EX-10.14






Exhibit 10.14




CHINA HYDROELECTRIC CORPORATION




- and -




SANMING RUIFENG HYDROPOWER

INVESTMENT CO., LTD.




 






Agreement

relating to

the sale and purchase of the equity of




Sunpower Asia Limited




 






July, 2008




 









 





Table of Content




	 	 	 	 	 	 	 
	Chapter 1

	 	Interpretation
	 	 	1	 
	 
	 	 	 	 	 	 
	Chapter 2

	 	Sale and Purchase of the Target Equity
	 	 	3	 
	 
	 	 	 	 	 	 
	Chapter 3

	 	Equity Transfer Price and Conditions Precedent
	 	 	3	 
	 
	 	 	 	 	 	 
	Chapter 4

	 	Completion
	 	 	5	 
	 
	 	 	 	 	 	 
	Chapter 5

	 	Assumption of the Target Company’s Liabilities
	 	 	6	 
	 
	 	 	 	 	 	 
	Chapter 6

	 	Warranties
	 	 	7	 
	 
	 	 	 	 	 	 
	Chapter 7

	 	Performance and Rescind
	 	 	8	 
	 
	 	 	 	 	 	 
	Chapter 8

	 	Purchaser’s Representations and Warranties
	 	 	9	 
	 
	 	 	 	 	 	 
	Chapter 9

	 	Confidentiality
	 	 	9	 
	 
	 	 	 	 	 	 
	Chapter 10

	 	Liability for Default
	 	 	10	 
	 
	 	 	 	 	 	 
	Chapter 11

	 	Settlement of Disputes
	 	 	11	 
	 
	 	 	 	 	 	 
	Chapter 12

	 	Governing Law
	 	 	11	 
	 
	 	 	 	 	 	 
	Chapter 13

	 	Others
	 	 	12	 






 









 




This Equity Sales and Purchase Agreement (the “Agreement”) is made on [ ] 2008 in
Beijing, China by and between:





	(1)	 	China Hydroelectric Corporation, a company incorporated under the laws of the Cayman Islands
and whose legal address is at 558 Lime Rock Road, Lime Rock, Connecticut 06039, and its
authorized representative is John D. Kuhns (“Purchaser”); and
	 
	(2)	 	Sanming Ruifeng Hydropower Investment Co., Ltd., a limited company
incorporated in China and whose registered address is at Block 160, Qian Long Xin Cun, Xin Shi
North Road, Sanming City, Fujian Province, PRC (“Vendor”),




The Purchaser and the Vendor are hereinafter collectively referred to as the “Parties”, each a
“Party”.



Whereas:





	1.	 	Sunpower Asia Limited (hereinafter referred to as the “Target Company”) is a company
incorporated under the laws of Hong Kong, whose legal address is at 5th Floor, Jardine House,
1 Connaught Place, Central, Hong Kong. Further information relating to the Target Company
is set out in Schedule 1. The Target Company is the legal owner of 25% equity in Sanming
Zhongyin Banzhu Hydroelectric Co., Ltd. (hereinafter referred to as “Banzhu”). The Vendor
is the sole legal and beneficial owner of the Target Company. All of the issued shares in the
Target Company are currently held in trust by Lin Shenfang and Tao Minxuan.
	 
	2.	 	On [      ] 2008, the Purchaser executed an Equity Transfer Agreement with Sanming
Ruifeng Hydropower Investment Co., Ltd. and Yong’an Ruifeng Hydroelectric Ltd.,
whereby the Purchaser agreed to acquire the equity shares held by Sanming Ruifeng
Hydropower Investment Co., Ltd. and Yong’an Ruifeng Hydroelectric Ltd.
respectively.
	 
	3.	 	Pursuant and subject to the terms of this Agreement, the Purchase intends to acquire the 100%
equity shares of the Target Company held by the Vendor so as to attain its objective of
indirect equity share holding in Banzhu. This Agreement is executed by the Parties
pursuant to the principle of mutual benefits following friendly consultations and
for mutual observance.





Chapter 1 Interpretation




	 	 	 
	Article 1

	 	Interpretation
	 
	 	 
	 

	 	In this Agreement the following words and expressions will have the following
meanings:







	 	1.1	 	“Equity Transfer Contract” means the “Equity Transfer
Contract Relating to the Transfer of Equity in Sanming Zhongyin Banzhu
Hydroelectric Co., Ltd.” dated [ ] 2008
executed  by the
Purchaser, Sanming Ruifeng Hydropower Investment Co., Ltd. and Yong’an
Ruifeng Hydroelectric Ltd..
	 
	 	1.2	 	“Claims” means all claims however arising.
	 
	 	1.3	 	“Encumbrance” means a mortgage, charge, pledge, lien, option,




 









 






	 	 	 	restriction, equity, right to acquire, right of pre-emption, third party
right or interest, other encumbrance or security interest of any kind or
any other type of preferential arrangement (including, without
limitation, a title transfer and retention arrangement) having similar
effect;
	 
	 	1.4	 	“PRC” means the People’s Republic of China, excluding, for
the purpose of the Agreement, Hong Kong and Macau Special
Administrative Regions and Taiwan;
	 
	 	1.5	 	“Hong Kong” means the Hong Kong Special Administrative
Region of the People’s Republic of China;
	 
	 	1.6	 	“Target Equity” means all the issued common shares of the
Target Company.
	 
	 	1.7	 	“Completion” has the meaning ascribed thereto under Article 17.
	 
	 	1.8	 	“Completion Date” has the meaning ascribed thereto under
Article 1.8 of the Equity Transfer Contract.
	 
	 	1.9	 	“Pre-Completion Liabilities” means all and any liabilities,
contingent liabilities, taxation, legal liabilities or other liabilities
(including Shareholders’ Loans) arising from or incurred in respect of the
Target Company and/or any business of the target Company existing at
Completion or any transaction conducted by the Target Company (including
without limitation any contractual liabilities assumed) and/or any assets
held or used by the Target Company on or before the Completion Date.
	 
	 	1.10	 	“Warranties” means the representations and warranties made
by the Vendor under Chapter 6 of this Agreement and Schedule 3.
	 
	 	1.11	 	“Target Group” means the Target Company and its
subsidiaries, including Banzhu.
	 
	 	1.12	 	“Disclosed” means fully, fairly and specifically disclosed
to the Purchasers in the Disclosure Letter, with sufficient clarity and
detail to enable the Purchaser to identify clearly and accurately the nature,
scope and effect of the matter disclosed;
	 
	 	1.13	 	“Disclosure Letter” means the letter of even date with this
Agreement issued by the Vendor to the Purchaser, which is initialed by the
Purchaser, relating to the Warranties together with any documents annexed to
it.
	 
	 	1.14	 	“Accounting Statements” means the audited and consolidated
profit and loss accounts, balance sheet, Notes and consolidated cash flow
accounts (if applicable) as at the Account Base Date relating to the Target
Company and prepared in accordance with Hong Kong’s principles of accounting.




 









 






	 	1.15	 	“Account Base Date” means 31 December, 2007.
	 
	 	1.16	 	“Management Statements” means the unaudited consolidated
balance sheet[s] and profit and loss account[s] of the Target Company as at
and for 1 January 2008 to 30 June 2008 prepared in accordance with Hong
Kong’s principles of accounting, as set out in Schedule 5 of this Agreement.
	 
	 	1.17	 	“Employee” means any director, ex-director, employee or ex-employee of the respective members of the Target Group.
	 
	 	1.18	 	“Business Day” means a day other than a Saturday or Sunday on which
commercial banks are open for business in Hong Kong.
	 
	 	1.19	 	“Member of the Target Group” means any member within the Target
Group.
	 
	 	1.20	 	“Taxation” or “Tax” means any forms of tax and impost, levy or duty
of any nature imposed in Hong Kong, PRC or any part of the world and
includes any levy in respect of pre-reorganization.
	 
	 	1.21	 	“Tax Authority” means the tax authority or agency in Hong Kong, PRC
or any other place having the power or authority or other ability to
collect taxes.
	 
	 	1.22	 	“Deposit” has the meaning ascribed thereto under Article 13.
	 
	 	1.23	 	“Purchaser’s Solicitor in Hong Kong” means DLA Piper Hong Kong of
40th Floor, Bank of China Building, 1 Garden Road, Central, Hong Kong.





	 	 	 
	 
	Chapter 2 Sale and Purchase of the Target Equity
	 
	 	 
	Article 2

	 	Pursuant to the agreement hereunder and subject to the terms and conditions
of this Agreement, the Vendor agrees to sell and the Purchase agrees to assume
the transfer of the Target Equity free from all Encumbrances and subject to the
Purchaser’s warranty of its full beneficial ownership of the Target Equity in
accordance with the terms and conditions of this Agreement.
	 
	 	 
	Article 3

	 	The Vendor hereby waives any right of first refusal or other rights of transfer
restriction in respect of the transfer of all or part of the Target Equity
whether derived from the provisions of any contract or law; at the same time, the
Vendor agrees to procure, before Completion, the irrevocable waiver of any such
rights by any third party who acquired such rights (if any).
	 
	 	 
	Article 4

	 	After Completion, the Vendor shall hold 100% of the equity of the Target
Company.
	 
	 	 
	 
	Chapter 3 Equity Transfer Price and Conditions Precedent
	 
	 	 
	Article 5

	 	The price for the transfer of equity in this sale and purchase of equity will be
the USD equivalent of RMB62,500,000 (“Equity Transfer Price”).
	 
	 	 
	Article 6

	 	Completion is conditional on the fulfillment of the following conditions in all
aspects or waived in accordance with the provisions of this Agreement (“Conditions Precedent”):







 









 






	 	6.1	 	the Purchaser being reasonably satisfied with all aspects
of the business operation, financial status and the result of legal due
diligence relating to the Target Group;
	 
	 	6.2	 	All Warranties are true, accurate and not misleading as if
such Warranties were repeated on Completion Date and during the period from
the date of execution of this Agreement to the Completion Date;
	 
	 	6.3	 	the Vendor has perform or complied with all
covenants and obligations required by this Agreement to be performed by it
prior to the Completion Date;
	 
	 	6.4	 	all the shareholders’ loans of the Target Company were
repaid in full or duly revoked; and
	 
	 	6.5	 	submission of the accounting statements to the Purchaser.





	 	 	 
	Article 7

	 	The Vendor will provide to the Purchase all materials and information in its
possession or under its control which is necessary for the satisfaction of any of
the Conditions Precedents and the Vendor undertakes that the Purchaser, its
employees, professional advisers and agents must be given all reasonable access
to the books, accounting records and other records of the Target Group for such
purpose.
	 
