Document:

Exhibit 4.118 

Between

Fujian Province Electric
Power Co., Ltd. Ningde Electric Power Industry Bureau

and

Pingnan County
Wangkeng Hydroelectric Co., Ltd.

Grid Connection and
Dispatching Agreement

Contract Number: 05930000
Diao Du 091 [2010] No.0480

For

Wangkeng Hydropower Station

July 2010

1

CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 I

 	
  

 	
 Definitions
 and Interpretations

 	
  

 	
 3

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 II

 	
  

 	
 RePresentations
 by the Parties

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 III

 	
  

 	
 Obligations
 of the Parties

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 IV

 	
  

 	
 Conditions
 for Grid Connection

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 V

 	
  

 	
 Connection
 Application and Acceptance

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 VI

 	
  

 	
 Grid
 connection and Dispatching during the Commissioning period

 	
  

 	
 14

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 VII

 	
  

 	
 Operation
 under Dispatching

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 VIII

 	
  

 	
 Equipment
 overhaul and Maintenance

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 IX

 	
  

 	
 POWER
 GENERATION PLAN

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 X

 	
  

 	
 Reservoir
 dispatching

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XI

 	
  

 	
 Relay
 Protection and Automatic Safety Devices

 	
  

 	
 26

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XII

 	
  

 	
 Dispatching
 Automation

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XIII

 	
  

 	
 Dispatching
 Communication

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XIV

 	
  

 	
 Accident
 management and Investigation

 	
  

 	
 35

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XV

 	
  

 	
 Force
 Majeure

 	
  

 	
 37

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XVI

 	
  

 	
 Liabilities
 for Breach of contract

 	
  

 	
 38

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XVII

 	
  

 	
 Effectiveness
 and valid Term

 	
  

 	
 43

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XVIII

 	
  

 	
 Modification,
 Assignment and Termination of this Agreement

 	
  

 	
 43

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XIX

 	
  

 	
 Dispute
 resolution

 	
  

 	
 44

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XX

 	
  

 	
 Applicable
 Law

 	
  

 	
 44

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Chapter
 XXI

 	
  

 	
 Miscellaneous

 	
  

 	
 44

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Appendix
 I.

 	
  

 	
 Diagram
 for metering Points

 	
  

 	
 48

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Appendix
 II.

 	
  

 	
 Technical
 Parameters for the Power Plant

 	
  

 	
 49

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Appendix
 III.

 	
  

 	
 Division
 of Dispatching Range of Power Plant Equipments

 	
  

 	
 51

 

2

(Agreement Number:     ) 

GRID CONNECTION AND
DISPATCHING AGREEMENT

This Grid Connection and Dispatching Agreement
(hereinafter referred to as this “Agreement”)
is executed by and between the following two Parties: 

Party A: Fujian Province Power Co., Ltd. Ningde Power Industry
Bureau, a power grid operation enterprise registered and established
with the Fujian Ningde Administration for Industry and Commerce, with the tax
registration number of 350902685060232, its registered address at No.48,
Hefeng Road, Ningde City, Fujian Province, Postal Code: 352100, and
the legal representative of which is Xu Fucong. 

Party B: Pingnan County Wangkeng
Hydroelectric Co., Ltd., a power generation enterprise with the legal
entity status, which was registered and established with the Administration for
Industry and Commerce of Pingnan County, Fujian Province, with the tax
registration number of 350923738029694, its registered address at the
5th&6th Floor, Cuibai Building, Gufeng Town, Pingnan
County, Fujian Province, Postal Code: 352300 and the legal
representative of which is John D. Kuhns. 

WHEREAS: 

	
  

 	
  

 
	
 (1)

 	
 Party A is currently operating and managing a
 power grid which is suitable for the operation of Power Plants, and agrees
 that the Power Plant of Party B could be connected to the power grid pursuant
 to the provisions of this Agreement; 

 
	
  

 	
  

 
	
 (2)

 	
 Party B is constructing, owning and operating the
Pingnan County Wangkeng Hydropower Station (hereinafter referred to as the “Power Plant”) with a total installed
capacity of 2*20 MW at Wangkeng Village, Tangkou Township, Pingnan County,
and agrees to connect the Power Plant to the power grid of Party A pursuant
to the provisions of this Agreement.  

 
	
  

 	
  

 
	
  

 	
 In order to ensure the safety, high quality and
 economic operation of the electric power system, regulate the dispatching of
 power grids and grid-connected operations, and protect the legal rights and
 interests of both Parties, on the principles of equality, free will and good
 faith, both Parties hereto have entered into this Agreement through
 consultations in accordance with the Electric
 Power Law of the People’s Republic of China, the Contract Law of the People’s Republic of China,
 the Administration Regulations on the
 Dispatching of Power Grids and other relevant laws and regulations
 of the People’s Republic of China.

 

Chapter I Definitions and Interpretations

	
  

 	
  

 
	
 1.1

 	
 Unless otherwise required by the context, the
 following terms used in this Agreement shall have the meanings set forth as
 follows: 

 

3

	
  

 	
  

 
	
 1.1.1

 	
  “Ningde Local Dispatching” refers to Ningde
 Dispatching and Operating Department, an agency in charge of organizing,
 commanding, instructing and coordinating the operation of the electric power
 system pursuant to applicable laws, which is subordinated to Party A. 

 
	
  

 	
  

 
	
 1.1.2

 	
 “Power Plant”
 refers to the power generation facility with all auxiliary facilities
 stretching to the property demarcation point with the total installed
 capacity of 40MW (with two (2) units, No. 1 unit of 20MW, No. 2 unit of 20
 MW, the detailed technical parameters please refer to Appendix II), which is
 constructed, owned, managed and operated by Party B and located in Wangkeng
 Village, Tangkou Township, Pingnan County, Fujian Province. 

 
	
  

 	
  

 
	
 1.1.3

 	
 “Connection
 Points” refer to the interconnection points connecting the Power
 Plant and the power grid (please refer to Appendix I). 

 
	
  

 	
  

 
	
 1.1.4

 	
 “Initial
 Connection Date” refers to the first day on which the Power Plant
 (units) is (are) connected to the power grid. 

