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**CONTENTS**       **CHAPTER I** **DEFINITIONS**  **7**        Article 1 Definitions   7        **CHAPTER II** **SALE EQUITY STAKE**  **9**        Article 2 Sale Equity Stake   9 Article 3 Transfer Price for the Sale Equity Stake  10 Article 4 Conditions Precedent for the Payment of the Transfer Price  11 Article 5 Payment  13 Article 6 Taxes Payable under the Transfer of the Sale Equity Stake  18        **CHAPTER III** **REPRESENTATIONS AND WARRANTIES BY ALL PARTIES**  **18**        Article 7 Representations and Warranties by All Parties  18        **CHAPTER IV** **DISCLOSURES, REPRESENTATIONS AND WARRANTIES BY TRANSFERORS**  **19**        Article 8 Disclosures, Representations and Warranties by Transferors  19 Article 9 General Representations and Warranties by Transferors  20 Article 10 Ownership  21 Article 11 The Company and the Hydroelectric Project  23        **CHAPTER V** **DISCLOSURES, REPRESENTATIONS AND WARRANTIES BY TRANSFEREE**  **33**        Article 12 Disclosures, Representations and Warranties by Transferee  33        **CHAPTER VI** **DELIVERY**  **34**        Article 13 Delivery  34        **CHAPTER VII** **DEBT ARRANGEMENT AND EMPLOYEES RELOCATION**  **38**        Article 14 Debts Arrangement  38 Article 15 Relocation of Employees  38        **CHAPTER VIII** **CONFIDENTIALITY**  **39**        Article 16 Confidentiality  39        **CHAPTER IX** **BREACH OF CONTRACT**  **40**        Article 17 Liability for Breach of a Representation or Warranty  40 Article 18 Liability for Breach of Contract  41        **CHAPTER X** ***FORCE MAJEURE***  **42**        Article 19 Force Majeure  42        **CHAPTER XI** **RESOLUTION OF DISPUTES**  **43**        Article 20 Arbitration  43 Article 21 Validity of the Arbitration Award  44 Article 22 Continuation of Rights and Obligations  44        **CHAPTER XII** **APPLICABLE LAW**  **44**        Article 23 Applicable Law  44        **CHAPTER XIII** **MISCELLANEOUS**  **44** 
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       Article 24 Waiver  44 Article 25 Transfer  45 Article 26 Amendment  45 Article 27 Severability  45 Article 28 Language  45 Article 29 Validity of the Text and Appendices  46 Article 30 Notification  46 Article 31 The Entire Agreement  47        **APPENDIX I** **CONDITIONS PRECEDENT**  **50**        **APPENDIX II** **DEBTS OF THE COMPANY**  **52**        **APPENDIX III** **EXISTING SECURITIES OF THE COMPANY**  **53**        **APPENDIX IV** **LIST OF REAL ESTATE AND MOVABLE ASSETS ( AS OF THE DATE OF MARCH 30, 2010)**  **54** 
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**SHARE TRANSFER CONTRACT**This Share Transfer Contract (hereinafter referred to as “**this Contract**”) is executed by thefollowing Parties in Beijing, China.(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: Mao Ding Gou,**a PRC citizen with the ID card number of 330326195701127514, whosedomicile is at No,122, Liunan Street, Aojiang Town, Pingyang County, ZhejiangProvince**;** **(3)** **Party C: Xu Xuan Bo**, a PRC citizen with the ID card number of 330326196309287518,whose domicile is at Room 341, Unit 3 of Building 1, Yahe Road, Kunyang Town, PingyangCounty, Zhejiang Province**;** **(4)** **Party D, Xu Xian Xiong,**a PRC citizen with the ID card number of330326196202147515, whose domicile is at No, 12, Erzhong East Road, LingxiTown, Cangnan County, Zhejiang Province**;** **(5)** **Party E, Zhang Jing Sheng**, a PRC citizen with the ID card number of53011219600103255X, whose domicile is at Team 2 of Tou Village, LongqingVillage Committee, Shalang Bai Ethnic Township, Wuhua District, Kunming City, YunnanProvince**;** **(6)** **Party F, Lin Rong,**a PRC citizen with the ID card number of 33032619601105181X,whose domicile is at Room 241, Building Y2, Yahe West Road, Kunyang Town, PingyangCounty, Zhejiang Province**;** **(7)** **Party G, Xu Jing Qing,**a PRC citizen with the ID card number of330326196207257713, whose domicile is at No.128, Xin’aozhong Road,
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  Aojiang Town, Pingyang County, Zhejiang Province**;** **(8)** **Party H, Mao Xin Run,**a PRC citizen with the ID card number of 33032619590712751X,whose domicile is at Shunyang Village, Wuyang Township, Pingyang County, ZhejiangProvince; **(9)** **Party I: Wang Shu Yi,**a PRC citizen with the ID card number of 530112197711031329,whose domicile is at No.619, Team 2 of Dapuji Village, Puji Agency of Wuhua District,Kunming City, Yunnan Province.Party B, Party C, Party D, Party E, Party F, Party G, Party H and Party I are hereinaftercollectively referred to as the “**Transferors**”. The Transferors and the Transferee are hereinaftercollectively referred to as “**all Parties**” as well as each of the Transferors and the Transferee ishereinafter referred to as “**Party**”.**WHEREAS**:(1) Luquan Xiaopengzu Hydropower Generation Co., Ltd. (hereinafter referred to as the “**Company**”)is a company incorporated in China for the purpose of hydropower generation investment,operation and management with the registered capital of RMB100,000,000, the registrationnumber of which is 530128000000331; (2) Party B owns twenty-one point one eight percent (21.18%) of the equity stake of the Company,and can exercise all of his full rights as a shareholder; (3) Party C owns eighteen point six one one percent (18.611%) of the equity stake of the Company,and can exercise all of his full rights as a shareholder; (4) Party D owns sixteen point two seven five percent (16.275%) of the equity stake of theCompany, and can exercise all of his full rights as a shareholder; (5) Party E owns fourteen percent (14%) of the equity stake of the Company, and can exercise allof his full rights as a shareholder;
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(6) Party F owns ten point zero zero nine percent (10.009%) of the equity stake of the Company,and can exercise all of his full rights as a shareholder; (7) Party G owns eight point four seven seven percent (8.477%) of the equity stake of theCompany, and can exercise all of his full rights as a shareholder; (8) Party H owns six point two four eight percent (6.248%) of the equity stake of the Company,and can exercise all of his full rights as a shareholder; (9) Party I owns five point two percent (5.2%) of the equity stake of the Company, and canexercise all of his full rights as a shareholder; (10) Subject to the terms and conditions set out in this Contract, Party B is willing to transfertwenty one point one eight percent (21.18%) of the equity stake of the Company held by him,Party C is willing to transfer eighteen point six one one percent (18.611%) of the equitystake of the Company held by him, Party D is willing to transfer sixteen point two seven fivepercent (16.275%) of the equity stake of the Company held by him, Party E is willing totransfer fourteen percent (14%) of the equity stake of the Company held by him, Party F iswilling to transfer ten point zero zero nine percent (10.009%) of the equity stake of theCompany held by him, Party G is willing to transfer eight point four seven seven percent(8.477%) of the equity stake of the Company held by him, Party H is willing to transfer sixpoint two four eight percent (6.248%) of the equity stake of the Company held by him, andParty I is willing to transfer five point two percent (5.2%) of the equity stake of theCompany held by him to the Transferee, all of which represent one hundred percent (100%) ofthe equity stake of the Company (hereinafter referred to as the “**Sale Equity Stake**”); (11) The Transferee is willing to acquire one hundred percent (100%) of the equity stake of theCompany from the Transferors subject to the terms and conditions set out in this Contract.