	 	 
	Article 8

	 	The Vendor undertakes to the Purchaser that it will use all endeavors to
procure that the Conditions Precedents will be fulfilled within 30 days after the
execution of this Agreement;
	 
	 	 
	Article 9

	 	The Purchaser may waive any of the Conditions Precedents by notice in
writing to the Vendor, without prejudice to the Vendor’s obligations to satisfy,
as soon as possible after Completion, any Conditions Precedent so waived.
	 
	 	 
	Article 10

	 	If any of the Conditions Precedent is not satisfied or waived within 30 days of the date
of execution of this Agreement or such later date as may be agreed in writing by the Parties,
then:







	 	10.1	 	the Purchase will not be obliged to complete the sale and
purchase of the Target Equity under this Agreement and neither of the Parties
will have any further rights or obligations under this Agreement, without
prejudice to the rights and obligations accrued to either Party on the
termination of the Agreement; and
	 
	 	10.2	 	The Vendor shall promptly return the Deposit to the
Purchaser or its designated person in the manner then specified by the
Purchaser.





	 	 	 
	Article 11

	 	To enable the Purchaser to conduct verifications of the Target Group, the
Vendor will, to the Purchaser’s reasonable satisfaction:







	 	11.1	 	provide the Purchaser access to all books and records of
the Target Group; and
	 
	 	11.2	 	the management personnel or any employee of the Target
Company must make themselves available at any time to answer questions




 









 






	 	 	 	raised by the Purchaser or give explanations in relation thereto,
	 
	 	provided that such verifications in respect of the Target Company: (1) is an
investigation set forth in Article 30; and (2) does not relate to establishing
the accuracy or otherwise of the Warranties.





	 	 	 
	Article 12

	 	Within 10 Working Days after the execution of this
Agreement, the Vendor will deliver all documents under Part 1
of Schedule 6 to the Purchaser’s Solicitors, such documents
to be jointly kept in custody and use in accordance with the
provisions of Part 2 of Schedule 6.
	 
	 	 
	Article 13

	 	Payment of the Equity Transfer Price







	 	13.1	 	First Instalment
	 
	 	 	 	The Parties agree unanimously that subject to the performance of the
liabilities under Article 12 by the Vendor, the first installment of the
Equity Transfer Price, that is USD equivalent of RMB35,000,000 payable
hereunder (“First Instalment”) will be paid within 10 Working Days after
the execution of this Agreement to an account designated by the Vendor.
(A USD account at the Bank of China (Hong Kong) Limited under the names
of Mr. Lin Shenfang and Ms. Tao Minxuan, of which account number is
01259592044392; A HKD account at the Bank of China (Hong Kong) Limited
under the names of Mr. Lin Shenfang and Ms. Tao Minxuan, of which account
number is 01259510088752)
	 
	 	13.2	 	The second instalment, that is USD equivalent of RMB
10,000,000 (together with the Initial Deposit hereinafter collectively
referred to as the “Deposit”) will be paid at the same time as the payment of
the payment as agreed under Clause 7.2 of the Equity Transfer Contract. The
details of payment accounts are same as described under clause 13.1.
	 
	 	13.3	 	Subject to the performance by the Vendor of its obligations
under Schedule 2, the USD equivalent of RMB17,500,000 will be paid on the
Completion Date. The details of payment accounts are same as described under
clause 13.1.





	 	 	 
	Article 14

	 	The amount payable under Article 13 shall be calculated in accordance with
the medium price of the foreign exchange rates quoted by the People’s Bank of
China on the date of the payment in question.
	 
	 	 
	Article 15

	 	Each of the Parties shall be responsible respectively for the taxes and fees payable by
it in respect of the income derived from or acts done under this Agreement as required by the
applicable laws.
	 
	 	 
	Article 16

	 	The Vendor shall issue proper and valid receipt voucher to the Purchaser at
the time of the receipt of each payment of the Equity Transfer Price paid by the
Purchaser.
	 
	 	 





Chapter 4 Completion




	 	 	 
	Article 17

	 	The completion of the sale and purchase of the Target Equity hereunder shall
take place (“Completion”) on Completion Date at the premises agreed by the






 









 






	 	 	 
	 

	 	Parties when each of the Parties must comply with the provisions of and perform
its obligations under Schedule 2.
	 
	 	 
	Article 18

	 	The Purchaser will not be obliged to complete the purchase of the Target Equity under
this Agreement unless the Vendor complies fully with its obligations under Schedule 2.
	 
	 	 
	Article 19

	 	If Completion does not take place on the Completion Date because the Vendor fails to
comply with any of its obligations under Schedule 2, the Purchaser may, by notice in writing
to the Vendor, elect to:







	 	19.1	 	proceed to Completion to the extent reasonably practicable;
	 
	 	19.2	 	postpone Completion to a date not more than 30 Business
Days after the Completion Date; or
	 
	 	19.3	 	terminate this Agreement.





	 	 	 
	Article 20

	 	If the Purchaser postpones Completion to another date in accordance with Article 19.2,
the provisions of this Agreement apply as if that other date is the Completion Date.
	 
	 	 
	Article 21

	 	If the Purchaser terminates this Agreement pursuant to Article 19.3:







	 	21.1	 	each Party’s rights and obligations will cease
immediately on termination, but termination of this Agreement will not
affect a Party’s accrued rights and obligations as at the date of
termination; and
	 
	 	21.2	 	the Vendor shall forthwith return the Deposit to the
Purchaser or any other person designated by the Purchaser, in the manner
specified by the Purchaser.





Chapter 5 Assumption of the Target Company’s Liabilities



	 	 	 
	Article 22

	 	The Vendor will be responsible for the discharge of all liabilities of the Target
Company incurred prior to Completion. In respect of Pre-Completion Liabilities not discharged
on Completion Date, the Vendor shall enter into a liabilities transfer agreement with the
Target Company and the relevant debtors which is acceptable by the Purchaser, expressly
agreeing that such liabilities will be assumed by the Vendor.
	 
	 	 
	Article 23

	 	If the Vendor discharged all Pre-Completion Liabilities prior to the Completion Date, it
shall procure that such discharge complies with the fundamental documents of the liabilities
so discharged and that the act of discharge is legal, valid and shall hold the Target Company
free from any demands or claims deriving therefrom.
	 
	 	 
	Article 24

	 	The Vendor hereby irrevocably undertakes to compensate and indemnify the Purchaser
and/the Target Company in full from any loss and/damages incurred and/or suffered by the
Purchaser and/or the Target Company from the Pre-Completion Liabilities.






 









 





Chapter 6 Warranties




	 	 	 
	Article 25

	 	The Vendor warrants and undertakes to the Purchaser that, subject to the information
Disclosed, at the date of this Agreement, each of the statements set
out in Schedule 3 is
true, accurate and complete in all respects and not misleading and will be true and accurate
in all respects and not misleading at all times before Completion up to and including the
Completion Date and, for this purpose, an express or implied reference in a Warranty to the
“date of this Agreement” is to be construed as including a reference to the Completion Date.
	 
	 	 
	Article 26

	 	The Vendor acknowledges that:







	 	26.1	 	the Purchaser is entering into this Agreement in reliance
on each Warranty;
	 
	 	26.2	 	each of the Warranty has been given as a representation and
with the intention of inducing the Purchaser to enter into this Agreement;
and
	 
	 	26.3	 	the Purchaser has been induced to enter into this Agreement
on the basis of and in full reliance upon the Warranties and that the
Purchaser may rely on the Warranties in warranting to any
subsequent purchaser of all or any of the Target Equity.





	 	 	 
	Article 27

	 	Each of the Warranties is to be construed as a separate and independent warranty and
(except where this Agreement provides otherwise) will not be limited or restricted by
reference to or inference from any other term of this Agreement or any other Warranty.
	 
	 	 
	Article 28

	 	The rights and remedies of the Purchaser in respect of any breach of any of the
Warranties will survive Completion.
	 
	 	 
	Article 29

	 	Between the date of execution of this Agreement and Completion, the Vendor agrees that
it will:







	 	29.1	 	procure that neither the Vendor nor the Target Group will
allow or procure any act or omission which would constitute a breach of any
of the Warranties;
	 
	 	29.2	 	procure that the Company complies with the provisions of Schedule 4;
and
	 
	 	29.3	 	immediately disclose in writing to the Purchaser any event
or circumstance which may arise or become known to the Vendor which would be
a breach of Article 29.2 or which constitutes a breach of or is materially
inconsistent with any of the Warranties or which might make any of them
inaccurate or misleading or which has or is likely to have an adverse effect
on the financial position or business prospects of the Target Group or which
is otherwise material to be known by a purchaser for value of the Target
Equity.





	 	 	 
	Article 30

	 	The Vendor and the Target Group shall provide the convenience reasonably requested by
the Purchaser, its employee and authorized representative to enable the Purchaser to verify
the accuracy of the Warranties, such reasonable requests by the Purchaser, its employee and
authorized representative shall






 









 






	 	 	 
	 

	 	not be refused by the Vendor, but the Warranties will not deemed in anyway
modified or discharged by reason of any investigation made by the Purchaser or
its employee or by reason of any information about the Target Company of which
the Purchaser has knowledge (actual or constructive) except that the Warranties
will be qualified by such information Disclosed.
	 
	Article 31

	 	If on or before the Completion Date the Purchaser reasonable considers that
the Vendor is in breach of any of the Warranties or any other provision of this
Agreement, the Purchaser may by notice to the Vendor elect to proceed to
Completion (but without prejudice to the Purchaser’s accrued rights as at the
occurrence of the breach) or terminate this Agreement.
	 
	Article 32

	 	If the Purchaser elects to terminate the Agreement pursuant to Article 31:







	 	32.1	 	the Vendor shall indemnify the Purchaser against all costs
incurred by it relating to the negotiation, preparation, execution or
termination of this Agreement or the satisfaction of any of the Conditions
Precedent;
	 
	 	32.2	 	each Party’s further rights and obligations will cease
immediately on termination, but termination will not affect a Party’s accrued
rights and obligations as at the date of termination; and
	 
	 	32.3	 	the Vendor shall forthwith return the deposit to the
Purchaser or any other person designated by the Purchaser, in the manner
specified by the Purchaser.





	 	 	 
	Article 33

	 	The Vendor agrees to indemnify the Purchaser in full for and against all costs
(including legal costs) and expenses incurred by the Purchaser either before or after the
commencement of any action in connection with:







	 	33.1	 	the settlement of any claim that any of the Warranties has
been breached or is untrue, inaccurate or misleading;
	 
	 	33.2	 	any legal proceedings arising out of or in connection with
any claim for breach of Warranty in which judgment is given in favour of the
Purchaser; or
	 
	 	33.3	 	the enforcement of any such settlement or judgment.





