Document:

EX-10.42

Exhibit 10.42

[Contract Number: Z090018]

SHARE TRANSFER CONTRACT

For

THIRTEEN PERCENT OF THE EQUITY INTERESTS

Of

YUNHE COUNTY SHAPULONG HYDROPOWER GENERATION CO., LTD.

	Transferor:	 	Zhejiang Province Water Resources and Hydroelectric Investment Group Co., Ltd.
	 
	Transferee:  	 	Zhejiang Province Jingning Yingchuan Hydroelectric Development Co., Ltd. 

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Notice of Use for This Contract

	1.	 	This Contract is a sample contract prepared according to the Contract Law of the
People’s Republic of China and the Interim Measures for the Administration of Transfer
of State-owned Assets in Enterprises. All articles hereunder are exemplary articles for
all parties to the assets and equity transaction to select to apply. The parties could
conclude supplemental agreements according to actual conditions.

	2.	 	In order to better protect the rights and interests of the parties, the parties shall
adopt a prudent attitude in entering into this contract and set forth the terms in
detail and specifically. In case of articles providing inapplicable matters, such
articles could be directly deleted.

	3.	 	The Transferor refers to the legal person or other organization which transfers its
assets and equity pursuant to law.

	4.	 	The Transferee refers to the legal person, natural person or other organization
entitled to acquire the assets and equity with consideration. In case of involving
natural person, please fill in the name and ID card number in the overview of parties,
and in case the Transferee is a legal person, natural person or other organization from
Hong Kong SAR, Macao SAR or Taiwan Region, the assets and equity transaction shall be
conducted according to the provisions of the Provisional Regulations on Direction Guide
to Foreign Investment issued by the State Council and other relevant regulations.

	5.	 	The legal form hereunder shall be filled in as the legal form specified in the
business licenses of the Transferor and the Transferee.

	6.	 	Transfer Target: The assets and equity transaction hereunder refers to the transfer of
assets ownership and/or equity interest with consideration, and the Transfer Target
shall include the whole or part of the investment interests of non-incorporated
enterprises, whole or part of the equity interest of limited liability companies,
non-listed joint stock limited companies and joint stock cooperative enterprises, and
the ownership of other assets

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	 	 	(including without limitation the material objects, land use right, industrial property and
non-patent technology, etc.) which could be transacted according to law.
	 
	7.	 	Article 4 and 5 hereunder are the detailed stipulations of Article 1. In case those
articles are not applicable to the transaction, such articles could be directly
deleted.
	 
	8.	 	Transfer Price refers to the price lawfully determined by the parties according to the
rules of Zhejiang Property & Stock Exchange. In case of transfer of state-owned assets
and equity, the state-owned assets shall be valuated by a lawfully entrusted qualified
valuation agency, and the transfer price shall be determined on the basis of the
appraised value.
	 
	9.	 	The Establishment and Effectiveness of the Contract: this Contract shall come into
effect after being signed or sealed by the parties to the transaction (unless being
required by the laws and administrative regulations to go through approval,
registration or other procedures before coming into effect).
	 
	10.	 	Statement of Zhejiang Property & Stock Exchange: this sample Contract shall only be used
upon the option of the parties according to actual conditions for the transaction carried
out in our exchange center. Our exchange center will not assume any guarantee obligations
due to formulating and providing this sample Contract, including but not limited to
guarantee for completeness of the articles of this sample Contract, guarantee for
genuineness of the signing date, guarantee for eligibility of the signing parties to this
transaction, and guarantee for genuineness and accuracy of representations and undertakings
and materials and documents provided by the parties for entering into this Contract and any
other guarantee liabilities.
	 
	11.	 	In case of inconsistency between this sample Contract and the regulations issued by the
state-owned assets supervision and administration authority, the relevant regulations shall
be followed. This sample contract shall be amended along with the alterations of
regulations.

Parties to this Contract

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The Transferor (hereinafter referred to as “Party A”): Zhejiang Province Water Resources
and Hydroelectric Investment Group Co., Ltd.

