hydroelectric Project, which has been obtained by theCompany before the effective date of this Contract (inclusive).  11.24 The originals of all the material contacts (including, without limitation, thecontracts and relevant supplemental agreements concerning project development, investmentcooperation, land requisition, land compensation, woodland compensation, land lease,loan, security, counter security, insurance, design, construction, project supervisor,purchase, sales of certified emission reductions, grid connection and dispatchingagreement, power purchase and sale contracts and relevant supplemental agreements, *etc*. )concluded by theCompany prior to the Signing Date of this Contract (inclusive) have been preserved bythe Company in complete form and there have been no violations thereof, and as far asthe Transferor knows, there does not exist any condition which may lead to the violationby the Company. In case of such circumstances, the Transferor has disclosed to theTransferee in written form.  11.25 The Company’s production technology and procedures are in full compliance withrelevant PRC laws, standards and norms, and there are no illegal actions of infringingupon intellectual property rights of others, such as patent, know-how, *et*c. In the eventthat the Company suffers from any punishment, damage or loss due to any above issue, theTransferor shall fully compensate the Company and/or Transferee.  11.26 Labour Contracts between the Company and the employees who are still employed bythe Company upon the Signing Date of this Contract have been legally and validlyconcluded. The various social insurance premiums, which
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   shall be paid for the employeesaccording to relevant PRC laws and regulations, have been fully and timely paid up, andthe Company has not delayed any payment of the employees’ social insurance premiums,salaries, and other welfares provided in PRC laws and the Company’s internal regulations.As of the Delivery Completion Date, the Company is free from any problem which may leadthe employees to initiate labour arbitrations or lawsuits against the Company. In theevent that the Company and/or Transferee suffer from any punishment, loss or damage dueto the aforesaid reasons, the Transferor shall be liable for the full compensation on theTransferee and/or the Company.  11.27 As of the Signing Date, relevant coordination fees, compensation fees and otherliabilities and obligations, which are payable and assumed by the Company to any ThirdParty in accordance with relevant agreements for the purpose of the construction, landoccupation and other issues of the Hydroelectric Project, have been fully paid off orimplemented, and relevant originals of the payment evidences and implementationsupporting documents have been delivered to the Transferee. After the Signing Date, inthe event thatthe Company and/or the Transferee suffer from any loss or damage due to the aforesaidreasons, the Transferor shall be liable for the full compensation on Transferee and/orthe Company.  11.28 The Company and/or the Transferee will not suffer from any damage or loss as aresult of being involved of any legal action, arbitration, claim, *etc*. initiated byEssent Energy Trading B.V. due to the Company’s termination and/or non-performance and/orfailure to perform the Certified Emission Reduction Purchase and Sale Agreement enteredinto between the Company and Essent Energy Trading B.V. on December 7, 2007. In the eventthat the Company and/or Transferee suffer from any loss or damage due to the aforesaidreason, the Transferor shall be liable for the full compensation on the Transferee and/orthe Company. Both Parties hereby confirm that all revenues generated from the CertifiedEmission Reduction Purchase and Sale Agreement shall be owned by the Transferor.