	 	 	 
	Article 34

	 	The rights of the Purchaser under Article 33 will be in addition and without prejudice
to any other right or remedy available to it under this Agreement or otherwise.






Chapter 7 Performance and Rescind




	 	 	 
	Article 35

	 	The Parties shall perform their respective obligations fully and completely as agreed
hereunder.
	 
	 	 
	Article 36

	 	In the case of the existence of any facts or circumstances relating to the Target Group
not disclosed by the Vendor at the date of this Agreement which will have material adverse
effects on the continuing validity and normal operations of the Target Group after the
Completion Date, the Vendor shall have the right to rescind this Agreement without prejudice
to the rights of the Purchaser under the other provisions of this Agreement.






 









 






	 	 	 
	Article 37

	 	Sanming Ruifeng Hydropower Investment Co., Ltd. and Yong’an Ruifeng
Hydroelectric Ltd. jointly or severally failed to fully and validly perform their
obligations under the Equity Transfer Contract causing serious damages to the
Purchaser’s interests, the Purchaser shall have the right to unilaterally rescind
this Agreement without prejudice to the rights of the Purchaser under the other
provisions of this Agreement.
	 
	 	 
	Article 38

	 	If the Purchaser rescinds this Agreement pursuant to Article 36 or Article 37:







	 	38.1	 	each Party’s further rights and obligations will cease
immediately on termination, but such termination will not affect a Party’s
accrued rights and obligations as at the date of termination; and
	 
	 	38.2	 	the Vendor shall forthwith return the Deposit to the
Purchaser or any other person designated by the Purchaser, in the manner
specified by the Purchaser.





Chapter 8 Purchaser’s Representations and Warranties


As a material inducement for the Vendor in entering into this Agreement, the Purchaser represents
and warrants as follows:




	 	 	 
	Article 39

	 	the Purchaser is a corporation incorporated and validly existing and
conducting normal operations under the laws of the Cayman Islands.
	 
	 	 
	Article 40

	 	the Purchaser has full civil rights and capacity to enter into and perform
this Agreement and has obtained the authorization necessary for the execution
and performance of this Agreement.
	 
	 	 
	Article 41

	 	upon coming into force, this Agreement shall be legally binding on the
Purchaser and is enforceable against the Purchaser, subject to the provisions
of laws on insolvency, liquidation, reorganization, extension of performance
and other laws relating to or having effects on the rights and remedies of the
creditors.
	 
	 	 
	Article 42

	 	neither the execution nor the performance of this Agreement by the
Purchaser will (1) result in the breach of any agreements, deeds, undertakings
or other documents to which the Purchaser is a party, (2) violate any law,
statute, regulations, rules or any judgment, injunction or order which will
have material adverse effects on the business, operations, assets or financial
condition of the Purchaser.






Chapter 9 Confidentiality




	 	 	 
	Article 43

	 	In respect of any information obtained or provided under this Agreement, each Party
shall: (1) keep confidential all such information for a period of five years from the date of
execution of this Agreement; (2) not disclose any of such materials or information to any
third party except to its employees or adviser as necessary.
	 
	 	 
	Article 44

	 	The provision of Article 43 is not applicable to materials and information which: (1)
can be shown by the receiving party or proved by the receiving party that it has obtained such
information through other legal means prior to disclosure or provision; (2) were obtained by
the receiving party from a third party having no obligations of confidentiality; (3) were
required to be disclosed by laws and
	 
	 	 





 









 






	 	 	 
	 

	 	regulations; and (4) information which is public
knowledge.






Chapter 10 Liability for Default




	 	 	 
	Article 45

	 	In the event that either Party fails to obtain the corporate authorization for the
execution and performance of this Agreement or such authorization is in conflict with other
agreements, its articles of association, government authorization or approval or any other
reasons attributable to such Party resulting in the invalidity or inability to perform or
perform in full of this Agreement, such event shall constitute a default by such Party. The
Party in default shall be liable for payment of default penalty equivalent to one percent of
the Equity Transfer Price to the non-defaulting Party. If the amount of the default penalty
is insufficient to compensate the non-defaulting for the economic losses suffered by it as a
result of the execution and performance of this Agreement, the defaulting Party shall pay the
amount in shortage to the non-defaulting Party for compensation of its economic losses.
	 
	 	 
	Article 46

	 	If the validity of the existence of the Target Company after Completion is affected as
a result of the omission in the disclosure before Completion of any matter having effects on
the validity of the existence of the Target Company, the Purchaser shall have the right to
rescind this Agreement and the Vendor shall forthwith return all payments received under this
Agreement with interest at the prevailing interest rate for bank loans during the period of
the possession of such payments, together with a default penalty at one percent of the Equity
Transfer Price. If the amount of the default penalty is insufficient to compensate the
non-defaulting for the economic losses suffered by it as a result of the execution and
performance of this Agreement, the defaulting Party shall pay the amount in shortage to the
non-defaulting Party for compensation of its economic losses.
	 
	 	 
	Article 47

	 	In the event of any major adverse effects on the Target Company after Completion as a
result of the failure by the Vendor to disclose any information for which the Vendor is
obliged to disclose and the Vendor fails to promptly eliminate such adverse affect or perform
its liability for indemnification upon request by the Purchaser, the Purchaser shall have the
right to rescind this Agreement and the Vendor shall forthwith return all payments received
under this Agreement with interest at the prevailing interest rate for bank loans during the
period of the possession of such payments, together with default penalty at one percent of
the Equity Transfer Price. If the amount of the default penalty is insufficient to compensate
the non-defaulting for the economic losses suffered by the non-defaulting Party as a result
of the execution and performance of this Agreement, the defaulting Party shall pay the amount
in shortage to the non-defaulting Party for compensation of its economic losses.
	 
	 	 
	Article 48

	 	If the Purchaser fails to make payment of the Equity Transfer Price during the agreed
period of payment, a default penalty at a daily rate of 0.08% on the aggregate amount delayed
shall be payable. If the delay in payment exceeds 30 days, the Vendor shall have the right to
rescind this Agreement.
	 
	 	 
	Article 49

	 	Any breach of the obligations under this Agreement or misrepresentations or statements
or non-performance of warranty liability by either of the Parties shall constitute a default.
If this Agreement could not be performed due to such default, the defaulting Party shall be
liable for payment of default penalty equivalent to one percent of the Equity Transfer Price
to the non-defaulting Party. If the amount of the penalty is insufficient to compensate the






 









 







	 	 	 
	 

	 	non-defaulting for the economic losses suffered by the non-defaulting Party as a
result of the execution and performance of this Agreement, the defaulting Party
shall pay the amount in shortage to the non-defaulting Party for compensation of
its economic losses.
	 
	 	 
	Article 50

	 	If the Purchaser fails to pay the Equity Transfer Price on time, the Vendor shall have
the right to postpone the performance of the obligations in connection therewith while the
Vendor and its affiliated company, Yong’an Ruifeng Hydroelectric Ltd., shall also have the
right to postpone the performance of their obligations under the Equity Transfer Contract
without constituting a default. If this Agreement could not become effective, could not be
performed, is rescinded or is terminated for whatever reasons, the Vendor and Yong’an Ruifeng
Hydroelectric Ltd. shall have the right to rescind the Equity Transfer Contract at the same
time, without being subject to any default by the Purchaser under the Equity Transfer
Contract. The Parties agree that the Vendor shall inform Yong’an Ruifeng Hydroelectric Ltd. of
the provisions of this Article on third party authorization together with a copy of this
Agreement attached.






Chapter 11
Settlement of Disputes




	 	 	 
	Article 51

	 	In the event of any problem or dispute in connection with the interpretation or
performance of this Agreement, the Parties shall endeavor to settle such disputes
through friendly consultations or mediation. Failing solution of the disputes
within ninety days of the dispute arising, either Party may elect to submit the
dispute for arbitration to Hong Kong International Arbitration Centre (“HKIAC”) in
accordance with its arbitration procedures and rules then in force and the
following provisions:







	 	51.1	 	arbitration shall be conducted in Hong Kong;
	 
	 	51.2	 	There shall be three (3) arbitrators in the arbitration
tribunal, of which one (1) will be appointed by the Purchaser, one (1) by the
Vendor and the third (3) arbitrator shall be appointed conclusively by the
HKIAC in accordance with its applicable arbitration rules.
	 
	 	51.3	 	The arbitral award rendered by the HKIAC is final and
binding on the Parties. Each Party agrees to be bound thereby and shall
act accordingly. Each Party may apply for judicial recognition of and
enforcement order for the arbitral award in any court of competent
jurisdiction.
	 
	 	51.4	 	The costs of arbitration shall be borne by the losing
Party, unless otherwise determined by the arbitration award.
	 
	 	51.5	 	Throughout any dispute arbitration, the other parts of this
Agreement shall continue in effect and the Parties shall continue to perform
their other obligations under this Agreement, with the exception of those
parts that are under arbitration between the Parties.





Chapter 12 Governing Law




	 	 	 
	Article 52

	 	Governing Law
	 
	 	 
	 

	 	The formation, validity and interpretation of this Agreement will be governed






 









 






	 	 	 
	 

	 	   by and construed in accordance with the laws of
Hong Kong.






Chapter 13 Others




	 	 	 
	Article 53

	 	Variations
	 
	 	 
	 

	 	No variation of this Agreement will be valid unless it is in writing and signed
by or on behalf of each of the Parties to this Agreement.
	 
	 	 
	Article 54

	 	Severability
	 
	 

	 	The invalidity of any provisions (or any part thereof) of this Agreement will not
affect the continuation in force of the remainder of this Agreement.
	 
	Article 55

	 	This Agreement is executed in Chinese.
	 
	 	 
	Article 56

	 	This Agreement is made in four copies with two copies to be held by each Party to this
Agreement.
	 
	 	 
	Article 57

	 	No waiver by the Purchaser of any breach or non-performance by the Vendor
of any provisions of this Agreement will be deemed to be a waiver of any
subsequent or other breach of that or any other provision and no failure to
exercise or delay in exercising any right or remedy under this Agreement will
constitute a waiver of the relevant provision or provisions of this Agreement. No
single or partial exercise of any right or remedy under this Agreement will
preclude or restrict the further exercise of any such right or remedy. The rights
and remedies of the Purchaser provided in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
	 
	 	 
	Article 58

	 	This Agreement will remain in full force and effect so far as concerns any matter
remaining to be performed at Completion even though Completion will have taken place.
	 
	 	 
	Article 59

	 	Further Assurance and Agency







	 	59.1	 	On and after Completion, the Vendor must, at the request of
the Purchaser, do and execute all such acts, deeds, documents and things as
may be necessary to give full effect to this Agreement and the transactions
hereunder.
	 
