Document:

Exhibit101MichaelSnowEmploymentAgreement

Exhibit 10.1

EMPLOYMENT AGREEMENT
THIS AGREEMENT (the “Agreement”) is dated  as of the 18th  day of  April,  2013 by and between Team Health, Inc., a Tennessee corporation (the “Company”), and Michael D. Snow (“Employee”).
WITNESSETH:

WHEREAS, the Company desires to employ Employee pursuant to the terms of this Agreement; and 

WHEREAS,  Employee desires to be so employed pursuant to the terms of this Agreement.
NOW THEREFORE, based upon these premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree upon the terms and conditions of Employee’s employment with the Company that are set forth herein,
1.    Effectiveness/Employment and Term. 
1.1    This Agreement constitutes a binding obligation of the parties as of the date hereof; provided that notwithstanding any other provision of this Agreement, the operative provisions of this Agreement shall become effective as of April 22nd, 2013 (the “Effective Date”).
1.2    The Company agrees to employ Employee and Employee agrees to be employed by the Company pursuant to the terms of this Agreement, and for the term of this Agreement, as the Company’s President, reporting to the Company’s Chief Executive Officer  (“Supervisor”)  to perform the duties assigned to Employee by the Company. The term of this Agreement shall be for a period of three (3) years commencing with the Effective Date, subject to earlier termination pursuant to this Agreement. Thereafter, this Agreement shall automatically renew for successive one (1) year terms unless sooner terminated pursuant to Section 6 of this Agreement. 
2.    Duties. Employee will perform all duties customarily incident to Employee’s position and such duties that are properly assigned to from time to time by the Company and/or Supervisor.  Employee shall devote Employee’s entire business time, attention and effort to the affairs of the Company and shall use Employee’s reasonable best efforts to promote the interests and success of the Company, and shall cooperate fully with the Supervisor in the advancement of the best interests of the Company. Provided, however, Employee may serve on corporate, civic or charitable boards or committees, deliver lectures, fulfill speaking engagements, or manage personal investments, provided that such activities do not individually or in the aggregate significantly interfere with, or are otherwise not inconsistent with, the performance of Employee’s duties under this Agreement. Nothing herein shall prevent Employee from engaging in certain passive investments so long as the same do not require Employee’s management efforts, are passive, are not inconsistent with Employee’s duties hereunder and are not prohibited by the restrictive covenants of Section 7.

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3.    Compensation.
3.1    Salary. Employee shall receive an annualized salary of Six Hundred Thousand ($600,000.00) per year, payable biweekly. On an annual basis, the Company may review Employee’s total compensation and may, in its sole discretion, increase Employee’s salary from time to time without the necessity of further action to amend this Agreement. Employee’s base salary as in effect at any time is hereinafter referred to as the “Base Salary”.
3.2    Bonus. For each fiscal year of the Company, Employee will be eligible to earn a bonus payment based on performance, determined in accordance with Exhibit A (the “Bonus”). The Bonus, if any, shall be paid to Employee within two and one-half (2.5) months after the end of the applicable fiscal year, or at such time as similar bonuses are paid to other similarly situated employees of Company.
3.3.    Taxes and Other Applicable Deductions. From all compensation paid to Employee, the Company shall withhold all applicable sums for all state, federal and local taxes, and such other amounts as are necessary and applicable or agreed to by Employee.
3.4     Equity Interest Incentives. Employee shall be eligible to receive awards as a participant in the Team Health Holdings, Inc. Amended and Restated 2009 Stock Incentive Plan (the “Plan”), subject to the terms of the Plan and the approval and sole discretion of the Team Health Holdings, Inc. (“TMH”) board of directors (the “Board”) and, if applicable, subject to compliance with any Executive Stock Ownership Guidelines as approved by the Board.  
4.    Employee Benefits. In addition to Employee’s salary, Employee shall be entitled to all standard benefits normally provided by the Company to its similarly situated executive officers, which may be sponsored, developed or established by the Company from time to time in the sole discretion of the Company. Notwithstanding the above, Employee shall receive, at a minimum, the following benefits: 
4.1.    Medical Coverage. The Company shall provide a standard medical benefit package, as offered to other employees of the Company, throughout the term of this Agreement.
4.2    Dental Coverage. The Company shall provide a standard dental benefit package, as offered to other employees of the Company, throughout the term of this Agreement.
4.3    Life Insurance. The Company will obtain and maintain a life insurance policy on the life of Employee in the face amount that is equivalent to two (2) times Employee’s Base Salary specified in Section 3.1, as adjusted from time to time; provided, that the amount of premiums paid by the Company is limited to insurance rates applicable to a healthy individual of like age. The Company agrees to pay all such premiums, if any, on the policy during the term of employment provided herein.
4.4    Personal Time Off. Employee is entitled to take the amount of fully compensated paid time off (PTO) per annum that is provided by the Company to other similarly situated executives. 

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4.5    Professional Fees/Journals/Society Memberships Stipend. The Company shall pay Employee Seven Hundred Fifty Dollars ($750.00) per annum to help defray Employee’s miscellaneous costs in maintaining professional relationships.
4.6    Directors and Officers Insurance. The Company shall provide Employee with a standard directors and officers insurance policy, as provided by the Company to other directors and/or officers of the Company, its affiliates and subsidiaries.
4.7    Personal Financial Planning Assistance.  Effective with the onset of this Agreement, the Company shall pay Employee Six Hundred Dollars ($600.00) per annum as a stipend to help defray costs for personal tax preparation and/or other personal and family financial planning costs.
4.8    Long-Term Disability Insurance Benefit. At a minimum, the Company shall acquire for Employee long-term disability insurance coverage throughout the term of this Agreement, for which protection to Employee shall apply after ninety (90) days of continuous disability with protection to age sixty-five (65) years and at sixty percent (60%) of Employee’s Base Salary, plus integration of benefits with government and certain other disability benefit programs (which may, inclusively, approximate sixty-five percent (65%) of Employee’s Base Salary). 
4.9    Automobile Expense.  The Company shall pay Employee Seven Hundred Fifty Dollars ($750.00) per month as an automobile allowance.
5.    Business Expenses. The Company will reimburse Employee, within sixty (60) days following submission by Employee to the Company of appropriate supporting documentation) for Employee’s usual and customary business expenses incurred in the course of Employee’s employment in accordance with the Company’s applicable policies and procedures, including expenditure limits and substantiation requirements, in effect from time to time regarding reimbursement of expenses incurred by similar situated employees of the Company; provided claims for such reimbursement (accompanied by supporting documentation) are submitted to the Company within ninety (90) days following the date such claims are incurred.
6.    Termination. Notwithstanding any other provision of this Agreement, the provisions of this Section 6 shall exclusively govern termination of this Agreement. 
6.1    Mutual Agreement/Resignation without Good Reason/Death or Disability. Employee’s employment shall terminate upon the occurrence of either of the following events:
(a)    The Company and Employee shall mutually agree to termination in writing or Employee shall resign without Good Reason; provided that Employee shall be obligated to give the Company at least ninety (90) days advance written notice of any resignation without Good Reason. Except as otherwise provided in Section 6.6(a) (i), upon Employee’s termination of employment due to mutual agreement, or the resignation of employment by Employee without Good Reason (as defined herein), Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any unreimbursed 

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expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination.
(b)    The death of Employee or termination by the Company due to Employee’s Disability. Disability for purposes of this Agreement shall be the inability of Employee to materially perform Employee’s duties hereunder due to a physical or mental condition for a period of ninety (90) consecutive days, as reasonably determined by the Board in good faith. Upon Employee’s termination of employment for death or disability, Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any unreimbursed expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination. 
6.2    Termination for Cause. Employee’s employment may be terminated by the Company for “Cause” upon the occurrence of any of the following events:
(a)    Employee’s conviction of or the entering of a guilty plea or plea of no contest with respect to a felony, the equivalent thereof, or any other crime involving fraud, dishonesty or moral turpitude which in the reasonable judgment of the Company is materially detrimental to the Company or materially affects Employee's ability to perform Employee’s duties pursuant to this Agreement;
(b)   Employee’s intentional neglect of or material inattention to Employee’s duties, which neglect or inattention remains uncorrected for more than 10 days following written notice from the Company detailing such neglect or inattention;
(c)       Employee commits an intentional and material act (i) to defraud the Company or its affiliates, or (ii) of embezzlement or dishonesty against the Company or its affiliates; or
(d)     Employee willfully impedes or endeavors to influence, obstruct or impede or fails to materially cooperate with an investigation authorized by the Company, a self-regulatory organization or a governmental department or agency; or

           (e )    Employee’s failure to relocate himself and his family and make his family permanent place of residence as Knoxville, TN or the immediate vicinity thereof  within six (6) months following the Effective Date of this Agreement.

Upon the Company’s termination of employment for Cause or upon termination of employment due to death or disability, Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any unreimbursed expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination, and Company will have no other liability to Employee hereunder. Such termination shall be without prejudice to any other remedy to which the Company may be entitled, either by law, or in equity, or under the terms of this Agreement.