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 11.29 Due to the reasonable needs of its production and operation, the Company has takenout requisite insurances which are usually purchased by other companies in the sameindustry, with all the insurance policies are valid, all the due insurance premiums havebeen paid up, and all the other key conditions have been fully fulfilled and compliedwith. As of the Delivery Completion Date, there are no conditions which have lead or maylead the aforesaid insurance policies to be invalid. The aforesaid insurance policies arefree from restrictions from any special or unusual articles. As of the DeliveryCompletion Date, there are no situations in which the Company may claim for compensationsfrom the insurer according to the aforesaid insurance policies.  11.30 All the accounts, books, ledgers and financial records of the Company have beenformulated in accordance with the accounting procedures and rules provided by PRCaccounting system, and have been fully, properly and accurately recorded and completed,which do not involve any material mistake and deviation, truly and precisely reflect alltransactions relating to the Company and show the financial, contractual and otherbusiness conditions of the Company during every financial term.  11.31 Any representation and warrant made by the Transferor remain valid withintwenty-four (24) days after the Delivery Completion Date.  11.32 In the event that the Transferee and/ or the Company suffers from any loss ordamage due to the Transferor’s violation of any of its warranties and representationshereunder, the Transferee shall be entitled to directly deduct the corresponding amountfrom the Guarantee Fund, which shall not be required to be refunded to the Transferor; inaddition, such compensation shall not prejudice any other rights of the Transferee and/orthe Company to claim for damages against the Transferor in accordance with otherprovisions hereof and the laws and regulations of the PRC.  11.33 The Transferor undertakes that it will use its best efforts to procure theconfirmation letter issued by the Agricultural Bank of China, Kunming City ChangchunSub-branch, confirming a) the bank has received the notice
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   regarding the transfer of theSale Equity Stake and agreed on such transfer; and b) the bank will not request theCompany to repay the loan in advance.**Chapter V Disclosures, Representations and Warranties by the Transferee****Article 12 Disclosures, Representations and Warranties by the Transferee**The Transferee hereby represents and warrants to the Transferor that: 12.1 The Transferee is a limited liability company that has been duly established,validly and legally in existence and also operated normally in accordance with the lawsand regulations of PRC.  12.2 The Transferee in signing this Contract and fulfilling all of its obligationsstipulated herein shall not contravene or result in the violation of or constitute afailure to fulfil or an inability to fulfil any of the stipulations of Transferee’sArticles of Association or its internal rules, any laws, regulations, stipulations,or any authorizations or approvals from any government body or department or anycontract or agreement that Transferee is a party to or is bound by.  12.3 No lawsuits, arbitrations, or other legal or administrative proceedings orgovernmental investigations are on-going against Transferee that will materially affectits ability to sign this Contract or fulfil its obligations under this Contract.  12.4 The Transferee undertakes that it will do its best to procure the approvals issuedby the Examination and Approval Authority requisite for the transfer of the Sale EquityStake contemplated under this Contract prior to May 25, 2010.**Chapter VI Delivery****Article 13 Delivery**
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 13.1 After the Signing Date, the Transferor and the Transferee shall immediatelyorganize a Delivery Team to actively make preparations for the delivery of the Companyand the Hydroelectric Project.  13.2 During the term from the Signing Date to the Delivery Completion Date: (1) The Transferor shall continue to operate the Company in general andusual way; the Transferor shall not (or shall not agree to) require the Company tomake any payment to any Third Party, however, excluding the payment which needs tobe made for the general operation purpose and the already determined expenditureprogramme (in the event that such payment exceeds RMB 50,000, it shall be subjectto the prior written consent of the Transferee); the Transferor shall notterminate any agreements or arrangements which have significant value to theCompany, or give up any rights which have significant value;  (2) In the event that the Company intends to enter into any contract,agreement or memorandum, *etc*., of which the price, value, liability ordebt (including contingent debt) exceeds the amount of RMB 50,000, the priorwritten consent from the Transferee must be procured;  (3) Without the prior written consent of the Transferee, the Transferorshall not make any material amendments to the financing, loan or securityarrangements of the Company;  (4) The Transferor shall take all reasonable actions to preserve andprotect the assets of the Company; and shall not create any pledge, mortgage andother type of securities on the assets of the Company, or provide guarantee orother security to any Third Party;  (5) The Transferor shall not, on behalf of the Company, settle, releaseor terminate any material lawsuits, arbitrations or other legal proceedings, orany material legal liabilities and claims, or give up the rights relating to theforegoing;
