EX-10.41






CONFIDENTIAL




Exhibit 10.41




BETWEEN




GUANGDONG QINGNENG POWER GENERATION

GROUP CO., LTD.




YAO LIN FU




AND




ZHEJIANG PROVINCE JINGNING YINGCHUAN

HYDROELECTRIC DEVELOPMENT CO., LTD.




SHARE TRANSFER CONTRACT




For




LONGQUAN RUIYANG CASCADE II HYDROELECTRIC




CO., LTD.




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CONTENTS




	 	 	 	 	 
	CHAPTER I DEFINITIONS AND INTERPRETATIONS
	 	 	5	 
	 
	Article 1 Definitions
	 	 	5	 
	 
	 	 	 	 
	CHAPTER II THE SALE EQUITY STAKE
	 	 	7	 
	 
	Article 2 Transfer of Sale Equity Stake
	 	 	8	 
	Article 3 Share Transfer Price
	 	 	8	 
	Article 4 Conditions Precedent for the Payment of the Transfer Price
	 	 	11	 
	Article 5 Payment
	 	 	12	 
	Article 6 Taxes Payable Under the Transfer of Sale Equity Stake
	 	 	14	 
	 
	 	 	 	 
	CHAPTER III REPRESENTATIONS AND WARRANTIES BY ALL PARTIES
	 	 	15	 
	 
	Article 7 Representations and Warranties by All Parties
	 	 	15	 
	 
	 	 	 	 
	CHAPTER IV DISCLOSURES, REPRESENTATIONS AND WARRANTIES BY THE
TRANSFERORS
	 	 	15	 
	 
	Article 8 Disclosures, Representations and Warranties by the Transferors
	 	 	15	 
	Article 9 General Representations and Warranties by the Transferors
	 	 	17	 
	Article 10 Ownership
	 	 	18	 
	Article 11 The Company and the Hydropower Station Project
	 	 	19	 
	 
	 	 	 	 
	CHAPTER V DISCLOSURES, REPRESENTATIONS AND WARRANTIES BY THE
TRANSFEREE
	 	 	28	 
	 
	Article 12 Disclosures, Representations and Warranties by the Transferee
	 	 	28	 
	 
	 	 	 	 
	CHAPTER VI DELIVERY
	 	 	28	 
	 
	Article 13 Delivery
	 	 	28	 
	 
	 	 	 	 
	CHAPTER VII CREDITOR’S RIGHT AND DEBT AND EMPLOYEES
ARRANGEMENT
	 	 	32	 
	 
	Article 14 Creditor’s Right and Debt Arrangement
	 	 	32	 
	Article 15 Employees Arrangement
	 	 	33	 
	 
	 	 	 	 
	CHAPTER VIII CONFIDENTIALITY
	 	 	34	 
	 
	Article 16 Confidentiality
	 	 	34	 
	 
	 	 	 	 
	CHAPTER IX BREACH of CONTRACT
	 	 	35	 
	 
	Article 17 Liability for Breach of a Representation or Warranty
	 	 	35	 
	Article 18 Liability for Breach of Contract
	 	 	36	 
	 
	 	 	 	 
	CHAPTER X FORCE MAJEURE
	 	 	37	 
	 
	Article 19 Force Majeure
	 	 	37	 
	 
	 	 	 	 
	CHAPTER XI RESOLUTION OF DISPUTES
	 	 	38	 
	 
	Article 20 Arbitration
	 	 	38	 
	Article 21 Validity of the Arbitration Award
	 	 	39	 
	Article 22 Continuation of Rights and Obligations
	 	 	39	 
	 
	 	 	 	 
	CHAPTER XII APPLICABLE LAW
	 	 	39	 
	 
	Article 23 Applicable Law
	 	 	39	 
	 
	 	 	 	 
	CHAPTER XIII MISCELLANEOUS
	 	 	40	 
	 
	Article 24 Waiver
	 	 	40	 






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	Article 25 Transfer
	 	 	40	 
	Article 26 Amendment
	 	 	40	 
	Article 27 Severability
	 	 	40	 
	Article 28 Language
	 	 	41	 
	Article 29 Validity of the Text and Appendices
	 	 	41	 
	Article 30 Notification
	 	 	41	 
	Article 31 The Entire Agreement
	 	 	42	 
	 
	 	 	 	 
	APPENDIX I EXISTING DEBTS OF THE COMPANY
	 	 	44	 
	 
	 	 	 	 
	APPENDIX II LIST OF SECURITY
	 	 	45	 
	 
	 	 	 	 
	APPENDIX III ASSETS LIST OF THE COMPANY
	 	 	46	 






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SHARE TRANSFER CONTRACT



This Share Transfer Contract (hereinafter referred to as “this Contract”) was
executed by and among the following Parties in Beijing, China on August 11, 2009.





	(1)	 	Party A: Zhejiang Province Jingning Yingchuan Hydroelectric Development Co.,
Ltd. (hereinafter referred to as the “Transferee”), a wholly foreign-owned
enterprise registered and established in accordance with the laws of the People’s
Republic of China, with its registration number of 331100400000390, the registered
address at Huangyangkou Village, Yingchuan Town, Jingning She Ethnic Autonomous
County, the legal representative of which is John D. Kuhns, whose nationality is
United States of America;
	 
	(2)	 	Party B: Guangdong Qingneng Power Generation Group Co., Ltd., a limited
liability company registered and established in accordance with the laws of the
People’s Republic of China, with its registration number of 441625000003740, the
registered address at Xiantang Mujing Management Zone, Dongyuan County, the legal
representative of which is Shi Guosong, whose nationality is Chinese;
	 
	(3)	 	Party C: Yao Linfu, a PRC citizen with the PRC ID card number of
330124195205240012, and domicile at Room 1402, Unit 2, Building 4 of Zhongrong
City Garden, West Lake District, Hangzhou City.




Party B and Party C are hereinafter collectively referred to as the “Transferors”.
The Transferors and the Transferee are hereinafter collectively referred to as
“All Parties” as well as each of the Transferors and the Transferee is hereinafter
referred to as “Party”.




WHEREAS:





	(1)	 	Longquan Ruiyang Cascade II Hydroelectric Co., Ltd. (hereinafter referred to
as the “Company”) is a company incorporated in China, conducting the business of
hydropower generation with its registration number of 331181000002027, both the
registered capital and the paid-up capital of which are RMB 56,500,000;




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	(2)	 	Party B holds ninety percent (90%) of the equity stake of the Company, and can
exercise all of its full rights as a shareholder;
	 
	(3)	 	Party C holds ten percent (10%) of the equity stake of the Company, and can
exercise all of his full rights as a shareholder;
	 
	(4)	 	Subject to the terms and conditions set out in this Contract, Party B is
willing to transfer ninety percent (90%) of the equity stake of the Company held
by it, and Party C is willing to transfer ten percent (10%) of the equity stake of
the Company held by him to the Transferee, both of which represent one hundred
percent (100%) of the equity stake of the Company (hereinafter referred to as the
“Sale Equity Stake”);
	 
	(5)	 	Party B and Party C both agree to waive their pre-emptive rights over the Sale
Equity Stake;
	 
	(6)	 	The Transferee is willing to acquire one hundred percent (100%) of the equity
stake of the Company from the Transferors subject to the terms and conditions set
out in this Contract.




Therefore, after friendly consultations, on the principles of equality and mutual
benefit, all Parties to this Contract have reached the following agreement in
accordance with the provisions of the Company Law of the People’s Republic of
China, the Contract Law of the People’s Republic of China and other relevant laws
and regulations of the People’s Republic of China:




CHAPTER I DEFINITIONS AND INTERPRETATIONS



Article 1 Definitions




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Unless otherwise prescribed and stipulated herein, the following terms used in
this Contract shall have the meanings set forth as follows:



The “Company” refers to Longquan Ruiyang Cascade II Hydroelectric Co., Ltd., a
limited liability company registered and established in accordance with the laws
of China, with its registration number being 331181000002027, registered capital
(paid-up capital) being RMB56,500,000 and registered address at Jin Village,
Xiaomei Town, Longquan City.



The “Hydropower Station Project” refers to Ruiyang Cascade II Hydropower Station
Project with the installed capacity of 32,000 KW, which is legally owned and
operated by the Company.



“Claims” refers to all the claims, actions, demands, proceedings judgments
liabilities, damages amounts, costs and expenses (including but not limited to
attorney fees) whatsoever and howsoever arising.



“Signing Date” refers to the date on which this Contract is signed.



“Effective Date” refers to the date on which this Contract comes into effect.



“Completion Date of Delivery” refers to the date provided in Article 13.8 hereof.