	 	 	 
	Registration Number:

	 	 3300001008886
	 
	 	 
	Registered Address:

	 	No. 195, Kaixuan Road, Hangzhou City
	 
	 	 
	Legal Form:

	 	Wholly State-owned Enterprise
	 
	 	 
	Legal Representative:

	 	Ling Shishan
	 
	 	 
	ID Card Number:

	 	 330106195312101234
	 
	 	 
	Telephone Number:

	 	 0571-87901230
	 
	 	 
	Account-opening Bank:

	 	China Construction Bank, Hangzhou 

City Qiutao Sub-branch
	 
	 	 
	Bank Account:

	 	 33001616635056000012

The Transferee (hereinafter referred to as “Party B”): Zhejiang Province Jingning
Yingchuan Hydroelectric Development Co., Ltd.

	 	 	 
	Registration Number:

	 	 331100400000390
	 
	 	 
	Registered Address:

	 	Huangyangkou Village, Yingchuan Town, Jingning She Ethnic Autonomous County
	 
	 	 
	Legal Form:

	 	Limited Liability Company (wholly owned by foreign legal entity)
	 
	 	 
	Legal Representative:

	 	John D. Kuhns
	 
	 	 
	Passport Number:

	 	 426647674

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In accordance with the provisions of the Contract Law of the People’s Republic of China, the
Interim Measures for the Administration of Transfer of State-Owned Assets in Enterprise and
other relevant laws and regulations of the People’s Republic of China, after friendly
consultations, on the principles of free will, fairness and good faith, Party A and Party B
have reached an agreement concerning the transfer of thirteen percent (13%) of the
equity interests of Yunhe County Shapulong Hydropower Generation Co., Ltd. held by Party
A to Party B, and entered into the following Share Transfer Contract (hereinafter referred
to as “this Contract”):

Article 1 Transfer Target

The Transfer Target under this Contract is: thirteen percent (13%) of the equity interests
of Yunhe County Shapulong Hydropower Generation Co., Ltd. (hereinafter referred to
as the “Transfer Target Enterprise”) held by Party A (hereinafter referred to as the
“Transfer Target”).

The Transfer Target Enterprise is a Sino-foreign equity joint venture which was legally
established according to law, with the registered capital of RMB35,340,000, the paid-up
capital of RMB 35,340,000 and address at No. 42, Xinhua Street, Yunhe Town.

Article 2 Mortgage, Pledge and Leasehold on the Transfer Target

The Transferor has fulfilled its duty of disclosure to the beneficiaries of the aforesaid rights,
and shall assume all legal liabilities arising from any concealment or misrepresentation.

Article 3 Representations, Warranties and Undertakings by Party A

	1.	 	Party A has the legal and valid right to dispose of the Transfer Target;

	2.	 	All evidentiary documents and materials provided to Party B for the purpose of
concluding this Contract are authentic and complete;

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	3.	 	All requisite approvals for concluding this Contract, including but not limited to the
authorizations, approvals and internal decisions, etc., have been legally and validly
procured, and all premises and conditions precedent for the establishment of this
Contract have been satisfied;

	4.	 	The Transfer Target does not involve any Third Party’s rights and interests and the
transfer of the Transfer Target does not contravene articles of associations, executed
contracts, agreements or other legal documents that are binding on the Transferor.

	5.	 	Party A shall provide all reasonable and necessary assistance in accomplishing the
approval and alteration procedures with competent governmental authorities which are
requisite for transferring the Transfer Target hereof.