	 	59.2	 	If, on Completion, any Target Equity has not been
transferred validly and effectively to and in the name of the Purchaser, the
Vendor shall hold such Target Equity in trust for the Purchaser and shall
comply with any instructions given by the Purchase in relation thereto.





	 	 	 
	Article 60

	 	Announcements
	 
	 	 
	 

	 	No announcement, communication or circular concerning this Agreement or
announcement or publication relating to any information obtained by one Party from
the other during the negotiation or implementation of this Agreement will be made
(whether before or after the Completion Date) by any of the Parties to this
Agreement without the prior approval of the other






 









 






	 	 	 
	 

	 	(such approval not to be unreasonably withheld or delayed) save for:







	 	60.1	 	announcements to its professional adviser or management
personnel or employees who need to know such information required for the
performance of their duties; and
	 
	 	60.2	 	such announcements as may be required by any applicable
laws and regulations, the Listing Rules and/or securities trading rules
and/or any other relevant authorities.





	 	 	 
	Article 61

	 	Costs and Stamp Duty







	 	61.1	 	Unless otherwise provided in this Agreement, each of the
Parties will bear and pay its own legal, accountancy and other expenses
incurred in and incidental to the preparation, negotiation and implementation
of this Agreement.
	 
	 	61.2	 	The cost of all stamp duty payable in respect of the
transfer of the Target Equity will be borne by the Parties respectively.





	 	 	 
	Article 62

	 	No Assignment







	 	62.1	 	This Agreement shall be binding on and enure for the
benefit of each Party’s successors and personal representatives.
	 
	 	62.2	 	This Agreement shall not be assigned except that each Party
may assign all or any part of its rights and obligations hereunder to its
wholly-owned subsidiaries and the Purchaser may assign any of its rights and
interests under this Agreement to any third party.
	 
	 	62.3	 	Except as otherwise expressly provided in this Agreement,
all rights and benefits under this Agreement are personal to the Parties and
may not be assigned at law or in equity without the prior written consent of
the other Party.





	 	 	 
	Article 63

	 	Entire Agreement







	 	63.1	 	This Agreement (including the schedules to it) and any
documents in the agreed form (collectively referred to as the “Acquisition
Documents”) constitute the entire agreement between the Parties with respect
to the subject matter of this Agreement.
	 
	 	63.2	 	Except for any misrepresentation or breach of warranty
which constitutes fraud:






	 	63.2.1	 	the Acquisition Documents supersede all previous agreements
(including the Letter of Intent) between the Parties relating to the
subject matter contained in the Acquisition Documents and any
representations and warranties previously given or made other than
those contained in the Acquisition Documents;






 











 






	 	63.2.2	 	each Party acknowledges to the other that it has not relied
on any representation or warranty other than the representations
and warranties contained in the Acquisition Documents;
	 
	 	63.2.3	 	each Party hereby irrevocably and unconditionally waives
any right it may have to claim damages or to rescind this
Agreement or any of the other Acquisition Documents by
reason of any misrepresentation and warranty not set forth
in
any such document.





	 	 	 
	Article 64

	 	This Agreement shall be effective from the date of effectiveness of the
Equity Transfer Contract.
	 
	 	 
	Article 65

	 	Notice







	 	65.1	 	Unless otherwise provided in this
Agreement, any notice or communication in writing to be given to either hereunder to the other
shall be given by express courier. All notices shall be served on the
5th day after posting (based on the postage stamp), but if the actual
date of receipt is earlier, shall be served on the actual date of receipt.
	 
	 	65.2	 	All notice and communications must be given to the following
addresses or such other address as may have been notified to the
other Party in writing:





	 	 	 	 	 
	 

	 	Purchaser’s address:
	 	Area B, Level 25, New Bao Li Building,
	 
	 	 	 	 
	 

	 	 	 	No. 1, Chaoyangmen Bei Dajie
	 
	 	 	 	 
	 

	 	 	 	Dong Cheng District, Beijing
	 
	 	 	 	 
	 

	 	Tel:
	 	010-64082341
	 
	 	 	 	 
	 

	 	Fax:
	 	010-64974430
	 
	 	 	 	 
	 

	 	Attention:
	 	Chen
	 
	 	 	 	 
	 

	 	Vendor’s address:
	 	Block 160, Qian Long Xin Cun, Xin Shi
	 
	 	 	 	 
	 

	 	 	 	North Road, Sanming City, Fujian Province,
	 
	 	 	 	 
	 

	 	 	 	PRC
	 
	 	 	 	 
	 

	 	Tel:
	 	0598-8202158
	 
	 	 	 	 
	 

	 	Fax:
	 	0598-8202031
	 
	 	 	 	 
	 

	 	Attention:
	 	Zhuang Kun Wei






 









 





Schedule 1




TARGET COMPANY




	 	 	 
	Name of Company:
	 	Sunpower Asia
limited 
	 
	 	 
	Company code:
	 	715770
	 
	 	 
	Date of incorporation:
	 	10 May, 2000
	 
	 	 
	Place of incorporation:
	 	Hong Kong
	 
	 	 
	Place of registration:
	 	5th Floor, Jardine House, 1 Connaught Place, Central, Hong Kong
	 
	 	 
	Directors:
	 	Lin Sheng Fang, Tao Minxuan
	 
	 	 
	Company Secretary:
	 	Gytho Company Limited
	 
	 	 
	Authorized capital:
	 	HK$10,000 - 10,000 common shares of HK$1 each
	 
	 	 
	Issued capital:
	 	HK$10,000 - 10,000 common shares of   HK$1 each
	 
	 	 
	Auditors:
	 	 
	 
	 	 
	Financial year closing date:
	 	31 December






 









 





Schedule 2




OBLIGATIONS ON COMPLETION




On Completion, the Vendor shall perform the following obligations:





	1.	 	The Vendor shall deliver or procure to be delivered to the Purchaser:






	 	1.1	 	a certificate duly executed by the Vendor the form and substance of which is
to the satisfaction of the Purchaser, evidencing that the conditions precedent
(other than the first item) have been fulfilled;
	 
	 	1.2	 	the deeds of assignment and the certificates of sales and purchase required for
the actual transfer of the Target Equity to the Purchaser, the necessary powers
of attorney and other documents of authorization, and all other documents
required for the transfer of the title of the Target Equity to the Purchaser so as
to enable the Purchaser to become its registered owner;
	 
	 	1.3	 	The share certificates representing the Target Equity issued to the Purchaser;
	 
	 	1.4	 	the board resolution duly and validly adopted by the directors of the Vendor
and the shareholders resolutions duly and validly adopted by the shareholders
of the Vendor, in form and substance satisfactory to the Purchaser. These
resolutions evidence that the Vendor has been authorized (1) to execute and
deliver this Agreement and any documents required to be delivered under this
Agreement, (2) to complete the transaction anticipated in this Agreement, and
(3) the name or names and his or their signature(s) of one or more of the
management personnel who shall execute this Agreement and any documents
required to be delivered under this Agreement on behalf of the Vendor;
	 
	 	1.5	 	the originals of the resolutions of the board of directors relating to the transfer
of the Target Equity and other related matters duly and validly adopted by the
board of directors of the Target Company, in form and substance satisfactory
to the Purchaser;
	 
	 	1.6	 	all the certificates of incorporation, certificates of change of company names,
certificates of business registrations, memorandum, articles of association,
business licenses, approval certificates and all documents issued or granted to
the Target Company by other competent authorities;
	 
	 	1.7	 	all the rubber chops, common seals, statutory registration books (including all
minutes of meetings which shall all be in writing), the certificates of shares
not yet issued and the books of account as at the Completion Date of the
Target Company;










 









 












	 	1.8	 	photo copies of all bank mandates given by the Target Company and the photo
copies of duly executed forms of cancellation of such bank mandates (if any);
	 
	 	1.9	 	all the bank accounting records to the Target Company, bank statements dated
not earlier than five working days before the Completion Date, and the balances
of the cash account books as at the Completion Date, the reconciliation
statements reconciling such balances with the bank statements;
	 
	 	1.10	 	all cheque books, cheques for transfer, bank statements, voucher receipt books,
current insurance policies, accounting records, title deeds, the title certificates
of all the assets, current contracts and other accounting records in possession or
under the control of the Target Company;
	 
	 	1.11	 	the photo copies of all tax returns and tax assessment (received on the date of
payment and before the date of completion);
	 
	 	1.12	 	all the letters, contracts and other documents belonging to the Target Company;
	 
	 	1.13	 	either a cheque drawn by the Vendor with the Hong Kong Special
Administrative Region as the payee, of which amount is equal to the amount of
the stamp duty assumed by the Vendor in accordance with this Agreement, or
cash equivalent to such amount of stamp duty assumed by the Vendor;
	 
	 	1.14	 	an undertaking executed by the Vendor given to the stamp duty officer of the
Stamp Office of the Inland Revenue Department, undertaking that the Vendor
shall pay any additional stamp duty as required in respect of the transfer of the
Target Equity;
	 
	 	1.15	 	undated letters of resignation duly executed by the directors and the company
secretary of the Target Company, and written confirmation that they have no
claims against the Target Company;
	 
	 	1.16	 	company documents under common custody; and
	 
	 	1.17	 	other documents and matters which the Purchaser may properly and reasonably
request for conducting any transactions.






	2.	 	The Vendor shall procure the Target Company to convene a meeting of the board of directors
of the company to pass the following matters which the Purchaser requests to deal with,
including but not limited to:






	 	2.1	 	acceptance of the resignation of the current directors and the company
secretary;





 









 






	 	2.2	 	appointment of the persons nominated by the Purchaser as the directors and
the company secretary of the Target Company; and
	 
	 	2.3	 	change of the signatories of all the accounts maintained by the Target
Company in the banks or financial institutions and bank mandates.







 









 








Schedule 3




WARRANTIES




Part 1





	1.	 	Basic Information






	 	1.1	 	All information and descriptions given in the recitals and Schedule 1 to this
Agreement relating to the Target Group are complete, true, accurate in all
respects and not misleading.
	 
	 	1.2	 	All written information given by or on behalf of the Vendor or any of its
representatives to the Purchaser, when given, shall be deemed to be true,
complete, accurate in all respects, and will not give rise to misunderstanding
in any way.
	 
	 	1.3	 	All information which when disclosed might be reasonably expected to affect
the Purchaser’s decision to enter into this Agreement or result in Purchaser’s
reduction of the assessed value of the Target Equity or induce it to require the
Vendor to perform other contractual obligations has been disclosed.
	 
	 	1.4	 	Information relating to the Target Equity and Target Group has been fully and
thoroughly disclosed to the Purchaser in writing before execution of this
Agreement.
	 
	 	1.5	 	All board resolutions and minutes and shareholders’ resolutions and minutes
of the Target Group are complete and accurate, and have been fully and
accurately given to the Purchaser.
	 