“Bank Accounts Designated by the Transferors” refer to the bank accounts
respectively opened by the Transferors in accordance with law under their own
names for the purpose of this Contract to receive the Transfer Price (as defined
in Art. 3.1 hereof) for the Sale Equity Stake.



“Encumbrance” refers to any mortgage, assignment, lien, charge, pledge, title
retention, right to acquire, security interest, option, pre-emptive right, and
any other restriction or conditions whatsoever including but not limited to:





	(1)	 	any right or power granted or reserved in or over or affecting the Sale
Equity Stake;




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	(2)	 	the right or power created or otherwise arising in or over the Sale Equity
Stake for Transfer under a fiduciary transfer, charge, lien, pledge, power of
attorney or other forms of encumbrance; or
	 
	(3)	 	any security over the Sale Equity Stake for the payment of a debt or any
other monetary obligations or the performance of any other obligations.





“Material Adverse Change” refers to





	 	(1)	 	investigations (which may cause the Company to be punished) or penalties
upon the Company by relevant governmental authorities;
	 
	 	(2)	 	involvement with any litigation, arbitration or any other judicial
proceedings by the Company; or
	 
	 	(3)	 	any change (or any development that, insofar as can reasonably be
foreseen, is likely to result in any change) that may cause loss to the normal
operation, business, or assets of the Company.




“RMB” or “Renminbi” refers to the legal currency of the PRC.



“Third Party” refers to any natural person, legal entity, or other organization
or entity, other than the parties to this Contract.



“Business Days” refers to the days on which the banks in Beijing are open for
business.



“PRC” or “China” refers to the People’s Republic of China, and insofar as this
Contract is concerned, shall exclude Hong Kong, Macao and Taiwan.




Chapter II The Sale Equity Stake





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Article 2 Transfer of Sale Equity Stake





	 	 	 	Pursuant to the terms stipulated in this Contract, the Transferors agree
to transfer to the Transferee and the Transferee agrees to accept from the
Transferors the Sale Equity Stake being one hundred percent (100%) of the
equity stake of the Company with all the rights and obligations of and
attaching to the Sale Equity Stake including, without limiting the
generality thereof, all the rights to receive dividends and to receive or
subscribe for shares (if any) declared, paid or issued by the Company and
free of any Claims or Encumbrances.





Article 3 Share Transfer Price





	 	3.1	 	The Transferors and the Transferee, after consultations, have finally
determined that the price for the Sale Equity Stake shall be RMB 160,000,000
(hereinafter referred to as the “Transfer Price”). Specifically, the amount
respectively payable to the Transferors shall be as follows:
	 
	 	 	 	Party B: RMB 144,000,000;
	 
	 	 	 	Party C: RMB 16,000,000.
	 
	 	3.2	 	The Transfer Price shall be paid in three (3) instalments:






	 	(1)	 	The initial instalment of the Transfer Price in the amount of RMB
100,000,000 shall be paid to the Transferors within three (3) Business
Days after all conditions precedent stipulated in Article 4.1 hereof have
been fully satisfied as scheduled. Considering the deposit, in the amount
of RMB 10,000,000 as agreed for the transaction contemplated herein, has
been paid by Party A to the bank account of Party B on June 8, 2009, this
deposit shall be set off as part of the Transfer Price paid to Party B and
thus, the Transferee only needs to pay to the Transferors the price in the
amount of RMB 90,000,000. Specifically, the amount respectively payable to
the Transferors shall be as follows:




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	 	 	 	Party B: RMB 80,000,000;
	 
	 	 	 	Party C: RMB 10,000,000.
	 
	 	(2)	 	After all conditions precedent stipulated in Article 4.2 hereof have
been fully satisfied as scheduled, the second instalment of the Transfer
Price in the amount of RMB 55,200,000 shall be paid to the Transferors on
the Completion Date of Delivery. Specifically, the amount respectively
payable to the Transferors shall be as follows:
	 
	 	 	 	Party B: RMB 49,680,000;
	 
	 	 	 	Party C: RMB 5,520,000.
	 
	 	(3)	 	The rest of the Transfer Price, namely, RMB 4,800,000, shall be
served as the guarantee fund for the warranty and indemnity by the
Transferors for the following items: (a) the warranty of the quality of
the Hydropower Station Project and the performance of this Contract; (b)
the indemnity for all taxes and fees requisite for the conversion of the
allocated land currently used for office building and dormitory building
of the Company (the number of the land certificate: Zhe Long Guo Yong
[2007] Zi No.4268) into the granted land. Upon the expiration of the
guarantee fund, no matter whether such conversion has been made or not,
the Transferee shall directly deduct RMB 500,000 from such guarantee fund
for which the Transferors shall not request the Transferee to refund and
the Transferee shall not claim for any other indemnity for the grant of
such land; (c) the Transferors undertake and warrant that as of the
Second Payment Date, the Company has fully paid off all taxes and fees
required by the PRC laws and regulations (including but not limited to
enterprise income tax and value-added tax), and there has been no tax
evasion, tax dodging and other illegal activities. The Transferors
undertake and warrant that they will accomplish the clearance of the tax
of the Company in accordance with law prior to April 30, 2010 and all
expenses and costs in




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	 	 	 	relation to such tax clearance shall be borne by the Transferors
themselves, for which the Company and/or the Transferee shall not be
held liable. In the event that the Company and/or the Transferee
incurs any expense or cost, then the Company and/or the Transferee
shall be entitled to directly deduct it from the guarantee fund, for
which the Transferors shall not request for refund. In addition, in
the event that the Company and/or the Transferee suffers any damage
or loss due to the unpaid taxes and/or fees, the Company and/or the
Transferee shall be entitled to directly deduct it from the guarantee
fund, for which the Transferors shall not request for refund; and (d)
the warranty for the completion of the dam registration of the
reservoir of the Hydropower Station Project in accordance with
relevant PRC laws and regulations and provision of the Dam
Registration Certificate to the Transferee by the Transferors.
However, as the local governmental authority has not carried out such
registration, therefore, in the event that, during the guarantee
period, the local governmental authority begins to accept such
registration, then the Transferors shall be responsible for the
procurement of Dam Registration Certificate. Any expense or cost in
relation to such registration shall be directly deducted from the
guarantee fund and the Transferors shall not request for refund. The guarantee period is six (6) months commencing from the Completion
Date of Delivery. During the guarantee period, in the event that the
Company suffers from any damage or loss due to the quality problems
of the Hydropower Station Project, or the Transferors are in breach
of any provisions of this Contract, or any representations or
warranties made by the Transferors under this Contract are proved to
be untrue, inaccurate or misleading, the Transferee is entitled to
deduct corresponding amount directly from the aforesaid guarantee
fund as compensation to the Company and/or the Transferee until the
exhaustion of this guarantee fund. In addition, the compensation
mentioned above shall not prejudice any other rights of the
Transferee and/or the Company to claim for damages against the
Transferors in accordance with other provisions hereof and PRC laws
and regulations. The balance of the said guarantee fund (if any)
shall be refunded to the Transferors within ten (10) Business Days
after the expiration of the guarantee period; however, if,




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	 	 	 	upon the expiration of the aforesaid guarantee period, the
Transferors fail to complete the aforesaid tax clearance pursuant to
the above-mentioned requirements, then the aforesaid guarantee period
shall be naturally extended to the date when the Transferors have
completed the aforesaid tax clearance. Under such circumstances, the
balance of the aforesaid guarantee fund (if any) shall be refunded
within ten (10) Business Days after the Transferors have completed
the aforesaid tax clearance.





Article 4 Conditions Precedent for the Payment of the Transfer Price





	 	4.1	 	Under this Contract, the conditions precedent for the payment of the first
instalment of the Transfer Price in the amount of RMB 100,000,000 by the
Transferee are: (1) this Contract has been executed by all Parties and become
effective; (2) Longquan City Administration for Industry and Commerce has
officially accepted the alteration registration application concerning the
transfer of Sale Equity Stake contemplated hereunder; and (3) there has been
no Material Adverse Change to the Company from the Signing Date of this
Contract to the First Payment Date (as defined in Article 5.2).
	 
	 	4.2	 	Under this Contract, the conditions precedent for the payment of the
second instalment of the Transfer Price in the amount of RMB 55,200,000 by the
Transferee is: (1) the alteration registration of the Sale Equity Stake with
the local administration for industry and commerce has been completed and the
Sale Equity Stake has been legally registered under the name of the
Transferee; (2) the new business license of the Company has been issued; (3)
the delivery stipulated in Chapter VI of this Contract has been fully
completed, and the Transferee and the Transferors have finally signed and
confirmed in written form regarding the completion of the Delivery; and (4)
there has been no Material Adverse Change to the Company from the First
Payment Date to the Second Payment Date (as defined in Article 5.2).
	 