 
	
  

 	
  

 
	
 1.1.5

 	
 “Connection
 Application” refers to the written application document submitted
 by Party B to Party A requesting for connecting its Power Plant (units) to
 the power grid. 

 
	
  

 	
  

 
	
 1.1.6

 	
 “Connection
 Method” refers to the systematic way of connecting the Power Plant
 (units) to the power grid. 

 
	
  

 	
  

 
	
 1.1.7

 	
 AGC: Automatic
 Generation Control.

 
	
  

 	
  

 
	
 1.1.8

 	
  AVC:
 Automatic Voltage Control. 

 
	
  

 	
  

 
	
 1.1.9

 	
 RTU: Remote Terminal Unit. 

 
	
  

 	
  

 
	
 1.1.10

 	
 “Disconnection”
 specially refers to under this Agreement the interruption of electric
 connection between the power grid and the power generation equipments which
 are operating connected to the power grid. 

 
	
  

 	
  

 
	
 1.1.11

 	
 “Special
 Operation Mode” refers to the operation arrangement of taking
 unusual connection mode for the Power Plant or the power grid due to certain
 needs. 

 
	
  

 	
  

 
	
 1.1.12

 	
 “Unit Available
 Capacity” refers to the output of the units modified at any time
 due to the restrictions of equipment conditions. 

 
	
  

 	
  

 
	
 1.1.13

 	
 “Planned Outage”
 refers to the status of the units of the Power Plant during the planned
 overhaul and reserve periods, including the general overhaul, the
 maintenance, the general service system planned overhaul, and the holiday
 repairing and the elimination of defects during off-break period and the
 shutdown reserve required by the dispatching center, etc. 

 
	
  

 	
  

 
	
 1.1.14

 	
 “Unplanned
 Outage” refers to the unavailable status of the units of the Power
 Plant other than Planned Outage. Based on the urgency of the needs of outage,
 the Unplanned Outage can be classified into five categories: (1) immediate
 outage; (2) the outage which could be delayed for a short while but the units
 must exit within six hours; (3) the outage which could be

 

4

	
  

 	
  

 
	
  

 	
 postponed over six
 hours but the units must exit within seventy-two hours; (4) the outage which could be deferred over seventy-two hours
 but the units must exit before the next Planned Outage; and (5) the prolonged
 outage which is beyond the period of the Planned Outage.

 
	
  

 	
  

 
	
 1.1.15

 	
 “Forced Outage”
 refers to the Categories 1, 2 and 3 of Unplanned Outage set forth in Article
 1.1.14. 

 
	
  

 	
  

 
	
 1.1.16

 	
 “Equivalent Unit
 Derated Hours” refers to the outage hours which are converted from
 derated hours and calculated by the maximum capacity on the nameplate. 

 
	
  

 	
  

 
	
 1.1.17

 	
 “Equivalent
 Unplanned Outage Hours” refers to the sum of Unplanned Outage
 hours and unplanned Equivalent Unit Derated Hours. 

 
	
  

 	
  

 
	
 1.1.18

 	
 “Annual
 Allowable Planned Outage Hours” refers to the allowable hours for
 Planned Outage within any given year for the units classified by the same
 type on the same grid which have been determined by both Parties according to
 the recommendations of equipment manufacturers and the operating conditions
 of the Power Plant’s grid-connected generation units. The Annual Allowable
 Planned Outage Hours for the units can be classified into the Annual
 Allowable Planned Outage Hours for general overhaul years and the Annual
 Allowable Planned Outage Hours for the years without general overhaul. 

 
	
  

 	
  

 
	
 1.1.19

 	
 “Annual
 Allowable Equivalent Unplanned Outage Hours” refers to the
 allowable hours for Equivalent Unplanned Outage within any given year for the
 units classified by the same type on the same grid which have been determined
 by both Parties according to the recommendations of equipment manufacturers
 and the operating conditions of the Power Plant’s grid-connected generation
 units. In this Agreement, it only refers to the Unplanned Outage caused by
 Party B’s Reason. The Annual Allowable Equivalent Unplanned Outage Hours for
 the units can be classified into the Annual Allowable Equivalent Unplanned
 Outage Hours for general overhaul years and the Annual Allowable Equivalent
 Unplanned Outage Hours for the years without general overhaul. 

 
	
  

 	
  

 
	
 1.1.20

 	
 “Daily Power
 Generation Dispatching Plan Curve” refers to the curve worked out
 by the Ningde Local Dispatching on a daily basis to determine the power
 generation output of the Power Plant for each period of time of the next day.
 

 
	
  

 	
  

 
	
 1.1.21

 	
 “Emergencies”
 refer to the major accidents occurred to the power generation or power supply
 facilities within the electric power system, including the grid frequency or
 electric voltage exceeds the prescribed limit, the loading of the
 transmission and transformation facilities is over the regulated amount, the
 power of trunk circuit exceeds the specified stability limitation and other
 operating conditions which threaten the grid operation safety, may destroy
 the grid stability and eventually lead to the grid collapse or even vast area
 power cut. 

 
	
  

 	
  

 
	
 1.1.22

 	
 “Dispatching
 Code for Electric Power System” refers to Fujian Province
 Dispatching Code for Electric Power System and Ningde City Dispatching Code
 for Electric Power System, which are formulated in accordance with the Administration Regulations on the Dispatching of

 

5

	
  

 	
  

 
	
  

 	
 Power Grids, the national
 standards and the electric power industry standards and regulate the
 dispatching and operation of the electric power system of this area.

 
	
  

 	
  

 
	
 1.1.23

 	
 “Party A’s
 Reason” refers to the requirements of Party A or liabilities
 attributed to Party A, including the liabilities which should be borne by
 Party A for the enlargement of accident due to Party A’s failure to perform
 relevant national regulations and standards, etc.
 

 
	
  

 	
  

 
	
 1.1.24

 	
 “Party B’s
 Reason” refers to the requirements of Party B or liabilities
 attributed to Party B, including the liabilities which should be born by Party
 B for the enlargement of accident due to Party B’s failure to perform
 relevant national regulations and standards, etc.
 