Article 4 Representations, Warranties and Undertakings by Party B

	1.	 	Party B has the capacity to enter into and perform this Contract;

	2.	 	All requisite approvals for concluding this Contract, including but not limited to the
authorizations, approvals and internal decisions, etc., have been legally and validly
procured;

	3.	 	Acquiring the Transfer Target by Party B does not contravene any contracts, agreements
or any other legal documents that the Transferee is bound by;

	4.	 	Party B undertakes that all information provided for application for bidding and all
evidentiary documents (including relevant appendices) certifying Party B satisfies the
qualifications for transferees are authentic, legal and valid, and warrants that the
qualification of Party B as the transferee and all relevant materials provided by Party
B are complied with the requirements for company’s shareholders set by the
administration for industry and commerce and other authorities;

	5.	 	Party B undertakes that the source of the Transfer Price, which was remitted to the
bank account of Zhejiang Property & Stock Exchange Co., Ltd. for acquiring the Transfer
Target, is true and legal. In case of any dispute over such sum of money, Party B shall
assume all liabilities arising therefrom.

	6.	 	Party B warrants that all contracts entered into by the Transfer Target Enterprise shall be
performed continuously.

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Article 5 Disposition Plan for Creditor’s Rights and Debts of the Transfer Target Enterprise

The pre-existing creditor’s rights and debts of the Transfer Target Enterprise shall be assumed by
the new company established after the transfer of equity interests.

Article 6 Transfer Method, Transfer Price, and Schedule, Method and Conditions for the Payment of
Transfer Price

	1.	 	Transfer Method: By private agreement.
	 
	2.	 	Transfer Price: Party A shall transfer the Transfer Target provided in Article 1
hereof to Party B at the price of RMB 8,580,000.00 (hereinafter referred to as
“Transfer Price”).
	 
	3.	 	Payment Method for Transfer Price: Party B shall make the payment in a lump sum, and
within five (5) working days from the signing date of this Contract, remit the full
amount of the Transfer Price into the bank account designated by Zhejiang Property &
Stock Exchange (account name: Zhejiang Property & Stock Exchange Co., Ltd.,
account-opening bank: China Zheshang Bank, Hangzhou Jianguo Sub-branch, account number:
3310010410120100005396).
	 
	4.	 	Clearing and Transfer Ways for Transfer Price: Within five (5) working days after
receiving full amount of the Transfer Price and all transaction fees remitted by Party
B, Zhejiang Property & Stock Exchange shall remit fifty percent (50%) of the Transfer
Price into the bank account designated by Party A, who shall assist and cooperate in
submitting materials for completing the alteration registration with administration for
industry and commerce, and after the materials have been accepted by the administration
for industry and commerce, Zhejiang Property & Stock Exchange shall remit twenty
percent (20%) of the full Transfer Price to the bank account designated by Party A and
the balance, namely, thirty percent (30%) shall be remitted to the bank account
designated by Party A after the alteration and property transfer procedures have been
accomplished by Party A and Party B.

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Article 7 Delivery of the Transfer Target

	1.	 	As determined by the parties through consultations, Party A shall, within ten (10)
days after Party B has fully paid off the Transfer Price, prepare an Assets Delivery
List incorporating relevant ownership certificates, approvals, financial and legal
documents and other documents and materials concerning the Transfer Target, and deliver
such list to Party B for check and acceptance, and signature and seal.

	2.	 	Party A shall be responsible for the completeness and authenticity of the
above-mentioned list and the consistency between the provided list and corresponding
Transfer Target, and shall assume all the liabilities arising from any concealment and
misrepresentation.

	3.	 	Party A shall assist Party B in accomplishing the shareholder alteration procedure.
The Transfer Target shall be deemed as having been transferred to Party B after the
shareholder alteration registration with the competent administration for industry and
commerce has been accomplished.

Article 8 Fees and Expenses in Relation to the Transfer

During the property transaction process herein, Party A and Party B shall respectively bear
the relevant taxes and fees and other expenses arising from property alteration and transfer
procedures according to the PRC regulations and deal with relevant matters by themselves.

Article 9 Liabilities for Breach of Contract

	1.	 	After entering into this Contract, neither Party A nor Party B shall propose to
terminate (rescind) this Contract without cause, the defaulting Party shall pay
liquidated damages in a lump sum of ten percent (10%) of the Transfer Price to the
other Party; in case the other Party suffers from any loss, the defaulting Party shall
be liable for compensations.