	 	4.3	 	Under this Contract, the conditions precedent for the repayment of the
guarantee fund (if any), by the Transferee is: (1) during the guarantee
period, the Hydropower Station Project does not have any quality problem, and
the




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	 	 	 	Transferors do not violate any provisions of this Contract; and (2) the
Transferors have completed the tax clearance of the Company in accordance
with Item (3) of Article 3.2 hereof.
	 
	 	4.4	 	In the event that any of the conditions set out in the above-mentioned
Article 4.1 and/or Article 4.2 and/or Article 4.3 has not been fulfilled or
satisfied, and the Transferee has not indicated its waiver of the said
conditions or any one of them in writing, the Transferee shall not be obliged
to pay the Transfer Price to the Transferors and shall not be deemed as breach
of contract.
	 
	 	4.5	 	The Parties hereby confirm that, in the event that the alteration
registration regarding the Sale Equity Stake contemplated hereunder has not
been completed within seven (7) Business Days after the date when Longquan
City Administration for Industry and Commerce has officially accepted the
application, then the Transferors shall refund the principal of the first
instalment of the Transfer Price in the amount of RMB100,000,000 and all
interests accrued thereon to the bank account designated by the Transferee on
the day when the aforesaid seven-Business-Days period is due. In addition, the
Transferee shall be entitled to rescind this Contract.
	 
	 	4.6	 	The Transferors and the Transferee agree that they shall use all their
best efforts to complete the requisite alteration registration procedure with
the competent administration for industry and commerce and the filing
procedure with the competent commercial authority for the transfer of the Sale
Equity Stake.





Article 5 Payment





	 	5.1	 	The Transferee shall remit RMB 90,000,000 of the first instalment of the
Transfer Price to the escrow account jointly designated by the Transferee and
the Transferors (the “Escrow Account”) within ten (10) Business Days from the
Signing Date of this Contract. The Escrow Account shall be opened in the name
of the Transferee with Bank of China, Lishui Branch. The Transferee will leave
its official seal and the Transferors will leave their personal seals.




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	 	 	 	The Transferors and the Transferee hereby confirm that all interests on
the Escrow Account shall be owned by the Transferee. In the event that
all conditions precedent provided in Article 4.1 have not been satisfied
as scheduled, then the Transferee shall be entitled to revoke the Escrow
Account and the Transferors shall cooperate unconditionally.
	 
	 	5.2	 	The First Payment Date shall be within three (3) Business Days after all
conditions precedent listed out in Article 4.1 hereof have been completed as
scheduled. The total amount of the first instalment of the Transfer Price
shall be RMB 100,000,000. The Transferee agrees that, on the First Payment
Date, the Transfer Price in the amount of RMB 90,000,000 shall be remitted
from the Escrow Account to the Bank Accounts Designated by the Transferors,
among which, RMB 80,000,000 shall be remitted to the bank account designated
by Party B, and RMB 10,000,000 shall be remitted to the bank account
designated by Party C, in the meanwhile, the deposit in the amount of RMB
10,000,000 remitted by the Transferee to the bank account of Party B on June
8, 2009 shall offset the Transfer Price paid to Party B.
	 
	 	 	 	The Second Payment Date shall be the Completion Date of Delivery after all
conditions precedent listed out in Article 4.2 hereof have been completed
as scheduled. The Transferee shall, on the Second Payment Date, remit the
Transfer Price in the amount of RMB 55,200,000 to the Bank Accounts
Designated by the Transferors, among which, RMB 49,680,000 shall be
remitted to the bank account designated by Party B, and RMB 5,520,000
shall be remitted to the bank account designated by Party C.
	 
	 	 	 	After the deduction of guarantee liabilities and indemnity assumed by the
Transferors in accordance with PRC laws and regulations and this Contract,
if there is a balance of the guarantee fund as stipulated in Item (3) of
Article 3.2 hereof, the Transferee shall pay such balance to the
Transferors in accordance with Item (3) of Article 3.2 of this Contract.
	 
	 	5.3	 	The Transferors shall, within three (3) Business Days after the conclusion
of this Contract, provide the Transferee in written form with the detailed




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	 	 	 	information in relation to the Bank Accounts Designated by the
Transferors, otherwise, in the event that the Transferors fail to provide
the detailed information of the bank accounts in a timely fashion, or the
Transferors fail to provide the documents, seals or procedures necessary
for the transfer of the fund in the Escrow Account in a timely fashion,
or due to the reasons of the accounts opening banks of the Transferors,
the Transferee cannot remit or cannot remit the Transfer Price as
scheduled, the Transferee shall not assume any liability arising
therefrom.
	 
	 	5.4	 	The Transferors shall issue to the Transferee the evidential documents for
the payment received within three (3) Business Days after receiving each
instalment of the Transfer Price paid by the Transferee. In the event that the
Transferors fail to issue the evidential documents for the payment received
within the prescribed time limit, the Transferee shall be entitled to
correspondingly delay in paying the rest Transfer Price, which shall not be
deemed as breach of contract. In the event that the evidential documents for
the payment issued by the Transferors are not in compliance with the PRC laws
and regulations which cause the Transferee and/or the Company to suffer from
any damage or loss, the Transferors shall assume joint liability for the
compensation on the Transferee and/or the Company.
	 
	 	5.5	 	The obligations of the Transferee shall be deemed as having been fully
accomplished upon the remittance of the Transfer Price into the Bank Accounts
Designated by the Transferors and the Transferee shall not take any
responsibilities or obligations thereafter.





Article 6 Taxes Payable under the Transfer of Sale Equity Stake





Any taxes or fees arising out of and payable pursuant to the fulfilment of the
terms of this Contract by each of the Transferors and the Transferee shall be
paid by the respective Party liable for the taxes or fees under the provisions
of relevant laws and regulations of China.



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Chapter III Representations and Warranties by All Parties




Article 7 Representations and Warranties by All Parties





	 	7.1	 	Prior to the signing of this Contract, if the signing party is a company,
such company shall provide a power of attorney which authorizes its
representative to sign this Contract; if the signing party is an individual,
such individual shall provide a copy of his/her identification card together
with the original of the identification card being shown; in case of proxy,
power of attorney thereof and a copy of the identification card of the
principal shall be provided.
	 
	 	7.2	 	When signing this Contract, the Transferors and the Transferee hereby
state that the documents and information provided to any other Party or their
agencies (including, without limitation, the lawyers, valuers, financial
staff, etc.) before the Signing Date are still valid and authentic, and
confirm that where there is any discrepancy therein with the terms of this
Contract, this Contract shall prevail.
	 
	 	7.3	 	The Transferors and the Transferee hereby agree that upon this Contract
coming into effect, the contracts or documents pertaining to the transfer of
the Sale Equity Stake entered into between the Transferors and the Transferee
prior to this Contract shall lapse automatically.
	 
	 	7.4	 	All Parties to this Contract agree to strive jointly in coordinating the
work pertaining to the transfer of the Sale Equity Stake, including but not
limited to registration and filing for record, etc., and the costs and
expenses arising therefrom shall be borne by the Company.





Chapter IV Disclosures, Representations and Warranties by the Transferors








Article 8 Disclosures, Representations and Warranties by the Transferors





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The Transferors hereby jointly and severally represent and warrant to the
Transferee that:






	 	8.1	 	All information and facts relating to the Company that is in the
possession of the Transferors or is known to any of the Transferors which will
have a substantive and adverse effect on the Transferors’ ability to fulfil
any of their obligations in this Contract or when disclosed to the Transferee
shall have a substantive effect on the willingness of the Transferee to sign
and fulfil its obligations under this Contract, have been disclosed to the
Transferee and the information provided by the Transferors to the Transferee
does not contain any representation that is untrue or misleading.
	 
	 	8.2	 	No lawsuits, arbitrations, or other legal or administrative proceedings or
governmental investigations are on-going against the Transferors that will
materially affect their ability to sign this Contract or fulfil their
obligations under this Contract.
	 
	 	8.3	 	As of the Signing Date, the Transferors have informed the Third Party the
whole matter of the transfer of the Sale Equity Stake under this Contract who
are related to the Sale Equity Stake and the Company; and in case of any
requirement for the consent of such Third Party, the Transferors have already
procured the corresponding written consent from such Third Party.
	 
	 	8.4	 	The Transferors hereby jointly undertake that neither of them will take
any action after the Signing Date that will cause any adverse impact on the
Company.
	 