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6.3    Termination Without Cause. The Company may terminate the Employee’s employment without Cause immediately at any time upon written notice to Employee.  In the event that the Company terminates Employee’s employment without Cause, Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any un-reimbursed expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination. In addition, Employee shall be entitled to the severance compensation and rights described in Section 6.5(a). 
6.4    Termination for Good Reason. Employee may voluntarily resign Employee’s employment for “Good Reason” upon the occurrence of any of the following:
(a)    The assignment to Employee of duties that represent a substantial adverse alteration in the nature or status of Employee’s responsibilities. 
(b)    Any reduction in Employee’s annual Base Salary (other than across the board reduction of similarly situated employees of the Company). 
(c)    Employee’s required relocation to a place of business more than fifty (50) miles away from Employee’s current place of business.
(d)    Any material breach by the Company of this Agreement or any other agreement with, or obligation to or for the benefit of, Employee, including but not limited to any stock option or stock incentive plan, in each case that is adverse to Employee.
Notwithstanding the foregoing, no event shall constitute Good Reason unless and until Employee shall have notified the Company in writing describing the event which constitutes Good Reason and then only if the Company shall fail to cure such event within thirty (30) days following its receipt of such written notice; provided, further, that “Good Reason” shall cease to exist for an event on the 60th day following the later of its occurrence or Employee’s knowledge thereof, unless Employee has given the Company written notice thereof prior to such date.
Upon Employee’s termination of employment for Good Reason, Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any un-reimbursed expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination. In addition, Employee shall be entitled to the severance compensation and rights described in Section 6.5(a).
6.5    Severance Compensation and Other Obligations.
(a)    If Employee’s employment is terminated by the Company without Cause,  by Employee for Good Reason, or by the Company for any reason (other than death or disability) within one year after a Sale of the Company (as hereinafter defined), then, subject to Employee’s continued compliance with the provisions of Section 7 and 8 of this Agreement, and provided Employee has signed a standard release of claims in favor of the Company and its Related Companies, the Company shall provide to Employee the following:

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(i)    Employee will receive an amount equal to two (2) times Employee’s Base Salary, payable in bi-weekly installments, beginning on the date of termination.
(ii)    Employee will receive an amount equal to two (2)   times the average annual Bonuses paid to Employee pursuant to Section 3.2 of this Agreement for the two most recently completed Performance  Periods (as defined in Exhibit A), payable in bi-weekly installments, beginning on the date of termination. 

(iii)    In order to reimburse Employee for Employee’s expenses associated with continued medical benefits coverage, payment to Employee of an aggregate amount equal to twenty-four (24) months of premiums for Company group medical benefits available to Employee and Employee’s family that were in force for Employee and Employee’s family immediately prior to termination.  The amount of such premiums shall be equal to the monthly premium set for those medical benefits pursuant to the continuation of medical coverage under section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”) and sections 601 through 608, inclusive, of ERISA (collectively, “COBRA”) at the time of Employee’s termination.  These payments shall be made by Company to Employee regardless of the COBRA continuation coverage actually in effect or the premiums actually paid for such coverage, and shall be payable in bi-weekly  installments, beginning on the date of termination. Employee understands and acknowledges that the payments specified by this Section 6.5(a)(iii) shall be made subject to all income, withholding and other employment taxes and Employee is solely responsible for all income, employment and other taxes that may be imposed thereon.
 
6.6    Sale of the Company.  A “Sale of the Company” means the occurrence of any of the following events: (i) any “Person” (as defined in Sections 13(d) and 14(d) of the Exchange Act (defined as the Securities and Exchange Act of 1934, as amended),  is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of “Securities” (defined as capital stock, limited partnership interests, limited liability company interests, beneficial interests, warrants, options, notes, bonds, debentures, and other securities, equity interests, ownership interests and similar obligations of every kind and nature of any Person) of the Company representing more than 50% of the combined voting power of the Company’s then outstanding voting Securities; or (ii) any sale of all or substantially all of the assets of the Company to any Person or such equityholder.
7.    Restricted Activities.
7.1    Preliminary Statement. Employee acknowledges that by virtue of Employee’s duties under this Agreement, Employee shall become aware of various sensitive and confidential information, and shall develop contacts and relationships which Employee otherwise would not have had access to or developed. Employee further acknowledges that such information and relationships would give Employee an unfair competitive advantage should Employee compete with the Company. Employee further acknowledges that the Company has certain subsidiaries and business divisions (collectively, the “Related Companies”) and that Employee may also become 

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aware of certain confidential information relating to the Related Companies and will develop certain contacts and relationships with clients or customers of the Related Companies which would give Employee an unfair competitive advantage if Employee should compete with the Related Companies. Accordingly, Employee agrees that Employee shall not, directly or indirectly, whether alone or as a partner, officer, director, investor, employee, agent, member or shareholder of any other entity or corporation, without the prior written consent of the Company, violate any of the covenants (the “Covenants”) set forth in this Section 7. For purposes of this Agreement, the term “business division” shall mean any person or entity which controls, is controlled by, or is under common control with the Company or a Related Company.
7.2    Covenant Not to Divulge Confidential Information. During the term of Employee’s employment with the Company, whether pursuant to this Agreement or otherwise, and after termination of Employee’s employment with the Company, Employee shall not (i) use any Confidential Information of or concerning the Company or the Related Companies except for the Company’s benefit or (ii) disclose or divulge to any third party any Confidential Information relating to the Company or the Related Companies, except as otherwise required by law. “Confidential Information” shall mean information concerning the Company or any Related Company, whether written or oral, which Employee is or becomes aware of and which has not been publicly disclosed. Information shall not be deemed “publicly disclosed” if disclosed by Employee in violation of this Agreement or as a result of such information being disclosed to employees or agents of the Company or any Related Company. 
7.3.    Covenant Not to Compete or Interfere with Business Relationships. During the term of Employee’s employment with the Company, whether pursuant to this Agreement or otherwise, for a period of two (2) years after termination of Employee’s employment with the Company  Employee shall not engage in any activity competitive with or adverse to the Company or any Related Company described in this Section 7.3. 
(a)    Employee shall not solicit or hire (for Employee or on behalf of a third party) any person who is then, or during the term of this Agreement was, an employee or contractor (including, without limitation, any contract physicians) of the Company or any Related Company. Contract physicians shall include those physicians with whom the Company or any Related Company then has a contract, or which have actively been recruited by the Company or any Related Company within one hundred eighty (180) days prior to termination of this Agreement.
(b)    Employee shall not induce or attempt to induce any person or entity doing business with the Company or any Related Company, to terminate such relationship, or engage in any other activity detrimental to any Related Company. Specifically, Employee shall not solicit or contract with (a) any then current client of the Company or any Related Company, (b) any client with which the Company or any Related Company previously did business during the one (1) year period immediately prior to termination of Employee’s employment with the Company, or (c) any prospective client of the Company or any Related Company which the Company or a Related Company was “actively seeking” to do business with within the one (1) year period immediately before termination of Employee’s employment with the Company. (For purposes of this Agreement, the Company or a Related Company will be deemed to have been “actively seeking” to do business 

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with a prospective client if the Company or a Related Company did any of the following: (A) met with the administration of such prospective client, (B) submitted a response to a Request for Proposal (“RFP”) or other formal proposal from such prospective client, or (C) made any other written response to a request, solicitation, or initial discussion by or with such prospective client.).
(c)    Employee shall not be employed by nor have any financial relationship with any entity which directly or indirectly performs any competitive activity which Employee is individually prohibited from performing under the terms of this Agreement.
(d)    Notwithstanding the restrictions specified in this Section 7, nothing herein shall be construed to prohibit Employee from: (i) owning, solely as a passive investment, the securities of an entity which are publicly traded on a national or regional stock exchange or on the over-the-counter market or investing through a private equity fund in securities of an entity that is not publicly traded, provided that Employee (A) is not a controlling person or, or a member of a group which controls, such entity and (B) does not, directly or indirectly, own 5% or more of any class of securities of such entity; or (ii) owning, solely as a passive investment, the securities of an entity which are not publicly traded provided that such entity is not engaged in a principal business of providing emergency room services to hospitals.
Except as specifically provided herein, Employee is free to engage in any business activity, not otherwise prohibited by this Agreement, in any geographic location.
7.4    Construction. For purposes of this Section 7, the term “then” shall mean at the time of Employee’s engagement in the applicable conduct. The Covenants are essential elements of this Agreement, and but for Employee’s agreement to comply with the Covenants, the Company would not have entered into this Agreement. The Covenant shall be construed as independent of any other provisions in this Agreement. Except as provided in Section 7.6 below, the existence of any claim or cause of action of Employee against the Company or any Related Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement of any of the Covenants. The period of time during which Employee is prohibited from engaging in the business practices described in the Covenants shall be extended by any length of time during which Employee is in breach of the Covenants. The Company and Employee agree that the Covenants are appropriate and reasonable when considered in light of the nature and extent of the business conducted by the Company. However, if a court of competent jurisdiction determines that any portion of the Covenants, including without limitation, the specific time period, scope or geographical area, is unreasonable or against public policy, then such Covenants shall be considered divisible as to time, scope, and geographical area and the maximum time period, scope or geographical area which is determined to be reasonable and not against public policy shall be enforced.
7.5    Remedies. The parties agree that if Employee breaches any Covenant, the Company or the Related Companies, as applicable, will suffer irreparable damages and Employee will receive a benefit for which Employee had not paid. Employee agrees that (i) damages at law will be difficult to measure and an insufficient remedy to the Company or a Related Company in the event that Employee violates the terms of this Section 7 and (ii) the Company and the Related Companies shall be entitled, upon application to a court of competent jurisdiction, to obtain 