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     For this purpose, after friendly consultations, on the principles of equality and mutualbenefit, all 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 and stipulated, the following terms used in this Contract shall havethe meanings set forth as follows:**The “Company”**refers to Luquan Xiaopengzu Hydropower Generation Co., Ltd., a limited liabilitycompany registered and established in accordance with the laws of PRC, with its registrationnumber being 530128000000331, registered capital (paid-up capital) being RMB100,000,000 andregistered address at Xiaopengzu Village, Xinglong Village Committee, Cuihua Township, LuquanCounty.**The “Hydroelectric Project”**refers to the Xiaopengzu Hydroelectric Project with the totalinstalled capacity of 44 MW which is legally owned and operated by the Company.**“New Articles of Association”**refers to the new Articles of Association of Luquan XiaopengzuHydropower Generation Co., Ltd. after the completion of the share transfer contemplated in thisContract, which has been approved by the Examination and Approval Authority.**“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.
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**“Signing Date”**refers to the date on which this Share Transfer 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 havingthe authority to examine and approve this Contract, the New Articles of Association of the Companyand to grant approval for the transfer of the Sale Equity Stake contemplated in this Contractpursuant to the provisions for the examination and approval of projects which have investments byforeign investors in the PRC.**“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;  (3) any change (or any development that, insofar as can reasonably be foreseen,is likely to result in any change) that may cause loss to the
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   financial conditions,business, assets or liabilities of the Company in the amount of more than RMB50,000.**“RMB” or “Renminbi”**refers to the legal currency of the PRC.**“US Dollar” or “US$”**refers to the legal currency of the United States of America.**“Transferors’ Bank Accounts**” refers to, for the purpose of this Contract, the bank accounts openedseparately by Party B, Party C, Party D, Party E, Party F, Party G, Party H and Party I undertheir respective names 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**Pursuant to the terms and conditions stipulated in this Contract, the Transferors agree totransfer to the Transferee and the Transferee agrees to accept from the Transferors the SaleEquity Stake being one hundred percent (100%) of the equitystake of the Company with all the rights and obligations of and attaching to the Sale EquityStake for transfer including, without limiting the generality thereof, all the rights toreceive dividends and to receive or subscribe for shares (if any) declared, paid or issued bythe Company and free of any Claims or Encumbrances.
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**Article 3 Transfer Price for the Sale Equity Stake** 3.1 The Transferors and the Transferee after consultations have finally determined thatthe price for the Sale Equity Stake shall be agreed at RMB240,000,000 (hereinafterreferred to as the “**Transfer Price**”). Specifically, the amount respectively payable tothe Transferors shall be as follows:    Party B: RMB50,832,000;    Party C: RMB44,666,400;    Party D: RMB39,060,000;    Party E: RMB33,600,000;    Party F: RMB24,021,600;    Party G: RMB20,344,800;    Party H: RMB14,995,200;    Party I: RMB12,480,000.  3.2 The Transfer Price shall be paid in two (2) instalments: (1) The first instalment of the Transfer Price, namely, RMB204,000,000,shall be paid within ten (10) Working Days after the Transferors have completedall conditions precedent stipulated in Article 4.2 hereof.  (2) The balance of the Transfer Price, namely, RMB36,000,000, shall bepaid within ten (10) Working Days after the Transferors have completed allconditions precedent stipulated in Article 4.3 hereof.
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 3.3 The Transferee shall pay the Transfer Price in equivalent US Dollars to theTransferors.**Article 4 Conditions Precedent for the Payment of the Transfer Price** 4.1 The Transferee agrees to pay RMB2,000,000 to the Transferors on the Signing Date asthe deposit, which shall be automatically set off against part of the first instalment ofthe Transfer Price when the Transferee pays the first instalment. The Transferors herebyirrevocably undertake and warrant that, prior to the payment of the first instalment ofthe Transfer Price by the Transferee, no matter how the power tariff or policy changes,the Transferors shall transfer the Sale Equity Stake in accordance with this Contract,otherwise, the Transferors shall refund twice of the deposit to the Transferee; inaddition, during that period, the Transferors and its agents or representatives shall notsolicit any other offer regarding the Sale Equity Stake and/or the Hydroelectric Project,neither shall the Transferors discuss or negotiate the transfer of the Sale Equity Stakeand/or Hydroelectric Project or the increase of the registered capital of the Company orparticipate in any such discussions or negotiations with any Third Party, otherwise, theTransferors shall refund twice of the deposit to the Transferee. The Transferee alsowarrants that it will acquire the Sale Equity Stake in accordance with this Contract,otherwise, the deposit will be retained by the Transferors.  4.2 Under this Contract, the conditions precedent for the payment of the firstinstalment of the Transfer Price in the amount of RMB204,000,000 by the Transferee areset out as follows: (1) The Transferors have 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;
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 (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;  (5) The competent foreign exchange administration authority has approvedthe transfer of the first instalment of the Transfer Price from the capitalaccount of the Transferee to the Transferors’ Bank Accounts; and  (6) From the Signing Date to the First Payment Date (as defined inArticle 5.1), there has been no Material Adverse Change to the Company. 4.3 Under this Contract, the conditions precedent for the payment of the balance of theTransfer Price by Transferee are set out as follows: (1) The delivery stipulated in Chapter VI of this Contract has been fullycompleted and the Transferee has issued the written confirmation letter to theTransferors confirming that the delivery has been fully completed;  (2) The Guarantee Fund in the amount of RMB12,000,000 which shall be paidby Transferors in accordance with Article 5.5 hereof has arrived at the bankaccount designated by Transferee;  (3) The competent foreign exchange administration authority has approvedthe transfer of the balance of the Transfer Price from the capital account of theTransferee to the Transferors’ Bank Accounts; and  (4) During the period from the First Payment Date to the Second PaymentDate (as defined in Article 5.2), there has been no Material Adverse Change to theCompany.