 
	
  

 	
  

 
	
 1.1.25

 	
 “Power Purchase
 and Sale Contract” refers to the contract entered into by and
 between Party A and Party B regarding the purchase and sale of the
 electricity output generated by the Power Plant and other relevant commercial
 issues. 

 
	
  

 	
  

 
	
 1.1.26

 	
 “Force Majeure” refers to the objective events which
 are unforeseen, unavoidable and insurmountable, including volcano eruptions,
 tornados, tsunamis, snowstorms, mudslide, landslide, flood, fire, water
 inflows failing to meet the designed standards, earthquakes, typhoons,
 thunder and lightening and fog flash, etc.
 which exceed the designed standards, and nuclear radiation, wars, plagues and
 riots, etc. 

 
	
  

 	
  

 
	
 1.1.27

 	
 “Direct
 Economic Loss” refers to expenses in connection
 with replaced spares and parts, materials, man power and transportation. In
 the event that equipment is destroyed and cannot be restored, then the loss
 shall be equal to the price to purchase same type equipment. 

 
	
  

 	
  

 
	
 1.2

 	
 Interpretations 

 
	
  

 	
  

 
	
 1.2.1

 	
 All headings hereof are only for the convenience
 of reading and shall not affect the interpretations of this Agreement in any
 way. 

 
	
  

 	
  

 
	
 1.2.2

 	
 The Appendices hereto shall have the same legal
 effect as this Agreement. 

 
	
  

 	
  

 
	
 1.2.3

 	
 Unless otherwise agreed by the Parties, this
 Agreement shall have binding force on the lawful successors or assignees of
 any Party. 

 
	
  

 	
  

 
	
 1.2.4

 	
 Unless otherwise required by the context, the
 year, month and day mentioned in this Agreement shall be the year, month and
 day in Gregorian calendar. 

 
	
  

 	
  

 
	
 1.2.5

 	
 The words “Include”, “Includes” or “Including”
 herein shall mean including without limitation. 

 
	
  

 	
  

 
	
 1.2.6

 	
 All numbers and terms mentioned in this Agreement
 shall include the given number. 

 

Chapter II Representations by the
Parties

	
  

 	
  

 
	
  

 	
 Any Party hereby represents to the other Party
 that:

 

6

	
  

 	
  

 
	
 2.1

 	
 It is an enterprise that has been duly
 established and validly and legally in existence in accordance with law, and
 has the full right to enter into and the ability to perform this Agreement. 

 
	
  

 	
  

 
	
 2.2

 	
 All procedures required for entering into and
 performing this Agreement (including procuring requisite governmental
 approvals, business license and power business permit, etc.) have been
 accomplished and are legal and valid. 

 
	
  

 	
  

 
	
 2.3

 	
 When entering into this Agreement, no judgments,
 verdicts, awards or specific administrative acts have been carried out by any
 courts, arbitration institutes, administrative organs or other regulatory
 bodies that will have material adverse effect on its performance of this
 Agreement. 

 
	
  

 	
  

 
	
 2.4

 	
 All internal authorization procedures required
 for executing this Agreement have been accomplished and this Agreement is
 signed by its legal representative or authorized proxy. This Agreement shall
 have the binding force on both Parties to this Agreement after it comes into
 effect. 

 

Chapter III Obligations of
the Parties

	
  

 	
  

 
	
 3.1

 	
 The obligations of Party A shall include the
 following: 

 
	
  

 	
  

 
	
 3.1.1

 	
 Abiding by the national laws and regulations,
 national standards and electric power industry standards, for the purpose of
 maintaining the safety, high quality and economic operation of the electric
 power system, and according to the Power Plant’s technical characteristics
 and the codes and specifications of Fujian electric power system, to carry
 out unified dispatching of the Power Plant on the principle of publicity,
 fairness and justice. 

 
	
  

 	
  

 
	
 3.1.2

 	
 To be responsible for the operation management,
 overhaul and maintenance and technological transformation for relevant
 equipments and facilities of the power grid within its jurisdiction, so as to
 meet the needs of normal operations of the Power Plant. 

 
	
  

 	
  

 
	
 3.1.3

 	
 Based on the anticipated objective of electricity
 generation output released by relevant authorities, according to the
 provisions of the Power Purchase and Sale Contract, and considering the
 actual operating conditions of the Fujian power grid, to work out and deliver
 to Party B the monthly power generation plan, the Daily Power Generation
 Dispatching Plan Curve and reactive output curve (or voltage curve) on
 schedule. 

 
	
  

 	
  

 
	
 3.1.4

 	
 To reasonably arrange the overhaul for the
 equipments of the Power Plant. 

 
	
  

 	
  

 
	
 3.1.5

 	
 To support and cooperate with Party B to carry
 out technological transformations or parameter adjustments of relevant
 facilities; to instruct and coordinate the dispatching and operation
 management of Party B related to the power grid; to provide Party B with
 instruction and coordination and requisite technical support for relevant
 professions and operations in connection with the grid operation safety, such
 as electric facilities, relay protection and automatic safety devices,
 excitation system (including PSS), AGG, and speed governor system, electric
 power metering system, electric power dispatching communication and
 dispatching automation, etc. 

 

7

	
  

 	
  

 
	
 3.1.6

 	
 According to relevant regulations, to inform
 Party B of the information concerning the major defects of facilities of the
 power grid relating to Party B and the power transmission ability relating to
 the Power Plant in a timely fashion, and to regularly disclose to Party B the
 electric power dispatching information relating to Party B. 

 
	
  

 	
  

 
	
 3.1.7

 	
 To timely amend relevant codes and regulations
 following the procedures in accordance with the operation requirements of the
 electric power system and the characteristics of the equipments of Party B. 

 
	
  

 	
  

 
	
 3.1.8

 	
 To take measures to prevent the occurrence of the
 accidents which could affect the safe operation of the electric power system;
 to regularly carry out special and professional safety inspections concerning
 the grid safety, and formulate counter measures against accidents subject to
 the needs; subject to the authorization of the power regulatory agency, the Ningde
 Local Dispatching works out the plan for grid-plant joint counter-accident
 exercise and organizes to implement such plan. 

