MOU
on Framework of Co-operation between

     

    Fuhrlander
AG (Fuhrlander)

     

    And

     

    A-Power
Energy Generation Systems, Ltd. (APWR)

     

    (formerly
Liaoning A-Power Energy Group)

     

    2008-1-28


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Preamble

     

    With the
accelerated globalization and regional economic collaboration, wind energy has
become an important alternative energy in support of the countries' sustainable
development and world market demand for wind turbines has increased
significantly.  In view of the status quo, prospects and future trend
of the wind turbine manufacturing markets in China, Germany and other countries
of the world, Fuhrlander and A-Power intend to establish long-term cooperation
in this regard.

     

    Both
parties agree to strengthening mutual cooperation and believe it is of strategic
importance in ensuring sustainable and profitable growth in both domestic and
international markets.

     

    A-Power
is an energy company registered in Shenyang, PRC China and listed on the U.S.
Nasdaq stock market with the technical capability and financing required for the
manufacturing of wind turbines.  Fuhrlander is registered in
Waigandshain, Germany, with wind turbine technology and manufacturing facility,
and is committed to the dissemination of wind turbine technology, manufacturing
of wind turbines and further development of wind energy.  Both parties
have reviewed and agree to the terms of long-term cooperation as laid out in
this MOU.

     

    
      	
              I. 

            	
              Principle

            


    

     

    
      	
               
      

            	
              1.

            	
              Leverage
      technical, manufacturing and financial strength and synergy for the mutual
      benefits of both parties;

            


    

     

    
      	
               
      

            	
              2.

            	
              Abide
      by relevant local statutory laws and regulations and strive to be socially
      responsible and environmental-friendly Enterprises committed to long-term,
      full-scope cooperation covering R&D (Research & Development),
      supply china, manufacturing, sales and marketing,
  etc.

            


    

     

    
      	
              II. 

            	
              Term
      of Co-operation

            


    

     

    Both
parties aim at long-term cooperation.  For the 8 years from 2008
through 2015, there will be two 4-year plans, with the first 4-year plan
formulated in 2008 and the second in 2011.  Subsequent 4-year plans
will be prepared by October in the year preceding the next 4-year
period.

     

    
      	
              III. 

            	
              Scope
      of Cooperation

            


    

     

    Both
parties agree to long-term cooperation in the field wind turbine technology and
manufacturing and other alternative, renewable energy.  Both parties
commit to strong coordination and communication.  A-Power will help
Fuhrlander leverage the ever-growing China market, Chinese supplier management
and comparatively lower cost, A-Power's manufacturing facility in Liaoning,
A-Power's financial and financing capability as a Nasdaq-listed public company,
Fuhrlander contributes to this long-term co-op with its market/brand
recognition, supply-chain management, technical know-how of FL2500 series wind
turbine, manufacturing experience.  Together, both parties will strive
for exemplary co-operation among Sino-German co-op enterprises.


    
      
         


      

      
        1

        
          

        

      

      
         


      

    

     

    In
particular, both parties agree, on best effort's basis, to manufacture 2.5 MW
wind turbines in Shenyang Facility with an aim to achieve production of 100
units for the year of 2008, of which Fuhrlander and A-Power each is entitled to
50 units to satisfy its respective customer need.

     

    
      	
               
      

            	
              -

            	
              A-Power
      is responsible for securing the 100 unit sales orders in
    China

            


    

     

    
      	
               
      

            	
              -

            	
              A-Power
      shall provide facility for the assembling, testing, inspection of the 100
      units, including 50 of Fuhrlander

            


    

     

    
      	
               
      

            	
              -

            	
              Fuhrlander
      may opt to re-export 50 units to its out-of-China customers, in which case
      Fuhrlander is responsible for the sales order, or Fuhrlander may sell the
      50 units in China and A-Power will secure sales order
      accordingly.

            


    

     

    
      	
               
      

            	
              -

            	
              In
      either of the above two cases, Fuhrlander shall be able to recognize
      revenue from the sales of 50 units and 100% the resulting after-tax
      profit.

            


    

     

    
      	
               
      

            	
              -

            	
              Fuhrlander
      and A-Power are jointly responsible for world-wide sourcing of the
      components for the 100 units.

            


    

     

    
      	
               
      

            	
              -

            	
              A-Power
      is responsible for financing the working capital required for the 100
      units, including down payment and subsequent balance purchase cost
      payment.

            


    

     

    
      	
               
      

            	
              -

            	
              Fuhrlander
      will provide on-site technical assistance at A-Power facility in
      Liaoning

            


    

     

    
      	
               
      

            	
              -

            	
              The
      finished 100 units will be branded under Fuhrlander or jointly under
      Fuhrlander and A-Power

            


    

     

    
      	
               
      

            	
              -

            	
              A-Power
      commits that, in addition to the above 100 units and upon Fuhrlander
      request, A-Power will provide capacity for the assembling of other wind
      turbines sold by Fuhrlander.

            


    

     

    
      	
               
      

            	
              -

            	
              A-Power
      commits to scouting in China for wind turbine component suppliers and
      final selection will be jointly determined by both
      parties.  Selected suppliers will provide for both the A-Power
      facility in Liaoning and Fuhrlander's facility in
  Germany.

            


    

     

    
      	
               
      

            	
              -

            	
              Fuhrlander
      commits to look for component suppliers in Germany to meet demands of both
      Fuhrlander and A-Power manufacturing
facilities.

            


    

     

    
      	
               
      

            	
              -

            	
              Both
      parties agree that wind turbine components can be sourced
      globally.

            


    

     

    
      	
               
      

            	
              -

            	
              Both
      parties agree to modify its sourcing strategy according to the market
      changes through negotiations.

            


    

     

    
      	
               
      

            	
              -

            	
              Both
      parties agree to utilize A-Power's facility in Liaoning as the
      manufacturing and sourcing base for Fuhrlander/A-Power global
      operation.  Fuhrlander is allowed to communicate A-Power's
      production facility as production base of Fuhrlander in China to the
      public.

            


    

     

    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    Other
details of co-op will be discussed in the first 4-year plan.

     

    
      	
              IV. 

            	
              Communication
      and Coordination

            


    

     

    To ensure
smooth cooperation and communication:

     

    
      	
               
      

            	
              1.

            	
              Both
      parties agree to meet at least once per year at the Chairman level to
      review and approve operation strategy and discuss other major issues
      associated with Fuhrlander/A-Power.

            


    

     

    
      	
               
      

            	
              2.

            	
              Senior
      management of both parties encourages coordination and communication at
      various business operation functions.  Co-op progress report
      will be compiled and submitted to Chairmen for review and
      approval.

            


    

     

    
      	
              V. 

            	
              Others

            


    

     

    This MOU
is executed on January 28, 2008 in Germany, six originals in total with each
party in procession of three.

     

    
      	
              Fuhrlander
      AG

            	
              A-Power
      Energy Generation Systems, Ltd

            


    

     

    
      
         


      

      
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