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 4.4 In the event that any of the conditions set out in the aforesaid Article 4.2 and/orArticle 4.3 has not been fulfilled or satisfied, and the Transferee has not indicated itswaiver of the said conditions or any one of them in writing, the Transferee shall not beobliged to pay the Transfer Price to the Transferors which shall not be deemed as breachof contract.  4.5 The Transferee shall be mainly responsible for the application for the approval ofthis Contract by the Examination and Approval Authority and the Transferors shall providefull cooperation, including but not limited to provision or execution of relevantdocuments. The Transferors and the Transferee shall make all 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 business license, the certificate of approval forestablishment of foreign invested enterprises and the approvals issued by the competentforeign exchange administration authority for the remittance of the Transfer Price.  4.6 Upon the expiration of ninety (90) Working Days commencing from the Signing Date,in the event that the conditions precedent set out in Article 4.2 hereof except for theconditions precedent in Item (1) of Article 4.2, have not been fully satisfied, thisContract shall not be binding on all Parties and the Transferors shall immediately refundthe deposit to the Transferee without compensation.**Article 5 Payment** 5.1 The First Payment Date shall be within ten (10) Working Days after all conditionsprecedent set out in Article 4.2 hereof have been completed. The Transferee shall, on theFirst Payment Date, remit the first instalment of the Transfer Price in the amount ofRMB204,000,000 to the Transferors’ Bank Accounts. The deposit (in the amount ofRMB2,000,000) paid by the Transferee shall be set off here. Therefore, on the FirstPayment Date, the
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   actual amount remitted by the Transferee to the Transferors’ BankAccounts shall be RMB202,000,000.    The Second Payment Date shall be within ten (10) Working Days after all conditionsprecedent set out in Article 4.3 hereof have been completed. The Transferee shall, on theSecond Payment Date, remit the balance of the Transfer Price in the amount ofRMB36,000,000 to the Transferors’ Bank Accounts.  5.2 The Transferors shall, within five (5) Working Days after the satisfaction of theconditions precedent to the payment, provide the Transferee in written form with thedetailed information in relation to the Transferors’ Bank Accounts, otherwise, in theevent that the Transferee cannot pay or cannot pay as scheduled the Transfer Price due tothe Transferors’ failure to provide the detailed information of the Transferors’ BankAccounts in a timely fashion, or due to the reason of the opening banks of theTransferors’ Bank Accounts, the Transferee shall not assume any liability arisingtherefrom.  5.3 The Transferors shall issue to the Transferee the legal documents evidencing thereceipt of the Transfer Price within five (5) Working Days after receiving eachinstalment of the Transfer Price paid by the Transferee. In the event that theTransferors fail to issue the said documents to the Transferee within the prescribed timelimit, the Transferee shall be entitled to correspondingly delay its payment of thefollowing payable instalment of the Transfer Price, which shall not be deemed as breachof contract. In the event that the said legal documents issued by the Transferors are notin compliance with the PRC lawsand regulations which cause the Transferee and/or the Company to suffer from any damageor loss, the Transferors shall assume joint liability for the compensation on theTransferee and/or the Company.  5.4 All Parties hereby confirm that, during the period from the First Payment Date tothe Second Payment Date (exclusive), the revenues of electricity fees of the Companyshall be divided between the Transferors and the Transferee in proportion to the actualpayment of the Transfer Price; and from the Second
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   Payment Date (inclusive), all theprofit of the Company shall be enjoyed by the Transferee.  5.5 The Transferors shall remit RMB12,000,000 to the bank account designated by theTransferee within five (5) Working Days from the arrival date of the first instalment ofthe Transfer Price paid by the Transferee at the Transferors’ Bank Accounts, which shallbe served as the guarantee fund for the performance of all the obligations of theTransferors under this Contract. The guarantee duration shall commence from the arrivaldate of such guarantee fund at the bank account designated by the Transferee andterminate when all obligations provided in Article 5.6 hereof have been fulfilled by theTransferors. Upon the expiration of the Guarantee Duration, the Transferee shall remitthe balance of the guarantee fund (if any) without any interest to the bank accountdesignated by Transferors. In the event that the Transferors fail to remit the fullamount of the guarantee fund to the bank account designated by the Transferee asscheduled, the Transferee shall be entitled to refuse to pay for the following payableinstalment of the Transfer Price, which shall not be deemed as breach of contract.  5.6 Under this Contract, within ten (10) Working Days as the Transferors complete theacceptances in relation to fire-prevention, water and soil preservation facilities, andenvironment protection, the Transferee shall refund half of the Guarantee Fund, namely,RMB 6,000,000 to the bank account designated by Transferors. When the Transferorscomplete the following obligations, the Transferee shall refund the balance of theguarantee fund (ifany) to the bank account designated by Transferors within ten (10) Working Days afterall such obligations have been fully fulfilled: (1) During the guarantee duration, the Hydroelectric Project does not haveany quality problem and the Transferors do not have any behaviours or situationsviolating any provisions of this Contract;  (2) The Transferors shall, on their own expenses, procure the replies(filings) for the project proposal, environmental impact valuation document, land
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   requisition, wood cutting, completion acceptance of environmental protectionfacilities and water and soil preservation facilities for the project of 110 kvtransmission line of the Hydroelectric Project and deliver the originals of suchreplies (filings) to the Transferee;  (3) The Transferors shall, on their own expenses, procure the replies inconnection with the completion acceptance of environmental protection facilities,completion acceptance of water and soil preservation facilities, fire-preventionacceptance, record and filing acceptance and other stage acceptances and specialacceptances of the Hydroelectric Project and deliver the originals of such repliesto the Transferee;  (4) The Transferors shall, on their own expenses, complete the overallcompletion acceptance of the Hydroelectric Project (including the completionacceptance of the 110 kv transmission line project of the Hydroelectric Project) inaccordance with relevant laws and regulations, procure the overall completionacceptance testimonial/approval and deliver the originals of such acceptancetestimonial/approval to the Transferee;  (5) The Transferors shall, on their own expenses, procure the Power BusinessPermit (Power Generation) registered under the name of the Company in accordancewith relevant laws and regulations, and deliver the original of the Power BusinessPermit (Power Generation) to the Transferee;  (6) The Transferors shall, on their own expenses, prompt the execution of theGrid Connection and Dispatching Agreement and Power Purchase and Sale Contractbetween the Company and Yunnan Grid Corporation, which shall provide the installedcapacity of the Hydroelectric Project as 44 MW, and conduct relevant filingprocedures for such Grid Connection and Dispatching Agreement and Power Purchase andSale Contract with the competent power regulatory authority and deliver theoriginals of such newly executed Grid Connection and Dispatching Agreement and PowerPurchase and Sale Contract to the Transferee; in addition, the Transferors
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   shall warrant that the tariff approved of the Hydroelectric Project is RMB0.194/kwh duringwet season, RMB0.219/kwh during normal season, and RMB0.244/kwh during dry season.  (7) The Transferors shall, on their own expenses, complete the safetyregistration and safety appraisal of reservoir dam of the Hydroelectric Project inaccordance with relevant PRC laws and regulations and deliver the originals of suchsafety registration certificate of reservoir dam and safety appraisal report ofreservoir dam to the Transferee;  (8) The Transferors shall, on their own expenses, complete the tax clearanceof the Company in accordance with law before April 30, 2010 and deliver relevantsupporting documents for such full payment of relevant taxes in accordance withrelevant laws;  (9) The Transferors shall procure the Social Insurance RegistrationCertificate under the name of the Company and deliver the original of SocialInsurance Registration Certificate to the Transferee; and  (10) The Transferors shall procure the Building Ownership Certificate for themanagement building of the Hydroelectric Project under the name of the Company anddeliver the original of the Building Ownership Certificate to the Transferee.   The Transferors hereby jointly and severally confirm and warrant that, in the event thatthe Transferee and/ or the Company incurs any fees or expenses or suffers from any lossor damage due to any of the above-mentioned issues, the Transferee is entitled todirectly deduct the corresponding amount from the guarantee fund, which shall not berequired to be refunded to the Transferors; in addition, such compensation shall notprejudice any other rights of the Transferee and/or the Company to claim for damagesagainst the Transferors in accordance with other provisions hereof and the laws andregulations of the PRC.