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injunctive relief to enforce the provisions of this Section 7 without the necessity of posting a bond or proving actual damages, which injunctive relief shall be in addition to any other rights or remedies available to the Company or the Related Companies. No remedy shall be exclusive of any other, and neither application for nor obtaining injunctive or other relief shall preclude any other remedy available, including money damages and reasonable attorneys’ fees. Employee agrees to pay the Company or the Related Companies all costs and expenses incurred by the Company or the Related Companies relating to the enforcement of the terms of this Section 7, including reasonable attorneys’ fees, both at trial and in appellate proceedings. Employee acknowledges and agrees that the Related Companies are intended beneficiaries of the Covenants and shall have the same rights and remedies as the Company to enforce the Covenants.
7.6    Limitation on Enforcement. In the event the Company materially breaches this Agreement by failing to meet a payment obligation hereunder (as defined below), and Employee is not in breach of this Agreement, then Employee shall no longer be bound by the Covenants. For purposes of this Agreement, “materially breaches this Agreement by failing to meet a payment obligation hereunder” shall mean (i) the Company has failed to meet a payment obligation hereunder (and likewise failed to cure such nonpayment within thirty (30) days following notice from Employee) and (ii) the Company did not have a good faith basis to not pay the disputed payment to Employee. If the Company has a good faith dispute regarding the amount owed to Employee, such dispute shall be submitted to arbitration pursuant to Section 20 herein. If a good faith dispute does exist regarding any payment obligation, the Company shall only be deemed to have materially breached this Agreement by failing to meet a payment obligation hereunder if, after the amount to be paid is determined by an arbitrator, the Company does not pay such amount awarded by the arbitrator within thirty (30) days after the arbitrator’s decision.
8.    Inventions and Intellectual Property. Employee acknowledges that all developments, including, without limitation, inventions, patentable or otherwise, discoveries, improvements, patents, trade secrets, designs, reports, computer software, flow charts and diagrams, procedures, data, documentation, ideas and writings and applications thereof relating to the present or planned business of the Company or any Related Company that, alone or jointly with others, Employee may conceive, create, make, develop, reduce to practice or acquire during the term of this Agreement (collectively, the “Developments”) are works made for hire and shall remain the sole and exclusive property of the Company, and Employee hereby assigns to the Company all of Employee’s right, title and interest in and to all such Developments. All related items, including, but not limited to, memoranda, notes, lists, charts, drawings, records, files, computer software, programs, source and programming narratives and other documentation (and all copies thereof) made or compiled by Employee, or made available to Employee, concerning the business or planned business of the Company or any Related Company shall be the property of the Company and shall be delivered to the Company promptly upon the termination of this Agreement. The provisions of this Section 8 shall survive the termination of this Agreement.
9.    Key Man Insurance. The Company shall have the option to purchase a key man disability and/or life insurance policy regarding Employee which names the Company or its designee as beneficiary. Employee agrees to cooperate with the Company in obtaining such policies including, without limitation, submitting to a reasonably requested medical examination.

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10.    Death. If Employee dies before the date on which all amounts owing to the Employee hereunder are paid in full, the Company and Holdings, as the case may be, shall pay to Employee’s estate (or such other recipient as designated from time to time by Employee in writing) such remaining amounts when and as such amounts were otherwise payable to Employee. After receiving the payments provided under this Section 10, Employee and Employee’s estate shall have no further rights against the Company for compensation under this Agreement.
11.    Assignment and Binding Effect. Employee may not sell, assign, transfer, or otherwise convey any of Employee’s rights or delegate any of Employee’s duties under this Agreement without the prior written consent of the Company. Otherwise, this Agreement shall be binding upon and inure, to the benefit of the parties and their successors, assigns, heirs, representatives and beneficiaries.
12.    Entire Agreement and Modification. This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof, supersedes all existing agreements between them concerning such subject matter, and may be modified only by a written instrument duly executed by both parties.
13.    Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. 
14.    Governing Law and Venue and Limitations Period. Tennessee law shall govern the rights and obligations under this Agreement, without giving effect to any conflict of laws principles that would require application of the laws of any other jurisdiction. In the event litigation is necessary, such legal action shall be commenced only in a court, of competent jurisdiction in Knox County, Tennessee; litigation commenced other than in Knox County, Tennessee shall be subject to being dismissed, stayed or having venue transferred to Knox County at the option of the party not commencing said litigation. The parties further waive all objections and defenses to litigation being conducted in Knox County, Tennessee, based upon venue or under the doctrine of forum non conveniens. Legal proceedings for breach of this Agreement shall be commenced within twelve (12) months of any alleged breach or thereafter be barred.
15.    Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or first class mail, to the addresses below, or hand-delivered to the party to whom it is to be given. Any party may change such address by written notice to the other party. Any notice or other communication given by certified mail or first class mail shall be deemed given two (2) days after mailing thereof, except for a notice changing a party’s address which shall be deemed given at the time of receipt thereof.

		
	If to the Company:
	Team Health, Inc.

265 Brookview Centre Way

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Suite 400
Knoxville, Tennessee 37919
Attention: General Counsel 
 
		
	With a copy to: 
	Team Health, Inc.

265 Brookview Centre Way
Suite 400
Knoxville, Tennessee 37919
Attention: Human Resources Vice President 

If to Employee:    
Address on File With Human Resources
    
Notwithstanding anything herein to the contrary, if actual written notice is received, regardless, of the means of transmittal, such notice shall be deemed to be acceptable and effective as proper notice under this Section 15.
16.    Severability. Except as otherwise provided in Section 7.4, in the event that any provision in this Agreement shall be found by a court, arbitrator, referee or governmental authority of competent jurisdiction to be invalid, illegal or unenforceable, such provision shall be construed and enforced as if it had been narrowly drawn so as not to be invalid, illegal or unenforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be effected or impaired thereby, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. 
17.    Headings. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.
18.    Confidentiality. The parties acknowledge and agree that this Agreement and each of its provisions are and shall be treated strictly confidential. During the term of this Agreement and thereafter, Employee shall not disclose any terms or information pertaining to any provision of this Agreement to any person or entity without the prior written consent of the Company, with the exception of Employee’s tax, legal or accounting advisors for legitimate business purposes of Employee, or as otherwise required by law.
19.    Enforcement Costs. Subject to the provisions of Section 7.5 herein, if any legal action or other proceeding is brought, for the enforcement of any of the terms or conditions of this Agreement, or because of an alleged dispute, breach, or default, in connection with any of the provisions of this Agreement the prevailing party in such action shall be entitled to recover from the non-prevailing party the costs it incurred in such action including, but not limited to, reasonable attorneys’ fees (including costs and fees incurred on appeal), in addition to any other relief to which such party may be entitled.

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20.    Survival. Termination of this Agreement shall not terminate any continuing obligation(s) of the parties under this Agreement, and the parties hereby agree that such obligation(s) shall survive termination, unless the context of the obligation(s) requires otherwise. 
21.    Name or Ownership Change. This Agreement shall continue in full force and effect in the event of a change in the name or ownership of the Company.
22.    Compliance with other Agreements. Employee represents and warrants that the execution of this Agreement and Employee’s performance of Employee’s obligations hereunder will not conflict with, or result in a breach of any provision of, or result in the termination of, or constitute a default under, any agreement to which Employee is a party or by which Employee is or may be bound. 
23.    No Rule of Construction. This Agreement shall be construed to be neither against nor in favor of any party hereto based upon any party’s role in drafting this Agreement, but rather in accordance with the fair meaning hereof.
24.    Indemnification.
24.1    General. The Company agrees that if Employee is made a party or is threatened to be made a party to any claim, action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that Employee is or was a trustee, director, officer, member, shareholder, partner, employee or agent of the Company or any of its Related Companies or is or was serving at the request of the Company or any of its business divisions as a trustee, director, officer, member, shareholder, partner, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other entity, including without limitation, service with respect to employee benefit plans, whether or not the basis for such Proceeding is alleged action in an official capacity while serving as a trustee, director, officer, member, shareholder, partner, employee, agent or otherwise, Employee shall be indemnified and held harmless by the Company to the fullest extent authorized by law, as the same exists or may hereafter be amended, against all Expenses (as defined herein) incurred or suffered by Employee in connection therewith, and such indemnification shall continue as to Employee even if he has ceased to be a trustee, director, officer, member, shareholder, partner or agent of, or is no longer employed by, the Company or any of its Related Companies and shall inure to the benefit of Employee’s heirs, executors and administrators; provided, however, that except with respect to proceedings to enforce rights to indemnification under this Agreement, the Company shall indemnify Employee in connection with a Proceeding (or part thereof) initiated by Employee only if such Proceeding (or part thereof) was authorized by the Board of Directors of the Company.  It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of Expenses where the undertaking required pursuant to this Agreement, if any, has been tendered to the Company) that the claimant has not met the standards of conduct which make it permissible under the Tennessee General Corporation Act for the Company to indemnify the claimant for the amount claimed but the burden of such defense shall be on the Company.
24.2    Expenses. As used in this Section 25, “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, costs, 