	 	8.5	 	Regarding the documents and information provided by the Transferors to the
Transferee and/or the Transferee’s agencies (including without limitation the
lawyers, valuers, financial staff, etc.) prior to the Signing Date, the
Transferors hereby undertake that:






	 	8.5.1	 	all copies made from original documents are true and complete and
that such original documents are authentic and complete;




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	 	8.5.2	 	all originals supplied to the Transferee and/or the Transferee’s
agencies are authentic and complete;
	 
	 	8.5.3	 	all signatures (stamps) appearing on documents supplied to the
Transferee and/or the Transferee’s agencies as originals or copies of
originals are genuine; and
	 
	 	8.5.4	 	the Transferors have drawn to the attention of the Transferee and/or
the Transferee’s agencies all matters that are material for the Transferee
to proceed with the transaction as contemplated in this Contract.






	 	8.6	 	At any moment of present or in the future, upon the request of the
Transferee, the Transferors shall, on their own expenses, use all efforts to
carry out and/or sign in a way which is satisfactory to the Transferee, or to
impel the Third Party to carry out and/or sign in a way which is satisfactory
to the Transferee, any action and/or document which the Transferee reasonably
deems requisite, in order to realize the full effectiveness and implementation
of this Contract.





     Article 9 General Representations and Warranties by the Transferors




	 	9.1	 	Party B is a legal entity that has been duly established according to the
laws and regulations of China and it is validly and legally in existence and
also operating normally in accordance with the laws and regulations of China.
Signing this Contract and fulfilling all of its obligations stipulated herein
by Party B shall not contravene or result in the violation of or constitute a
failure to fulfil or an inability to fulfil any of the stipulations in its
articles of association or internal rules, any laws, regulations,
stipulations, any authorization or approval from any government body or
department or the stipulations of any contract or agreement that Party B is a
party to or is bound by.




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	 	9.2	 	Party C is a PRC citizen with all civil abilities to enter into this
Contract and fulfil all of his obligations stipulated herein. Signing this
Contract and fulfilling all of his obligations stipulated herein by Party C
shall not contravene or result in the violation of or constitute a failure to
fulfil or an inability to fulfil any of the stipulations in any laws,
regulations, stipulations, any authorization or approval from any government
body or department or the stipulations of any contract or agreement that Party
C is a party to or is bound by.





Article 10 Ownership





	 	10.1	 	The Transferors hereby jointly and severally undertake and warrant that:
the Transferors are the legal owners of the Sale Equity Stake and have full
authority and right to transfer the Sale Equity Stake to the Transferee and
the Sale Equity Stake does not involve any state-owned assets and interests.
In the event that the Transferee and/or the Company suffer from any damage or
loss due to the reason that the Sale Equity Stake involves state-owned assets
and interests, the Transferors shall assume joint liability for the full
compensation on the Transferee and/or the Company.
	 
	 	10.2	 	The Transferors hereby jointly and severally undertake and warrant that:
up to the First Payment Date (inclusive), the Sale Equity Stake is not subject
to any Claims or Encumbrances (including but not limited to any form of
option, acquisition right, mortgage, pledge, guarantee, lien or any other
forms of third party rights); and there is no interest present and no
agreement or undertaking in existence that may result in or create any Claim
or Encumbrance on the Sale Equity Stake (including but not limited to the
aforesaid option, acquisition right, mortgage, pledge, guarantee, lien or any
other forms of third party rights and interest).
	 
	 	10.3	 	All obligations as the shareholders of the Company which shall be born by
the Transferors for the benefit of the Company and Third Party have been fully
fulfilled by the Transferors. Any Third Party or any level of the governmental
authorities of the PRC shall not, due to the Transferors’ failure to perform




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	 	 	 	their due obligations as the shareholders of the Company, claim against
the Company and/or the Transferee or adopt administrative acts which are
unfavourable to the Company and/or the Transferee, including but not
limited to imposition of fine, revocation of the business license,
requiring to make additional payment for the taxes or ordering to stop
production, etc.
	 
	 	10.4	 	The Transferors hereby jointly and severally undertake and warrant that:
no lawsuits, arbitrations, or other legal or administrative proceedings or
governmental investigations are on-going against any party of the Transferors
that will materially affect the Transferors’ ability to sign this Contract or
fulfil the Transferors’ obligations under this Contract.
	 
	 	10.5	 	The Transferors hereby jointly and severally undertake and warrant to
provide all relevant materials which should be provided by the Transferors and
are requisite for carrying out the alteration registration of the Sale Equity
Stake, including but not limited to the tax clearance certificate issued by
the competent taxation authority.





     Article 11 The Company and the Hydropower Station Project


The Transferors hereby jointly and severally represent and warrant to the
Transferee that:





	 	11.1	 	The Company is a legal entity duly established according to the laws of
China, which is validly and legally in existence and also operating normally
in accordance with the laws and regulations of China.
	 
	 	11.2	 	The registered capital of the Company has been fully paid up as
scheduled. The Transferors have fully fulfilled their capital contribution
obligations, which have been legally verified in accordance with relevant PRC
laws. There is no withdrawal of the registered capital by the Transferors.




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	 	11.3	 	The Company is the legal owner of the Hydropower Station Project and can
enjoy the full and complete ownership, operation right and right to profit of
the Hydropower Station Project.
	 
	 	11.4	 	The development, construction and operation of the Hydropower Station
Project have procured all requisite approvals issued by relevant governmental
authorities and are complied with all relevant PRC laws and regulations and
the approvals, permits and licenses issued by relevant governmental
authorities, and there is no violation of the PRC laws and regulations and
approvals, permits and licenses issued by relevant governmental authorities,
or conditions which result in or may result in the revocation or withdrawal of
such approvals, permits or licenses. In the event that the Transferee and/or
the Company suffer from any damage or loss arising out of any violation and/or
revocation and/or withdrawal, the Transferors shall be jointly liable for the
full compensation on the Transferee and/or the Company.
	 
	 	11.5	 	Prior to the date of the delivery of the assets, every aspect of the
Hydropower Station Project, including but not limited to the hydrology,
geology, water flow, dam safety and hydropower generator units, etc., is
complied with the requirements for the normal power generation, and except for
normal operation losses, is free from any flaw, defect or any other problems.
In the event that the Transferee and/or the Company incur any damage or loss
arising out of any flaw, defect or any other problem which has already existed
before the Completion Date of Delivery, the Transferors shall be jointly
liable for the full compensation on the Transferee and/or the Company.
	 
	 	11.6	 	Up to the First Payment Date, the Company has never suffered and is not
currently suffering from any administrative investigations, lawsuit,
arbitration, disputes, Claims or other proceedings (no matter ongoing, pending
or threatened), nor has the Company been punished, and the Transferors can
foresee that no punishment is to be made against the Company by any
administrative authorities of the PRC for the issues already existed before
the transfer of the Sale Equity Stake. Up to the Signing Date, the Transferors
have fully disclosed in written form to the Transferee all information in
respect of




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	 	 	 	environmental protection, water and soil conservation, flood prevention
plan, utilization of land (woodland), woods cutting, power generation,
emigrants relocation, fire-prevention and work safety of the Company,
etc. In addition, the Transferors hereby jointly warrant that all fees
(including but not limited to water resources fees), charges, penalties
and expenses payable to or being required to be paid to any PRC
governmental authority have been paid off. As of the Second Payment Date,
there are no such fees, charges, penalties and expenses in default, nor
are there any costs and/or expenses being required by any PRC
governmental authority to be paid for any purpose of correcting defects
and/or inappropriate actions of the Company in default. In the event that
the Transferee and/or the Company suffers from any penalty, damage, loss,
etc. due to any such administrative investigations, lawsuit, arbitration,
disputes, claims, penalties and/or other proceedings which existed before
the completion of the transfer of the Sale Equity Stake, the Transferors
shall be jointly liable for the full compensation on the Transferee
and/or the Company.
	 
	 	11.7	 	The Company legally owns all real estate (including but not limited to
land, buildings, dams, headrace, electricity power transmission lines,
structures and affiliated facilities) and moveable assets (including but not
limited to machines, equipments, vehicles, furniture and office facilities),
which are requisite for its business operation and shall be not less than
those real estate and moveable assets listed out in the Assets List in
Appendix III to this Contract. Except for the securities disclosed in Appendix
II to this Contract, the Company has not created any other security (including
but not limited to mortgage, pledge and lien) or other Encumbrance on the real
estate and movable assets. Prior to the Completion Date of Delivery
(inclusive), all material aspects of all buildings, dams, machines,
equipments, vehicles and other assets owned by the Company are in good, safe
and operational conditions (excluding the loss from normal usage), which are
anticipated not to be repaired (excluding the daily requisite maintenance),
replaced or supplemented within twenty-four (24) months after the Signing Date
due to the causes existed prior to the Completion Date of Delivery
(inclusive). The Transferors hereby warrant and undertake that commencing from
the Signing Date, the real estate and movable assets mentioned above will not
suffer from




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	 	 	 	any loss or damage due to the reasons of the Transferors or any Third
Party existing prior to the Completion Date of Delivery (inclusive). In
the event that such real estate and movable assets suffer from any loss
or damage due to the actions of the Transferors or any Third Party, the
Transferors shall be jointly liable for the full compensation on the
Transferee and/or the Company.
	 