	2.	 	In case either Party A or Party B violates any of its representations, warranties and

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	 	 	undertakings, the other Party shall be entitled to require the defaulting Party to pay
liquidated damages in the amount of ten percent (10%) of the Transfer Price.
	 
	3.	 	In the event that Party B fails to pay the Transfer Price according to the provisions
hereof, Party A shall be entitled to rescind this Contract and confiscate the full
amount of the guarantee fund paid by Party B and require Party B to compensate the
losses (which shall be calculated by the standard of five ten-thousandth (5 ) of the
total amount of unpaid Transfer Price per day). In the event that Party A does not
exercise its right to rescind this Contract, it shall be entitled to require Party B to
pay liquidated damages in the amount of five ten-thousandth (5 ) of the total amount of
unpaid Transfer Price per day.
	 
	4.	 	In the event that Party A fails to deliver the Transfer Target according to the
provisions hereof, Party B shall be entitled to rescind this Contract and require Party
A to compensate the losses arising therefrom. In addition, it shall be entitled to
require Party A to pay liquidated damages in the amount of ten percent (10%) of the
Transfer Price.
	 
	5.	 	In case this Contract cannot be performed, or fully performed or is recognized by
relevant authorities as invalid due to the fault of either Party, the defaulting Party
shall assume the liabilities for breach of contract. If both Parties are at fault, both
Parties shall assume liabilities respectively corresponding to their faults.

Article 10 Notice and Service

	1.	 	Any Party issuing any notification or communication to the other Party due to the
performance of this Contract shall have them in written form and send them to the
following addresses stipulated herein. Any notification or communication shall be sent
by a courier or via post office. If sent by a courier, it shall be deemed as effective
upon being signed in; if sent via post office, it shall be deemed as being served on the
date of receipt. Any change of address shall be notified to other Party in written form
within five (5) days, in case of failure of delivery or no one receives the notification
or communication at agreed address due to either Party’s failure to give notice, then
the notification or communication shall be deemed as being served from the fifth day
after the notification or communication has been delivered to the agreed address.

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	2.	 	The addresses of both Parties shall be as follows:
	 
	 	 	Party A: Zhejiang Province Water Resources and Hydroelectric Investment Group Co., Ltd.

	 	 	 
	Address:

	 	No. 195, Kaixuan Road, Hangzhou City
	 
	 	 
	Telephone Number:

	 	 0571-87901230
	 
	 	 
	Post Code:

	 	 310020
	 
	 	 
	Facsimile Number:

	 	 0571-87901229
	 
	 	 
	Party B:

	 	Zhejiang Province Jingning Yingchuan Hydroelectric Development Co., Ltd.
	 
	 	 
	Address:

	 	Huangyangkou Village, Yingchuan Town, Jingning She Ethnic Autonomous County
	 
	 	 
	Telephone Number:

	 	 13906536766
	 
	 	 
	Post Code:

	 	 323000
	 
	 	 
	Facsimile Number:

	 	 0578-2291172

Article 11 Applicable Law

The application and interpretation of this Contract shall be governed by the laws and
regulations of the People’s Republic of China.

Article 12 Amendment and Rescission of Contract

This Contract may be amended or rescinded through mutual agreement of both Parties.

In case of any of the following circumstances occurs, either Party hereto may rescind this
Contract:

	1.	 	The purpose of this Contract cannot be realized due to Force Majeure or other reasons
which are not attributable to both Parties,

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	2.	 	The other Party loses the ability to actually perform this Contract.

	3.	 	The other Party fails to perform this Contract within the time limit agreed herein or
any other breach of contract which leads to the failure of the realization of the
purpose of this Contract.

Any amendment to or termination of this Contract shall be made in written form and filed
with Zhejiang Property & Stock Exchange for record.