	 	1.6	 	Except for the ownership of 25% equity interests in Banzhu, the Target
Company does not own any shares, securities or other interests or any other
assets of any other persons.






	2.	 	Capacity and Ownership of Target Equity






	 	2.1	 	The Vendor has full power to execute this Agreement and exercise its rights
and perform its obligations under this Agreement, and has taken all action
necessary to authorize the Vendor to execute this Agreement and perform its
obligations under this Agreement. This Agreement, when executed, shall
constitute a lawful, valid and binding agreement on the Vendor and may be
enforced against the Vendor in accordance with the terms and provisions of
this Agreement.
	 
	 	2.2	 	The Vendor’s execution, delivery and performance of this Agreement will not
breach:










 









 












	 	2.2.1	 	Any laws, regulations, orders or decrees of any government
department, regulatory authority or court of any jurisdiction with
competent jurisdiction over the Vendor;
	 
	 	2.2.2	 	The laws and documents on which the establishment and creation of
the Vendor is based; or
	 
	 	2.2.3	 	Any agreement or other undertaking to which the Vendor is a party or
which is binding on the Vendor or any of its assets.






	 	2.3	 	There is no encumbrance on the Target Equity or any parts thereof or any
unissued share capital of the Target Company and there are no commitments,
agreements or arrangements which create or might create such encumbrance.
Neither are there negotiations which may lead to such an agreement or
commitment and no claim has been made by any person to be entitled to the
foregoing Encumbrance.
	 
	 	2.4	 	The Vendor is the sole and beneficial owner of the Target Equity and has full
rights, power and authority to sell, transfer and assign the full legal and
beneficial ownership in the Target Equity and all its existing and future
additional rights and such transfer will not result in any breach of the
provisions of any contract or other obligations binding upon the Vendor or
their respective property.
	 
	 	2.5	 	There is no agreement, arrangement or obligation requiring the creation,
allotment, issue, transfer, redemption or repayment of any shares in the share
capital and authorized capital of the Target Company, or the grant to any
person of the right to require the creation, allotment, issue, transfer,
redemption or repayment of any shares in the capital of the Target Company
(including, without limitation, an option or right of pre-emption or
conversion).
	 
	 	2.6	 	There is no litigation, arbitration, prosecution, administrative or other legal
proceedings or dispute in existence or threatened against the Vendor in
respect of the Target Equity or the Vendor’s entitlement to dispose of the
Target Equity and there are no facts known to the Vendor which might give
rise to any such proceedings or any such dispute.
	 
	 	2.7	 	Neither the Target Equity nor any property of members of the Target Group
has been a subject of a transaction at an undervalue.
	 
	 	2.8	 	The Target Company has never received any notice or any application or
notice of any intended application issued under the provisions of the relevant
laws in relation to the register of members of the Target Company.










 









 












	 	2.9	 	The Company has never exercised nor attempted to exercise or
claim any lien
over the Target Equity and no call on the Target Equity (if any) is outstanding
and all the share capital of the Target Equity are fully paid up.
	 
	 	2.10	 	The Company has not at any time given any financial assistance in
connection with the purchase of the Target Equity.






	3.	 	Accounts






	 	3.1	 	The Accounts Statement has been prepared in accordance with
the requirements of the applicable laws and on a basis consistent with that
adopted in the preparation of the audited combined accounts statement of the
Target Company for each of the financial years since its incorporation and in
accordance with all financial reporting standards, statements of standard
accounting practice and generally accepted accounting principles and
practices in Hong Kong and gives a true and fair view of the assets and
liabilities and state of affairs of the Target Group as at the Accounts Date and
its profits and losses for the relevant period ended on the Accounts Date.
	 
	 	3.2	 	The Management Statement has been prepared on a basis consistent with the
monthly management accounting records of the Target Company before
execution of this Agreement and in accordance with the accounting policies
applied to the accounting records and gives a true and fair view in all respects
of the assets and liabilities, profits and losses of the Target Group for the
period as at and to 30 June 2008.
	 
	 	3.3	 	The Accounts Statement discloses all the assets and either makes full
provision or reserve for or, as appropriate, discloses all bad and doubtful
debts and all accruals and liabilities whether actual, contingent, unquantified
or disputed and all capital commitments whether actual or contingent of the
Target Group as at the Accounts Date.
	 
	 	3.4	 	All the audited/or unaudited balance sheets and profit and loss accounts of
the
members of the Target Group for the financial years since its incorporation
ended on the Accounts Date complied with the requirements of all relevant
laws and with all statements of standard accounting practice, all financial
reporting standards and generally accepted accounting principles and
practices of Hong Kong or China (as the case may be) then in force.
	 
	 	3.5	 	The rate of depreciation adopted in the audited/or unaudited balance sheets
of
the members of the Target Group for each of the financial years since its
incorporation ended on the Accounts Date was sufficient for the book value
of each of the fixed assets of the members of the Target Group to be written
down to nil by the end of its useful life.










 









 












	 	3.6	 	Except as specifically stated in the audited/or unaudited balance sheets and
profit and loss accounts of the members of the Target Group for each of the
financial years ended on the Accounts Date, no changes in the policies of
accounting adopted for the audited/or unaudited balance sheets and profit and
loss accounts have been made for any of those financial years and the method
of valuing stock and work in progress and the basis of depreciation and
amortisation adopted has been consistent during each of these financial years.
	 
	 	3.7	 	The profits shown by the audited/ or unaudited balance sheets and profit and
loss accounts of the members of the Target Group for each of the financial
years since its incorporation ended on the Accounts Date have not (except as
disclosed in such accounts) been affected by any extraordinary or exceptional
item or by any other factor rendering such profits for all or any of such
periods unusually high or low.
	 
	 	3.8	 	Full provision has been made in the deferred tax account for any tax revenue
from enterprises subject to taxation and the differential tax arising from the
sale of fixed assets based on the value recorded in the accounting records,
and no overstatement has been made in the accounting records for the value
of any assets.
	 
	 	3.9	 	No value has been attributed to any type or category of stock which has
previously been attributed no value.
	 
	 	3.10	 	No asset (whether fixed intangible investment or current) has been revalued
upwards in the accounting records and no intangible asset has been brought
into the accounting records.
	 
	 	3.11	 	No surplus on any pension arrangements has been written back or brought
into reserves and full provision has been made for pension obligations.






	4.	 	Position Since Accounts Date






	 	4.1	 	Since the Accounts Date:






	 	4.1.1	 	the business of the members of the Target Group has been
carried on
in the ordinary and usual course and so as to maintain the same as a
going concern.
	 
	 	4.1.2	 	there has been no deterioration either in turnover or in
the financial
or trading position or in the prospects of the members of the Target
Group compared with the same periods during each of the two
preceding years and the Vendor is not aware of any matter or
circumstance which has affected or is likely to affect adversely the
volume or level of trading of the members of the Target Group.




 









 






	 	4.1.3	 	the members of the Target Group have not acquired or disposed of
or agreed to acquire or dispose of any business or any material asset
or assumed or acquired any material liability (including a contingent
liability) otherwise than in the ordinary course of business.
	 
	 	4.1.4	 	the members of the Target Group have paid their creditors in
accordance with their respective credit terms otherwise than in the
ordinary course of business and there are no amounts owing by the
members of the Target Group which have been due for more than
three months.
	 
	 	4.1.5	 	no debtor has been released by the members of the Target Group on
terms that he pays less than the book value of his debt and no debt
owing to the members of the Target Group has been deferred,
subordinated or written off or has proved to any extent irrecoverable
and all book debts at the date hereof are good and will be
recoverable in full on their respective due dates in the ordinary
course.
	 
	 	4.1.6	 	neither the turnover nor the expenses (direct and indirect) nor the
trading position nor the margin of profitability of the members of
the Target Group shows any material deterioration by comparison
with the turnover, expenses, trading position and margin of
profitability of the members of the Target Group for the
corresponding period in its last completed accounting reference
period.
	 
	 	4.1.7	 	there has not been any material change in the assets or liabilities
(including contingent liabilities) of the members of the Target Group
as shown in the accounting record except for changes arising from
routine payments and from routine supplies of goods and services in
the normal course of trading.
	 
	 	4.1.8	 	all payments, receipts and invoices of the members of the Target
Group have been fully and accurately recorded in their respective
books.
	 
	 	4.1.9	 	there has not been any capitalization of reserves of the members of
the Target Group and the members of the Target Group have not
issued or agreed to issue any share or loan capital other than that
issued at the Accounts Date and have not granted or agreed to grant
any option in respect of any share or loan capital and the members
of the Target Group have not repaid any loan capital in whole or in
part nor have they, by reason of any default by them in their




 









 






	 	 	 	obligations, become bound or liable to be called upon to repay
prematurely any loan capital or borrowed monies.
	 
	 	4.1.10	 	there has been no resolution of or agreement by the members of the
Target Group (except as provided in this Agreement or with the prior
written consent of the Purchaser) and in particular there has been no
capital reorganization or other change in the capital structure of the
members of the Target Group.
	 
	 	4.1.11	 	the members of the Target Group have not changed their accounting
reference period.
	 
	 	4.1.12	 	no supplier to or customer of the members of the Target Group who
accounted for five per cent of the members of the Target Group’s
annual turnover in the last financial year has ceased to trade with the
members of the Target Group or notified the members of the Target
Group of their intention to do so and the business of the members of
the Target Group has not been materially affected by any change in
the terms of business with such a supplier or customer and the
members of the Target Group have not been notified of any such
proposed change.
	 
	 	4.1.13	 	the members of Target Group have not declared or paid any
dividends or other distributions.






	5.	 	Business Name






	 	5.1	 	The members of the Target Group do not use any name for any purpose other
than their full corporate names.
	 
	 	5.2	 	The members of the Target Group may lawfully use all or any part of their
corporate names in their operations. The use of such names will not lead to
infringement of the intellectual property of any third party.






	6.	 	Licences, Permits and Consents






	 	6.1	 	The members of the Target Group have obtained all licences, permissions,
authorizations and consents required to own and operate their assets and for the
carrying on of its business (full details of which are set out in the Disclosure
Letter). All such licences, permissions, authorizations and consents are in full force
and effect, and the members of the Target Group are not in breach of any of the terms
and conditions attached to those licences, permissions, authorizations and consents.
There are no circumstances which indicate that any of such licences, permissions,
authorizations or consents may be revoked or be refused to be renewed in the ordinary
course




 









 






	 	 	 	of events nor are there any circumstances which indicate that equivalent
licences, permissions, authorizations or consents on terms no less favorable than
at present cannot be granted to the members of the Target Group after the Target
Equity has been transferred to the Purchaser.