 
	
  

 	
  

 
	
 3.1.9

 	
 To assist Party B in respect of the investigation
 on accidents. 

 
	
  

 	
  

 
	
 3.1.10

 	
 To provide training to on-duty operating staff of
 Party B in respect of Dispatching Code and other dispatching administration
 regulations. 

 
	
  

 	
  

 
	
 3.2

 	
 The obligations of Party B shall include the
 following: 

 
	
  

 	
  

 
	
 3.2.1

 	
 Abiding by the national laws and regulations,
 national standards, the electric power industry standards and the codes and
 regulations of the electric power system, for the purpose of maintaining the
 safe, high quality and economic operation of the Fujian electric power
 system, to comply with the unified dispatching by the Ningde Local Dispatching,
 and reasonably organize the operation of the Power Plant. 

 
	
  

 	
  

 
	
 3.2.2

 	
 To organize the real time operation of the Power
 Plant according to the dispatching instructions of the Ningde Local
 Dispatching, and participate in the peak regulation, frequency modulation,
 voltage regulation and backup of the electric power system. 

 
	
  

 	
  

 
	
 3.2.3

 	
 According to the requirements of the Ningde Local
 Dispatching, to provide proposals concerning the equipment overhaul plans for
 the Power Plant and to implement the approved overhaul plans and organize the
 overhaul and maintenance of facilities. 

 
	
  

 	
  

 
	
 3.2.4

 	
 To accept the professional instructions and
 coordination provided by Party A pursuant to Article 3.1.5; and to assign
 relevant technical and overhaul management staff so as to assist Party A in
 relevant work. 

 
	
  

 	
  

 
	
 3.2.5

 	
 To carry out technological transformations or
 parameter adjustments for the facilities according to the needs in a timely
 fashion, and file such transformations or adjustments with Party A (in case
 of involving grid safety, the consent from Party A must be procured). 

 

8

	
  

 	
  

 
	
 3.2.6

 	
 According to relevant regulations, to provide to
 Party A with the operating conditions for the facilities of the Power Plant
 and the production information, including fuel and water resources, etc in a timely, accurate, objective and
 complete fashion. 

 
	
  

 	
  

 
	
 3.2.7

 	
 To formulate field operation codes consistent
 with the electric power system codes and specifications of Party A, and file
 such codes with Party A. 

 
	
  

 	
  

 
	
 3.2.8

 	
 To take measures to prevent the occurrence of
 accidents that may affect the operation safety of the electric power system;
 to assist Party A in carrying out regular special and professional safety
 inspections relating to the grid safety, and implement the precautionary
 measures proposed during the inspections; in case of any specific counter
 measures against accidents or other safety requirements for the electric
 power system raised by the Ningde Local Dispatching, to implement and
 maintain the operations according to the requirements; to file relevant
 documents of safety measures with the Ningde Local Dispatching; and to
 participate in the joint anti-accident exercise organized by the Ningde Local
 Dispatching. 

 
	
  

 	
  

 
	
 3.2.9

 	
 To assist Party A in respect of the investigations
 on and analysis of accidents and implement counter-accident measures. 

 
	
  

 	
  

 
	
 3.3

 	
 Parties hereof shall jointly abide by the codes,
 regulations, measures and other norms promulgated by the State Grid, East
 China Grid or Party A for purpose to maintain liable and safe grid operation
 in connection with capital construction, operation, maintenance, dispatching
 and management. 

 

Chapter IV Conditions for
Grid Connection

	
  

 	
  

 
	
 4.1

 	
 The primary and secondary equipments of Party B
 shall conform to the national standards, the electric power industry
 standards and other relevant regulations and Fujian Dispatching Service
 Instruction for On-grid Power Plant, shall be installed and commissioned
 according to the design requirements approved by the organizations authorized
 by the State, and shall pass the acceptance according to the infrastructure
 construction procedures of the State; the normal operation mode for grid
 connection has been defined, relevant parameters have been adjusted as
 compatible (the parameters setting requirements relating to the power grid
 shall be provided by the dispatching center), equipment settings have been
 set in accordance with the requirements of the dispatching and management
 range division, and all conditions for being connected to the power grid of
 Party A and accepting the unified dispatching by the dispatching center are
 ready. 

 
	
  

 	
  

 
	
 4.2

 	
 The relay protection and automatic safety devices
 (including the excitation system, speed regulation system, high-frequency
 generator tripping and low-frequency self-start) of the Power Plant shall
 conform to the national standards, the electric power industry standards and
 other relevant regulations, shall be installed and commissioned according to
 the design requirements approved by the organizations authorized by the
 State, and pass the acceptance pursuant to the requirements of the Administrative Measures on the Commissioning
 Acceptance for New Relay Protection Facilities of Electric Power System of
 Fujian Province 

 

9

	
  

 	
  

 
	
  

 	
 and satisfy all conditions for synchronous
 operation, and comply with the relevant provisions of Chapter X hereof.

 
	
  

 	
  

 
	
 4.3

 	
 The dispatching automation facilities of the
 Power Plant, including the units AGC/AVC, the computer monitoring system and
 electric power metering devices, etc.,
 shall conform to the national standards, the electric power industry
 standards and other relevant regulations, shall be installed and commissioned
 according to the design requirements approved by the organizations authorized
 by the State, and pass the acceptance according to infrastructure
 construction procedures of the State, comply with the relevant provisions of
 Chapter XI hereof, and satisfy the conditions for synchronous operation. 

 
	
  

 	
  

 
	
 4.4

 	
 The power dispatching communication facilities of
 the Power Plant shall conform to the national standards, the electric power
 industry standard and other relevant regulations, shall be installed and
 commissioned according to the design requirements approved by the
 organizations authorized by the State, and pass the acceptance according to
 the infrastructure construction procedures of the State, and comply with the
 relevant provisions of Chapter XIII hereof. 

 
	
  

 	
  

 
	
 4.5

 	
 The energy metering devices of the Power Plant
 shall be configured according to the Technical Administration Code
 of Electric Power Metering Devices (DL / T448-2000) and the provisions of the
 Power Purchase and Sale Contract, and pass the testing and acceptance jointly
 organized by Party A and Party B.