	 	11.8	 	The production, operation, construction and business of the Company are
complied with all applicable PRC laws and regulations, including but not
limited to those laws and regulations in relation to hydropower generation,
environmental protection, water and soil conservation, flood prevention plan,
construction of water resources projects, bidding, utilization of woodland,
woods cutting, fire-prevention, work safety and emigrants relocation. The
Transferors warrant that the environmental protection authority, water
resources authority, electricity regulatory authority, construction authority,
forestry authority, fire-prevention authority, planning authority, safe
production authority, development and reform authority and other governmental
authorities will not punish the Company due to the issues of environmental
protection, water and soil conservation, water drawing, flood prevention plan,
design and construction of hydro projects, bidding, power generation,
utilization of woodland, woods cutting, fire-prevention, work safety and
emigrants relocation, etc. which already existed before the Second Payment
Date. In the event that the Company suffers from any loss or damage due to the
punishment by local government, environmental protection authority, water
resources authority, electricity regulatory authority, forestry authority,
construction authority, fire-prevention authority, planning authority, safety
production authority, development and reform authority or other governmental
authorities, the Transferors shall fully compensate the Transferee and/or the
Company so as to hold the Transferee and/or the Company harmless.
	 
	 	11.9	 	The fire-prevention design of all construction projects of the Company
are fully complied with all relevant PRC laws and regulations and the relevant
requirements of national fire-prevention technical standards.




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	 	11.10	 	Prior to the signing of this Contract, the Transferors have already
disclosed all information about the debts of the Company. As of the Second
Payment Date, such information remains complete, reliable, accurate and
genuine. As of the Signing Date, all debts of the Company have been set out in
Appendix I to this Contract, and as of the Second Payment Date, all due
principal and accrued interests of the debts listed out in Appendix I hereto
have been fully paid off. The Transferors shall assume joint liabilities to
fully compensate the Transferee and/or the Company for any undisclosed debts
or unpaid due principal and interests, so as to hold the Transferee and/or the
Company harmless.
	 
	 	11.11	 	As for the bank loans listed in Appendix I to this Contract, the
Transferors shall do their utmost to assist the Transferee in negotiating with
the lender, so as to make sure there will be no adverse change of the terms
and conditions of the existing bank loans of the Company.
	 
	 	11.12	 	The Company can legally own the land use right of all the land and all
the buildings currently used by the Company, free from being sued, arbitrated,
punished or suffering from other damage or loss due to the problems of land
and/or buildings. In the event that the Transferee and/or the Company suffer
from any punishment, damage or loss due to the use of such land or buildings,
the Transferors shall assume joint liabilities to fully compensate the
Transferee and/or the Company.
	 
	 	11.13	 	The procurement of the land use right (allocated) with the State-owned
Land Use Right Certificates (the certificate No.: Long Guo Yong (2004) Zi No.
0628005, Long Guo Yong (2004) Zi No. 0627001, Zhe Long Guo Yong (2007) Zi No. 4268) for the land currently used by the Company is
in full compliance with the PRC laws and regulations, and all relevant
taxes and fees have been fully paid off in accordance with law. In the
event that the Transferee and/or the Company suffer from any
punishment, damage or loss due to the land, the Transferors shall
assume joint liabilities to fully compensate the Transferee and/or the
Company.




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	 	11.14	 	The procurement of the land use rights (granted) with the State-owned
Land Use Right Certificates (the certificate No.: Zhe Long Guo Yong (2007) Zi
No. 4267 and the certificate No: Long Guo Yong (2004) Zi No. 0628006 ) for the
land currently used by the Company is in full compliance with the PRC laws and
regulations, and all relevant taxes and fees (including, without limitation,
the compensation fees for land requisition, and land grant fees) have been
fully paid off in accordance with law. In the event that the Transferee and/or
the Company suffer from any punishment, damage or loss due to the said land,
the Transferors shall assume joint liabilities to fully compensate the
Transferee and/or the Company.
	 
	 	11.15	 	After the Signing Date, the Transferors shall normally operate and
manage the Company until the Completion Date of Delivery and warrant that
there will be no Material Adverse Change to the operation, business and
conditions of the Company.
	 
	 	11.16	 	As of the Second Payment Date, the Company has not carried out any
equity investment or any other investment in any other companies, enterprises
and other economic organizations. In the event that the Company suffers from any damage or loss due to such undisclosed equity
investment or other investment, the Transferors shall assume joint
liabilities to fully compensate the Transferee and/or the Company.
	 
	 	11.17	 	As of the Second Payment Date, there has been no pledge or other
restrictions on the right to the collection of the electricity fees and
operation right of the Company. In the event that the Company and/or the
Transferee suffers from any damage or loss due to such pledge or right
restrictions, the Transferors shall assume joint liabilities to fully
compensate the Transferee and/or the Company.
	 
	 	11.18	 	As of the Second Payment Date, except for the securities listed out in
Appendix II to this Contract, the Company’s assets and rights are free from
any other security (including but not limited to mortgage, pledge and lien) or
any other Encumbrance, neither has the Company provided any security




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	 	 	 	(including but not limited to mortgage, pledge and guarantee) for any
other companies, enterprises, economic entities or any individuals. In
the event that the Transferee and/or the Company suffers from any
damage or loss due to such undisclosed security, the Transferors shall
assume joint liabilities to fully compensate the Transferee and/or the
Company.
	 
	 	11.19	 	The Company has conducted valid tax registration and procured the valid
Tax Registration Certificate. The Company has filed the tax declaration in
accordance with the requirements of the laws and regulations of the PRC, and
all contents declared have been real and complete. As of the Second Payment
Date, the Company has fully paid off all taxes required by the PRC laws and
regulations, including but not limited to enterprise income tax, value-added
tax, urban maintenance and construction tax and additional education fees. The
Transferors shall assume joint liabilities for any unpaid taxes to the
Transferee and/or the Company so as to hold the Transferee and/or the Company
harmless.
	 
	 	11.20	 	All construction projects (whether completed or under construction) of
the Company have obtained all requisite governmental approvals and licenses
and are constructed in strict compliance with such approvals and licenses
issued by relevant governmental authorities and there have been no violations
thereof. In the event that after the completion of the transfer of the Sale
Equity Stake, the Company is punished by any governmental authority as a
result of any above-mentioned issues, the Transferors shall assume joint
liabilities to fully compensate the Company and/or the Transferee.
	 
	 	11.21	 	The effectiveness of this Contract shall not cause any Third Party to
terminate the contracts or agreements concluded with the Company prior to the
Effective Date of this Contract (inclusive) which are still effective on the
Effective Date, and will not create any security or Encumbrance in any other
form favourable to the Third Party on the assets of the Company.




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	 	11.22	 	The effectiveness of this Contract shall not cause any adverse impact
on the development, operation and assets of the Hydropower Station Project of
the Company, and will not cause the Company to lose the development right,
operation right, ownership or right to profit of the Hydropower Station
Project which have been owned by the Company prior to the Effective Date of
this Contract (inclusive).
	 
	 	11.23	 	The originals of all contracts (including but not limited to contracts
relating land requisition, loan, security, insurance, design, construction,
supervision, procurement, grid connection principle agreement, grid
connection and dispatching agreement and grid connection economic agreement)
concluded by the Company prior to the Effective Date of this Contract
(inclusive) have been preserved by the Company in complete form and there
have been no violations thereof, and as far as the Transferors know, there
does not exist any condition which may lead to the violation by the Company.
In case of such circumstances, the Transferors have disclosed it to the
Transferee in written form.
	 
	 	11.24	 	The Company’s production technology and process are in full compliance
with relevant PRC laws, regulations, standards and norms, and there are no
illegal actions of infringing upon intellectual property rights of others,
such as patent, know-how, etc. In the event that the Company suffers from any
punishment, damage or loss due to any above-mentioned issues, the Transferors
shall assume joint liabilities to fully compensate the Company and/or the
Transferee.
	 