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 (6) The Transferor shall not release or write off any debt owed by thedebtor specified in the accounting books of the Company;  (7) The Transferor shall ensure the Company will not enter into anycooperation, joint venture or other forms of outward equity investment or debtinvestment arrangements;  (8) In case of any Material Adverse Change or other conditions which maycause the representations, warranties or undertakings made by the Transferor to befalse, inaccurate, unrealizable or misleading, the Transferor shall inform theTransferee in written form within twenty-four (24) hours and provide reasonableand detailed information and explanation; and  (9) The Transferor or the Company will not take any actions which mayviolate the provisions of this Contract or may influence the fulfilment ofthe obligations hereunder or the transfer of the Sale Equity Stake contemplatedherein. 13.3 The Transferor shall warrant making a full and complete delivery and the Company’smovable assets and real estate delivered to the Transferee shall not be decreased ordamaged comparing with those listed in Appendix IV to this Contract. Otherwise, theTransferor shall fully compensate the Transferee and/or the Company.  13.4 The delivery includes but not limited to: (1) The production, operation and management of the Company and theHydroelectric Project;  (2) Delivery of financial affairs;
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 (3) The Company’s seals, such as the official seal, financial sealand contract seal, *etc*. shall be delivered to the Transferee;  (4) The originals of the accounts opening documents and seals forall the bank accounts of the Company shall be delivered to the Transferee;  (5) The Transferor and the Transferee shall check and verify allthe assets (including but not limited to the real estate and movable assets) ofthe Company in accordance with the real estate and movable assets list ofAppendix IV, make a list of the Company’s assets, and complete the deliverywith the representatives of both the Transferor and the Transferee signed andconfirmed on site; during the checking and verifying of the assets, theTransferor shall compensate for the damaged assets by reference to the assessedvalue;  (6) Originals of all approvals, certificates, licences, customerinformation and other materials shall be delivered to the Transferee, whichshallbe no less than those materials set out in the materials list delivered to andconfirmed by the Transferee as provided in Appendix I;  (7) Originals of all the project drawings, contracts and agreements(including but not limited to grid connection and dispatching agreement, powerpurchase and sale contract, project contract, equipment contract, installationcontract, project supervisor contract, materials contract, loan contract andmortgage contract) and other files shall be delivered to the Transferee;  (8) Originals of all the financial accounting books, financialvouchers and the fiscal files shall be delivered to the Transferee;  (9) The Transferor shall deliver the specific technologies of theparties to the Hydroelectric Project contracts, such as the parties ofconstruction, equipment manufacture, design, supervision, quality examination,etc. to the Transferee; and
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 (10) The delivery of other materials and files of the Company. 13.5 The delivery shall be completed within five (5) Working Days after the PaymentDate, the completion of which shall be confirmed in writing by the Transferee. TheDelivery Completion Date shall be the issuance date of the written confirmation by theTransferee.  13.6 After the completion of the delivery, as for the reasonable request of furtherdelivery raised by the Transferee in writing, the Transferor shall cooperate actively.  13.7 The Transferor shall make sure the continuity, stability and safety of theproduction and operation of the Company during the process of delivery.  13.8 The Transferor shall fully cooperate so as to complete the delivery. In the eventthat the Transferee or the Company after the transfer of the Sale EquityStake suffers from any damage due to the Transferor’s non-cooperation, the Transferorshall be liable for the compensation in accordance with law.**Chapter VII Debt Arrangement and Employees Relocation****Article 14 Debts Arrangement** 14.1 Both Parties confirm that as of the Delivery Completion Date, the banking debts ofthe Company shall be in the total amount of RMB 55,000,000, and the Company will continueto undertake such loans after the completion of the transfer of the Sale Equity Stake.All creditor’s right and other debts incurred prior to the Delivery Completion Date shallbe enjoyed and assumed by the Transferor and the Transferee and/or the Company shall notbe liable unless otherwise agreed by the Parties.
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 14.2 After the completion of the transfer of the Sale Equity Stake, except for thebanking debt in the amount of RMB 55,000,000 listed out in the above Article 14.1, theTransferee shall not assume any other liabilities for the other debts of the Companybefore the Delivery Completion Date. In the event that the Company and/or the Transfereesuffer from any damage or loss due to such debts, the Transferor shall assume theliability to fully compensate the Company and/or the Transferee.**Article 15 Relocation of Employees** 15.1 Upon the completion of the transfer of the Sale Equity Stake, the Transferee shallbe entitled to choose to employ excellent employees from the current employees of theCompany. The terms and conditions of their employment shall be determined by reference tothe standards applied in the other domestic project companies currently owned by theTransferee in principle and implemented in accordance with *the Labour Law of the PRC*, *theLabour Contract Law of the PRC*and its implementation regulations and other relevant PRClaws and regulations. The Company shall execute new labourcontracts with the employees and the Transferor shall be responsible for the relocationof those employees who are not re-employed by the Company.  15.2 The Transferor undertakes and warrants that it will properly relocate the employeeswho are fired or not re-employed by the Company and shall ensure that such employees willnot make any trouble against the Company, nor will apply for arbitration, bring lawsuitor any other administrative or judicial proceedings against the Company. The Transferorshall make sure that the Company will not be punished by any competent governmentalauthority or incur any other adverse effect due to the relocation of the aforesaidemployees.  15.3 The Transferor undertakes and warrants that all compensation, indemnity, costs andany other expenses in connection with the relocation of the employees of the Companyshall be assumed by the Transferor itself. In the event that the Company and/or theTransferee suffer from any damage or loss, the Transferor shall be liable for the fullcompensation on the Company and/or the Transferee.
