Exhibit
10.13

     

    SHARE
EXCHANGE AGREEMENT

     

    
 

    PARTY A:
ASIALINK(FAR
EAST)LIMITED,
a company incorporated under the laws of the Hong Kong Special Administrative
Region of the People’s Republic of China, with the business registration
certification number: 33913161-000-07-08-7, and the address: RM 1401 WORLD
COMMERCE CENTRE HARBOUR CITY 7-11 CANTON RD TST KL.

    


    PARTY B:
SMARTHEAT INC., a company incorporated under the laws of the State of Nevada.
Mr. Jun Wang served as the Chairman and CEO of SMARTHEAT INC., who is a Chinese
citizen.

    


    WHEREAS,
PARTY A has agreed to transfer 100% of the issued and outstanding capital stock
(the “Target Equity ”) held by it in SAN DE KE Co., Ltd. (the “Target Company”)
to PARTY B; PARTY B agreed to acquire the Target Equity and to pay the price to
PARTY A; After friendly consultations, both PARTY A and PARTY B agreed to
implement the share exchange transaction (the “Share Exchange”) upon the terms
and subject to the conditions set forth herein.

    


    Section
1. The Target Company

     

    
      	
              1.1.      

            	
              The
      Target Company is a wholly foreign-owned enterprise, which was
      incorporated under the laws of the People’s Republic of China. The Target
      Company’s business registration certification Number is QIDUHUPUZONGZI
      321124(PUDONG), and its address is 4# workshop, 6999 Chuansha Street,
      Pudong New District, Shanghai City. Mr. Zirong Zhang served as the the
      legal representative of the Target Company, who is Chinese
      citizen.

            
	 	 


    

    
      	
              1.2.      

            	
              The
      registered capital of the Target Company is US$200,000 as of the signature
      date of this Agreement. PARTY A is the exclusive shareholder of the Target
      Company, and duly holds the Target
Equity.

            


    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
      	
              1.3.      
        

            	
              The
      benchmark date for the Share Exchange shall be September 25, 2008. The
      balance sheet of the Target Company as of September 25, 2008 shall be an
      annex to this Agreement, which is named as “Acquisition Table”. PARTY A
      shall assure PARTY B that the Acquisition Table is real, objective and
      accurate.

            


    

    


    Section
2. Declarations and Assurances

     

    
      	
              2.1.

            	
              Declarations
      and Assurances by PARTY A to PARTY
B:

            


    

    As of the
date that the Target Equity is duly transferred to PARTY B from PARTY A, PARTY A
is duly incorporated under the laws of the Hong Kong Special Administrative
Region of the People’s Republic of China, and is in good standing; PARTY A has
the absolute right to dispose its assets of properties; PARTY A has made the
decision to consent the Share Exchange in accordance with its By-laws; The
Target Equity is free and clear of any security interest, mortgage, pledge,
lien, encumbrance.

     

    
      	
              2.2.

            	
              Declarations
      and Assurances by PARTY B to PARTY
A:

            


    

    
      As of the
date that the Target Equity is duly transferred to PARTY B from PARTY A, PARTY B
is duly incorporated under the laws of the Nevada State and is in good standing;
PARTY B has the absolute right to dispose its assets or properties; PARTY B has
made the decision to consent the Share Exchange in accordance with its By-laws;
The money paid to PARTY A by PARTY B comes from the legal
resource.

    

    


    Section
3. The Target Equity

     

    
      
        	
                3.1.      
         

              	
                PARTY
      A shall totally transfer the Target Equity to PARTY B; PARTY A shall not
      hold the shareholder status of the Target Company anymore, after the
      Target Equity has been duly transferred to PARTY B.

              
	 	 


      

    

    
      
        	
                3.2.      
       

              	
                PARTY
      B shall totally acquire the Target Equity from PARTY A; PARTY B shall be
      the exclusive shareholder of the Target Company after the Target Equity
      has been duly transferred to PARTY B.

              
	 	 


      

    

    
      	
              3.3.      
       

            	
              PARTY
      A shall be responsible for the remaining debts of the Target Company that
      are not listed on the Acquisition Table before the Target Equity has been
      duly transferred to PARTY B. After the Target Equity has been duly
      transferred to PARTY B, such debts shall not be subject to PARTY B and the
      Target Company.

            


    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
Section
4. The Price

     

    
      	
              4.1.      
      

            	
              PARTY
      B shall pay US$741,516 to PARTY A for the Share
  Exchange.

            


    

    


    Section
5. Payments

     

    
      
        
          	
                  5.1.

                	
                  PARTY
      A shall provide PARTY B with some relative written documents within 5 days
      after the signature date of this Agreement, and cooperate with PARTY B to
      apply to the government agencies for processing the approval and
      registration procedures. 

                


        

      

       

    

    
      
        	
                5.2.      
      