 
	
  

 	
  

 
	
 4.6

 	
 According to the requirements of the Administrative Rules on Secondary System Safety
 Guarding of Power Dispatching (No.5 Decree issued by the State
 Electricity Regulatory Commission), the secondary system of the Power Plant
 shall be protected by safety precautionary measures, and approved by the
 dispatching center to be qualified for operation. 

 
	
  

 	
  

 
	
 4.7

 	
 All operation and maintenance codes for the Power
 Plant have been formulated and relevant management regulations are complete,
 and those related to the grid safety shall be consistent with the safety
 management regulations of the connected power grid. 

 
	
  

 	
  

 
	
 4.8

 	
 The denominations and numbers for the equipments
 of the Power Plant shall be given in accordance with the dispatching and
 management range principle. The denominations and numbers released by the
 dispatching center for the equipments within the jurisdiction of the
 dispatching center have been marked up at eye-catching places on the
 respective electric equipments so as that the on-duty operators of the Power
 Plant may clearly define the electric equipments to be operated. 

 
	
  

 	
  

 
	
 4.9

 	
 The Power Plant’s on-duty operators which are
 authorized to take dispatching instructions shall receive strict training
 pursuant to the provisions of the Administration
 Regulations on the Dispatching of Power Grids and other relevant
 regulations, and procure relevant qualification certificates before being
 assigned to the posts. 

 
	
  

 	
  

 
	
 4.10

 	
 The primary and secondary equipments of Party A
 to be operated in conjunction with the operation of Party B shall conform to
 the national standards, the electric power industry 

 

10

	
  

 	
  

 
	
  

 	
 standards and other relevant regulations, shall
 be installed and commissioned according to the design requirements approved
 by the organizations authorized by the State, and pass the acceptance
 according to the infrastructure construction procedures of the State, with
 the relevant parameters reasonably compatible, the settings of such
 equipments being set as required and readily available for the Power Plant to
 be connected.

 
	
  

 	
  

 
	
 4.11

 	
 To ensure the safe, stable as well as economical
 and high-quality operation of the power grid, if the Power Plant is required
 to construct new facilities or to upgrade the primary and secondary equipment
 according to the unified technical standard, plan and design requirements,
 Party B shall be responsible for relevant implementation work according to
 the design plan determined by Party A and shall be responsible for operating
 and maintaining the side equipment of the Power Plant.. 

 
	
  

 	
  

 
	
 4.12

 	
 The power station shall formulate a scheme on
 preventing the entire outage of the Power Plant and on the power supply under
 the Power Plant’s protected status according to the requirement of Ningde
 Local Dispatching. In the mean time, it shall report the said scheme to the
 Ningde Local Dispatching for recordation. The power station shall conduct a
 black start-up capability test on the generator set according to the
 requirement of Local Dispatching, shall formulate its own black start-up
 scheme according to the black start-up schemes of Fujian power grid and
 Ningde local power grid, shall organize and carry out all kinds of security
 and technical measures of the Power Plant’s black start-up and shall
 regularly conduct the anti-accident rehearsal. The black start-up scheme of
 the power plan shall be reported to the Local Dispatching for recordation as
 well. 

 
	
  

 	
  

 
	
 4.13

 	
 The Power Plant of Party B shall be recognized by
 the start-up committee joined by Party A. Further, after all the conditions
 for Connection are fully accepted and recognized by all the professionals of
 Ningde Local Dispatching and after all the dispatching conditions for the
 operation are satisfied, the Power Plant can be connected with the power
 grid. If Party B fails to well act according to the correction proposal
 brought forward by Ningde Local Dispatching, Ningde Local Dispatching is
 entitled to reject starting the commissioning of the generator set. 

 
	
  

 	
  

 
	
 4.14

 	
 Without the approval of the competent department,
 Party B shall not supply the power directly to the users; otherwise, Ningde
 Local Dispatching is entitled to reject the Power Plant to conduct the
 grid-connection operation. If there is any new policy enacted by the state,
 which permitting the Power Plant’s direct power supply, then the parties shall
 conduct further negotiation separately. 

 

Chapter V Connection
Application and Acceptance

	
  

 	
  

 
	
 5.1

 	
 Party B shall apply to Party A for the grid
 connection of its Power Plant, and shall be connected to the grid through a
 method as required upon the acceptance of Party A. 

 
	
  

 	
  

 
	
 5.2

 	
 Connection Application 

 
	
  

 	
  

 
	
  

 	
 Party B shall submit a connection application to
 Party A twenty (20) days prior to the Initial Connection Date of the Power
 Plant (units) which shall include the scope of the facilities to be

 

11

	
  

 	
  

 
	
  

 	
 connected, the basic conditions, the acceptance
 results, the commissioning schedule and plan for the Power Plant (units) to
 be connected, etc., and shall
 be attached with all documents set out in Article 5.5 hereof.

 
	
  

 	
  

 
	
 5.3

 	
 Acceptance of Connection Application 

 
	
  

 	
  

 
	
  

 	
 Upon the receipt of the connection application
 from Party B, Party A shall carefully review the application according to the
 provisions of Chapter IV hereof and other relevant regulations concerning the
 grid connection, and shall reply in time to Party B without any unreasonable
 delay.

 
	
  

 	
  

 
	
 5.3.1

 	
 In the event that the materials provided in the
connection application conform to relevant requirements, Party A shall
confirm it within ten (10)days after the receipt of such application from
Party B, and send a written confirmation notice to Party B five (5) days
prior to the Initial Connection Date of the units.  

 
	
  

 	
  

 
	
 5.3.2

 	
 In the event that the materials provided in the
connection application do not conform to relevant requirements, Party A shall
be entitled to refuse to confirm, but shall notify Party B in written form of
the reasons for such refusal to confirm within ten (10) days after the
receipt of such application.  

 
	
  

 	
  

 
	
 5.4

 	
 The Parties hereto shall make arrangements for
 detailed issues relating to the grid connection of the Power Plant when the
 connection application is confirmed. 