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attorneys’ fees, accountants’ fees, disbursements and costs of attachment or similar bonds, costs of investigations, and any expenses of establishing a right to indemnification under this Agreement.
24.3    Enforcement. If a claim or request under this Section 24 is not paid by the Company, or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, Employee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim or request and, if successful in whole or in part, Employee shall also be entitled to be paid the costs and expenses, including, without limitation, attorneys’ fees, or prosecuting such suit, together with prejudgment interest.
24.4    Partial Indemnification. If Employee is entitled to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Employee for the portion of such Expenses to which Employee is entitled.
24.5    Advances of Expenses. Expenses incurred by Employee in connection with any Proceeding shall be paid by the Company in advance upon Employee’s request that the Company pay such Expenses, but only in the event that Employee shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which Employee is not entitled to indemnification, and (ii) a statement of Employee’s good faith belief that the standard of conduct necessary for indemnification by the Company has been met.
24.6    Notice of Claim. Employee shall give the Company notice of any claim made against Employee for which indemnification will or could be sought under this Agreement. In addition, Employee shall give the Company such information and cooperation as it may reasonably require and as shall be within Employee’s power and at such times and places as are convenient for Employee.
24.7    Defense of Claim. With respect to any Proceeding (except any criminal or regulatory Proceeding) as to which Employee notifies the Company of the commencement thereof: (i) the Company will be entitled to participate in such Proceeding at its own expense; (ii) except as otherwise provided below, to the extent it so desires, the Company will be entitled to assume the defense thereof, with counsel satisfactory to Employee, which in the Company’s discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary thereof (Employee also shall have the right to employ Employee’s own counsel in such action, suit or Proceeding if Employee reasonably concludes that failure to do so would involve a conflict of interest between the Company and Employee, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.); and (iii) the Company shall not be liable to indemnify Employee under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent, such consent not to be unreasonably withheld. The Company shall not settle any action or claim in any manner that would impose any penalty that would not be paid directly or indirectly by the Company or result in any limitation on, or reporting requirements to third parties by, Employee without Employee’s prior written consent. Neither the Company nor Employee will unreasonably withhold or delay their respective consent to any proposed settlement. A party from which consent to settle is requested shall respond to such request no later than five (5) days, unless for good cause, but in no event less than thirty (30) days. 

13

A party’s response shall either consent or set forth in reasonable detail the basis on which consent is withheld. A party failing to timely respond as provided herein shall be deemed to have consented to such proposed settlement.
24.8    Non-Exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 24 shall not be exclusive of any right that Employee may have or hereafter may acquire under any statute or certificate of incorporation or bylaws of the Company or any subsidiary thereof, agreement, vote of shareholders or disinterested directors or trustees or otherwise.
 25. Compliance With IRC 409A.
25.1    Application of Section 409A. To the extent of any compliance issues or ambiguous terms, this Agreement shall be construed in such a manner so as to comply with the requirements of Section 409A of the Code, and the rules set forth in this Section 25.1 shall apply with respect to any payments that may be subject to Section 409A of the Code notwithstanding any other provision of this Agreement.
25.2    Timing of Payments.  Notwithstanding the applicable provisions of this Agreement regarding the timing of payments, any payment due hereunder which is contingent upon receipt of the Release described in Section 6.5 shall be made, if at all, in accordance with this Section 25.2, and only if Employee has delivered to the Company a properly executed Release for which all legally mandated revocation rights of the Employee have expired prior to the sixtieth (60th) day following the date of termination.  Any such payment shall be made after receipt of such executed and irrevocable Release within such sixty (60) period, unless otherwise scheduled to be made after such period pursuant to the terms of this Agreement; provided, however, if the sixty (60) day period for such payments begins in one taxable year of Employee and ends in a second taxable year of Employee, any payments otherwise payable within such sixty (60) day period will be made in the second taxable year.  Any payments due after such sixty (60) period shall be payable in accordance with their regularly scheduled payment date.  All payments hereunder are subject to any required delay pursuant to Section 25.3, if applicable. If the Company does not receive a properly executed Release, for which all rights of revocation have lapsed, prior to the time specified in this Section 25.2, Employee shall forfeit all rights to any payments under Section 6.5 of this Agreement which are contingent on such Release.
25.3 Notwithstanding anything herein to the contrary, (i) if at the time of Employee’s termination of employment with the Company Employee is a “specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Employee) until the date that is six months following Employee’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to Employee hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred 

14

if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax. The Company shall consult with Employee in good faith regarding the implementation of the provisions of this Section 25; provided that neither the Company nor any of its employees or representatives shall have any liability to Employee with respect to thereto. For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments and references herein to Employee’s termination of employment shall refer to Employee’s “separation from service” within the meaning of the default provisions of Treas. Reg. § 1.409A-1(h)..
26.    Effect of Termination. Any termination of the Employee’s employment with the Company shall automatically be deemed to be a simultaneous resignation of all other positions and titles the Employee holds with the Company, Holdings or any of their business divisions, whether as an officer, director, fiduciary, administrator or otherwise.

[SIGNATURES ON NEXT PAGE]

15

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
COMPANY:
TEAM HEALTH, INC.

By: /s/  HEIDI S. ALLEN    
Its: SENIOR VICE PRESIDENT AND GENERAL COUNSEL    

EMPLOYEE:  

/s/  MICHAEL D. SNOW    
      MICHAEL D. SNOW

16

Exhibit “A”

Management  Incentive  Plan

During each fiscal year of the Company (each a “Performance Period”), Employee shall be entitled to participate in an Annual Management Incentive Plan (the “Bonus Plan”) based upon the achievement of certain Team Health, Inc. (“Company”) and/or Division or other operating area financial and discretionary goals and objectives as determined by the Company’s Board of Directors (the “Board”) or designated Compensation Committee of the Board (“the Committee”), referred hereinafter as the “Administrator” of the Plan.  At the beginning of each Performance Period (and generally within the first ninety (90) days of each fiscal year), the Financial Performance Component (as defined below) and Discretionary Component (as defined below) determined at the Administrator’s discretion, will be distributed to Employee and related participants under the Bonus Plan.  The “Financial Performance Component” shall mean, for any Performance Period, EBITDA or other performance targets established by the Administrator. The “Discretionary Component” shall mean, for any Performance Period, the specific objectives defined by senior management of the Company and the Administrator and based upon the senior management’s assessment of the Company’s and Employee’s individual performance. Specific information to be provided to the Employee in regard to the operation of the Bonus Plan for the applicable Performance Period shall include, as applicable, the Financial Performance Component and the Discretionary Component established by the Administrator, including the quantitative earnings targets for the Company and, if applicable, for an operating area, qualitative performance measures, basis for measurement of performance against targets, and adjustments of eligible bonus pool for over or under performance against targets.   

For purposes of the Bonus Plan, Employee’s Target Annual Bonus opportunity for each Performance Period will be equal to seventy percent (70%) of Employee’s base salary as of the end of each Performance Period of the Bonus Plan. The Target Annual Bonus amount paid to Employee hereunder, if any, shall be prorated based on the number of days the Employee worked during the Performance Period.  Unless otherwise determined by the Administrator, or except as specifically provided in Section 6.5 (“Severance Compensation”) of this Employment Agreement, Employee shall not be entitled to the payment of any bonuses under the Bonus Plan with respect to a Performance Period in the event of the termination of Employee’s employment with the Company for any reason prior to the last day of the applicable Performance Period.  Bonus payments, if earned, shall be paid to Employee no later than two and one-half (2.5) months following the Performance Period to which such bonus relates, or at such time as similar bonuses are paid to other similarly situated employees of Company.   

For purposes of this Agreement, EBITDA shall mean the Company’s or the Division’s respective earnings before interest, taxes, depreciation and amortization, as calculated by the Company using its usual and customary accounting practices.  The parties specifically acknowledge that the salary and benefits paid by the Company to Employee pursuant to this Agreement shall be deemed to be expenses when calculating the EBITDA. 

 

Exhibit B – Relocation Assistance

		
	•
	Reimbursement for reasonable expenses incurred in Employee’s three house hunting trips to Knoxville all in accordance with the Company’s expense reimbursement policies.

		
	•
	Packing, transportation and reasonable insurance thereon by a Team Health approved mover of household goods.

		
	•
	Employee will be reimbursed for the costs for up to 6 months of storage in Knoxville, TN of Employee’s household goods, grossed up for the payment of applicable taxes.

		
	•
	Reimbursement of up to $3,000 per month for up to 6 months of temporary housing costs in Knoxville, TN,  grossed up for the payment of  applicable taxes.