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 5.7 The obligations of the Transferee shall be deemed as having been fully accomplishedupon the remittance of the Transfer Price to the Transferors’ Bank Accounts; however, theTransferee shall continue to cooperate with the Transferors to complete variousobligations provided in Article 5.6 hereof.**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 Transferors 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 All Parties****Article 7 Representations and Warranties by All Parties** 7.1 Prior to the signing of this Contract, if the signing party is a company, suchcompany shall provide a power of attorney which authorizes its representative to signthis Contract; if the signing party is an individual, such individual shall provide aphotograph of his/her identification card together with the original of theidentification card being shown. In case of proxy, power of attorney thereof and a copyof the identification card of the principal shall be delivered.  7.2 At the time of signing this Contract, the Transferors and the Transferee herebystate that the documents and information provided to the Party (ies) or their agencies(including, without limitation, the lawyers, valuers, financial advisers, *et*c.) prior tothe Signing Date are still valid and authentic and confirm that, should discrepanciesarise between the latter and the terms of this Contract, this Contract shall prevail.  7.3 The Transferors and the Transferee hereby agree that the contracts or documentspertaining to the transfer of Sale Equity Stake entered into among
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   all Parties prior tothis Contract shall lapse automatically upon this Contract coming into effect.  7.4 All 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.**Chapter IV  Disclosures, Representations and Warranties by Transferors****Article 8 Disclosures, Representations and Warranties by Transferors**The Transferors hereby jointly and severally represent and warrant to the Transferee that: 8.1 All information and facts relating to the Company that is in the possession of theTransferors or is known to any of the Transferors which will have a substantive effect onthe Transferors’ abilities to fulfil any of their 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 Transferors 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 Transferors that will materiallyaffect their abilities to sign this Contract or fulfil their obligations under thisContract.  8.3 Up to the Signing Date, the Transferors have 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 Transferors have procured the written consent from the Third Party.
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 8.4 The Transferors hereby undertake that none of them will take any action after theSigning Date that will cause any adverse impact on the Company/Hydroelectric Project.  8.5 Regarding the documents and information provided by Transferors to the Transfereeand/or the Transferee’s agencies (including, without limitation, the lawyers, valuers,financial advisers, *etc*.) prior to the Signing Date, the Transferors hereby undertakethat: 8.5.1 all copies made from original documents are true and complete andthat such original documents are authentic and complete;  8.5.2 all documents supplied to the Transferee and/or the Transferee’sagencies as originals are authentic and complete;  8.5.3 all signatures (stamps) appearing on documents supplied to theTransferee and/or Transferee’s agencies as originals or copies of originals aregenuine; and  8.5.4 The Transferors have 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 Prior to the Delivery Completion Date, at any moment upon the request byTransferee, the Transferors shall, on their own expenses, carry out and/or conduct in away which is satisfactory to the Transferee, or to impel the Third Party to carry outand/or conduct in a way which is satisfactory to the Transferee, any action and/ordocument which the Transferee reasonably deems requisite, in order to realize the fulleffectiveness and implementation of this Contract.**Article 9 General Representations and Warranties by Transferors**
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 9.1 Party B and Party C are legal entities that have been duly established according tothe laws and regulations of China and they are validly and legally in existence and alsooperating normally in accordance with the laws and regulations of China. Signing thisContract and fulfilling all of their obligations stipulated herein by Party B and Party Cshall not contravene or result in the violation of or constitute a failure to fulfil oran inability to fulfil any of the stipulations in any laws, regulations, stipulations,any authorization or approval from any government body or department or the stipulationsof any contract or agreement that Party B or Party C is a party to or is bound by.  9.2 Party D is a PRC citizen with all civil abilities to enter into this Contract andfulfil all of his obligations stipulated herein. Signing this Contract and fulfillingall of his obligations stipulated herein by Party D shall not contravene or result in theviolation of or constitute a failure to fulfil or an inability to fulfil any of thestipulations in any laws, regulations, stipulations, any authorization or approval fromany government body or department or the stipulations of any contract or agreement thatParty D is a party to or is bound.**Article 10 Ownership** 10.1 The Transferors jointly and severally undertake and warrant that: the Transferorsare the legal owners of the Sale Equity Stake and have fullauthority and right to transfer the Sale Equity Stake to the Transferee and the SaleEquity Stake does not involve any state-owned assets and interests. In case that theTransferee and/or Company suffer from any loss or damage due to the involvement of anystate-owned assets and interests in the Sale Equity Stake, the Transferors shall assumethe joint liability and compensate the Transferee and/or the Company in full.  10.2 The Transferors jointly and severally undertake and warrant that: up to the FirstPayment Date (inclusive), the Sale Equity Stake is not subject to any Claims orEncumbrances (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 isno interest present and no agreement or undertaking
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   in existence that may result in orcreate any Claim or Encumbrance on the Sale Equity Stake (including but not limited tothe aforesaid option, acquisition right, mortgage, pledge, guarantee, lien or any otherform of third party rights and interest).  10.3 The Transferors jointly and severally undertake and warrant that: all obligationsas the shareholders of the Company which shall be assumed by the Transferors for thebenefit of the Company and the Third Party have been fully fulfilled by the Transferors.Any Third Party or any level of the governmental authorities of the PRC shall not, due tothe Transferors’ failure to fulfil their due obligations as the shareholders of theCompany, claim for rights against the Company or the Transferee or adopt administrativeacts which are unfavourable to the Company or the Transferee, including but not limitedto imposing fine, revoking the business license, requiring to make supplemental paymentfor the taxes or compelling to stop production, *etc*.  10.4 The Transferors jointly and severally undertake and warrant that: no lawsuits,arbitrations, or other legal or administrative proceedings or governmental investigationsare on-going against any party of the Transferors that will materially affect theTransferors’ abilities to sign this Contract or fulfil the Transferors’ obligations underthis Contract.  10.5 The Transferors jointly and severally undertake and warrant to provide all relevantmaterials which should be provided by the Transferors and are requisite for procuring thewritten approvals to this Contract, New Articles of Association, the transfer of the SaleEquity Stake stipulated in this Contract from the Examination and Approval Authority,certificate of approval for establishment of foreign invested enterprises, and businesslicense of foreign invested enterprises of the Company, and conducting the alterationregistration of the Sale Equity Stake under the name of the Transferee with the competentadministration of industry and commerce, including but not limited to the tax clearancecertificate issued by the competent taxation authority.