	 	11.25	 	Labour Contracts between the Company and the employees who are still
employed by the Company upon the Signing Date have been legally and
effectively executed. The registration of the social insurance for the
employees of the Company has been legally and validly taken out. The various
social insurance premiums and housing provident fund, which shall be taken
out for the employees according to relevant PRC laws and regulations, have
been fully paid up in a timely fashion, and there has been no payment for the
employees’ social insurance premiums, housing




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	 	 	 	provident fund, wages, and other welfares provided in PRC laws and the
Company’s internal regulations in default. As of the Second Payment
Date, there has not been any circumstance which may lead the employees
to bring labour arbitrations or lawsuits against the Company. In the
event that the Company and/or the Transferee suffer from any
punishment, loss or damage due to the aforesaid issues, the Transferors
shall assume joint liabilities to fully compensate the Transferee
and/or the Company.
	 
	 	11.26	 	As of the Second Payment Date, the Company does not lease any real
estate or movable assets such as land, buildings, machines and equipments,
etc.
	 
	 	11.27	 	The Company has taken out requisite insurances usually purchased by
other enterprises within the same industry based on reasonable requirements of
its production and operation, all policies of which are still valid, all due
insurance premiums of which have been paid off, and all other material
conditions of which have been fully fulfilled and observed. As of the Second
Payment Date, there is no circumstance which may have led to or may lead to
the invalidity of the aforesaid insurance policies. The aforesaid insurance
policies are free from any special or unusual restrictions. As of the Second
Payment Date, there have been no circumstances under which the Company could
claim for compensation against the insurer in accordance with the aforesaid
policies.
	 
	 	11.28	 	The Transferors undertake and warrant that, on the Completion Date of
Delivery provided in Chapter 6 hereof, the water level of the reservoir of the
Hydropower Station Project shall not be lower than the average water level of
August for the most recent four (4) years of the Hydropower Station Project,
namely, 523 meters. In the event that the water level of the reservoir is
lower than the aforesaid standard over 10%, then the Transferors shall make
corresponding indemnity on the Transferee and/or the Company, provided that
the decline is not due to the Force Majeure as defined in Chapter 10.




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	 	11.29	 	All representations and warranties made by the Transferors under this
Article 11 shall be valid for two (2) years commencing from the Signing Date
of this Contract.





Chapter V Disclosures, Representations and Warranties by the Transferee




Article 12 Disclosures, Representations and Warranties by the Transferee





The Transferee hereby represents and warrants to the Transferors that:




	 	12.1	 	The Transferee is a legal entity that has been duly established according
to the laws of the PRC and it is validly and legally in existence and also
operating normally in accordance with the laws and regulations of the PRC.
	 
	 	12.2	 	Signing this Contract and fulfilling all of its obligations stipulated
herein shall not contravene or result in the violation of or constitute a
failure to fulfil or an inability to fulfil any of the stipulations of the
Transferee’s articles of association or its internal rules, any laws,
regulations, stipulations, or any authorizations or approvals from any
government body or department or any contract or agreement that the Transferee
is a party to or is bound by.
	 
	 	12.3	 	No lawsuits, arbitrations, or other legal or administrative proceedings
or governmental investigations, etc. are on-going against the Transferee that
will materially affect its ability to sign this Contract or fulfil its
obligations under this Contract.





Chapter VI Delivery




Article 13 Delivery




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	 	13.1	 	The delivery provided in this Chapter shall include, without limitation,
the delivery of the production, operation and management of the Company and
the Hydropower Station Project, financial affairs, assets, files and
documents, certificates and licenses, approval documents, official stamps and
the project constructions from the Transferors to the Transferee.
	 
	 	13.2	 	The Parties hereby confirm that, the income derived from power generation
of the Company during the period between the First Payment Date (inclusive)
and the Second Payment Date (exclusive), after deducting all expenses and
costs, shall be owned by the Transferors, however, all interests accrued on
the first instalment of the Transfer Price in the amount of RMB 100,000,000
during such period shall be owned by the Transferee and the applicable annual
interest rate is 6.53%. The Transferors shall remit the aforesaid interests to
the bank account designated by the Transferee on the Second Payment Date; in
the event that electricity fees of the Company have not been settled on the
Completion Date of Delivery, then the Transferee shall remit the aforesaid
income, after deducting all costs and expenses, to the Transferors within
seven (7) Business Days after the receipt of the electricity fees generated
during the period between the First Payment Date (inclusive) and the Second
Payment Date (exclusive). From the Second Payment Date (inclusive), all
income derived from power generation of the Company shall be owned by the
Transferee.
	 
	 	13.3	 	During the period between the Signing Date of this Contract and the
Completion Date of Delivery as prescribed in this Chapter:






	 	(1)	 	The Transferors shall continue to operate the Company in general and
usual way; the Transferors shall not (or shall not agree to) require the
Company to make any payment to any Third Party, however, excluding the
payment which needs to be made for the general operation purpose and the
determined expenditure programme (in the event that such payment exceeds
RMB50,000, it shall be subject to the prior written consent of the
Transferee); the Transferors shall not terminate any




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	 	 	 	agreements or arrangements which have significant value to the
Company, or give up any rights which have significant value;
	 
	 	(2)	 	In the event that the Company intends to enter into any contract,
agreement or memorandum, etc., of which the price, value, liability or
debt (including contingent debt) exceeds the amount of RMB 50,000, the
prior written consent from the Transferee must be procured;
	 
	 	(3)	 	Without the prior written consent of the Transferee, the Transferors
shall not make any material amendments to the financing, loan or security
arrangements of the Company;
	 
	 	(4)	 	The Transferors shall take all reasonable actions to preserve and
protect the assets of the Company; and shall not create any pledge,
mortgage and other type of securities on the assets of the Company, or
provide guarantee or other security to any Third Party in the name of the
Company;
	 
	 	(5)	 	The Transferors shall not, on behalf of the Company, settle, release
or terminate any material lawsuits, arbitrations or other legal
proceedings, or any material legal liabilities and claims, or give up the
rights relating to the foregoing;
	 
	 	(6)	 	The Transferors shall not release or write off any debt owed by the
debtor specified in the accounting books of the Company;
	 
	 	(7)	 	The Transferors shall ensure the Company will not enter into any
cooperation, joint venture or other forms of outward equity investment or
debt investment arrangements;
	 
	 	(8)	 	In case of any Material Adverse Change or other conditions which may
cause the representations, warranties or undertakings made by the
Transferors to be false, inaccurate, unrealizable or misleading, the
Transferors shall inform the Transferee in written form within
twenty-four




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	 	(24)	 	hours and provide reasonable and detailed information and
explanation; and
	 
	 	(9)	 	The Transferors and/or the Company will not take any actions which may
violate the provisions of this Contract or may influence the fulfilment of
the obligations hereunder or the transfer of the Sale Equity Stake
contemplated herein.






	 	13.4	 	The Transferors shall deliver the production, operation and management of
the Company and the Hydropower Station Project to the Transferee in accordance
with the requirements of the Transferee.
	 
	 	13.5	 	The Transferors shall deliver all assets of the Company and the
Hydropower Station Project to the Transferee in accordance with the Assets
List in Appendix III hereto. The Transferors shall warrant making a full and
complete delivery and there shall be no derogation between the Company’s
assets delivered to the Transferee and those listed out in the Assets List in
Appendix III hereto, otherwise, the Transferors shall make full compensation
on the Transferee and/or the Company for any damage or loss.
	 
	 	13.6	 	The Transferors shall deliver to the Transferee all documents and file
materials in accordance with the list of documents and materials jointly
confirmed by the Transferee and the Transferors in written form, including,
without limitation, all stamps of the Company, such as the official stamp,
financial stamp and contract stamp, the originals of all account opening
documents and specimen chops for all bank accounts of the Company, the
originals of all approvals, certificates, permits, customer information,
building ownership certificates, state-owned land use right certificates and
other materials, the originals of all project drawings, contracts, agreements
of the Hydropower Station Project, the originals of all financial accounting
books, financial vouchers and the accounting files of the Company. The
Transferors shall make a full and complete delivery and there shall be no
derogation between the documents and files materials of the Company and the
Hydropower Station Project delivered to the Transferee and those listed out in
the list of documents




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	 	 	 	and materials jointly confirmed by the Transferee and the Transferors in
written form, otherwise, the Transferors shall make full compensation on
the Transferee and/or the Company for any damage or loss.
	 
	 	13.7	 	The Transferors shall deliver to the Transferee relevant information
concerning technology and the units contracting the construction works of the
Hydropower Station Project, equipment manufacturer, design, project
supervision, quality examination and transmission lines, etc.
	 