		
	•
	Employer will reimburse Employee for the following customary and reasonable closing costs associated with Employee’s purchase of a residence in the Knoxville, TN area: (i) interest or points for mortgage financing placement, (ii) attorney’s fees, and (iii) title insurance , grossed up for the payment of applicable taxes.

		
	•
	Employer agrees to reimburse Employee for miscellaneous reasonable closing costs and payment of a reasonable realtor commission upon the sale of Employee’s house in Alabama, grossed up for the payment of applicable taxes; however, if Employee sells his Alabama home without paying a realtor commission Employer agrees to pay Employee Thirty Thousand  Dollars ($30,000), subject to the Employee’s payment  of  applicable taxes, to be paid within 10 business days after the closing on the sale of the Alabama home.

		
	•
	Employee has represented that the Alabama Residence has recently been appraised at $1,090,000 (“Appraised Value”). Should the  Residence be sold at a sales price (without any reduction thereof for the realtor commission paid thereon) that is less than the Appraised Value (“Loss”), Employer will reimburse Employee up to a maximum reimbursement of $300,000, subject to the Employee’s payment  of  applicable taxes,  for the “Reimbursable Loss” as follows:

		
	(i)
	Employer will reimburse Employee for the first $100,000 of Loss and

		
	(ii)
	Employer will reimburse Employee for 1⁄2 of any Loss which exceeds $100,000 up to a maximum additional reimbursement of $300,000.

		
	(iii)
	By way of example, if the Sales price is $900,000 then the Reimbursable Loss would be $145,000  as follows:

 
a.    $100,000 for (i) above and

		
	b.
	$90,000 divided by 1⁄2  = $45,000

		
	c. 
	 a+ b = $145,000,  the Reimbursable  Loss .     

The amount of Reimbursable Loss so determined will be paid to Employee within 10 business days of the closing on the sale of the Alabama home.Exhibit 4.118

 

BETWEEN

 

 

CHINA HYDROELECTRIC CORPORATION

 

 

AND

 

 

FUJIJAN JINZAOQIAO HYDROPOWER CO., LTD.

 

 

SHARE TRANSFER AGREEMENT

 

For

 

 

PINGNAN COUNTY YUHENG HYDROPOWER

 

CO., LTD.

 

1

 

CONTENTS

 

	
CHAPTER I
    	
DEFINITIONS   AND INTERPRETATIONS
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE 1
    	
DEFINITIONS
    	
5
    
	
 
    	
 
    	
 
    
	
CHAPTER   II
    	
EQUITY   STAKE TRANSFER
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
TRANSFER   OF EQUITY STAKE
    	
7
    
	
ARTICLE 3
    	
SHARE   TRANSFER PRICE
    	
8
    
	
ARTICLE 4
    	
PAYMENT
    	
8
    
	
ARTICLE 5
    	
TAXES   PAYABLE UNDER THE TRANSFER OF EQUITY STAKE
    	
9
    
	
 
    	
 
    	
 
    
	
CHAPTER   III
    	
REPRESENTATIONS   AND WARRANTIES BY BOTH PARTIES
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
REPRESENTATIONS   AND WARRANTIES BY BOTH PARTIES
    	
9
    
	
 
    	
 
    	
 
    
	
CHAPTER   IV
    	
DISCLOSURES,   REPRESENTATIONS AND WARRANTIES BY THE TRANSFEROR
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE 7
    	
DISCLOSURES,   REPRESENTATIONS AND WARRANTIES BY THE TRANSFEROR
    	
10
    
	
ARTICLE 8
    	
GENERAL   REPRESENTATIONS AND WARRANTIES BY THE TRANSFEROR
    	
15
    
	
ARTICLE 9
    	
OWNERSHIP
    	
15
    
	
 
    	
 
    	
 
    
	
CHAPTER V
    	
DISCLOSURES,   REPRESENTATIONS AND WARRANTIES BY THE TRANSFEREE
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE 10
    	
DISCLOSURES,   REPRESENTATIONS AND WARRANTIES BY THE TRANSFEREE
    	
16
    
	
 
    	
 
    	
 
    
	
CHAPTER   VI
    	
DELIVERY
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 11
    	
DELIVERY
    	
17
    
	
 
    	
 
    	
 
    
	
CHAPTER   VII
    	
ARRANGEMENT   OF DEBTS AND EMPLOYEES
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE 12
    	
ARRANGEMENT   OF DEBTS
    	
19
    
	
ARTICLE 13
    	
EMPLOYEES
    	
20
    
	
 
    	
 
    	
 
    
	
CHAPTER   VIII
    	
CONFIDENTIALITY
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE 14
    	
CONFIDENTIALITY
    	
20
    
	
 
    	
 
    	
 
    
	
CHAPTER   IX
    	
BREACH OF   CONTRACT
    	
21
    
	
 
    	
 
    	
 
    
	
ARTICLE 15
    	
LIABILITY   FOR BREACH OF A REPRESENTATION OR WARRANTY
    	
21
    
	
ARTICLE 16
    	
LIABILITY   FOR BREACH OF CONTRACT
    	
22
    
	
 
    	
 
    	
 
    
	
CHAPTER X
    	
FORCE MAJEURE
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE 17
    	
FORCE   MAJEURE
    	
23
    
	
 
    	
 
    	
 
    
	
CHAPTER   XI
    	
RESOLUTION   OF DISPUTES
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE 18
    	
ARBITRATION
    	
24
    
	
ARTICLE 19
    	
VALIDITY   OF THE ARBITRATION AWARD
    	
24
    
	
ARTICLE 20
    	
CONTINUATION   OF RIGHTS AND OBLIGATIONS
    	
25
    
	
 
    	
 
    	
 
    
	
CHAPTER   XII
    	
APPLICABLE   LAW
    	
25
    
	
 
    	
 
    	
 
    
	
ARTICLE 21
    	
APPLICABLE   LAW
    	
25
    
	
 
    	
 
    	
 
    
	
CHAPTER   XIII
    	
MISCELLANEOUS
    	
25
    
	
 
    	
 
    	
 
    
	
ARTICLE 22
    	
WAIVER
    	
25
    
	
ARTICLE 23
    	
TRANSFER
    	
26
    

 

2

 

	
ARTICLE 24
    	
AMENDMENT
    	
26
    
	
ARTICLE 25
    	
LANGUAGE
    	
26
    
	
ARTICLE 26
    	
VALIDITY   OF THE TEXT AND APPENDICES
    	
26
    
	
ARTICLE 27
    	
NOTIFICATION
    	
27
    
	
ARTICLE 28
    	
THE   ENTIRE AGREEMENT
    	
28
    
	
 
    	
 
    	
 
    
	
APPENDIX   I
    	
EXISTING   DEBTS OF THE COMPANY
    	
30
    
	
 
    	
 
    	
 
    
	
APPENDIX   II
    	
LIST OF   SECURITY
    	
31
    

 

3

 

SHARE TRANSFER AGREEMENT

 

This Share Transfer Agreement (hereinafter referred to as this “Agreement”) is executed by and between the following Parties in China on October 18, 2012.

 

(1)             Party A: China Hydroelectric Corporation (中华水电公司) (hereinafter referred to as the “Transferor”), a company registered and established in accordance with the laws of the Cayman Islands, with its registered address at 558 Lime Rock Road, Lime Rock, Connecticut 06039, the authorized representative of which is Lin Yousu, whose nationality is Australia;

 

(2)             Party B: Fujian Jinzaoqiao Hydropower Co., Ltd. (福建金造桥水电有限公司) (hereinafter referred to as the “Transferee”), a company registered and established in accordance with the laws of the People’s Republic of China, with its registration number being 350900400001259 and registered address at Wangkeng Village, Tangkou Township, Pingnan County, the authorized representative of which is Zhang Rongbin, whose nationality is China.

 

The Transferor and Transferee are hereinafter collectively referred to as both “Parties” as well as each of the Transferor and Transferee is hereinafter referred to as a “Party”.

 

WHEREAS:

 

(1)             Pingnan County Yuheng Hydropower Co., Ltd. (hereinafter referred to as the “Company”) is a wholly owned foreign enterprise incorporated in China, conducting the business of hydropower generation and hydropower development with its registered capital in the amount of RMB20,000,000;

 

(2)             The Transferor holds one hundred percent (100%) of the equity stake of the Company, and can exercise all of its full rights as a shareholder;

 

4

 

(3)             Subject to the terms and conditions set out in this Agreement, the Transferor is willing to transfer one hundred percent (100%) of the equity stake of the Company (hereinafter referred to as the “Equity Stake”) held by it to the Transferee;

 

(4)             The Transferee is willing to acquire one hundred percent (100%) of the equity stake of the Company from the Transferor subject to the terms and conditions set out in this Agreement.