Article 13 Effectiveness of Contract

	1.	 	This Contract shall come into effect after being signed by the authorized
representatives of both Parties and affixed with official stamps. (Where the
effectiveness of a contract is subject to approvals or registration procedures, etc. as
required by relevant laws and regulations, this Contract shall come into effect from
the date of being approved by or registered with the competent authorities).

	2.	 	After this Contract comes into effect, any amendment or supplement to this Contract
shall be concluded as appendices to this Contract in written form. The appendices to
this Contract shall have the same legal effect as this Contract.

Article 14 Miscellaneous

	1.	 	The net profits yielded during the period from the base date of assets valuation to
the completion date of transfer (the date of completing shareholder alteration
registration with administration for industry and commerce) shall be enjoyed and
procured by the Transferor in the proportion of shareholding, and the losses incurred
during such period shall be born by the Transferee.

	2.	 	This Contract shall be signed in nine (9) counterparts. Each party shall hold three
(3) counterparts, one (1) counterpart shall be filed with Zhejiang Property & Stock
Exchange for record, and the rest two (2) counterparts shall be submitted to relevant
authorities.

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SIGNATURE PAGE ONLY (WITH NO FORMAL TEXT)

The Transferor (Party A): Zhejiang Province Water Resources and Hydroelectric Investment Group Co.,
Ltd.

(Stamp)

Authorized/Legal Representative (Signature):

Signing Date: June 29, 2009

The Transferee (Party B): Zhejiang Province Jingning Yingchuan Hydroelectric Development Co., Ltd.

(Stamp)

Authorized /Legal Representative (Signature):

Signing Date: June 29, 2009

Witnessed By: Zhejiang Property & Stock Exchange

(Stamp)

Authorized Representative (Signature):

Witness Date: June 29, 2009

Signing Place: Hangzhou, Zhejiang Province

12EX-10.43

Exhibit
10.43

SHARE TRANSFER CONTRACT

[Contract Number: 20090722]

For

YUNHE COUNTY SHAPULONG HYDROPOWER GENERATION CO., LTD.

			
	Transferee:	 	Zhejiang Province Jingning Yingchuang Hydroelectric Development Co., Ltd.

			
	Transferor:	 	Zhejiang Guangning Hydroelectric Development Co., Ltd.

July 22, 2009

 

 

SHARE TRANSFER CONTRACT

Transferee: Zhejiang Province Jingning Yingchuan Hydroelectric Development Co., Ltd. (hereinafter
referred to as the “Transferee”)

	 	 	 
	Authorized Representative:

	 	John D. Kuhns
	 
	 	 
	Position:

	 	President

Transferor: Zhejiang Guangning Hydroelectric Development Co., Ltd. (hereinafter referred to as the
“Transferor”)

	 	 	 
	Legal Representative:

	 	Lu Ning
	 
	 	 
	Position:

	 	Chairman

WHEREAS,

Yunhe County Shapulong Hydropower Generation Co., Ltd. (hereinafter referred to as “Yunhe County
Shapulong Company”) is a limited liability company established according to law, with the
registered capital of RMB35,340,000. As one of the shareholders of Yunhe County Shapulong Company,
the Transferor has contributed in the amount of RMB13,075,800 and holds 37% of the equity interests
of Yunhe County Shapulong Company. The Transferor is willing to transfer thirty-seven percent (37%)
of the equity interests of Yunhe County Shapulong Company held by it to the Transferee, and the
Transferee is willing to acquire the equity interests transferred by the Transferor. After friendly
consultations, on the principles of free will, fairness and good faith, the Parties hereto have
reached an agreement concerning the transfer of thirty-seven percent (37%) of the equity interests
of Yunhe County Shapulong Company held by the Transferor to the Transferee, and entered into the
following Share Transfer Contract for the Parties to abide by.

Article 1 Transfer Target

 

 

The Transfer Target under this Contract is thirty-seven percent (37%) of the equity interests of
Yunhe County Shapulong Company held by the Transferor (hereinafter referred to as the “Transfer
Target”).