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**Chapter VIII Confidentiality****Article 16 Confidentiality** 16.1 Unless otherwise provided for in another relevant confidentiality agreement, withregard to the confidential and exclusive information that have been disclosed to or maybe disclosed to the other Parties by any Party to this Contract pertaining to theirrespective businesses, or financial situations and other confidential matters, bothParties to this Contract which have received the aforesaid confidential information(including written information and non-written information, hereinafter referred to as“**Confidential Information**”) shall: 16.1.1 Keep the aforesaid Confidential Information confidential;  16.1.2 Save for the disclosure of the Confidential Information by a Party to this Contractto its employees solely for the performance of their duties and responsibilities,none of the Parties to this Contract shall disclose the Confidential Information toany Third Party or any entity. 16.2 The provisions of the aforesaid Article 16.1 shall not apply to ConfidentialInformation: 16.2.1 which was available to the receiving Party from the written records made by thereceiving Party and was approved to be known by the receiving Party by the writtenrecords before the disclosing Party disclosed the information to the receiving Party;  16.2.2 which has become public information by means not attributable to any breach by thereceiving Party;
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 16.2.3 which was obtained, by the receiving Party from a Third Party not subject to anyconfidentiality obligation to the said Confidential Information. 16.3 As far as any natural person or legal entity which is a Party to this Contract isconcerned, notwithstanding that it has ceased to be a Party to this Contract because ofthe transfer of its rights and obligations pursuant to the terms of this Contract, thestipulations set out in this Chapter IIX shall remain binding on it.**Chapter IX Breach of Contract****Article 17 Liability for Breach of a Representation or Warranty** 17.1 If any representation or warranty made by any Party to this Contract is found to bean error, or if any fact that has or is likely to have a major or substantialeffect on the signing of this Contract by any Party has been omitted, or if anyrepresentation or warranty is found to be misleading or untrue in any respect, thenon-breaching Party shall be entitled to require the Party in breach for fullcompensation for any loss, damage, cost or expense arising from the erroneous,misleading or untrue representation or warranty of the Party in breach or arising fromany other breach of any representation and warranty given by the Party in breach.  17.2 Each representation and warranty set out in this Contract is to be construedindependently.**Article 18 Liability for Breach of Contract** 18.1 In the event of a breach committed by any Party to this Contract, the saiddefaulting Party shall be liable to the other Party for the losses and damages or anyother liabilities arising out of that defaulting Party’s breach of contract in accordancewith the provisions of this Contract and the laws and regulations of PRC. In the eventboth Parties commit the breach of contract, one Party shall assume the liability tocompensate the loss or damage or other obligations for the other Party.
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 18.2 In the event that the undisclosed issues by the Transferor prior to the signing ofthis Contract, which may influence the legal existence of the Company and theHydroelectric Project, actually influence the legal existence of the Company or theHydroelectric Project after the share transfer hereunder, the Transferee shall beentitled to terminate this Contract and to require the Transferor to refund the fullamount of the Transfer Price which has been paid by the Transferee and to pay threepercent (3%) of the Transfer Price as liquidated damages. In addition, the Transfereeshall be entitled to resort to other claims in accordance with the PRC laws.  18.3 Any violation of the obligations, representations and warranties under thisContract by any Party of the Transferor and the Transferee shall constitute abreach of contract, and the defaulting Party shall assume the liability to compensateall the losses due to the breach of contract to the other Party.  18.4 Any delayed performance of the obligations and provisions under this Contract byany Party of the Transferor or the Transferee shall constitute a breach of contract;however, the delayed performance or non-performance due to the other Party’s advanceperformance obligation shall not constitute a breach of contract.    The defaulting Party with delay in performance of the Contract shall paythe liquidated damages per day in the amount of the Transfer Price multiplied bythe one-year bank loan rate announced by the People’s Bank of China to thenon-defaulting Party; in the event that the defaulting Party delays to perform theContract over thirty (30) Business Days, the non-defaulting Party shall beentitled to terminate the Contract, and to require the defaulting Party to pay onepercent (1%) of the Transfer Price as liquidated damages. The procurement of theliquidated damages shall not prejudice the non-defaulting Party’s right to claimfor other legal remedies in accordance with other provisions of this Contract andthe PRC laws and regulations.