	 	13.8	 	The delivery shall be fully completed within ten (10) Business Days from
the First Payment Date. The date of the final signing of the confirmation by
the Transferee and the Transferors shall be the Completion Date of Delivery.
	 
	 	13.9	 	After the Completion Date of Delivery, the Transferors shall provide
active cooperation when the Transferee reasonably requires further delivery in
writing.
	 
	 	13.10	 	The Transferors shall make sure the continuity, stability and safety of
the production and operation of the Company during the process of the
delivery.
	 
	 	13.11	 	The Transferors shall fully cooperate so as to complete the delivery. In
the event that the Transferee or the Company after the transfer of the Sale
Equity Stake suffers from any damage due to the Transferors’ non-cooperation,
the Transferors shall be jointly liable for the compensation in accordance
with law.





Chapter VII Creditor’s Right and Debt and Employees Arrangement




Article 14 Creditor’s Right and Debt Arrangement





	 	14.1	 	All Parties confirm that, as of the First Payment Date, the total amount
of the debt of the Company was RMB 108,000,000. After the completion of the




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	 	 	 	transfer of the Sale Equity Stake contemplated herein, such debt shall
continue to be born by the Company.
	 
	 	14.2	 	After the completion of the transfer of the Sale Equity Stake
contemplated herein, all creditor’s rights enjoyed by the Company and all
debts assumed by the Company prior to the Second Payment Date shall be enjoyed
and assumed by the Transferors (except for the bank loan set out in Appendix I
hereto, but all due interest of such loan prior to the Second Payment Date
shall still be paid by the Transferors.).





Article 15 Employees Arrangement





	 	15.1	 	Upon the completion of the transfer of the Sale Equity Stake, The
Transferee shall be entitled to choose to re-employ excellent employees from
the current employees of the Company. The terms and conditions of their
employment shall be determined by reference to the standards applied in the
other domestic project companies currently owned by the Transferee in
principle and implemented in accordance with the Labour Law of the PRC, the
Labour Contract Law of the PRC and other relevant PRC laws and regulations. The
Company will execute new labor contracts with the employees and the
Transferors shall be responsible for the relocation of those employees
who are not re-employed by the Company.
	 
	 	15.2	 	The Transferors undertake and warrant that they will properly relocate
the employees who are fired or not re-employed by the Company and shall ensure
that such employees will not make trouble against the Company, nor will apply
for arbitration, bring lawsuit or any other administrative or judicial
proceedings against the Company. The Transferors shall make sure that the
Company will not be punished by any competent governmental authority or incur
any other adverse effect due to the relocation of the aforesaid employees.
	 
	 	15.3	 	The Transferors undertake and warrant that all compensation, indemnity,
costs and any other expenses in connection with the relocation of the
employees of the Company shall be assumed by the Transferors themselves. In
the event that




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	 	 	 	the Company and/or the Transferee suffer from any damage or loss, the
Transferors shall be jointly liable for the full compensation on the
Company and/or the Transferee.





Chapter VIII Confidentiality




Article 16 Confidentiality





	 	16.1	 	All Parties agree unless otherwise provided for in another relevant
confidentiality agreement that with regard to the confidential and exclusive
information that have been disclosed to or may be disclosed to the other
Parties by any Party to this Contract pertaining to their respective
businesses, or financial situations and other confidential matters, all
Parties to this Contract which have received the aforesaid confidential
information (including written information and non-written information,
hereinafter referred to as “Confidential Information”) shall:






	 	16.1.1	 	Keep the aforesaid Confidential Information confidential;
	 
	 	16.1.2	 	Save for the disclosure of the Confidential Information by a Party
to this Contract to its employees solely for the performance of their
duties and responsibilities, none of the Parties to this Contract shall
disclose the Confidential Information to any Third Party or any entity.






	 	16.2	 	The provisions of the aforesaid Article 16.1 shall not apply to
Confidential Information:






	 	16.2.1	 	which was available to the receiving Party from the written records
procured by the receiving Party from the disclosing Party before the
disclosing Party disclosed the information to the receiving Party;




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	 	16.2.2	 	which has become public information by means not attributable to
any breach by the receiving Party;
	 
	 	16.2.3	 	which was obtained, by the receiving Party from a Third Party not
subject to any confidentiality obligation affecting the said Confidential
Information.






	 	16.3	 	As far as any natural person or legal entity which is a Party to this
Contract is concerned, notwithstanding that it has ceased to be a Party to
this Contract because of the transfer of its rights and obligations pursuant
to the terms of this Contract, the stipulations set out in this Chapter VIII
shall remain binding on it.





Chapter IX Breach of Contract




Article 17 Liability for Breach of a Representation or Warranty





	 	17.1	 	If any representation or warranty made by any Party to this Contract is
found to be an error, or if any fact that has or is likely to have a major or
substantial effect on the signing of this Contract by any Party has been
omitted, or if any representation or warranty is found to be misleading or
untrue in any respect, the non-breaching Party shall be entitled to look to
the Party (ies) in breach for full compensation for any loss, damage, cost or
expense arising from the erroneous, misleading or untrue representation or
warranty of the Party (ies) in breach or arising from any other breach of any
representation and warranty given by the Party (ies) in breach.
	 
	 	17.2	 	Each representation and warranty set out in this Contract is to be
construed independently.




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	 	17.3	 	For the avoidance of doubt, the Transferors hereby unconditionally and
irrevocably agree and confirm that they shall be jointly liable for any
liability for any breach of representation or warranty.





Article 18 Liability for Breach of Contract





	 	18.1	 	In the event of a breach committed by any Party to this Contract, the
said defaulting Party shall be liable to the other Party (ies) in accordance
with the provisions of this Contract and the PRC laws and regulations. In the
event all Parties hereof commit breach of the contract, each Party shall be
liable to the other Party (ies) for the losses and damages or any other
liabilities arising out of its breach of contract.
	 
	 	18.2	 	In the event that the undisclosed issues by the Transferors prior to the
signing of this Contract which may influence the legal existence of the
Company and the Hydropower Station Project, after the completion of the Sale
Equity Stake, actually influence the legal existence of the Company or the
Hydropower Station Project, the Transferee is entitled to terminate this
Contract and to require the Transferors (1) to refund the full amount of the
Transfer Price paid by the Transferee; (2) to pay three percent (3%) of the
Transfer Price as liquidated damages, and (3) is entitled to enjoy other legal
claims and compensations in accordance with other provisions hereof and PRC
laws and regulations.
	 
	 	 	 	After all conditions precedent for the payment of the first and second
instalments of the Transfer Price by the Transferee have been satisfied,
in the event that the Transferee fails to pay the corresponding Transfer
Price in accordance with the time limit provided in this Contract and such
delayed payment has exceeded thirty (30) Business Days from the time limit
provided in this Contract, then the Transferors shall be entitled to
rescind this Contract, and request the Transferee (1) to return the Sale
Equity Stake, (2) to pay three percent (3%) of the Transfer Price as
liquidated damages, and (3) is entitled to enjoy other legal claims and
compensations in accordance with other provisions hereof and PRC laws and
regulations.




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	 	18.3	 	Any violation of the obligations, representations and warranties under
this Contract by any Party of the Transferors or Transferee shall constitute a
breach of contract, and the defaulting Party (ies) shall assume the liability
to compensate all the losses due to the breach of contract to the other Party.
	 
	 	18.4	 	Any delayed performance of the obligations, representations and
warranties under this Contract by any Party of the Transferors or Transferee
shall constitute a breach of contract; however, the delayed performance or
non-performance due to the other Party’s advance performance obligation shall
not constitute a breach of contract.
	 
	 	 	 	The defaulting Party with delay in performance of the Contract shall pay
the liquidated damages per day in the amount of the Transfer Price
multiplied by the one-year bank loan rate announced by the People’s Bank
of China to the non-defaulting Party (ies); in the event that the
defaulting Party delays to perform the Contract over thirty (30) Business
Days, the non-defaulting Party (ies) is entitled to terminate the
Contract, and to require the defaulting Party to pay one percent (1%) of
the Transfer Price as liquidated damages. The procurement of the
liquidated damages shall not prejudice the non-defaulting Party (ies)
right to claim for other legal remedies in accordance with other
provisions of this Contract and the PRC laws and regulations.
	 
	 	18.5	 	For the avoidance of doubt, the Transferors hereby unconditionally and
irrevocably agree and confirm that they shall be jointly liable for any
liability for any breach of this Contract committed by any of the Transferors.





Chapter X Force Majeure




Article 19 Force Majeure




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	 	19.1	 	“Force Majeure” refers to earthquake, typhoon, flood, fire, war,
political unrest and such special incidents or events that are deemed to be
Force Majeure occurrences under the provisions of relevant PRC laws and
regulations.
	 