 
	
  

 	
  

 
	
 5.4.1

 	
 Party A shall, within ten (10) days prior to the
 agreed Initial Connection Date, provide to Party B with the electric power
 system data, equipment parameters and system diagrams in respect of the Power
 Plant, including the relay protection settings (or limits) for the power grid
 related to the Power Plant and the settings (or limits) for the relay
 protection and automatic safety devices of the Power Plant related to the
 power grid. 

 
	
  

 	
  

 
	
 5.4.2

 	
 Party A shall provide to Party B with the name
 list of liaison staff (including staff authorized to issue dispatching
 instructions, staff in charge of operation modes, relay protection staff,
 automation staff and communication staff) and contact details. 

 
	
  

 	
  

 
	
 5.4.3

 	
 Party B shall, within five (5) days after the
 receipt of the confirmation notice, submit the grid connection commissioning
 items and plans to Party A according to its requirements, and negotiate with
 the dispatching center to determine the specific timing and procedures for
 the initial connection. 

 
	
  

 	
  

 
	
 5.4.4

 	
 Party A shall make a written confirmation of the
 grid connection commissioning items and plans of the units submitted by Party
 B three (3) days prior to the Initial Connection Date of the Power Plant. 

 
	
  

 	
  

 
	
 5.5

 	
 When submitting the connection application, Party
B shall provide to Party A with accurate materials in Chinese (the parameters
required to be actually measured during the startup process of the grid
connection may be submitted within five (5) days after the grid connection of
the units), including:  

 

12

	
  

 	
  

 
	
 (1)

 	
 The technical specifications, technical
 parameters and actually measured parameters (including the zero sequence
 impedance parameters for the main transformers) for the main equipments such
 as power generators (including speed governors and excitation system) and
 main transformers which are required for calculating the tidal current,
 stability and relay protection settings.

 
	
  

 	
  

 
	
 (2)

 	
 The drawings (including the drawings for a
 complete set of protections for generators and transformers), instruction
 manuals and trip models of the relay protection and automatic safety devices
 which are related to the grid operation; and the installation and
 commissioning reports for the relay protection and automatic safety devices
 within the range of power dispatching. The equipments’ technical parameters
 required for calculating the settings of the system protection of Party A,
 the over-excitation character curve for the transformer of power generator of
 300MW and above, the allowable high and low frequency limits for the units, etc., and the machines and equipments
 account (which could be filled out and submitted in DMIS system) for the
 relay protection and safety automatic protection and other equipments within
 Party B’s Power Plant. 

 
	
  

 	
  

 
	
 (3)

 	
 Documents such as the technical instructions,
 technical parameters and equipment acceptance reports for the dispatching
 automatic equipments of the Power Plant which are related to Party A, the
 tele-control information form for the Power Plant (including the no-load
 voltage ratio and tele-metering full scale values of current transformers and
 voltage transformers), the completion acceptance report of the energy
 metering system of the Power Plant, and relevant plans and technical
 documents in respect of the safety protection for the computer system of the
 Power Plant. 

 
	
  

 	
  

 
	
 (4)

 	
 Documents such as drawings, equipment technical
 specifications and equipment acceptance reports for the communication
 projects which are interconnected with or related to the communication
 network of Party A. 

 
	
  

 	
  

 
	
 (5)

 	
 The technical instructions and drawings for the
 unit excitation system and PSS devices (design and measured parameters),
 under-excitation limitation, loss of excitation, loss of step protection and
 dynamic monitoring systems. 

 
	
  

 	
  

 
	
 (6)

 	
 Hydrological data of reservoir area. 

 
	
  

 	
  

 
	
 (7)

 	
 The technical specifications, technical
 parameters and measured parameters of other main equipments related to the
 grid operation. 

 
	
  

 	
  

 
	
 (8)

 	
 Field operation codes. 

 
	
  

 	
  

 
	
 (9)

 	
 Primary electric wiring diagrams. 

 
	
  

 	
  

 
	
 (10)

 	
 The startup and shutdown curves and the load
 increasing and decreasing rate of the units, relevant parameters and
 materials concerning AGC, AVC and inherent frequency modulation of the units.
 

 
	
  

 	
  

 
	
 (11)

 	
 Measures to ensure the electric power utility of
 the Power Plant. 

 

13

	
  

 	
  

 	
  

 
	
  

 	
 (12)

 	
 The units commissioning plans, and startup
 commissioning schemes for the step-up substation and the units.

 
	
  

 	
  

 	
  

 
	
  

 	
 (13)

 	
 Name list of the on-duty operators of the
 Power Plant who are authorized to take dispatching instructions and the
 photocopies of their qualification certificates and contact details.

 
	
  

 	
  

 	
  

 
	
  

 	
 (14)

 	
 Name lists and contact details for the
 professional staff in the fields of operation mode, relay protection,
 automation, communication and reservoir dispatching.

 

Chapter VI Grid connection and dispatching during the
commissioning period

	
  

 	
  

 
	
 6.1

 	
 In accordance with the commissioning items
 and plans confirmed by Party A, Party B may carry out the commissioning for
 the grid-connected operation of the Power Plant.

 
	
  

 	
  

 
	
 6.1.1

 	
 The commissioning units of the Power Plant
 shall be regarded as the operating equipments connected to the grid, which
 shall be incorporated into the Fujian Province unified operation and
 management of the electric power system, and abide by the operational codes
 and specifications of the electric power system and comply with the unified
 dispatching.

 
	
  

 	
  

 
	
 6.1.2

 	
 The Power Plant shall, according to the
commissioning items and plans which have been confirmed, prepare a detailed
commissioning scheme for the connection of units and report to the Ningde
Local Dispatching item by item1 in accordance with the commissioning schedule. 

 
	
  

 	
  

 
	
 6.1.3

 	
 The specific commissioning operations for
 grid connection shall be performed in strict accordance with the dispatching
 instructions of Ningde Local Dispatching.

 
	
  

 	
  

 
	
 6.1.4

 	
 In case of any operation of the equipments
 only managed by the Power Plant itself, which may bring about impact on the
 power grid, Party B shall inform the Ningde Local Dispatching in advance to
 make preparations and accident forecasts, and implement in strict accordance
 with the commissioning scheme.

 
	
  

 	
  

 
	
 6.2

 	
 Party A shall assist Party B in the
 grid-connected commissioning by reference to the actual operating conditions
 of the power grid.