	 	6.2	 	The members of the Target Group carry on their business in accordance with
the applicable laws and regulations at all times. The members of the Target
Group carry on their business within the scope of operation stated in their
business licences. None of the members of the Target Group or any of their
directors, officers, employees or agents related to the Group has engaged in
offences, torts, or violated the requirements or terms of any decrees, treaties,
rules, regulations or other obligations in connection with the Group or the
business conducted by it. Without prejudice to the generality of the
foregoing, the members of the Target Group have obtained all registrations,
approvals, permits, licences and consents required for the ownership of their
assets and the carrying on of their business and all such registrations,
approvals, licences and consents are validly subsisting and without reasons
leading to their suspension, revocation and cancellation (whether due to the
transfer of the Target Equity hereunder or as a result of other causes).
	 
	 	6.3	 	The members of the Target Group have not given any power of attorney or
any other authority (express, implied or ostensible) which is still outstanding
or effective to any person to enter into any contract or do anything on their
behalf (other than any authority of employees to enter into routine trading
contracts in the normal course of their duties).






	7.	 	Assets






	 	7.1	 	All the property and assets which are described and included in the Accounts
Statement and/or in the books of account or records of the members of the Target
Group or which are used in connection with the business of the members of the Target
Group or which are in the reputed ownership of the members of the Target Group
(including but not limited to the Property) are:






	 	7.1.1	 	legally and beneficially owned by the members of the
Target Group with good and marketable title;
	 
	 	7.1.2	 	in the possession or under the control of the members of
the Target Group;
	 
	 	7.1.3	 	free from all Encumbrances and there is not any agreement or
commitment to give or create, and no claim has been made by any

person entitled to any Encumbrance; and
	 
	 	7.1.4	 	situated in Hong Kong or within the territory of China.




 









 






	 	7.2	 	The members of the Target Group own the assets necessary or desirable for
the effective operation of their business.
	 
	 	7.3	 	None of the assets referred to in Paragraph 7.1 are the subject of any
assignment, franchise, preferential franchise, factoring arrangement, leasing
or hiring agreement, hire purchase agreement for payment on deferred terms
or any similar agreement or arrangement.
	 
	 	7.4	 	All the plant, machinery, equipment and vehicles owned or used by the
members of the Target Group (if any) are in good repair and working order
and have been regularly and properly maintained and no substantial repairs
are in hand or are necessary and none of the plant, machinery, equipment or
vehicles is out of date, dangerous, inefficient, unsuitable or in need of
renewal or replacement or fails to comply with all the applicable safety
standards.
	 
	 	7.5	 	None of the members of the Target Group has owned or used any other plant,
machinery, equipment or vehicles, nor are there any other members of the
Target Group which have renewed the required plant, machinery, equipment
or vehicles.






 











 





SUNPOWER ASIA LIMITED




MANAGEMENT ACCOUNT




PERIOD: from January 1, 2008 to September 30, 2008




 









 





SUNPOWER ASIA LIMITED




	 	 	 
	CONTENT	 	PAGE
	 
	 	 
	Balance Sheet
	 	1
	 
	 	 
	Income Statement
	 	2






 









 






P. 1




SUNPOWER ASIA LIMITED




THE BALANCE SHEET AS OF SEPTEMBER 30, 2008




	 	 	 	 	 
	 	 	September 30, 2008
	 	 	HK$
	 
	Non-cash Assets
	 	 	 	 
	Related Rights and Interests
	 	 	1	 
	Current Liabilities
	 	 	 	 
	Accrued Expenses
	 	 	3,000	 
	Deposit of Related Parties
	 	 	392,448	 
	Deposit of Directors
	 	 	92,564	 
	 
	 	 	488,012	 
	 
	 	 	 	 
	Net Liabilities
	 	 	(488,011	)
	 
	 	 	 	 
	Subentry
	 	 	 	 
	Share Capital
	 	 	10,000	 
	Accumulated Losses
	 	 	(498,011	)
	 
	 	 	 	 
	 
	 	 	(498,011	)
	 
	 	 	 	 





The genuineness and accuracy shall be guaranteed by the following persons:




	 	 	 	 	 
	                                        
Director

	 	 
	 	                                        
Director






 









 






P. 2




SUNPOWER ASIA LIMITED




INCOME STATEMENT

The period is from January 1, 2008 to September 30, 2008




	 	 	 	 	 
	 	 	2008.1.1-2008.9.30
	 	 	HK$
	 
	Other Revenues
	 	 	—	 
	Audit Compensation
	 	 	3000	 
	Yearly Income
	 	 	105	 
	Business Registration Expenses
	 	 	450	 
	Company Searching Expenses
	 	 	450	 
	Registration of Office
	 	 	4,000	 
	Secretary Expenses
	 	 	5,000	 
	Miscellaneous Expenses
	 	 	2,595	 
	 
	 	 	 	 
	Pre-tax Losses
	 	 	(15,600	)
	Tax
	 	 	—	 
	 
	 	 	 	 
	Yearly Losses
	 	 	(15,600	)
	Balance B/F
	 	 	(482,411	)
	 
	 	 	 	 
	Surplus Transferred to the Next Year
	 	 	(498,011	)
	 
	 	 	 	 







 











 






	8.	 	Insurance






	 	8.1	 	Full details of all insurance policies effected by persons in relation to any
of the members of the Target Group’s assets have been disclosed to the Purchaser and
all such details are true and correct in all respects and all such insurance policies
are currently in full force and effect.
	 
	 	8.2	 	The members of the Target Group have not done or omitted to do or suffered
anything to be done or not to be done which has or might render any policies of
insurance taken out by the members of the Target Group or by any other person in
relation to any of the members of the Target Group’s assets void or voidable or
which would or might result in an increase in the rate of premiums on the said
policies and there are no claims outstanding and no circumstances which would or might
give rise to any claim under any of such policies of insurance.
	 
	 	8.3	 	All the assets of the members of the Target Group of an insurable nature are
and have at all material times been insured in amounts representing their full
replacement or reinstatement value (with no provision for deduction or excess) against
fire and other risks normally insured against by persons carrying on similar
businesses to the business of the members of the Target Group. The members of the
Target Group are and have at all material times been insured against accident, third
party and other risks normally insured against by persons carrying on similar
businesses to the business of the members of the Target Group.
	 
	 	8.4	 	The members of the Target Group have taken out and participated in insurance
in respect of employment, labour, industrial injury, unemployment and retirement
insurance in accordance with the relevant laws, regulations and administrative rules
in Hong Kong and China, and have paid premiums in accordance with the relevant laws,
regulations and administrative rules and requirements of insurance contracts
and complied with all relevant regulations and provisions.






	9.	 	Records
	 
	 	 	All the accounting records, books, registers, ledgers and financial and other material
records of whatsoever kind (including all invoices and other value-added tax records) of
the members of the Target Group are up to date, in the possession or under control of the
members of the Target Group respectively and have been fully properly and accurately kept
and compiled and properly filed, registered or stamped in the relevant departments of the
government; there are no material errors or discrepancies contained or reflected in such
records and they give and reflect a true and fair view of the financial, contractual and
trading position of the members of the Target Group and





 









 






of the condition of their respective plant and machinery, fixed and current assets and
liabilities (actual and contingent), debtors, creditors, goods-in-stock and
work-in-progress.




	10.	 	Confidential Information






	 	10.1	 	The members of the Target Group do not use any processes and are not engaged
in any activities which involve the misuse of any confidential information possessed
by any third party.
	 
	 	10.2	 	The Vendor and the members of the Target Group are not aware of any actual or
alleged misuse by any person of any of their Confidential Information.
	 
	 	10.3	 	The members of the Target Group have not disclosed to any person any of their
Confidential Information except where such disclosure was properly made in the normal
course of their respective business and was made subject to an agreement under which
the recipient is obliged to maintain the confidentiality of such Confidential
Information and is restrained from further disclosing or using it.
	 
	 	10.4	 	Confidential Information used by the members of the Target Group is kept
strictly confidential and the members of the Target Group operate and fully comply
with procedures which maintain such confidentiality, which confidentiality
has not been breached.






	11.	 	Employees






	 	11.1	 	None of the employees of the members of the Target Group has given or
received notice terminating his employment or will be entitled to receive such notice
pursuant to the provisions of this Agreement.
	 
	 	11.2	 	Full particulars of the terms and conditions of employment of all the
employees of the members of the Target Group (including, without
limitation, all remuneration, incentives, bonuses, expenses, profit-sharing
arrangements and other payments, share option schemes and other benefits whatsoever
payable) and, where an employee has been continuously absent from work for more than
one month, the reason for the absence, have been disclosed.
	 
	 	11.3	 	There is not in existence any employment or labour contract with any employee
of the members of the Target Group (or any individual service agreement) which cannot
be terminated by the member of the Group giving three months’ notice or less without
giving rise to the making of a payment in lieu of notice or a claim for damages or
compensation (other than a statutory redundancy payment or statutory compensation for
unfair dismissal) or which




 









 






	 	 	 	is in suspension or has been terminated but is capable of being revived or enforced or in
respect of which the Target Group has a continuing obligation.






	 	11.4	 	In relation to each of the present employees of the members of the Target Group (and so far
as relevant to each former employee) the member of the Group has:






	 	11.4.1	 	complied with all statutes, regulations and codes of conduct relevant to the
relations between it and its employees or between it and any approved trade union or
appropriate representative.
	 
	 	11.4.2	 	maintained adequate and suitable records regarding the service of each of its
employees.
	 
	 	11.4.3	 	complied with all collective agreements and customs and practices for the time
being dealing with such relations or the conditions of service of its employees; and
complied with all relevant orders and awards made under any statute affecting the
conditions of service of its employees.
	 
	 	11.4.4	 	paid the social insurance premiums/mandatory provident fund and individual income
tax regarding all its employees.






	 	11.5	 	The members of the Target Group are not involved in any disputes and there are no
circumstances which may result in any dispute involving any of their officers or employees or
former employees and none of the provisions of this Agreement is likely to lead to any such
dispute.
	 
	 	11.6	 	There is not outstanding any agreement or arrangement to which a member of the Target Group
is a party for profit sharing or for payment to any of its officers or employees or former
employees of bonuses or for incentive payments or other similar matters.
	 
	 	11.7	 	There is no agreement or arrangement between the members of the Target Group and any of their
employees with respect to his employment, his ceasing to be employed or his retirement which
is not included in the written terms of his employment contract or previous employment
contract.
	 
	 	11.8	 	Since the Accounts Date, no change has been made in the terms of employment (other than
those required by law) of any of the employees of the members of the Target Group and the
members of the Target Group are not obliged or required to increase the remuneration of their
employee by 10% or more.