	 	19.2	 	In the event of the occurrence of a Force Majeure event, the obligations
of the Party to this Contract affected by this Force Majeure event shall cease
during the period of the Force Majeure event and any term or period set out in
this Contract and to which the affected party is subject shall automatically
be extended by a period equal to the term or period of the Force Majeure
event, the period of extension shall be the same as the period of cessation of
the obligations by reason of the Force Majeure event, and the said Party shall
not be liable for any losses and damages or any other liabilities arising out
of a breach of contract as provided for in this Contract for the duration of
the Force Majeure.
	 
	 	19.3	 	The Party claiming the occurrence of a Force Majeure event shall promptly
inform the other Party (ies) in writing, and within seven (7) Business Days
thereafter, it shall provide sufficient evidence (issued by the notary
organization or the competent authorities) of the occurrence and the
continuity of the Force Majeure event. It shall also do its best to eliminate
the adverse effect of the Force Majeure event.





Chapter XI Resolution of Disputes




Article 20 Arbitration





	 	20.1	 	Any dispute arising out of or in connection with this Contract between the
Parties to this Contract shall firstly be resolved through friendly
consultation.
In the event that sixty (60) Business Days after the commencement of the
friendly consultations, the dispute cannot be resolved through such
means, either Party may submit the dispute to the China International
Economic and




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	 	 	 	Trade Arbitration Commission in Beijing for arbitration in accordance
with its prevailing valid arbitration rules. The arbitration place shall
be in Beijing.
	 
	 	20.2	 	The arbitration tribunal shall be constituted by three (3) arbitrators,
and the arbitration procedure shall be conducted in Chinese.





Article 21 Validity of the Arbitration Award




The arbitration award shall be final and binding on all Parties to this
Contract. All Parties to this Contract agree to be bound by the said award,
and to act according to the terms of the said award.



Article 22 Continuation of Rights and Obligations





After a dispute has arisen and during its arbitration process, other than the
disputed matter, all Parties to this Contract shall continue to exercise their
other respective rights stipulated in this Contract, and shall also continue
to fulfil their other respective obligations stipulated in this Contract.



Chapter XII Applicable Law




Article 23 Applicable Law





The laws and regulations of the PRC shall govern and be binding on the
establishment, validity, interpretation and execution of this Contract. All
disputes arising out of or in connection with this Contract shall be
determined according to the laws of the PRC. In the event the laws of the PRC
do not make provision for a certain issue relating to this Contract, reference
shall be made to general international business practices.



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Chapter XIII Miscellaneous




Article 24 Waiver





The non-exercise or delay in the exercise of an entitlement stipulated in this
Contract by any Party to this Contract shall not be regarded as a waiver of
the said entitlement. Any single exercise or partial exercise of an
entitlement shall not rule out any future re-exercise of the said entitlement.



Article 25 Transfer





Unless otherwise described and prescribed in this Contract, without being
agreed upon by all other Parties in written form, or without being approved by
relevant examination and approval authorities in case such approval is
required by relevant laws, none of the Parties to this Contract shall transfer
or assign all or any part of this Contract or transfer or assign that Party’s
entitlement or obligations as stipulated in this Contract.



Article 26 Amendment





	 	26.1	 	This Contract has been executed for the benefit of all Parties to this
Contract and their respective lawful successor(s) and assignees, and shall
have legal binding effect on them.
	 
	 	26.2	 	This Contract may not be amended verbally. Only by signing a written
document by all Parties indicating their consent to such amendment, the
amendment may come into effect.





Article 27 Severability





The invalidity of any term of this Contract shall not affect the validity of
other terms of this Contract.



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     Article 28 Language




This Contract is written in both the Chinese language and the English
language. In case of any inconsistency between the Chinese text and the
English text, the Chinese text shall prevail.



Article 29 Validity of the Text and Appendices





	 	29.1	 	This Contract shall come into effect after being signed and sealed with
stamps of all Parties. The Chinese text of this Contract shall be signed in
six (6) sets of original. Each Party shall hold one (1) set of original, and
one (1) set of original shall be sent to the competent Administration for
Industry and Commerce and any other governmental authorities as required
respectively. The remaining originals shall be kept for record by the Company.
	 
	 	29.2	 	The English text of this Contract shall be signed in four (4) sets of
original and each Party shall hold one (1) set of original. The remaining
originals shall be kept for record by the Company.
	 
	 	29.3	 	The Appendices to this Contract shall form an integral part of this
Contract, and shall have the same legal effect as this Contract.





Article 30 Notification





	 	30.1	 	Unless otherwise specified and prescribed, any Party issuing any
notification or written communication to the other Party (ies) according to
the provisions of this Contract shall have them written in the Chinese
Language and shall send them as a letter by a courier service company, or by
facsimile. Letters sent by a courier service company shall be deemed as
having been served seven (7) Business Days after handing over the notification
or communication to the courier service company. Any notification or written
communication sent in accordance with the stipulations of this Contract shall
be deemed to be




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	 	 	 	served on the date of receipt. If they are sent by facsimile, the date
of receipt shall be deemed to be three (3) Business Days after
transmission, subject to a facsimile confirmation report evidencing this.
	 
	 	30.2	 	All notifications and communications shall be sent to the following
addresses, until such time when the other Party (ies) issues a written notice
of any change to its address:





	 	 	 
	The Transferee’s Address:

	 	District B, 25th Floor, New Poly Plaza, No.1,
North Street of Chaoyangmen, Dongcheng Distric,
Beijing China.
	 
	 	 
	Telephone Number:

	 	86-10-6492-8483
	Facsimile Number:

	 	86-10-6496-1540
	Attention:

	 	Chen Fang
	 
	 	 
	Party B’s Address:

	 	11th Floor, Capital Time Square, No.88, Chang’an
West Avenue, Xicheng District, Beijing City
	Telephone Number:

	 	010-83914567
	Facsimile Number:

	 	010-83914666
	Attention:

	 	Li Hong
	 
	 	 
	Party C’s Address:

	 	Room 1402, Unit 2, Building 4 of Zhongrong City
Garden, West Lake District, Hangzhou City
	Telephone Number:

	 	15858139588
	Post Code:

	 	310012
	Attention:

	 	Yao Linfu






Article 31 The Entire Agreement





This Contract constitutes the entire agreement of all Parties to this Contract
pertaining to the transaction agreed upon in this Contract, and shall replace
all the previous discussions, negotiations and agreements among all Parties to
this Contract in respect of the transaction of this Contract.




(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)




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IN WITNESS WHEREOF, the duly authorised representatives of Party A and Party B
have signed this Contract with Party C on the date first above written.




	 	 	 
	Party A:

	 	Zhejiang Province Jingning Yingchuan Hydroelectric Development Co., Ltd.
	 
	 	 
	 

	 	(Stamp)
	 
	 	 
	Signature:

	 	                    
	 
	 	 
	Position:

	 	                    
	 
	 	 
	Party B:

	 	Guangdong Qingneng Power Generation Group Co., Ltd.
	 
	 	 
	 

	 	(Stamp)
	 
	 	 
	Signature:

	 	                    
	 
	 	 
	Position:

	 	                    
	 
	 	 
	Party C:

	 	Yao Linfu
	 
	 	 
	Signature:

	 	                    






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Appendix I Existing Debts of the Company




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Balance of	 	 	 	 	 	 
	Loan	 	 	 	the Loan	 	 	 	 	 	 
	Contract	 	 	 	Principal	 	Loan	 	Interest	 	 
	Number	 	Lender	 	(RMB)	 	Term	 	Rate	 	Mortgaged Assets
	2007 Nian
Long Zhong
Yin Jie Zi
No. D014
 

	 	Bank of
China,
Longquan
City Sub-branch
	 	 	108,000,000	 	 	From
August 29,
2007 to
August 28,
2016
	 	Floating
interest rate
with an
annual
interest rate
of 7.56%,
and the
interest rate
shall be
fixed each
year
	 	The real estate and
movable properties
of the Hydropower
Station Project






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Appendix II List of Security




List of Security



The Transferors have disclosed to the Transferee the following security (including
but not limited to mortgage, pledge, guarantee and other forms) provided by the
Company for the benefit of the Company itself:




	 	 	 	 	 	 	 
	 	 	 	 	Type of	 	Mortgaged
	Security Contract Number	 	Creditor	 	Security	 	Assets
	2007 Nian Long Zhong Yin Di Zi
No. D006


	 	Bank of China, Longquan
City Sub-branch 	 	Maximum
Amount
Mortgage 	 	All real estate
and movable
properties of
the
Hydropower
Station Project






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Appendix III Assets List of the Company





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