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**Article 11 The Company and the Hydroelectric Project**The Transferors hereby jointly and severally represent and warrant 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. TheTransferors have completed their full obligations to contribute, and have procured validverifications for their contributions according to PRC laws. There is no withdrawal ofthe registered capital by the Transferors.  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 and permits of relevantgovernmental authorities, in no violation ofPRC laws and regulations and approvals and permits of relevant governmental authorities,without any condition that leads to or may leads to the revocation or withdrawing ofsuch approvals and permits. In the event that Transferee and/or the Company suffer fromany damage or loss arising out of any violation and /or revocation and/or withdrawing,the Transferors shall be jointly liable for the full compensation on the Transfereeand/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, dam safety andhydropower generating units, *etc*., is complied with the requirements of power generationunder normal situations and is free from any defect or any other problem provided of theloss due to normal operation and usage. In the event that Transferee and/or the Companysuffer from any
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   damage or loss arising out of any defect or any other problem whichalready existed before the Delivery Completion Date, the Transferors shall be jointlyliable for the full compensation on the Transferee and/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, disputes,claims or other proceedings (ongoing, pending or threatened), nor the Company has beenpunished or the Transferors can foresee any punishment to be made by any administrativeauthorities of the PRC for the issues already existed before the transfer of the SaleEquity Stake. Up to the Delivery Completion Date, the Transferors have fully disclosed tothe Transferee all information in respect of environmental protection, water and soilpreservation, flood prevention plan, utilization of land (woodland), wood cutting, powergeneration, relocation, fire-prevention and work safety, *etc*. In addition, theTransferors hereby jointly and severally warrant that all fees (including, withoutlimitation, water resources fees, land requisition and compensation fees, water and soilpreservation facility compensation fees, *etc*.), charges, penalties and expenses payableto or being required to pay to any PRC governmental authority have been paid in full,and, as of the Second Payment Date, there is no arrears of such fees, charges, penaltiesand expenses, nor is there any arrears of costs and/or expenses being required byany PRC governmental authority to be paid for any purpose of correcting defects and/orinappropriate actions of the Company. In the event that the Transferee and/or theCompany suffer from any penalty, damage, loss, *etc*. due to any such administrativeinvestigations, prosecutions, disputes, claims, penalties and/or other proceedings whichexisted before the Second Payment Date, the Transferors shall assume joint liabilitiesand fully compensate the Transferee and/or the Company.  11.7 The Company legally owns all requisite real estate (including but not limited toland, buildings, dams, water supply system, electricity power transmission lines,structures and subsidiary facilities) and moveable assets (including but not limited tomachineries, equipments, vehicles, furniture and office supplies), and suchreal estateand movable assets shall be not less than those
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   real estate and movable assets listed outin Appendix IV to this Contract. The Company does not provide any other security(including but not limited to mortgage, pledge and lien) or other restrictions on thereal estate and movable assets, except for those listed out in Appendix III to thisContract. Up to the Delivery Completion Date, all material aspects of the buildings,dams, machineries and equipments, vehicles and other assets owned by the Company are ingood, secure and operational conditions, which are anticipated not to need to be repaired(excluding the daily requisite repairs), replaced or supplemented within twelve (12)months after the Signing Date due to the issues before the Delivery Completion Date. TheTransferors warrant and undertake that commencing from the Signing Date to the DeliveryCompletion Date, the above real estate and movable assets will not suffer from any lossor damage resulting from the actions of the Transferors or any Third Party. In case ofany loss or damage suffered by the real estate and movable assets due to the abovementioned causes, the Transferors shall assume the joint liability and compensateTransferee and/or the Company in full.  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 construction of water resource project, invitation and submission of bids,utilization of woodland, wood cutting, fire-prevention, work safety and relocation. TheTransferors warrant that the environmental protection authorities, water resourceauthorities, power regulatory authorities, construction authorities, forestryauthorities, fire-prevention authorities, planning authorities, safe productionauthorities, development and reform authorities and other governmental authorities willnot punish the Company for the problems of environmental protection, water and soilpreservation, water fetching, flood prevention planning, design and construction ofwater resources projects, invitation and submission of bids, power generation,utilization of woodland, wood cutting, fire-prevention, work safety and relocation, *etc*.which already existed before the Delivery Completion Date. In the event that the Companysuffers from any loss or damage due to the
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   punishment by local government, environmentalprotection authority, water resources authority, electricity regulatory authority,forest authority, construction authority, fire-prevention authority, planning authority,work safety authority, development and reform authorities or other governmentalauthorities, the Transferors shall fully compensate the Transferee and/or the Company soas to hold the Transferee and/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 Transferors have already disclosed allinformation of the debts of the Company. As of the First Payment Date, that informationis still complete, liable, accurate and true. As of the Signing Date, all debts of theCompany have been indicated in Appendix II to this Contract and as of the First Paymentdate, all due principal and interests of the debts set out in Appendix II hereto havebeen fully paid off. The Transferors shall assume joint liabilities for any undiscloseddebts of the Company and any unpaid due principal and interests so as to hold theTransferee and/or the Company harmless.  11.11 The Company can legally own the land use right and building ownership for all theland and buildings currently occupied and used by the Company, and could not be involvedin any legal action, arbitration, penalty or suffer from any other damage or loss due tothe land and/or building issues. In the event that the Transferee and/the Company sufferfrom any penalty, damage or loss, *etc*. due to the use of land or building, theTransferors shall assume the joint liability to compensate Transferee and/or the Companyin full.  11.12 The procurement of the state-owned land use right (obtained through allocation)for the land currently occupied and used by the Company with the State-owned Land UseRight Certificates (the serial numbers of which are: Lu Guo Yong [2008] No.189, Lu GuoYong [2008] No.190 and Fu Guo Yong [2008] No.180) has been fully in compliance with theregulations of PRC laws
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   and regulations, and relevant fees and taxes have been fully paidoff in accordance with law. In the event that the Transferee and/or the Company sufferfrom any penalty, damage or loss, *etc*. due to such land, the Transferors shall assume thejoint liability to compensate the Transferee and/or the Company in full.  11.13 The procurement of the building ownership for the building currently occupied andused by the Company with the Building Ownership Certificate (the number of which is LuQuan Xian Fang Quan Zheng Lu Quan Zi No.20092201) has been in full compliance with theprovisions of PRC laws and regulations, and relevant fees and taxes have been fully paidoff in accordance with laws. In the event the Transferee and/or the Company suffer fromany penalty, damage or loss, *etc*. due to the procurement of such building ownership, theTransferors shall assume the joint liability to compensate Transferee and/or the Companyin full.  11.14 As of the First Payment Date, the Hydroelectric Project legally occupies and usesthe land with the area of 68.2404 hectare, among which, state-owned land use rightcertificates for 46.1004 hectares land have been obtained by the Company throughallocation and the other 22.14 hectare land is river course; in addition, the usage ofsuch 22.14 hectare river course by the Company iscomplied with the regulations of relevant PRC laws and regulations and relevant fees andtaxes have been fully paid off without any violation of laws. The competent governmentalauthorities will not impose any fine or any administrative penalties in other forms orrequire any making up of any fees to the Transferee and/or the Company for theoccupation and using of such river course by the Company. In the event that theTransferee and/or the Company suffer from any penalty, damage or loss, *etc*. due to suchland occupation and usage, the Transferors shall assume the joint liability tocompensate the Transferee and/or the Company in full.  11.15 The mortgage created on the state-owned land use right of 46.1004 hectare occupiedby the Company, which has been obtained through allocation, has been approved by thecompetent state-owned land administration authorities,
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   and the Company has completedrelevant mortgage registration procedures for such state-owned land use right mortgageand paid off relevant fees. Such state-owned land use right mortgage has been in fullcompliance with relevant PRC laws and regulations without any violation, and thecompetent state-owned land administration authorities will not require any other fees forsuch mortgaged allocated state-owned land from the Transferee and/or the Company, neitherwill impose any fine or other administrative penalties on the Transferee and/or theCompany. In the event the Transferee and/or the Company suffer from any penalty, damageor loss, *etc*. due to such state-owned land use right mortgage, the Transferors shallassume the joint liability to compensate Transferee and/or the Company in full.  11.16 The leased agricultural land with an area of 61.045 mu (which are located atXiaopengzu Village, Houjing Village and Shibajing Village of Luquan County CuihuaTownship, Xinglong Village ) by the Company in accordance with relevant land leasecontracts has been approved by the competent state-owned land administration authorities,and the Company has paid off relevant fees for such land lease. Such lease of theagricultural land of 61.045 mu has been in full compliance with relevant PRC laws andregulations without any violation, and the competent state-owned land administrationauthorities may not impose any fine or other administrative penalties on Transfereeand/or the Company.In the event the Transferee and/or the Company suffer from any penalty, damage or loss,*etc*. due to such land lease, the Transferors shall assume the joint liability tocompensate Transferee and/or the Company in full. The land lease agreements entered intobetween the Company and relevant lessors (eight villagers including Yang Tian Rong ofShibajing Village of Luquan County Cuihua Township, Xinglong Village) will continue tobe performed. Prior to the delivery of the management and operation of the HydroelectricProject to the Transferee, the Transferors shall pay relevant rental and fees inaccordance with the lease contract entered into with Yang Tian Rong and provide relevantpayment vouchers. After the delivery of management and operation of the HydroelectricProject to the Transferee, the Transferee shall pay the rental and fees in accordancewith the lease contract entered into with Yang Tian Rong.