Article 2 Transfer Price, Payment Schedule and Method

	1.	 	Transfer Price: The Transferor shall transfer the Transfer Target provided in Article 1
hereof to the Transferee at the price of RMB 21,000,000.
	 
	2.	 	Payment Schedule and Method for Transfer Price:

	 	(1)	 	The Transfer Price shall be paid by an escrow account, and both Parties have
jointly elected Lishui Notary Public Office as the escrow agent. Within three (3) working
days after signing this Contract, both Parties shall enter into an Escrow Agreement with
Lishui City Liancheng Notary Public Office, with all fees and expenses relating to the
Notary Public Office born by the Transferor.
	 
	 	(2)	 	Within seven (7) working days after signing this Contract, the Transferee shall
remit the full amount of the Transfer Price in a lump sum of RMB 21,000,000 to the bank
account designated by Lishui City Liancheng Notary Public Office for acquiring
thirty-seven percent (37%) of the equity interests. Lishui City Liancheng Notary Public
Office shall make the payment pursuant to the conditions precedent to payment agreed by
the Parties under this Contract.
	 
	 	(3)	 	Conditions precedent to payment agreed by the Parties are set forth as follows:

	 	A.	 	After the Parties have jointly completed relevant approval procedures
with the Commerce Department of Zhejiang Province or its authorized department and
procured the reply approving the equity transfer issued by the Commerce Department
of Zhejiang Province or its authorized department and the new Certificate of
Approval for Establishment of Enterprises with Foreign Investment in the People’s
Republic of China of Yunhe County Shapulong Company, Lishui City Liancheng Notary
Public Office shall, according to the conditions provided in the Escrow Agreement
with the number of Li Lian Gong

 

 

	 	 	 	Jian Zi (2009) No. 001, transfer fifty percent (50%) of the Transfer Price in the
total amount of RMB 21,000,000 for the thirty seven percent (37%) of the equity
interest, namely RMB 10,500,000, to the Transferor.
	 
	 	B.	 	After the Parties have jointly completed relevant procedures for
alteration registration with the competent administration for industry and commerce,
the Transfer Target has been registered under the name of the Transferee and Yunhe
County Shapulong Company has procured the new Business License, Lishui City
Liancheng Notary Public Office shall, according to the conditions provided in the
Escrow Agreement with the number of Li Lian Gong Jian Zi (2009) No. 001, transfer
fifty percent (50%) of the Transfer Price in the total amount of RMB 21,000,000 for
the thirty seven percent (37%) of the equity interest, namely RMB 10,500,000, to the
Transferor.
	 
	 	C.	 	After the full amount of the Transfer Price has been transferred to the
Transferor, all interests accrued from the Transfer Price in the bank account
designated by Lishui City Liancheng Notary Public Office for depositing the Transfer
Price shall be owned by the Transferee.

Article 3 Representations, Warranties and Undertakings by Both Parties

	I.	 	Representations, Warranties and Undertakings by the Transferor
	 
	1.	 	The Transferor has the legal and valid right to dispose of the Transfer Target;
	 
	2.	 	 All documents listed out in the Delivery List are authentic and complete;
	 
	3.	 	All requisite approvals for concluding this Contract, including but not limited to the
authorizations, approvals and internal decisions of the company, etc., have been legally and
validly procured;
	 
	4.	 	The Transfer Target does not involve any Third Party’s rights and interests and the transfer
of the Transfer Target does not contravene articles of associations, executed contracts,
agreements or other legal documents that are binding on the Transferor.
	 
	5.	 	The Transferor undertakes that, during the period from signing this Contract to

 

 

	 	 	completing relevant approval and registration procedures, it will not carry out any actions
which may cause material adverse change to the assets, properties, business and financial
conditions of the company.