 

Therefore, after friendly consultations, on the principles of equality and mutual benefit, both Parties to this Agreement 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, the Law of the People’s Republic of China on Wholly Foreign-owned Enterprises and other relevant laws and regulations of the People’s Republic of China:

 

CHAPTER I        DEFINITIONS AND INTERPRETATIONS

 

Article 1                                    Definitions

 

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

 

The “Company” refers to Pingnan County Yuheng Hydropower Co., Ltd., a limited liability company registered and established in accordance with the laws of China, with its registration number being 350923100000932, with registered capital being RMB20,000,000 and registered address at Yuanping Village, Shoushan Township, Pingnan County.

 

The “Hydroelectric Station Project” refers to Yuanping Hydroelectric Station Project with the installed capacity of 30,000 KW, which is legally owned and operated by the Company.

 

5

 

“PRC” or “China” refers to the People’s Republic of China.

 

“Claims” refers to all the claims, actions, demands, proceedings judgments liabilities, damages amounts, costs and expenses (including legal costs and disbursements) whatsoever and howsoever arising.

 

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

 

“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 Equity Stake;

 

(2)                       the right or power created or otherwise arising in or over the 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 Equity Stake for the payment of a debt or any other monetary obligations or the performance of any other obligations.

 

“Examination and Approval Authority”, pursuant to the provisions for the examination and approval of projects which have investments by foreign investors in the PRC, refers to the relevant Chinese government departments having authority to examine and approve this Agreement and the transfer of the Equity Stake contemplated in this Agreement.

 

“Material Adverse Change” refers to

 

(1)                       investigations (which may cause the Company to be punished) and penalties upon the Company by relevant governmental authorities;

 

6

 

(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 financial conditions, business, assets or liabilities of the Company in the amount of more than RMB100,000.

 

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

 

“US Dollar” or “US$” refers to the legal currency of the United States of America.

 

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

 

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

 

Chapter II            Equity Stake Transfer

 

Article 2                                    Transfer of Equity Stake

 

Pursuant to the terms stipulated in this Agreement, the Transferor agrees to transfer to the Transferee and the Transferee agrees to accept from the Transferor the 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 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.

 

7

 

Article 3                                    Share Transfer Price

 

The Transferor and Transferee, after consultations, have finally determined that the price for the Equity Stake shall be agreed at RMB134,000,000 (hereinafter referred to as the “Transfer Price”).

 

Article 4                                    Payment

 

The Parties, after consultations, have agreed that the Transfer Price under this Agreement shall be paid in four (4) instalments:

 

(1)                       The first instalment in the amount of RMB5,000,000 shall be paid by the Transferee to the Transferor within three (3) Business Days after this Agreement has been executed;

 

(2)                       The second instalment in the amount of RMB20,000,000 shall be paid by the Transferee to the Transferor within three (3) Business Days after this Agreement has been approved in writing by the Examination and Approval Authority;

 

(3)                              The third instalment in the amount of RMB43,000,000 shall be paid by the Transferee to the Transferor within fifteen (15) Business Days after this Agreement has been approved in writing by the Examination and Approval Authority;

 

(4)                       The fourth instalment in the amount of RMB66,000,000 shall be paid by the Transferee to the Transferor on or before 31 January 2013.

 

The Transferee shall remit the Transfer Price into the bank accounts designated by the Transferor. Unless otherwise stipulated by this Agreement, the obligations of the Transferee shall be deemed as having been fulfilled after the Transfer Price has been fully remitted into the bank accounts designated by the Transferor and the Transferee shall not assume any responsibilities or obligations of this Agreement in relation to the payment of the Transfer Price thereafter. The Transferor shall issue the legal receipts respectively to the Transferee within five (5) days after having received each of the instalments of the Transfer Price.

 

8

 

Article 5                                    Taxes Payable under the Transfer of Equity Stake

 

Any taxes or fees arising out of and payable pursuant to the fulfilment of the terms of this Agreement by each of the Transferor and Transferee shall be paid by the respective Party liable for the taxes or fees under the provisions of relevant laws and regulations of China. Both the Transferor and the Transferee have no obligation to pay any consultation fees or commission to any third party.

 

Chapter III                                Representations and Warranties by Both Parties

 

Article 6                                    Representations and Warranties by Both Parties

 

6.1                 Prior to the signing of this Agreement, if the signing party is a company, such company shall provide a power of attorney which authorizes its representative to sign this Agreement.

 

6.2                 Both Parties to this Agreement agree to strive jointly in coordinating the work pertaining to the transfer of the Equity Stake, including but not limited to application for approvals, registration, etc., and the costs and expenses arising therefrom shall be borne by the Company.

 

9

 

Chapter IV                                 Disclosures, Representations and Warranties by the Transferor

 

Article 7                                    Disclosures, Representations and Warranties by the Transferor

 

The Transferor hereby represents and warrants to the Transferee that:

 

7.1                 As of the Signing Date, no lawsuits, arbitrations, or other legal or administrative proceedings or governmental investigations are on-going  against the Transferor and the Company that will severely affect their ability to sign this Agreement or fulfil their obligations under this Agreement.

 

7.2                 The Transferor hereby undertakes that it will not take any action after the Signing Date that will cause any adverse impact on the Company. After the Signing Date, the Transferor shall normally operate and manage the Company until the completion of the delivery stipulated in this Agreement and warrant that there will be no Material Adverse Change to the operation, business and conditions of the Company.

 

7.3                 The Transferor has disclosed to the Transferee all the materials and facts related to the Company it holds or knows, which have material and adverse impact on the ability of the Transferor for its duly execute its obligations under this Agreement, or have material impact on the willingness of the Transferee to enter into this Agreement or execute the obligations under this agreement when disclosed to the Transferee. In addition, the materials provided from the Transferor to the Transferee do not include any misleading or untrue representation.

 

7.4                 As of the Signing Date, the Transferor have informed the Third Party (such as the lending banks of the Company) the matter of the transfer of the Equity Stake under this Agreement who are related to the Equity Stake and the Company; and in case of any requirement for the consent of such Third Party, the Transferor has already procured the corresponding written consent from such Third Party.

 

7.5                 Regarding the documents and information provided by the Transferor to the Transferee prior to the Signing Date, the Transferor hereby undertakes that:

 

10

 

(1)                              all copies made from original documents are true and complete and that such original documents are authentic and complete;

 

(2)                              all originals supplied to the Transferee and/or the Transferee’s agencies are authentic and complete;

 

(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

 

(4)                              the Transferor have drawn to the attention of the Transferee all matters that are material for the Transferee to proceed with the transaction as contemplated in this Agreement.

 

7.6                 Up to the Signing Date, the Company has never been involved in and is not currently involved in any administrative investigations, lawsuit, arbitration, disputes, Claims or other proceedings (no matter ongoing, pending or threatened), nor has the Company been punished. Up to the Closing Date, the Transferor hereby warrants that all fees, charges, penalties and expenses payable to or being required to pay to any PRC governmental authority have been paid off. As of the Closing 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 transfer of the Equity Stake, the Transferor shall be liable for the full compensation on the Transferee and/or the Company.

 

7.7                 The Company legally owns all real estate (including but not limited to land, buildings, dams, reservoirs, headrace, 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 subject to the confirmation by both Parties. All material aspects of all buildings, machines, equipments, vehicles and other assets owned by the Company are in good, safe and operational conditions (excluding the loss from normal usage). The Transferor hereby warrants and undertakes that commencing from the Signing Date, the  real estate and movable assets mentioned above will not suffer from any loss or damage resulting from the actions of the Transferor.

 

11

 

7.8                 In this Agreement, the Transferor has already disclosed all information about the debts of the Company. As of the payment date of third instalment of the Transfer Price, 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 Agreement, and up to the Closing Date, all due principal and accrued interests of the debts listed out in Appendix I hereto shall be borne by the Transferor. The Transferor shall assume liabilities for any undisclosed debts before the Signing Date or unpaid due principal and interests of the Company so as to hold the Transferee and the Company harmless.

 

7.9                 As of the Signing Date, the Company has not carried out any equity investment in any other companies, enterprises, etc. In the event that the Company suffers from any damage or loss due to such undisclosed equity investment, the Transferor shall assume liabilities to fully compensate the Transferee and/or the Company.

 

7.10          As of the Signing Date, except for the securities listed out in Appendix II to this Agreement, 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 (including but not limited to mortgage, pledge and guarantee) for any other companies, enterprises, economic entities or any individuals. In the event that the Company suffers from any damage or loss due to such undisclosed security, the Transferor shall assume liabilities to fully compensate the Transferee and/or the Company.

 

12

 

7.11          As of the Signing 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 construction tax and additional education fees. The Transferor shall assume liabilities for any unpaid taxes to the Transferee  and/or the Company so as to hold the Transferee and/or the Company harmless.

 

7.12          This Agreement coming into effective cannot or is impossible to cause the Third Party to terminate the contracts or agreements executed by it with the Company prior to the effective date of this Agreement (inclusive) and are still effective up to the effective date of this Agreement.

 

7.13          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 social insurance registration for the employees of the Company has been legally and validly carried out. The various social insurance premiums, 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 not been any payment for the employees’ social insurance premiums, salaries, and other welfares provided in PRC laws and the Company’s internal regulations in default. As of the Signing Date, there has not been any situation which may cause the employees to bring labour arbitrations or lawsuits against the Company.