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 11.17 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 Transferors shall assume the jointliability to compensate the Transferee and/or the Company in full  11.18 After the Signing Date, the Transferors shall normally operate and manage theCompany and warrant that there will not be any Material Adverse Change of the operation,business and conditions of the Company.  11.19 As of the Second Payment Date, the Company does not have any equity investment orother investment in any other companies, enterprises, and other economic organizations,*etc*. In the event that the Company suffers from any damage or loss due to suchundisclosed equity investment or otherinvestments, the Transferors shall assume joint liabilities and fully compensate theTransferee and/or the Company.  11.20 As of the Second Payment Date, other than those securities set out in Appendix IIIto this Contract, the Company’s assets and rights are free from any other security(including but not limited to mortgage, pledge and lien) or any other restrictions,neither has the Company provided any security (including but not limited to mortgage,pledge and guarantee, *etc*.) for any other companies, enterprises, economic entities orany individuals. In the event that the Company suffers from any damage or loss due tosuch undisclosed securities, the Transferors shall assume joint liabilities and fullycompensate the Transferee and/or the Company
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 11.21 The Company has completed relevant taxation registration effectively and obtainedvalid taxation registration certificates, and conducted relevant taxation declaration inaccordance with PRC laws, with all contents declared being real and complete. As of theSecond Payment Date, the Company has fully paid up all taxes required by the PRC laws andregulations, including but not limited to enterprise income tax, value-added tax, urbanconstruction tax and educational surcharges. The Transferors shall assume jointliabilities for any unpaid tax and fine to the Transferee and/or the Company so as tohold the Transferee and/or the Company harmless.  11.22 All construction projects (whether finished or under construction) of the Companyhave obtained all requisite governmental approvals and permits and are strictly compliedwith and without any violation of the approvals and permits issued by relevantgovernmental authorities. In the event that the Company is punished or suffers from anydamage or loss after the completion of the transfer of the Sale Equity Stake by anygovernmental authority because of any above issue, the Transferors shall assume jointliabilities and fully compensate the Company and/or the Transferee.  11.23 The effectiveness of this Contract will not cause any Third Party to terminate thecontracts or agreements which are concluded with the Company prior tothe effective date (inclusive) of this Contract which are still effective on theeffective date of this Contract, and will not create any security or restriction in anyother form favourable to the Third Party on the assets and/or rights of the Company.  11.24 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).
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 11.25 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, procurement, projectsupervisor, purchase, sales of certified emission reductions, grid connection anddispatching agreement, power purchase and sale contracts and relevant supplementalagreements, *etc*. ) concluded by the Company prior to the Signing Date of this Contract(inclusive) have been preserved by the Company in complete form and there have been noviolations thereof, and as far as the Transferors know, there does not exist anycondition which may lead to the violation by the Company. In case of such circumstances,the Transferors have disclosed to the Transferee in written form.  11.26 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, theTransferors shall assume joint liabilities and fully compensate the Company and/orTransferee.  11.27 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 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 Second Payment Date, the Company is free from any problem which may lead theemployees to initiate labour arbitrations or lawsuits against the Company. In the eventthat the Company and/or Transferee suffer from any punishment, loss or damage due to theaforesaid reasons, the Transferors shall be jointly liable for the full compensation onthe Transferee and/or the Company.
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 11.28 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 that the Company and/or the Transferee suffer from any loss or damage due tothe aforesaid reasons, the Transferors shall be jointly liable for the full compensationon Transferee and/or the Company.  11.29 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 byElectric Power Development Co., Ltd. due to the Company’s termination and/or failure toperform the Certified Emission Reductions Purchase and Sale Agreement entered intobetween the Company and Electric Power Development Co., Ltd. on November 28, 2008. In theevent that the Company and/or Transferee suffer from any loss or damage due to theaforesaid reason, the Transferors shall be jointly liable for the full compensation toTransferee and/or the Company.  11.30 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 mature insurance premiumshave been paid up, and all the other key conditions have been fully fulfilled andcomplied with. As of the Second Payment Date, there are no conditions which have lead ormay lead the aforesaid insurance policies to be invalid. The aforesaid insurance policiesare free from restrictions from any special or unusual articles. As of the Second PaymentDate, there are no situations in which the Company may claim for compensations from theinsurer according to the aforesaid insurance policies.