	6.	 	Within five (5) working days after the Transferee has remitted the Transfer Price in the full
amount of RMB 21,000,000 to the bank account designated by Lishui City Liancheng Notary Public
Office, the Transferor shall deliver No.1 to No. 5 documents as listed out in the Delivery
List (attached as Appendix 1) to the Transferee, and complete the approval and alteration
procedures together with the Transferee concerning the Transfer Target hereunder. During the
process of conducting share transfer procedures, in the event that the Commerce Department of
Zhejiang Province or its authorized department and the competent administration for industry
and commerce require the Transferor to provide other requisite documents (subject to the
written notice issued by relevant authorities) besides No.1 to No. 5 documents listed out in
the Delivery List (attached as Appendix 1) for completing the approval procedures, the
Transferor shall cooperate unconditionally.
	 
	7.	 	Cooperating and providing relevant documents which should be provided by the Transferor for
completing the alteration procedures for the transfer of thirteen percent (13%) of the equity
interests of Yunhe County Shapulong Company held by Zhejiang Province Water Resources and
Hydroelectric Investment Group Co., Ltd.
	 
	II.	 	Representations, Warranties and Undertakings by the Transferee
	 
	1.	 	The Transferee has the capacity to enter into and perform this Contract;
	 
	2.	 	All requisite approvals for concluding this Contract, including but not limited to the
authorizations, approvals and internal decisions, etc., have been legally and validly
procured;
	 
	3.	 	Acquiring the Transfer Target by the Transferee does not contravene any contracts, agreements
or any other legal documents that the Transferee is bound by;
	 
	4.	 	The Transferee warrants that its qualification for acquiring the Transfer Target and all
materials provided by it will meet the qualification requirements for company’s shareholders
set by the administration for industry and commerce and other authorities.

 

 

			
	Article 4	 	Approval from Commercial Authority, Alteration Registration with Administration for
Industry and Commerce and Closing of Equity Interests

	1.	 	The approval procedure for the transfer of equity interests with the Commerce Department of
Zhejiang Province or its authorized department shall be jointly carried out by both Parties.
	 
	2.	 	The alteration registration with the competent administration for industry and commerce shall
be jointly carried out by both Parties.
	 
	3.	 	In order to accelerate the completion of the transaction, the Transferor and the Transferee
shall make their best efforts to procure the approvals and registrations from the Commerce
Department of Zhejiang Province or its authorized department and other relevant governmental
authorities concerning the transfer of equity stake as soon as possible.
	 
	4.	 	The Closing Date for transferring the Transfer Target shall be the day when the Transfer
Target is registered under the name of the Transferee and Yunhe County Shapulong Company has
procured its new Business License. Commencing from the Closing Date, the Transferor shall not
enjoy and undertake the rights and obligations as the shareholder of Yunhe County Shapulong
Company, namely, the shareholder’s rights and obligations enjoyed and undertaken by the
Transferor shall be enjoyed and undertaken by the Transferee.

Article 5 Disposition of Creditor’s Rights and Debts

Any creditor’s right and debt of Yunhe County Shapulong Company occurred after the Closing Date
provided herein shall be irrelevant to the Transferor, however, as for the creditor’s right and
debt of Yunhe County Shapulong Company occurred before the Closing Date, the Transferor shall
continue to assume relevant rights and liabilities.

Article 6 Taxes and Fees Relating to Transfer of Equity Interests

 

 

Relevant taxes and fees and other expenses arising from this Contract shall be borne respectively
by the Transferor and the Transferee according to relevant Chinese regulations.

Article 7 Liability for Breach of Contract

After this Contract has come into effect, in the event that any Party hereto proposes to terminate
(rescind) this Contract without cause during the performance period, the defaulting Party shall pay
20% of the full amount of the Transfer Price to the other Party in a lump as liquidated damages.

Article 8 Rescission of Contract

	1.	 	In case the Transferee still fails to remit the full amount of the Transfer Price to the bank
account designated by Lishui City Liancheng Notary Public Office when fifteen (15) days is due
after the payment date as agreed hereunder, the Transferee shall be deemed as having
fundamentally violated this Contract. This Equity Transfer Contract shall be rescinded
immediately and the Parties do not need to conclude any other documents concerning the
rescission.
	 