 









 






	 	11.9	 	None of the members of the Target Group has entered into any recognition
agreement with any trade union or done any acts which might be taken as
recognition.
	 
	 	11.10	 	There is no agreement, arrangement, scheme or obligation (whether legal or
moral) for the payment of any pensions, allowances, lump sums or other like benefits
on redundancy, on retirement or on death or during periods of sickness or disablement
for the benefit of any of the employees of any member of the Target Group or for the
benefit of dependants of such persons.
	 
	 	11.11	 	No amounts due to or in respect of any of the employees of the members of
the Target Group are in arrears or unpaid.
	 
	 	11.12	 	No monies or benefits other than in respect of contractual emoluments are
payable to any of the employees of the members of the Target Group and there is not at
present a claim, occurrence or state of affairs which may hereafter give rise to a
claim against any member of the Target Group arising out of the employment or
termination of employment of any employee for compensation for loss of office or
employment or otherwise.






	12.	 	Contracts






	 	12.1	 	There is not outstanding in connection with the business of the members
of the Target Group:






	 	12.1.1	 	any agreement or arrangement between a member of the Target Group and
any third party the signature or performance of which will
contravene this Agreement or under which the third party will acquire a right
of termination or any;
	 
	 	12.1.2	 	any agreement or arrangement between a member of the Target Group and a
company which is a member of the Target Group;
	 
	 	12.1.3	 	any sale or purchase, option or similar agreement,
arrangement or obligation affecting the assets of the Target Group or by
which the Target Group is bound;
	 
	 	12.1.4	 	any agreement or contract containing any unusual or onerous terms to be
observed or performed by the members of the Target Group or which the members
of the Target Group cannot comply with on time or without undue or unusual
expenditure of money or effort;





 









 








	 	12.1.5	 	any agreement or contract which is unusual, unprofitable
(that is to say known to have been likely to result in a loss to
the members of the Target Group on completion of
performance) or of a long-term nature (that is to say
incapable of performance in accordance with its terms within three
months after the date on which it was entered into or undertaken);
or
	 
	 	12.1.6	 	any agreement or arrangement which involves or may involve
obligations which by reason of their material nature ought to be made known
to the Purchaser.






	 	12.2	 	None of the members of the Target Group nor any party with whom any member of
the Target Group has entered into any agreement or contract is in default being a
default which would have a material effect on the financial or trading position or
prospects of any member of the Target Group and there are no circumstances likely to
give rise to such a default.
	 
	 	12.3	 	No breach of contract, event or omission has occurred which would entitle any
third party to terminate any contract to which any member of the Target Group is a
party or to call in any money before the due date. None of the members of the Target
Group has received notice of intention to terminate any of such agreements or
contracts.
	 
	 	12.4	 	The Vendor has no reason to believe that any customer or supplier of any
member of the Target Group other person dealing with any member of the Target Group
will refuse to continue to deal with the members of the Target Group and/or the
Purchaser or will deal with them on a smaller scale than at present as a result of the
change of control of the members of the Target Group to be effected pursuant to this
Agreement.
	 
	 	12.5	 	Full details of all agreements, arrangements or contracts (whether oral or in
writing) made between the members of the Target Group and their employees,
clients or customers other than in the ordinary course of business have been
disclosed.
	 
	 	12.6	 	The members of the Target Group have not provided or agreed to provide any
warranty or compensation in favour of any third party.






	13.	 	Borrowings
	 
	 	 	Except as disclosed in the Accounts Statement and Management Statement, none of the members
of the Target Group has outstanding:





 









 






	 	13.1	 	any borrowing or indebtedness in the nature of borrowing including any bank
overdrafts, liabilities under acceptances (otherwise than in respect of normal
trade bills) and acceptance credits;
	 
	 	13.2	 	any guarantee, indemnity or undertaking (whether or not legally binding) to
procure the solvency of any person or any similar obligation; or
	 
	 	13.3	 	any Encumbrance or any obligation (including a conditional obligation) to
create an Encumbrance.






	14.	 	Litigation, Offences and Compliance with Statutes






	 	14.1	 	Neither the members of the Target Group nor any person for whose acts the
members of the Target Group may be jointly liable or who may render the Target Group
jointly liable is a claimant, defendant or otherwise a party to any litigation,
arbitration or administrative proceedings which are in progress or are threatened or
pending by or against or concerning any member of the Target Group or any of its
assets. None of the members of the Target Group is being prosecuted for any
criminal offence and no governmental, administrative or official investigation
or inquiry concerning the business or management officers of the members of the Target
Group or its assets is in progress or pending and there are no circumstances which are
likely to give rise to any such proceedings, investigation or inquiry.
	 
	 	14.2	 	Neither the members of the Target Group nor any of its management officers,
agents or employees (during the course of their duties in relation to the business of
the Company) has committed or omitted to do any act or thing the commission or
omission of which could be in contravention of the statutory obligations or laws of
Hong Kong, China or any other country giving rise to any fine, penalty, default
proceedings or other liability in relation to the business, management officers or
property of the members of the Target Group or any judgment or decision which would
materially affect the financial or trading position or prospects of the members of the
Target Group.
	 
	 	14.3	 	The members of the Target Group have not done or agreed to do anything as a
result of which either any investment or other grant paid to the them is or may be
liable to be refunded in whole or in part or any such grant for which application has
been made by them may not be paid or may be reduced.
	 
	 	14.4	 	The members of the Target Group do not have any outstanding debts in respect
of any statutory or governmental levies or charges.
	 
	 	14.5	 	The Target Equity was not purchased or subscribed for by the Vendor with
funds (and financing guarantees of the bank) derived from criminal proceeds.





 









 







	 	14.6	 	To the best of the Vendor’s knowledge, information and belief:






	 	14.6.1	 	none of the assets owned by the members of the Target Group has been
acquired with monies representing the proceeds of crime.
	 
	 	14.6.2	 	the members of the Target Group have not at any time received monies
representing criminal proceeds.






	15.	 	Restrictive Agreements and Competition






	 	15.1	 	There are no effective agreements restricting the liberty of any member of
the Target Group to provide services or restricting the liberty to establish trade
contacts with any person it deems fit at any time, and there are no contracts in
whatever form restricting the members of the Target Group to carry on any activities
in any part of the world.
	 
	 	15.2	 	None of the members of the Target Group is or has been a party to any
agreement, arrangement, concerted practice or usual transaction which act is subject
to the competition law, anti-restriction trading practice,
anti-monopoly law, consumer protection law or any relevant applicable legislation
(“Anti-monopoly Rules”) under any jurisdiction. Neither is it or has it been
required by its regulations to declare or in conflict with it or is or has become the
subject of any inquiry, investigation or litigation proceedings under such legislation
or in breach of such legislation (as far as the Vendor knows).
	 
	 	15.3	 	None of the members of the Target Group is in breach or in contravention of
any terms, decrees, judgments, rules or other legal documents, or in breach or in
contravention of undertakings relating to any Anti-monopoly Rules. Neither has it
received any complaint made or threatened to be made by any person under
Anti-monopoly Rules, received information requests, investigations or
protests relating to Anti-monopoly Rules, nor has it instituted any litigation
proceedings on the ground or basis of Anti-monopoly Rules (or any of their provisions)
as defence.






	16.	 	Subsidiaries
	 
	 	 	The Target Company has not since its incorporation had any subsidiary or subsidiary
undertaking other than Banzhu.
	 
	17.	 	Insolvency






	 	17.1	 	No resolution has been passed nor meeting called to consider such
resolution for the winding up of or for the appointment of a liquidator by any member





 









 







of the Target Group, and no such petition or order has been presented or made.




	 	17.2	 	No liquidator, administrator, receiver, receiver and manager, administrative receiver or
similar officer has been appointed in relation to any member of the Target Group or in
relation to the whole or any part of its assets, rights or revenues.
	 
	 	17.3	 	In relation to the members of the Target Group:






	 	17.3.1	 	no voluntary liquidation arrangement has been proposed or implemented under
applicable laws;
	 
	 	17.3.2	 	no scheme for debt repayment arrangements has been proposed or implemented
under applicable laws;
	 
	 	17.3.3	 	there is no scheme for the benefit of creditors, whether or not under the
protection of the court and whether or not involving a reorganization or
rescheduling of debt; or
	 
	 	17.3.4	 	there is no law, regulation or proceeding relating to the reconstruction or
adjustment of debts.






	 	17.4	 	None of the members of the Target Group has stopped or suspended payment of its debts, and
each member of the Target Group is able or deemed able to pay its debts.
	 
	 	17.5	 	No distress, execution or other process has been levied on an asset of any member of the
Target Group or the Vendor and no unsatisfied judgment, order or award is outstanding against
any member of the Target Group or the Vendor.
	 
	 	17.6	 	No action has been or is being taken by the competent authority to strike any member of the
Target Group off the register, under applicable laws.
	 
	 	17.7	 	None of the Vendor or members of the Target Group has been forced into liquidation, nor has
any petition for its liquidation has been proposed.





 









 





Part 2




Environmental Issues




Environmental Issues





	1.	 	None of the members of the Target Group, its management officers, agents or employees has
violated any environmental laws, whether as a result of intentional or negligent acts. They
have always complied with the relevant implementation criteria, guiding directions, standards
and the consultation materials issued by the other competent authorities.
	 
	2.	 	In relation to the business carried on by them or the property owned, possessed or controlled
by them at any time, the members of the Target Group have not received any notice or other
information from any competent authority claiming that they have violated or failed to comply
with environmental laws or mandatory demands and the compliance of such laws or demands
may be ensured through further proceedings. Nor are there any existing circumstances which
will likely lead to the receipt of such notice, order or other information or the receipt of
any communication or information or the receipt of communication, information or circumstances
from the competent authority indicating the giving of such notice.
	 
	3.	 	In relation to the property, assets or business of the members of the Target Group, the
competent authority has not exercised the right of access, the right to sample, survey or take
photos, has not removed, demolished or tested any materials, articles or living things, has
not required any person to make representations in respect of any examination or investigation
(with or without signature), has not demanded the production of any data, nor has it taken
any steps to seize any materials, articles or living things and/or keep them unharmed.
	 
	4.	 	In relation to the business carried on by them or the property owned, possessed or controlled
by them at any time, the members of the Target Group have not received any complaints from any
third party (including employees) claiming that they have violated environmental laws.
Neither the Vendor nor any member of the Target Group is aware of any circumstances which may
give rise to such complaints.





 









 






Part 3




Taxation





	1.	 	The Accounts Statement and Management Accounts Statement include all Taxation for which the
members of the Target Group are liable to pay during the period ended on the Accounts Date (or
30 June 2008, if applicable) or any subsequent period, including deferred taxation and
provisional taxation. The Taxation is based on the tax rate and tax laws in force on the
Accounts Date targeted at any transaction, event, occurrence of negligence, any revenue,
profit or income obtained, accrued or received before the Accounts Date (or 30 June 2008, if
applicable) or the liabilities of the Target Company up to that date. All potential tax
liability has been paid or disclosed in the accounting records.
	 