 
	
  

 	
  

 
	
 6.2.1

 	
 The Power Plant during the grid-connected
 commissioning period shall be incorporated into the formal dispatching range,
 and shall be managed in accordance with relevant codes and specifications of
 the electric power system. 

 
	
  

 	
  

 
	
 6.2.2

 	
 According to the requirements of the Power
 Plant and the operating conditions of the power grid, Party A shall formulate
 special commissioning dispatching schemes (including emergency treatment
 measures), and reasonably arrange the dispatching items and dispatching plans
 for the Power Plant. The commissioning dispatching scheme and specific 

 

	
  

 	
  

 	
  

 
	

 

 	
  

 
	
 1

 	
 Subject to the approval of the dispatching center, one-time application and filing is acceptable as well.

 

14

	
  

 	
  

 
	
  

 	
 commissioning plan shall be notified to the
 Power Plant three (3) days prior to the start of commissioning.

 
	
  

 	
  

 
	
 6.2.3

 	
 Through consultations and agreement with
 the Power Plant, rolling adjustments may be made to the commissioning plan
 according to the commissioning progress of the units and the grid operating
 conditions.

 
	
  

 	
  

 
	
 6.2.4

 	
 The Ningde Local Dispatching may send
 relevant staff as required for field dispatching, and provide necessary
 technical guidance or support.

 
	
  

 	
  

 
	
 6.3

 	
 Party A must prepare an emergency plan for
 any possible Emergencies during the commissioning period of Party B, defining
 the principles of managements and the specific measures to handle
 Emergencies, and ensure the safety of the electric power system and
 equipments. In case of any Emergencies occurred to the power grid, the
 dispatching center shall be entitled to adjust the operation mode and the
 power generation plan for the Power Plant to the extent of disconnecting the
 Power Plant from the power grid.

 
	
  

 	
  

 
	
 6.4

 	
 Party B shall conduct various performance
 tests or appraisals on the Power Plant’s generator set in accordance with the
 power industry standards, the power grid operation codes, and other
 regulations enacted by the state and Fujian power administrative departments.
 If the said performance tests or appraisals may affect the normal operation
 of the power grid, then such performance tests or appraisals can be
 implemented only after being approved by Ningde Local Dispatching.

 
	
  

 	
  

 
	
 6.5

 	
 During the commissioning, the operation or
 withdrawal of the equipment dispatched by Party A shall be conducted strictly
 in accordance with the commissioning and dispatching scheme issued by Ningde
 Local Dispatching. If Party B fails to operate or withdraw the equipment
 according to the said scheme, then it shall bear the liabilities for breach
 of contract according to Chapter 16 of this Agreement.

 
	
  

 	
  

 
	
 6.6

 	
 After completing the test on each generator
 set and completing compiling relevant data, Party B shall submit relevant and
 necessary test data to Ningde Local Dispatching. After setting up the new
 generator set, Party B shall provide the in-plant equipment as-built drawings
 required for the power grid dispatching to Ningde Local Dispatching.

 
	
  

 	
  

 
	
 6.7

 	
 After the Power Plant completes its
 start-up and trial operation (including the black start-up test), the Power
 Plant shall put the equipment (which is installed according to the
 requirements of the design and the power grid) into normal operation and
 shall go through the inspection and acceptance procedures of Party A (the
 representatives of Ningde Local Dispatching shall also participate in such
 procedures). The generator set can be put into commercial operation only
 after it has been accepted.

 

Chapter VII Operation under Dispatching

	
  

 	
  

 
	
 7.1

 	
 During the operation period, the on-duty
 operators of the Power Plant shall strictly follow the dispatching
 instructions given by the on-duty dispatchers of the Ningde Local
 Dispatching.

 

15

	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The Power Plant must implement the
 dispatching instructions released by the Ningde Local Dispatching in a prompt
 and accurate manner, and shall not refuse or delay the implementation with
 any excuse. In case that implementing a dispatching instruction may endanger
 the staff or equipments, the on-duty operators of the Power Plant shall
 immediately report to the on-duty dispatchers of the Ningde Local Dispatching
 and clarify the reasons, and the on-duty dispatchers of the Ningde Local
 Dispatching shall decide whether or not to continue such implementation.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 As for those equipments within the range of
 direct dispatching by the Ningde Local Dispatching, the Power Plant must
 strictly follow the relevant operation rules of dispatching and carry out
 operations according to the dispatching instructions, and be responsible for
 the accuracy and promptness of implementing the dispatching instructions; and
 shall honestly report the field conditions and answer the inquiries from the
 on-duty dispatchers of the Ningde Local Dispatching.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 As for those equipments within the
 licensing dispatching range of the Ningde Local Dispatching, the on-duty
 operators of the Power Plant shall make a report to the on-duty dispatchers
 of the Ningde Local Dispatching prior to the operations, and only upon an
 approval, such operations may be carried out according to the Dispatching
 Code for Electric Power System and the field operation regulations of the
 Power Plant.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 The Power Plant shall ensure that there are
 sufficient on-duty operators who are available to communicate with the Ningde
 Local Dispatching and follow the instructions from the Ningde Local
 Dispatching.

 
	
  

 	
  

 	
  

 
	
 7.2

 	
 The Ningde Local Dispatching shall
 reasonably arrange the Daily Power Generation Dispatching Plan Curve of the
 Power Plant according to relevant requirements. During the normal operation,
 the on-duty dispatchers have the right to make appropriate adjustment to the
 Daily Power Generation Dispatching Plan Curve according to the actual
 operating conditions of the power grid, and such adjustment shall be notified
 to the on-duty operators of the Power Plant fifteen (15) minutes in advance.

 
	
  

 	
  

 	
  

 
	
 7.3

 	
 In case of any abnormal condition of the
 operating equipments of the Power Plant, the Power Plant may, according to
 the regulations of the Dispatching Code for Electric Power System, bring
 forth an overhaul application to the Ningde Local Dispatching in advance. The
 Ningde Local Dispatching shall, according to the regulations of the
 Dispatching Code for Electric Power System and the actual conditions of the
 power grid, approve such overhaul application in advance upon going through
 specified procedures and revise relevant plans. In the event that the
 equipments need an urgent outage, the Ningde Local Dispatching shall make a
 prompt reply judging from the actual conditions. The Power Plant shall follow
 the final approval from the Ningde Local Dispatching.