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 11.31 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, and truly and precisely reflectall transactions relating to the Company and show the financial, contractual and otherbusiness conditions of the Company during every financial term.**Chapter V  Disclosures, Representations and Warranties by Transferee****Article 12 Disclosures, Representations and Warranties by Transferee**The Transferee hereby represents and warrants to the Transferors that: 12.1 The Transferee is a legal entity that has been duly established, validly andlegally in existence and also operated normally in accordance with the laws andregulations 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, orany authorizations or approvals from any government body or department or any contractor 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 shall pay the Transfer Price in accordance with this Contract. Inthe event that the Transferee fails to perform its obligations in time which
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   has causedeconomic losses to the Transferors, the Transferee shall assume correspondingcompensation liability.  12.5 After the Delivery Completion Date, in the event that the machines and otherfacilities of the Hydroelectric Project are severely damaged or lost due to the wrongoperation by the Transferee which consequently make the Transferors unable to fulfilvarious obligations provided in Article 5.6 hereof, then the Transferee shall refund thebalance of the guarantee fund (if any) to the Transferors within ten (10) days after suchevent is investigated and confirmed.**Chapter VI  Delivery****Article 13 Delivery** 13.1 After the Signing Date, Transferors and Transferee shall immediately organize aDelivery Team to actively carry out the delivery of the Company and the HydroelectricProject, including but not limited to the delivery of the production and operationmanagement, finance, assets, files and records, certificates, approvals, seals and theconstruction projects to the Transferee.  13.2 During the term from the Signing Date to the Delivery Completion Date: (1) The Transferors shall continue to operate the Company in general andusual way; the Transferors shall not (or shall not agree to) require the Companyto make any payment to any Third Party, however, excluding the payment which needsto be made for the general operation purpose and the determined expenditureprogramme (in the event that such payment exceeds RMB50,000, it shall be subjectto the prior written consent of the Transferee); the Transferors shall notterminate any agreements or arrangements which have significant value to theCompany, or give up any rights which have significant value;
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 (2) In the event that the Company intends to enter into any contract,agreement or memorandum, *etc*., of which the price, value, liability or debt(including contingent debt) exceeds the amount of RMB 50,000, the prior writtenconsent from the Transferee must be procured;  (3) Without the prior written consent of the Transferee, the Transferorsshall not make any material amendments to the financing, loan or securityarrangements of the Company;  (4) The Transferors 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 in the name of the Company;  (5) The Transferors 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;  (6) The Transferors shall not release or write off any debt owed by thedebtor specified in the accounting books of the Company;  (7) The Transferors 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 Transferors tobe false, inaccurate, unrealizable or misleading, the Transferors shall inform theTransferee in written form within twenty-four (24) hours and provide reasonableand detailed information and explanation; and
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 (9) The Transferors and/or the Company will not take any actions whichmay violate the provisions of this Contract or may influence the fulfilment of theobligations hereunder or the transfer of the Sale Equity Stake contemplatedherein. 13.3 Transferors shall warrant making a full and complete delivery and the Company’smovable assets and real estate delivered to Transferee shall not be decreased or damagedcomparing with those listed in Appendix IV to this Contract. Otherwise, the Transferorsshall compensate Transferee and/or the Company in full.  13.4 The delivery includes but not limited to: (1) The production, operation and management of the Company;  (2) The Company’s seals, such as the official seal, financial sealand contract seal, *etc*. shall be delivered to the Transferee;  (3) The originals of the accounts opening documents and seals forall the bank accounts of the Company;  (4) The Transferors and Transferee shall check and verify all theassets (including but not limited to the real estate and movable assets) of theCompany in accordance with the real estate and movable assets list of AppendixIV, make a list of the Company’s assets, and finish the delivery which shall beconfirmed by Transferors and Transferee and signed on site; during the checkingand verifying of the assets, the Transferors shall compensate for the damagedassets by reference to the assessed value;  (5) Originals of all the approvals, certificates, permits, customerinformation and other materials of the Company shall be delivered to theTransferee, which shall include all the materials set out in
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   materials listdelivered to and confirmed by Transferee provided by Appendix I;  (6) Originals of all the project drawings, agreements (includingbut not limited to grid connection and dispatching agreement, power sale andpurchase contract, project contract, equipment contract, installation contract,project supervisor contract, materials contract, loan contract and mortgagecontract) and other files shall be delivered to Transferee;  (7) Originals of all the financial accounting books, financialvouchers and the fiscal files shall be delivered to the Transferee;  (8) The Transferors 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  (9) The delivery of other materials and files of the Company. 13.5 The delivery shall be completed within five (5) Working Days after the FirstPayment Date, the completion of which shall be confirmed in writing byTransferee. The Delivery Completion Date shall be the issuance date of the writtenconfirmation by Transferee.  13.6 After the completion of the delivery, as for the reasonable request of furtherdelivery by Transferee in writing, the Transferors shall cooperate actively.  13.7 The Transferors shall make sure the continuity, stability and safety of theproduction and operation of the Company during the process of the delivery.  13.8 The Transferors shall fully cooperate so as to complete the delivery. In the eventthat the Transferee or the Company after the transfer of the Sale Equity Stake suffersfrom any damage due to the Transferors’ non-cooperation, the
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   Transferors shall be jointlyliable for the compensation in accordance with law.**Chapter VII  Debt Arrangement and Employees Relocation****Article 14 Debts Arrangement** 14.1 All Parties confirm that as of the First Payment Date, the debts of the Companyshall be in the total amount of RMB150,000,000, and the Company will continue toundertake such loans after the completion of the transfer of the Sale Equity Stake.  14.2 After the completion of the transfer of the Sale Equity Stake, except for thedebts listed out in Article 14.1 above, the Transferee shall not assume any otherliabilities to the other debts of the Company before the First Payment Date. In the eventthat the Company and/or the Transferee suffer from any damage or loss due to such debts,the Transferors shall assume the joint liability to compensate the Company and/orTransferee in full.**Article 15 Relocation of Employees** 15.1 Upon the completion of the transfer of the Sale Equity Stake, the Transfereeshall be entitled to choose to employ excellent employees from the current employees ofthe Company. The terms and conditions of their employment shall be determined byreference to the standards applied in the other domestic project companies currentlyowned by the Transferee in principle and implemented in accordance with *the Labour Law ofthe PRC*, *the Labour Contract Law of the PRC*and its implementation regulations and otherrelevant PRC laws and regulations. The Company shall execute new labor contracts with theemployees and the Transferors shall be responsible for the relocation of those employeeswho are fired or not re-employed by the Company.
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 15.2 The Transferors undertake and warrant that they will properly relocate theemployees who are fired or not re-employed by the Company and shall ensure that suchemployees will not make any trouble against the Company, nor will apply for arbitration,bring lawsuit or any other administrative or judicial proceedings against the Company.The Transferors shall make sure that the Company will not be punished by any competentgovernmental authority or incur any other adverse effect due to the relocation of theaforesaid employees.  15.3 The Transferors undertake and warrant that all compensation, indemnity, costsand any other expenses in connection with the relocation of the employees of the Companyshall be assumed by the Transferors themselves. In the event that the Company and/or theTransferee suffer from any damage or loss due to the employee relocation issues of theCompany, the Transferors shall be jointly liable for the full compensation on the Companyand/or the Transferee.**Chapter VIII Confidentiality****Article 16 Confidentiality** 16.1 Unless otherwise provided in other confidentiality agreements, with regard to theconfidential and exclusive information that have been disclosed to or may be disclosed tothe other Parties by any Party to this Contract pertaining to their respectivebusinesses, or financial situations and other confidential matters, all Parties to thisContract which have received the aforesaid confidential information (including writteninformation and non-written information, hereinafter referred to as “**ConfidentialInformation**”) 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
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        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 the 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;  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 Contractbecause of the transfer of its rights and obligations pursuant to the terms of thisContract, the stipulations set out in this Chapter VIII 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 exists any omission, or if any fact, representation or warranty that has oris likely to have a major or substantial effect on the signing of this Contract by anyParty is found to be misleading or untrue in any respect, the non-breaching Party shallbe entitled to require the Party (ies) in breach for full compensation for any loss,damage, cost or expense arising from the
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   erroneous, misleading or untrue representationor warranty of the Party (ies) in breach or arising from any other breach of anyrepresentation and warranty given by the Party (ies) in breach.  17.2 Each representation and warranty set out in this Contract is to be construedindependently.  17.3 For the avoidance of doubt, the Transferors hereby unconditionally and irrevocablyagree and confirm that they shall be jointly liable for any liability for any breach ofrepresentation or warranty.**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 (ies) for breach of contract inaccordance with the provisions of this Contract and the laws and regulations of PRC. Inthe event all Parties commit the breach of contract, one Party shallassume the liability to compensate the loss or damage or other obligations as a resultof its respective breach of contract to the other Parties respectively.  18.2 In the event that the undisclosed issues by Transferors 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 transfer of the Sale Equity Stake, the Transferee isentitled to the termination of this Contract and to require Transferors to fully pay backthe Transfer Price which has already paid by Transferee and three percent (3%) of theTransfer Price as liquidated damages; in addition, the Transferee is entitled to resortto other applicable claims in accordance with the PRC laws.  18.3 Any violation of the obligations, representations and warranties under thisContract by any Party of the Transferors or Transferee shall constitute a breach ofcontract, and the defaulting Party (ies) shall assume the liability to compensate all thelosses due to the breach of contract to the other Party.