	2.	 	Other than the trading activities in the ordinary course of business, the members of the
Target Group have not further incurred any tax liability or potential tax liability since the
Accounts Date.
	 
	3.	 	All declarations made by the members of the Target Group for taxation purpose were at the
time and are still correct and proper, all other information provided to the relevant Taxation
Authority for such purpose was at the time and is still correct and proper and such
declarations include all declarations and information which should have been provided or given
by the members of the Target Group and there is at the date of this Agreement no dispute with
the relevant Taxation Authority, nor is there any fact or matter which may lead to such
dispute. There is no tax liability (present or future) which has not been provided in the
accounting records.
	 
	4.	 	All declarations and information provided or given by the members of the Target Group to the
relevant Taxation Authority in respect of the import and export of any products are correct.
The members of the Target Group have all complied with all regulations relating to the import
and export of products and import duty and consumption tax.
	 
	5.	 	The members of the Target Group have paid all Taxation for which they are liable to the
relevant Taxation Authority on the due date for payment and are not liable to pay any penalty
or interest in respect thereof. Without prejudice to the generality of the foregoing, the
members of the Target Group have made all deductions and withholding in respect of the
Taxation required by the relevant legislation, such deductions and withholding to be made from
their payments, including but not limited to interest, pensions or other annual
payments, franchise fees, rent,  remuneration payable to employees or
sub-contractors or payments made to non-residents. The members of the Target Group have
accounted in full to the appropriate authority for the Taxation so deducted or withheld when
necessary.





 









 






	6.	 	Under any applicable laws, no asset has been transferred to the members of the Target
Group which will or may give rise to any claims, tax assessments or payment demands in
respect of estate duty; and there is no charge or potential charge on any asset or property
of the members of the Target Group.
	 
	7.	 	All remuneration, pensions, severance compensation or other amounts paid or payable to the
current or former employees and officers of the members of the Target Group and all interest,
pensions, franchise fees, rent and other annual payments paid or payable under any obligations
existing at the date of execution of this Agreement (whether before or after the date of
execution of this Agreement) (based on the tax legislation in force at the date of execution
of this Agreement) may be deducted for profit tax purpose at the time of calculating the
profit of the members of the Target Group or charging fees with respect to the income of the
members of the Target Group.
	 
	8.	 	During the period between the Accounts Date and the Completion Date, no act or omission which
may give rise to claims under the terms of Taxation compensation will occur.
	 
	9.	 	The members of the Target Group have all complied with all applicable laws in respect of
Taxation and all directions issued by the relevant Taxation Authority in any way, and have
issued and maintained complete, correct and up-to-date records, invoices and other documents
required by all applicable laws and directions.





 









 






Schedule 4




OBLIGATIONS BEFORE COMPLETION



The Vendor covenants with the Purchaser that, unless otherwise provided for in this Agreement or
previously agreed in writing by the Purchaser, in the period from the date of this Agreement to the
Completion Date, it will procure that each member of the Target Group must:





	1.	 	continue in the ordinary and usual course the business carried on by it at the date of
execution of this Agreement and so as to maintain the same as a going concern;
	 
	2.	 	not dispose of or agree to dispose of or acquire or agree to acquire any assets or shares or
assume or incur or agree to assume or incur a liability, obligation or expense (actual or
contingent) except in the ordinary and usual course of business;
	 
	3.	 	not merge or amalgamate or agree to merge or amalgamate its business with any other company;
	 
	4.	 	not enter into any scheme or arrangement with creditors;
	 
	5.	 	not enter into any contract, transaction or arrangement with the Vendor or other members of
the Vendor’s Group;
	 
	6.	 	not pass any shareholders’ resolution;
	 
	7.	 	not create, allot, issue, acquire, redeem or repay any share or loan capital or agree,
arrange or undertake to do any of those things or acquire or agree to acquire shares or any
other interest in any other company;
	 
	8.	 	not enter into any long-term contract for a term of twelve months or more or any contract or
arrangement involving expenditure or liabilities in excess of HK$50,000 or undertake any
unusual or new form of expenditure;
	 
	9.	 	not make any capital commitment in the amount of more than HK$50,000 or approve or agree to
make any capital expenditure in excess of that amount;
	 
	10.	 	not amend or terminate any material agreement, arrangement or obligation to which it is a
party;
	 
	11.	 	not enter into, amend, terminate or dispose of any property lease contract or
acquire or dispose of any property;
	 
	12.	 	not engage in any transaction except on an arm’s-length basis in the ordinary course of
business;










 









 












	13.	 	not increase or agree to increase the remuneration (including, without limitation,
salary, bonuses, commissions, profits in kind, annuity payments and welfare funds) of any
of its employees or vary the terms of employment of or dismiss any core employee or engage
any new employee or agree to provide any gratuitous payment or benefit to any person in the
ordinary course of business except as provided for in any laws;
	 
	14.	 	not alter or agree to alter the terms of any existing borrowing facilities or arrange
additional borrowing facilities;
	 
	15.	 	not create or agree to create any Encumbrance over any of its assets or make any loans or
enter into any guarantee or stand surety for the obligations of any third party;
	 
	16.	 	not grant any credit except for the provision of general trading credit in the ordinary
course of business;
	 
	17.	 	not declare, make or pay any dividend or other distribution;
	 
	18.	 	not change its current accounting reference date;
	 
	19.	 	not enter into any litigation or arbitration proceedings unless it is necessary to enter into
such litigation or arbitration proceedings in order to respond to the litigation or
arbitration proceedings instituted by any third party;
	 
	20.	 	not compromise, settle, waive a right, drop or agree to drop a lawsuit in relation to
litigation or arbitration proceedings or a liability, claim, action, summons, or waive a right
in relation to litigation or arbitration proceedings except in the ordinary course of business
or unless it is necessary to protect its interests;
	 
	21.	 	conduct its business in all material respects in accordance with all existing legal and
administrative requirements in any jurisdiction;
	 
	22.	 	not cancel by the due date the insurance policies in force at the date of this Agreement nor
do or omit to do anything to render such policies void or voidable; and
	 
	23.	 	co-operate with the Purchaser to:






	 	23.1	 	ensure the efficient continuation of management after Completion;
	 
	 	23.2	 	prepare for the introduction of the Purchaser’s normal working procedures in
readiness for Completion; and
	 
	 	23.3	 	provide a copy of its books of management account to the Purchaser within
five working days after the end of each month.





 









 





SCHEDULE 5




MANAGEMENT STATEMENTS




 









 





SUNPOWER ASIA LIMITED




MANAGEMENT ACCOUNT




PER IOD: from January 1, 2008 to September 30, 2008





 









 








SUNPOWER ASIA LIMITED




	 	 	 	 	 
	CONTENT	 	PAGE
	Balance Sheet
	 	 	1	 
	 
	 	 	 	 
	Income Statement
	 	 	2	 







 









 










P. 1




SUNPOWER ASIA LIMITED




THE BALANCE SHEET AS OF SEPTEMBER 30, 2008




	 	 	 	 	 
	 	 	September 30, 2008
	 	 	HK$
	Non-cash Assets
	 	 	 	 
	Related Rights and Interests
	 	 	 	 
	 
	 	 	1	 
	 
	 	 	 	 
	Current Liabilities
	 	 	 	 
	Accrued Expenses
	 	 	3,000	 
	Deposit of Related Parties
	 	 	392,448	 
	Deposit of Directors
	 	 	92,564	 
	 
	 	 	488,012	 
	 
	 	 	 	 
	Net Liabilities
	 	 	(488,011	)
	 
	 	 	 	 
	Subentry
	 	 	 	 
	Share Capital
	 	 	10,000	 
	Accumulated Losses
	 	 	(498,011	)
	 
	 	 	 	 
	 
	 	 	(498,011	)
	 
	 	 	 	 






The genuineness and accuracy shall be guaranteed by the following persons:




	 	 	 	 	 
	 

Director

	 	 
	 	 
 Director







 









 









P. 2




SUNPOWER ASIA LIMITED




INCOME STATEMENT

The period is from January 1, 2008 to September 30, 2008




	 	 	 	 	 
	 	 	2008.1.1-2008.9.30
	 	 	HK$
	Other Revenues
	 	 	—	 
	Audit Compensation
	 	 	3,000	 
	Yearly Income
	 	 	105	 
	Business Registration Expenses
	 	 	450	 
	Company Searching Expenses
	 	 	450	 
	Registration of Office
	 	 	4,000	 
	Secretary Expenses
	 	 	5,000	 
	Miscellaneous Expenses
	 	 	2,595	 
	 
	 	 	 	 
	Pre-tax Losses
	 	 	(15,600	)
	Tax
	 	 	—	 
	 
	 	 	 	 
	Yearly Losses
	 	 	(15,600	)
	Balance B/F
	 	 	(482,411	)
	 
	 	 	 	 
	Surplus Transferred to the Next Year
	 	 	(498,011	)
	 
	 	 	 	 







 









 










SCHEDULE 6




Part 1




List of Documents handed over under Article 12





	1.	 	Share certificates formally endorsed in respect of the Target Equity registered in the name
of the Vendor;
	 
	2.	 	Certificate of incorporation, Certificate of change in name and business registration
certificate of the Target Company; and
	 
	3.	 	Common seal and statutory books (including minute books) and books of account of the Target
Company;






	 	 	The above are collectively known as the “Corporate Documents”.





Part 2




Joint Custody and Arrangement for the use of Documents handed over under
Article 12





	1.	 	The Corporate Documents will be deposited in the safe deposit box in the office of the
Purchaser’s Hong Kong Solicitors (“Place of Joint Custody”) which is jointly designated by the
Purchaser and the Vendor and can only be jointly opened by the Purchaser and the Vendor. At
the time of deposit, the Purchaser and the Vendor shall confirm in writing the name, type and
quantity of the subject matter.
	 
	2.	 	Before Completion, if the Vendor needs to use any such Corporate Documents, it shall
give notice to the Purchaser and if it agrees to such use, the Purchaser will arrange
for the Vendor’s personnel to go to the Place of Joint Custody to use the documents.
	 
	3.	 	Upon Completion, the Purchaser and the Vendor shall jointly open the above safe deposit
box and the Vendor shall deliver all Corporate Documents to the Purchaser.





 









 




The Parties to this Agreement have executed this Agreement at the date set forth above for
observance.




Purchaser:

Authorized Representative:

Date: July 11, 2008




Vendor:

Authorized Representative:

Date: July 11, 2008