	2.	 	In case the Transferor still refuses to cooperate with the Transferee to carry out the share
transfer procedures when fifteen (15) days is due after the Transferee has remitted the full
amount of the Transfer Price to the bank account designated by Lishui City Liancheng Notary
Public Office, the Transferor shall be deemed as having fundamentally violated this Contract.
This Contract shall be rescinded immediately and the Parties do not need to conclude any other
document concerning the rescission.
	 
	3.	 	In the event that the share transfer hereunder is not approved by the Commerce Department of
Zhejiang Province or its authorized department before August 30, 2009, this Contract shall be
rescinded immediately and the Parties do not need to conduct any other procedures concerning
the rescission.

 

 

	4.	 	In case of any of the aforesaid three circumstances for rescinding this Contract, all
principal and interest for the Transfer Price remitted by the Transferee to the bank account
of Lishui City Liancheng Notary Public Office shall be immediately and unconditionally
remitted back to the bank account designated by the Transferee.

Article 9 Resolution of Disputes

Any dispute between the Parties arising from performing this Contract shall be resolved through
friendly consultation. In case such dispute cannot be resolved through consultation, either Party
may submit the dispute to the people’s court at the location of Yunhe County Shapulong Company.

Article 10 Applicable Law

The application and interpretation of this Contract shall be governed by the laws and regulations
of the People’s Republic of China.

Article 11 Effectiveness of Contract

This Contract shall come into effect after being signed by the respective authorized representative
of the Transferor and the Transferee, affixed with official stamps and approved by the Commerce
Department of Zhejiang Province or its authorized department. This Contract shall be signed in
eight (8) counterparts, the Transferor and the Transferee shall each hold two counterparts, and the
rest shall be used for approvals and registrations.

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

 

 

SIGNATURE PAGE ONLY (NO FORMAL TEXT)

The Transferee: Zhejiang Province Jingning Yingchuan Hydroelectric Development Co., Ltd.

     (official stamp)

Authorized Representative (Signature): John D. Kuhns

The Transferor: Zhejiang Guangning Hydroelectric Development Co., Ltd.

     (official stamp)

Legal Representative (Signature): Lu Ning

This Contract was entered into by the Parties in Lishui City, Zhejiang Province, the People’s
Republic of China on July 22, 2009.

 

 

Appendix 1

Delivery List of Materials

on

Equity Interest Transfer of Yunhe County Shapulong Hydropower Generation Co., Ltd.

	1.	 	Two (2) sets of Certificates of Legal Representative of Zhejiang Guangning Hydropower
Development Co., Ltd.
	 
	2.	 	Four (4) sets of copies of Enterprise Legal Person Business License of Zhejiang Guangning
Hydropower Development Co., Ltd.
	 
	3.	 	Four (4) sets of Resolutions of Shareholders’ Meeting of Zhejiang Guangning Hydropower
Development Co., Ltd. approving the Transfer of 37% of the equity interest of Yunhe County
Shapulong Hydropower Generation Co., Ltd. to Zhejiang Province Jingning Yingchuan
Hydroelectric Development Co., Ltd.
	 
	4.	 	One (1) set of Resolution of Board of Directors of Yunhe County Shapulong Hydropower
Generation Co., Ltd. concerning the equity interest transfer dated May 25, 2009 (with the
number of [2009] No. 03) (already provided).
	 
	5.	 	Four (4) sets of Letter of Removal of Former Directors and Supervisors appointed by the
Transferor to Shapulong Company.
	 
	6.	 	Other documents to be provided by the Transferor required by foreign economic and trade
department and administration authority for industry and commerce for the completion of the
equity interest alteration registration (subject to written notice).

The Transferor: Zhejiang Guangning Hydroelectric Development Co., Ltd.

Representative:

The Transferee: Zhejiang Province Jingning Yingchuan Hydroelectric Development Co., Ltd.

Representative:

July 25, 2009

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