 

7.14          The Company has taken out requisite insurances usually purchased by other enterprises within the same industry as reasonably required by its production and operation, all policies of which are still valid up to the Signing Date, all the 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 Signing Date, there is no circumstance which may have caused or may cause the invalidity of the aforesaid insurance policies. The aforesaid insurance policies are free from any special or unusual restrictions. As of the Signing Date, there have been no situations under which the Company could claim for compensation against the insurer in accordance with the aforesaid policies.

 

13

 

7.15          All accounts, accounting books, ledger and financial records of the Company is made in accordance with the accounting procedures and standards stipulated by the Chinese accounting system, and have been recorded and completed  duly, properly and accurately, without any kinds of material errors and deviations, reflecting all the transactions regarding to the Company truly and impartially and revealing the business financial, contractual situations of the Company during each fiscal period.

 

7.16          The Company is the legal owner of the Hydroelectric Station Project and can enjoy the full and complete ownership, operation right and right to profit of the Hydroelectric Station Project.

 

7.17          Prior to the date of the delivery, every aspect of the Hydroelectric 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 of the transfer of the Equity Stake, the Transferor shall be liable for the full compensation on the Transferee and/or the Company.

 

7.18          At any moment of present or in the future, upon the request of the Transferee, the Transferor shall, on its own expenses, make all efforts to carry out and/or conduct in a way which is satisfactory to the Transferee, or to impel the Third Party to carry out and/or conduct 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 Agreement.

 

14

 

Article 8                                    General Representations and Warranties by the Transferor

 

The Transferor is a legal entity that has been duly established according to the laws and regulations of Cayman Islands and is validly and legally in existence. Signing this Agreement and fulfilling all of its obligations stipulated herein by the Transferor 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 the Transferor is a party to or is bound by.

 

Article 9                                    Ownership

 

9.1                 The Transferor hereby undertakes and warrants that: the Transferor is the legal owner of the Equity Stake and has full authority and right to transfer the Equity Stake to the Transferee.

 

9.2                 The Transferor hereby undertakes and warrants that: up to the date of the alteration registration of the transfer of the Equity Stake with the competent administration for industry and commerce , the 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 interest); and there is no agreement or undertaking in existence that may result in or create any Claim or Encumbrance on the 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).

 

15

 

Chapter V                                      Disclosures, Representations and Warranties by the Transferee

 

Article 10                             Disclosures, Representations and Warranties by the Transferee

 

The Transferee hereby represents and warrants to the Transferor that:

 

10.1          The Transferee is a legal entity that has been duly established according to the laws of China and it is validly and legally in existence and also operating normally in accordance with the laws and regulations of China.

 

10.2          Signing this Agreement and fulfilling all obligations stipulated herein by the Transferee 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 the Transferee is a party to or is bound by.

 

10.3          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 Agreement or fulfil its obligations under this Agreement.

 

10.4          The Transferee has the sufficient financial ability to afford the Transfer Price stipulated in this Agreement and make the payment in strict accordance with this Agreement in due course.

 

10.5          Both Parties shall complete the foreign exchange procedure for the payment of the Transfer Price by the Transferee to the Transferor in a timely fashion according to relevant PRC laws and regulations.

 

10.6          The Transferee shall pay the fund possession fees for the fourth instalment of the Transfer Price in the amount of RMB66,000,000. This fund possession fees shall be subject to the bank loan benchmark rate announced by the People’s Bank of China, calculating from the sixteenth Business Day after this Agreement is approved by the Examination and Approval Authority , to the date the fourth instalment of the Transfer Price is actually paid. This fund possession fees shall be paid together with the fourth instalment of the Transfer Price to the bank account designated by the Transferor.

 

16

 

Chapter VI                                 Delivery

 

Article 11                             Delivery

 

11.1          After this Agreement come into force, the Transferor and Transferee shall immediately organize and establish a Delivery Team to actively carry out the delivery of the Company and the Hydroelectric Station Project.

 

11.2          The Transferor shall warrant making a full and complete delivery and there shall be no derogation of movable assets and real estate delivered to the Transferee compared with the assets list confirmed by the Parties. The Transferor and the Transferee shall jointly confirm the completion of delivery in written form.

 

11.3          The delivery shall include, without limitation, the following:

 

(1)                   the delivery of the rights of production, operation and management of the Company and the Hydroelectric Station Project to the authorized person by the Transferee;

 

(2)                   the checking and counting of all the assets (including but not limited to the real estate and movable assets) of the Company by the Transferor and Transferee, the formulation of the list of the Company’s assets, and the delivery of such assets, subject to the on-site confirmation  by signing of the representatives respectively from the Transferor and Transferee; as for the derogated assets during the assets sorting and counting, the compensation shall be made by the Transferor in accordance with the appraisal value;

 

(3)                   the delivery of the originals of all approvals, certificates and licences, permits and customer information, building ownership certificates, state-owned land use right certificates to the Transferee, except for the certificates or documents pledged in the banks or relevant governmental authorities;

 

17

 

(4)                   the delivery of the originals of all project drawings, contracts, agreements (including but not limited to grid connection and dispatching agreement, power sale and purchase contract, project contracts,  equipment contracts, installation contracts and materials contracts) and other files and documents to the Transferee;

 

(5)              the delivery of the originals of all financial accounting books, financial vouchers and the accounting files to the Transferee;

 

(6)              the technology transfer and delivery of the list concerning the units contracting the construction works of the Hydroelectric Station Project, equipment manufacturer, design, project supervision, quality examination and transmission lines, etc. to the Transferee;

 

(7)              the delivery of all other materials and files of the Company; and

 

(8)              other delivery reasonably required by the Transferee.

 

11.4          24 o’clock of the date when this Agreement is approved by the Examination and Approval Authority is the point of time for the division of rights and interests between the Transferor and Transferee (the “Closing Date”). Before this point of time, the due interests of the debts of the Company disclosed in Appendix I to this Agreement shall be borne by the Transferor. After this point of time, the balance of the principal listed in the Appendix I to this Agreement and the debts made after this point of time and the interests of the debts listed in Appendix I shall be borne by the Transferee. The debts of the Company existed before the Closing Date which are undisclosed in this Agreement shall be borne by the Transferor.

 

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11.5          The delivery shall be fully completed when the second instalment of the Transfer Price arrives at the bank account designated by the Transferor. In addition, the completion of such delivery shall be subject to the written confirmation of both the Transferor and the Transferee. After the completion of the delivery, the Transferor shall provide active cooperation when the Transferee reasonably requires further delivery in writing.

 

11.6          The Transferor and the Transferee shall make sure the continuity, stability and safety of the production and operation of the Company during the process of the delivery.

 

11.7          The Transferor and the Transferee shall fully cooperate so as to complete the delivery. In the event that the other Party or the Company after the transfer of the Equity Stake suffers from any damage due to any Party’s non-cooperation, such Party shall be liable for the compensation in accordance with law.

 

11.8          The Parties agree that after this Agreement is approved by the Examination and Approval Authority, the Parities will jointly cooperate in respect of the alteration registration of the Sale Equity Stake with the local administration for industry and commerce. The specific time for such application of alteration will be separately agreed by the Parties.

 

Chapter VII                            Arrangement of Debts and Employees

 

Article 12                    Arrangement of Debts

 

Both Parties confirm that all debts and creditor’s rights up to the Closing Date shall be borne by the Transferee. As of the Closing Date, the total amount of the principal of all debts of the Company is RMB145,000,000 (as set out in Appendix I hereto in detail).

 

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Article 13                    Employees

 

13.1          After the completion of the transfer of the Equity Stake, the Company shall relocate current employees of the Company in accordance with law, and the terms and conditions of their employment including their remuneration for their employment shall be determined by reference to the current standards in principle and implemented in accordance with the Labour Law of the PRC, the Labour Contract Law of the PRC and other relevant Chinese laws and regulations.

 

13.2          The Company shall protect the legal rights and interests of its employees in accordance with law.

 

Chapter VIII                       Confidentiality

 

Article 14                    Confidentiality

 

14.1          Both Parties agree that unless otherwise provided in other relevant confidentiality agreements, with regard to the confidential and exclusive information that have been disclosed to or may be disclosed to the other Party by either Party to this Agreement pertaining to their respective businesses, or financial situations and other confidential matters, both Parties to this Agreement which have received the aforesaid confidential information (including written information and non-written information, hereinafter referred to as “Confidential Information”) shall:

 

14.1.1             Keep the aforesaid Confidential Information confidential;

 

14.1.2             Save for the disclosure of the Confidential Information by a Party to this Agreement to its employees solely for the performance of their duties and responsibilities, neither of the Parties to this Agreement shall disclose the Confidential Information to any Third Party or any entity.

 

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14.2                     The provisions of the aforesaid Article 14.1 shall not apply to Confidential Information:

 

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

 

14.2.2             which has become public information by means not attributable to any breach by the receiving Party;

 

14.2.3             which was obtained, by the receiving Party from a Third Party not subject to any confidentiality obligation affecting the said Confidential Information.