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**Chapter X*****Force Majeure*****Article 19*****Force Majeure*** 19.1 *“Force Majeure*” refers to earthquake, typhoon, flood, fire, war, political unrestand such special incidents or events that are deemed to be *Force Majeure*occurrencesunder the provisions of the relevant laws and regulations of PRC.  19.2 In case of occurrence of a *Force Majeure*event, the obligations of the Party tothis Contract affected by this *Force Majeure*event shall cease during the period of the*Force Majeure*event and any term or period set out in this Contract to which the affectedparty is subject shall automatically be extendedby a period equal to the term or period of the *Force Majeure*event, the period ofextension shall be the same as the period of cessation of the obligations by reason ofthe *Force Majeure*event, and the said Party shall not be liable for any losses anddamages or any other liabilities arising out of a breach of contract as provided for inthis Contract for the duration of the *Force Majeure*.  19.3 The Party claiming the occurrence of a *Force Majeure*event shall promptly informthe other Party in writing, and within seven (7) days thereafter, it shall providesufficient evidence issued by the notary organization of the occurrence and thecontinuity of the *Force Majeure*event. It shall also do its best to eliminate the adverseeffect of the *Force Majeure*event.**Chapter XI Resolution of Disputes****Article 20 Arbitration** 20.1 Any dispute arising out of or in connection with this Contract between the Partiesto this Contract shall firstly be resolved through friendly consultation. In the eventthat thirty (30) days after the commencement of the friendly consultations, the disputecannot be resolved through such means, either Party
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   may submit the dispute to the ChinaInternational Economic and Trade Arbitration Commission South China Sub-Commission forarbitration in accordance with its prevailing valid arbitration rules. The place forarbitration shall be in Shenzhen.  20.2 The arbitration tribunal shall consist of three (3) arbitrators and the arbitratorsshall be proficient in both English and Chinese Languages.**Article 21 Validity of the Arbitration Award**The arbitration award shall be final and shall be binding on both Parties to this Contract. BothParties to this Contract agree to be bound by the said award, and to act according to the terms ofthe said award.**Article 22 Continuation of Rights and Obligations**After a dispute has arisen and during its arbitration process, other than the disputed matter,both Parties to this Contract shall continue to exercise their other respective rights stipulatedin this Contract, and shall also continue to fulfil their other respective obligations stipulatedin this Contract.**Chapter XII Applicable Law****Article 23 Applicable Law**The laws and regulations of the PRC shall govern and be binding on the establishment, validity,interpretation and execution of this Contract. All disputes arising out of or in connection withthis Contract shall be determined according to the laws of the PRC. In the event the laws of thePRC do not make provision for a certain issue relating to this Contract, reference shall be madeto the general international business practice.**Chapter XIII Miscellaneous**
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**Article 24 Waiver**The non-exercise or delay in the exercise of an entitlement stipulated in this Contract by anyParty to this Contract shall not be regarded as a waiver of the said entitlement. Any singleexercise or partial exercise of an entitlement shall not rule out any future re-exercise of thesaid entitlement.**Article 25 Transfer**Unless otherwise described and prescribed in this Contract, without the prior written consentsfrom the other Party or the written approvals from the Examination and Approval Authority asrequired by laws, none of the Parties to this Contract shall transfer or assign that Party’sentitlement or obligations as stipulated in this Contract.**Article 26 Amendment** 26.1 This Contract has been executed for the benefit of both Parties to this Contractand their respective lawful successor(s) and assignees, and shall have legal bindingeffect on them.  26.2 This Contract may not be amended verbally. Only both of the written document signedby both Parties indicating their consent to such amendment and the written approval ofthe Examination and Approval Authority, shall any amendment to this Contract becomeeffective.**Article 27 Severability**The invalidity of any term in this Contract shall not affect the validity of the other terms inthis Contract.**Article 28 Language**This Contract shall be executed in both Chinese Language and English Language. In case of anyinconsistency between the Chinese Language and the English Language, the Chinese Language shallprevail.