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 18.4 Any delayed performance of the obligations or provisions under this Contract by anyParty of the Transferors or Transferee shall constitute a breach of contract; however,the delayed performance or non-performance due to the other Party’s advance performanceobligation 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 (ies); in the event that the defaulting Party delays toperform the Contract over thirty (30) Business Days, the non-defaulting Party(ies) is entitled to terminate the Contract, and to require the defaulting Partyto pay one percent (1%) of the Transfer Price as liquidated damages. Theprocurement of the liquidated damages shall not prejudice the right of thenon-defaulting Party (ies) to claim for other legal remedies in accordance withother provisions of this Contract and the PRC laws and regulations.  18.5 For the avoidance of doubt, Transferors hereby unconditionally and irrevocablyagree and confirm that they shall be jointly liable for any liability for any breach ofthis Contract committed by any of Transferors.**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 other events that are deemed to be *Force Majeure*occurrences under the provisions of the relevant laws and regulations of PRC.
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 19.2 In the event of the occurrence of a *Force Majeure*event, the obligations of theParty to this Contract affected by this *Force Majeure*event and any term or period setout in this Contract to which the affected Party is subject shall cease during the periodof the *Force Majeure*event and shall automatically be extended, the period of extensionshall be the same as the period of cessation of the obligations by reason of the *ForceMajeure*event, and the said Party shall not assume any breach liabilities hereunder.  19.3 The Party claiming the occurrence of a *Force Majeure*event shall promptly informthe other Party (ies) in writing, and within seven (7) days thereafter, it shall providesufficient evidence of the occurrence and the continuity of the *Force Majeure*eventissued by the notary organization. The Party claiming the occurrence of a *Force Majeure*event shall also do its best to eliminate the adverse effect 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 shall firstly beresolved through friendly consultation by all Parties. In the event that thirty (30)days after the commencement of the friendly consultations, the dispute cannot be resolvedthrough such means, either Party may submit the dispute to the China InternationalEconomic and Trade Arbitration Commission in Beijing for arbitration in accordance withits prevailing valid arbitration rules. The place for arbitration shall be Beijing.  20.2 The arbitration tribunal shall be constituted by three (3) arbitrators and thearbitrators shall have a good knowledge of both English and Chinese Languages.
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**Article 21 Validity of the Arbitration Award**The arbitration award shall be final and shall be binding on all Parties to this Contract. AllParties 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, allParties to this Contract shall continue to exercise their other respective rights stipulated inthis Contract, and shall also continue to fulfil their other respective obligations stipulated inthis 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 under this Contract shall bedetermined according to the laws of the PRC. In the event the laws of the PRC do not makeprovision for a certain issue relating to this Contract, reference shall be made to generalinternational business practice.**Chapter XIII Miscellaneous****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.
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**Article 25 Transfer**Unless otherwise described and prescribed in this Contract, without the prior written consentsfrom the other Parties 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 in part or total as stipulated in this Contract.**Article 26 Amendment** 26.1 This Contract has been executed for the benefit of all Parties to this Contract andtheir respective lawful successor(s) and assignees, and shall have legal binding effecton them.  26.2 This Contract may not be amended verbally. Only both of the written document signedby all Parties indicating their consent to such amendment and the written approval of theExamination 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 is written in both the Chinese Language and the 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 Text and Appendices** 29.1 This Contract, being executed by all Parties, shall become effective on theapproval date by the Examination and Approval Authority. The Chinese text of thisContract shall be signed in ten (10) sets of original. Each Party shall each hold one (1)set of original, and one (1) set of original each shall be sent to the Examination andApproval Authority, the competent administration for industry and commerce and any othergovernmental authorities as required. The remaining originals shall be filed and kept bythe Company.  29.2 The English text of this Contract shall be signed in eight (8) sets of original andone (1) set of original each shall be sent to the Examination and Approval Authority, thecompetent administration for industry and commerce and any other governmental authoritiesas required. The remaining originals shall be filed and kept by 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 in this Contract, any Party issuing anynotification or written communication to the other Party (ies) according to theprovisions of this Contract shall have them written in the Chinese and English Languageand shall send them as a letter by a courier service company or by facsimile. Letterssent by a courier service company will require a confirmation to be given seven (7)Working Days after handing over the notification or communication to the courier servicecompany. Any notification or written communication sent in accordance with thestipulations of this Contract shall be deemed to be effective on the date of receipt. Ifthey are sent by facsimile, the date of receipt shall be deemed to be three (3) WorkingDays after transmission, subject to a facsimile confirmation report evidencing this.
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 30.2 All notifications and communications shall be sent to the following addresses,until such time when the other Party (ies) issues a written notice of any change to itsaddress:   ***Transferee’s Address***: 25B, New Poly Plaza, No.1 Chaoyangmen North St., DongchengDistrict, Beijing*Telephone Number*: 010-6492 8483 *Facsimile Number*: 010-6496 1540 *Addressee:* Jin Lei   ***The Address jointly appointed by Transferors***: Xiaopengzu Hydroelectric Company, Dongcun Township PostOffice, Fumin County, Yunnan Province*Telephone Number*: 13008652111 *Facsimile Number*: 0871-8863500 *Addressee*: Mao Ding Gou**Article 31 The Entire Agreement**This Contract constitutes the entire agreement of all Parties to this Contract pertaining to thetransaction agreed upon in this Contract, and shall replace all the previous discussions,negotiations and agreements among all Parties to this Contract in respect of the transaction ofthis Contract.*(REMAINDER OF PAGE INTENTIALLY LEFT BLANK)*
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IN WITNESS WHEREOF, the duly authorised representatives of Party A, Party B and Party C havesigned this Contract with Party D on the date first above written.***Party A***: **Fujian Huabang Hydroelectric Investment Co., Ltd.**