 

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

 

Chapter IX                                Breach of Contract

 

Article 15                    Liability for Breach of a Representation or Warranty

 

15.1          If any representation or warranty made by either Party to this Agreement 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 Agreement by either 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 defaulting Party for full compensation for any loss, damage, cost or expense arising from the erroneous, omitted, misleading or untrue representation or warranty of the defaulting Party or arising from any other breach of any representation and warranty given by the defaulting Party.

 

21

 

15.2          Each representation and warranty set out in this Agreement is to be construed independently.

 

Article 16                    Liability for Breach of Contract

 

16.1          In the event of a breach committed by either Party to this Agreement, the said defaulting Party shall be liable to the other Party for the losses and damages or any other liabilities arising out of that defaulting Party’s breach of contract in accordance with the provisions of this Agreement and the laws and regulations of China. In the event that both Parties to this Agreement commit a breach, each of the Parties shall be liable to the other Party for the losses and damages or any other liabilities incurred respectively.

 

16.2          Any violation of the obligations, representations and warranties under this Agreement by either Party of the Transferor 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.

 

16.3          Any delayed performance of the obligations or the matters under this Agreement by Transferor shall constitute a breach of contract (however, the delayed performance or non-performance due to the other Party’s prior performance obligation shall not constitute a breach of contract), the Transferee shall be entitled to terminate this Agreement, and request for a payment in the amount of 10% of the Transfer Price as liquidated damages.

 

16.4          Any delay in paying each of the first, second, and third instalments of the Transfer Price by Transferee shall constitute a breach of contract (however, the delayed performance or non-performance due to the other Party’s prior performance obligation shall not constitute a breach of contract), the Transferee shall pay daily penalty on the basis of the amount of overdue payment and bank loan benchmark rate announced by the People’s Bank of China. If the delay in payment lasts over 30 days, the Transferor shall be entitled to terminate this Agreement, and request for a payment in the amount of 10% of the Transfer Price as liquidated damages.

 

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16.5          Any delay in paying the fourth instalment of the Transfer Price by Transferee shall constitute a breach of contract (however, the delayed performance or non-performance due to the other Party’s prior performance obligation shall not constitute a breach of contract), the Transferee shall pay daily penalty on the basis of the amount of overdue payment and twice of the bank loan benchmark rate announced by the People’s Bank of China. If the delay in payment lasts over 60 days, the Transferor shall be entitled to terminate this Agreement, and request for a payment in the amount of 20% of the Transfer Price as liquidated damages.

 

Chapter X                                     Force Majeure

 

Article 17                    Force Majeure

 

17.1          “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 the relevant laws and regulations of China. The Parties hereby confirm lack of fund by any Party shall not constitute a Force Majeure event

 

17.2          In the event of the occurrence of a Force Majeure event, the obligations of the Party to this Agreement 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 Agreement to which the affected party is subject shall automatically be extended by a period equivalent to the term or period of the Force Majeure event, and the said Party shall not be liable for any liabilities arising out of a breach of contract as provided for in this Agreement for the duration of the Force Majeure.

 

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17.3          The Party claiming the occurrence of a Force Majeure event shall promptly inform the other Party in writing, and within seven (7) days thereafter, it shall provide sufficient evidence issued by the notary organization for the occurrence and the continuity of the Force Majeure event. The Party claiming the occurrence of a Force Majeure event shall also do its best to eliminate the adverse effect of the Force Majeure event.

 

Chapter XI                                Resolution of Disputes

 

Article 18                    Arbitration

 

18.1          Any dispute arising out of or in connection with this Agreement shall firstly be resolved through friendly consultation. In the event that the dispute cannot be solved through friendly consultations, either Party may submit the dispute to the China International Economic and Trade Arbitration Commission for arbitration in accordance with its prevailing valid arbitration rules at the time of application for arbitration. The arbitration place shall be in Shanghai.

 

18.2          The arbitration tribunal shall be composed by three (3) arbitrators, and the arbitration procedure shall be conducted in Chinese.

 

Article 19                    Validity of the Arbitration Award

 

The arbitration award shall be final and binding on both Parties to this Agreement. Both Parties to this Agreement agree to be bound by the said award, and act accordingly.

 

24

 

Article 20                             Continuation of Rights and Obligations

 

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

 

Chapter XII                           Applicable Law

 

Article 21                             Applicable Law

 

The laws and regulations of the PRC shall govern and be binding on the establishment, validity, interpretation and execution of this Agreement. All disputes arising out of this Agreement 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 Agreement, reference shall be made to general international business practices.

 

Chapter XIII                      Miscellaneous

 

Article 22                             Waiver

 

The failure or delay in the exercise of an entitlement stipulated in this Agreement by either Party to this Agreement 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.

 

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Article 23                             Transfer

 

Unless otherwise described and prescribed in this Agreement, neither of the Parties to this Agreement shall transfer or assign all or any part of that Party’s entitlement or obligations as stipulated in this Agreement provided that it has not obtained the consent in writing from the other Party to this Agreement in advance or the approval in writing from the Examination and Approval Authority as required by the laws.

 

Article 24                             Amendment

 

24.1            This Agreement shall not be amended verbally. Any amendment to this Agreement shall become effective only upon the procurement of the written document indicating their consent signed by both Parties and the written approval of the Examination and Approval Authority.

 

Article 25                             Language

 

This Agreement is written in the Chinese and English languages.  In case of any inconsistency, the Chinese version shall prevail.

 

Article 26                             Validity of the Text and Appendices

 

26.1            This Agreement shall become effective upon the approval from the Examination and Approval Authority.  The Chinese text of this Agreement is executed in five (5) sets of original. Each Party shall hold one (1) set of original, and one (1) set of original shall be sent to the Examination and Approval Authority, the competent Administration for Industry and Commerce and any other governmental authorities as required respectively. The remaining originals shall be filed and kept by the Company.

 

26

 

Article 27                             Notification

 

27.1            Unless otherwise specified and prescribed in this Agreement, either Party issuing any notification or written communication to the other Party according to the provisions of this Agreement 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 Agreement shall be deemed to be served on the date of receipt.  If the notification or communication is 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.

 

27.2            All notifications and communications shall be sent to the following addresses, until such time when the other Party issues a written notice of any change to its address:

 

	
The Transferor’s   Address:
    	
Room 2105, 21st Floor, Block A, Ping’an   International Financial Centre, No. 3, Xinyuan Street South, Chaoyang   District, Beijing, China.
    
	
 
    	
 
    
	
Telephone Number:
    	
010-6408 2341
    
	
 
    	
 
    
	
Facsimile Number:
    	
010-8444 2788
    
	
 
    	
 
    
	
Attention:
    	
Jin Lei
    
	
 
    	
 
    
	
The Transferee’s   Address:
    	
No.7, Huancheng Road Yi Xiang, Gufeng Town,   Pingnan County, Fujian Province
    
	
 
    	
 
    
	
Telephone Number:
    	
0593-3309556
    
	
 
    	
 
    
	
Facsimile Number:
    	
0593-3322468
    
	
 
    	
 
    
	
Attention:
    	
Li Cong Bin
    

 

27

 

Article 28                             The Entire Agreement

 

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

 

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

 

28

 

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

 

 

	
Party   A:           China Hydroelectric Corporation
    
	
 
    
	
 
    
	
Signature:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Position:
    	
 
    	
 
    
	
 
    
	
 
    
	
Party   B:           Fujian Jinzaoqiao Hydropower Co., Ltd.
    
	
 
    
	
 
    
	
 
    	
(Company Seal)
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Position:
    	
 
    	
 
    
				

 

29

 

 

Appendix I                                                               Existing Debts of the Company

 

	
No.
    	
 
    	
Loan
   Contract
   Number
    	
 
    	
Lender
    Bank
    	
 
    	
Balance of
   Loan
    (RMB)
    	
 
    	
Loan Term
    	
 
    	
Current
    Interest Rate
    	
 
    	
Mortgage and/or Pledge
   Assets
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
FJ001622010519
    	
 
    	
Bank of China,   Fujian Branch
    	
 
    	
84,000,000
    	
 
    	
December 22,   2010-Ocboter 20, 2020
    	
 
    	
7.4025%
    	
 
    	
Assets Mortgage
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2007 Nian   (Pingnan) Zi No. 008
    	
 
    	
Industrial and   Commercial Bank of China, Pingnan Sub-branch
    	
 
    	
61,000,000
    	
 
    	
June 28, 2007-June   25, 2017
    	
 
    	
6.8%
    	
 
    	
Assets Mortgage
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Amount (the Principal)
    	
 
    	
RMB 145,000,000
    	
 
    

 

30

 

Appendix II                             List of Security

 

	
No.
    	
 
    	
Security Contract Number
    	
 
    	
Creditor
    	
 
    	
Type of Security
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
FJ001622010519
    	
 
    	
Bank of China,   Fujian Branch
    	
 
    	
Assets Mortgage
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
2007 Nian   (Pingnan) Zi No. 008
    	
 
    	
Industrial and   Commercial Bank of China, Pingnan Sub-branch
    	
 
    	
Assets Mortgage
    

 

31

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