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**Article 29 Validity of the Contract and Appendices** 29.1 This Contract, being executed by both Parties, shall become effective on theapproval date by the Examination and Approval Authority. The Chinese text of thisContract shall be signed in five (5) sets of original. Each Party shall each hold one (1)set of original, and one (1) set of original shall be sent to the Examination andApproval Authority and other governmental authorities as required. The remainingoriginals shall be filed and kept by the Company.  29.2 The English text of this Contract shall be signed in five (5) sets of original andone (1) set of original each shall be sent to the Examination and Approval Authority andany governmental authorities as required. The remaining originals shall be filed and keptby the Company.  29.3 The Appendices to this Contract shall form an integral part of this Contract, andshall have the same effect as this Contract.**Article 30 Notification** 30.1 Unless otherwise specified and prescribed, any Party issuing any notification orwritten communication to the other Party according to the provisions of this Contractshall have them written in the Chinese and English Language and shall send them as aletter by a courier service company or by facsimile. Letters sent by a courier servicecompany will require a confirmation to be given seven (7) Working Days after handing overthe notification or communication to the courier service company. Any notification orwritten communication sent in accordance with the stipulations of this Contract shall bedeemed to be effective on the date of receipt. If they are sent by facsimile, the dateof receipt shall be deemed to be three (3) Working Days after transmission, subject to afacsimile confirmation report evidencing this.  30.2 All notifications and communications shall be sent to the following addresses,until such time when the other Party issues a written notice of any change to itsaddress:
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       ***Transferee’s Address***:  25B, New Poly Plaza, No.1 Chaoyangmen North St., Dongcheng District, Beijing  *Telephone Number*: 010-6492 8483  *Facsimile Number*: 010-6496 1540  *Addressee:* Jin Lei       ***The Transferor’s Address***:   8th Floor, Minnan Plaza, Hubin South Road, Xiamen City  *Telephone Number*: 0592-5831088  *Facsimile Number*: 0592-5831299  *Addressee*: Mao Chengwen**Article 31 The Entire Agreement**This Contract constitutes the entire agreement of both Parties to this Contract pertaining to thetransaction agreed upon in this Contract, and shall replace all the previous discussions,negotiations and agreements between both Parties to this Contract in respect of the transaction ofthis Contract.*(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)*
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IN WITNESS WHEREOF, the duly authorised representatives of Party A and Party B have signed thisContract on the date first above written.   ***Party A***: **Fujian Huabang Hydroelectric Investment Co., Ltd.**  (Stamp)   *Authorized Representative (Signature)*: /s/ James Li                                                              /s/ Gan Wu    ***Party B***: **Yunnan Minhe Hydroelectric Investment Co., Ltd.**  (Stamp)   *Authorized Representative (Signature)*: /s/ Zhang Zimin 
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**Appendix I Conditions Precedent****Conditions Precedent**The Transferor hereby confirms and warrants that it shall, on its own expenses, complete allof the following conditions precedent: (1) To enter into the extension agreement on the Power Purchase and Sale Contract onOutbound Transmission to Provincial Grid Output (purchaser’s contract number: Yun Dian NuYing Gou Shou Dian He Tong [2009] No.26/Power Wheeling Party Contract number: YH2009011)with Yunnan Grid Corporation Nujiang Power Supply Bureau and Yunnan Nujiang Power GridCo., Ltd. and to enter into the extension agreement on the Power Purchase and SaleContract (contract number 2009004); or procure the confirmation letter respectivelyissued by Yunnan Grid Corporation Nujiang Power Supply Bureau and Yunnan Nujiang PowerGrid Co., Ltd., confirming the Power Purchase and Sale Contract on Outbound Transmissionto Provincial Grid Output (purchaser’s contract number: Yun Dian Nu Ying Gou Shou Dian HeTong [2009] No.26/Power Wheeling Party Contract number: YH2009011) is still valid andthey will continue to perform such contract and to obtain the confirmation letter issuedby Yunnan Nujiang Power Grid Co., Ltd., confirming that the Power Purchase and SaleContract (contract number 2009004) is still valid and it will continue to perform suchcontract;  (2) To deliver the list of all documents, vouchers and other materials of the Companyto the Transferee, including, without limitation, the financial vouchers, accountingbooks, approvals, certificates, permits, customers information, all contracts andagreements signed by the Company, employees materials, *etc*.;
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 (3) To provide the preliminary design report of the Hydroelectric Project and relevantapprovals;  (4) To provide the original of the insurance policy for the property comprehensiveinsurance, which is still within the valid term and taken out by the Company for thewhole assets of the Latudihe Hydropower Station, and the payment vouchers for theinsurance premium; both Parties confirm that the insurance premium prior to the DeliveryCompletion Date shall be assumed by the Transferor and the insurance after the DeliveryCompletion Date shall be assumed by the Transferee; and  (5) To provide the overall completion acceptance report and relevant approvals.
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