              	
                PARTY
      B shall pay the price to PARTY A as followed:

              
	 	 


      

    

    
      
        	
                            
      

              	
                a)
      PARTY B shall pay an initial US$ 222,455 to PARTY A within 15 days after
      the signature date of this Agreement;

              
	 	 


      

    

    
      
        	
                            
      

              	
                b)
      PARTY B shall pay an additional US$ 370,758 to PARTY A within 15 days
      after all the necessary written documents have been filed with the
      government agencies;

              
	 	 


      

    

    
      	
                          
      

            	
              c)
      PARTY B shall pay a final US$ 148,303 to PARTY A within 15 days after the
      Share Exchange has been approved and registered by the government
      agencies.

            


    

    


    Section
6. Breach of Agreement

     

    
      
        	
                6.1.      
      

              	
                PARTY
      A shall fulfill its responsibilities under this Agreement, in case of
      breach by PARTY A, it shall compensate PARTY B for actual
      losses.

              
	 	 


      

    

    
      	
              6.2.      

            	
              PARTY
      B shall fulfill its responsibilities under this Agreement, in case of
      breach by PARTY B, it shall compensate PARTY A for actual
      losses.

            


    

    


    Section
7. Governing Law and Settlement of Disputes

     

    
      
        	
                7.1.      
      

              	
                Both
      PARTY A and PARTY B have agreed that this agreement shall be deemed to
      have been made under, and shall be governed by, and construed in
      accordance with the laws of the People’s Republic of
  China.

              
	 	 


      

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

    

    
      	
              7.2.      
      

            	
              PARTY
      A and PARTY B shall friendly consult to settle the dispute arising from
      performing this Agreement; in case of failing to consult, each PARTY shall
      have the right to indict.

            


    

    


    Section
8. Effectiveness and Termination

     

    
      	
              8.1.      
      

            	
              This
      Agreement shall become effective upon the signatures and seals by PARTY A
      and PARTY B.

            


    

    


    Section
9. Procedures, Taxes and Fees

     

    
      
        	
                9.1.      
      

              	
                PARTY
      A shall assign its personnel to process the relative approval and
      registration issues, while PARTY B shall provide PARTY A with some
      necessary help.

              
	 	 


      

    

    
      	
              9.2.      
       

            	
              PARTY
      A and PARTY B shall respectively pay the taxes and fees relating to the
      Share Exchange according to the relative law; the taxes and fees that are
      not specifically regulated shall be equally shared by PARTY A and PARTY
      B.

            


    

    


    Section
10. Force Majeure

     

    
      	
              10.1.    
      

            	
              Neither
      party is responsible for any situation arising from Force Majeure such
      as:natural disasters including earthquakes, hurricanes and floods, wars,
      riots or other major national or social
  uprisings.

            


    

    


    Section
11. Copies

     

    
      
        	
                11.1.

              	
                This
      Agreement has 4 copies, each Party holds one copy, the two other copies
      are used to be file with government
agencies.

              


      

    

    


    Section
12. Signing

     

    
      	
              12.1

            	
              This
      agreement is signed in Beijing City, PRC on September 25,
      2008.

            


    

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    Section
13. Noncompetition

     

    13.1 As
the shareholders of PARTY A, Mr. Yaoming Xue and Mr. Feng Chen (the “Two
People”)both make the following Declarations and Assurances to PARTY B and the
Target Company:

     

    Within 4
years After the Target Equity has been duly transferred to PARTY B, the Two
People shall not serve the duties, other than the duties that the Two People
served in the Target Company, or not engaged in the business that will compete
with the Target Company;

     

    The Two
People shall not make any investment in the companies that will compete with the
Target Company;

     

    The Two
People shall not serve duties in any companies that will compete with the Target
Company;

     

    The Two
People shall not operate any acts that will compete with the Target
Company.

     

    13.2. The
Two People shall respectively pay RMB 800,000 (approximately equals US$116,788 )
to each of PARTY B and the Target Company, in case of breaching the clause 13.1
above.

     

    
      
        
          
            	
                    Signature:

                  	
                    1. 
      Yaoming
Xue

                  	
                    2. 
      Feng
  Chen:

                  
	 	 	 
	 
      	
                    September25,
      2008

                  	
                    September25,
      2008

                  


          

        

      

    

     

     

    
 

    PARTY A :
ASIALINK(FAR
EAST)LIMITED

    (SEAL)

    


    Signature:
/s/ Authorized
AsiaLink Signatory

    September
25, 2008

    


    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    


    


    PARTY B :
SMARTHEAT INC.

    (SEAL)

    


    Signature: /s/ Authorized SmartHeat
Signatory

    September
25, 2008

     

    


    
      
         

      

      
        6

        
          

        

      

      
         

      

    


    Annex
:  Acquisition Table

    


     

     

    
 

    
      
         

      

      
        7