 
	
  

 	
  

 	
  

 
	
 7.4

 	
 The Ningde Local Dispatching shall, on the
 principle of the units on the same grid, of the same type and with the same
 technical conditions shall be modulated to a basically same magnitude, and
 considering the power grid structure, the grid operation requirements and the
 electric technical conditions of the Power Plant, arrange the Power Plant to
 be involved in the peak 

 

16

	
  

 	
  

 	
  

 
	
  

 	
 regulation, frequency modulation, voltage
 regulation and standby of the electric power system in a safe, high quality
 and economic manner.

 
	
  

 	
  

 	
  

 
	
 7.4.1

 	
 Peak Regulation

 
	
  

 	
  

 	
  

 
	
  

 	
 The Power Plant shall participate in the
 peak regulation of the electric power system in accordance with relevant
 regulations, standards of the State and the unit capacity. The regulation
 range for normal operations and accidents please refer to Appendix II. 

 
	
  

 	
  

 	
  

 
	
 7.4.2

 	
 Frequency Modulation

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The Power Plant shall participate in the frequency
 modulation of the power grid. The dispatching center may, according to the
 actual conditions of the power grid, arrange the Power Plant to be the
 modulation plant of the power grid and to carry out operation in accordance
 with the curve released by the dispatching center. The Power Plant must
 comply with the dispatching instructions and maintain the grid frequency
 within the scope prescribed by the Dispatching Code.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 When the power generator has been connected
 to the power grid, the automatic speed governing system of the Power Plant
 must be put into operation. In case of any failure or abnormity of the
 automatic speed governing system of the Power Plant, the staff of the Power
 Plant shall immediately notify the dispatching center and settle the
 malfunctions as soon as possible.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The launch and exit of AGC of the unit
 shall be executed in accordance with the dispatching instructions, the
 setting parameters and the unit output response speed of which shall comply
 with the requirements of grid safety operation and shall be uniformly set by
 the Ningde Local Dispatching according to the characteristic of the unit, the
 testing result and relevant requirements. Party B shall not make alteration
 arbitrarily. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 The Power Plant shall implement relevant
 management regulations of the dispatching center concerning the primary
 frequency regulation of the power grid of Fujian Province, and conform to the
 various management requirements.

 
	
  

 	
  

 	
  

 
	
 7.4.3

 	
 Voltage Regulation

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The voltage test point of the Fujian power
 grid is 110KV busbar. Ningde Local Dispatching shall provide the maximum and
 minimum voltage curves of the voltage test point to the Power Plant. The
 Power Plant shall monitor and adjust the voltage at the test point under the
 operation of the generator set according to the “Dispatching Codes” to ensure
 the monthly pass-rate of the voltage at the test point reaching 100%.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 During the operation, in the event that the
 units have lost the ability of reactive adjustment (or have reached the
 operation limitation), or the voltage at the testing point has deviated from
 the quality limit, the Power Plant shall immediately inform the dispatching
 center, and the dispatcher of the dispatching center shall take relevant
 measures to maintain the voltage at the testing point within the quality
 limit. 

 

17

	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Subject to the needs of adjusting and
 controlling safety operation of the power grid, the units of the Power Plant
 must be equipped with AVC and shall be put into operation according to the
 dispatching instructions of the dispatching center.

 
	
  

 	
  

 	
  

 
	
 7.4.4

 	
 Standby

 
	
  

 	
  

 	
  

 
	
  

 	
 If required by the Ningde Local
 Dispatching, the Power Plant shall leave a proportional rotary standby
 volume. In the event that the rotary standby volume cannot meet the
 requirements of the Ningde Local Dispatching, the Power Plant shall
 immediately report to the on-duty dispatchers of the Ningde Local
 Dispatching.

 
	
  

 	
  

 	
  

 
	
 7.4.5

 	
 After the Power Plant has been connected to
 the power grid and started operation, besides the rectification measures
 taken by the staff of the Power Plant according to the dispatching
 instructions of the dispatching center, the automatic excitation modulation
 system of the Power Plant must be put into operation. In case of the failure
 or malfunction of the automatic excitation system of the Power Plant, the
 staff of the Power Plant shall immediately inform the dispatching center and
 make well disposal of the defects as soon as possible, and disconnect the
 power generator if necessary until the problems have been resolved. 

 
	
  

 	
  

 	
  

 
	
 7.4.6

 	
 The AGC/AVC controlling system at the Power
 Plant constitutes an important component part of the AGC/AVC system of the
 whole power grid. The Power Plant shall take charge of the maintenance and
 make the operation availability rate of the AGC/AVC reach the target rate as
 specified in Chapter XII. 

 
	
  

 	
  

 	
  

 
	
 7.5

 	
 In case of any Special Operation Mode of
 Party A due to the equipment upgrading or transformation which may affect the
 normal operation of the Power Plant, the Ningde Local Dispatching shall
 notify the Power Plant of relevant plans three (3) days in advance and
 implement the plan which has been determined through consultation.

 
	
  

 	
  

 	
  

 
	
 7.6

 	
 In case of any Special Operation Mode of
 Party B due to the equipment upgrading or transformation which may affect the
 normal operation of the power grid, Party B shall notify the Ningde Local
 Dispatching of relevant amended plans five (5) days in advance and implement
 the plan which has been determined through consultation.

 
	
  

 	
  

 	
  

 
	
 7.7

 	
 The Power Plant shall implement the
 “Administrative Rules on the Generator Excitation System of Fujian Power
 Grid”. The “Administrative Rules on the Generator Set Speed Regulating System
 of Fujian Power Grid” shall apply to the speed regulating system of the
 generator set.

 
	
  

 	
  

 	
  

 
	
 7.8

 	
 Both Parties shall exchange the name lists
 of on-duty staff in written form and notify any alteration thereof promptly.

 
	
  

 	
  

 	
  

 
	
 7.9

 	
 The Power Plant shall keep daily field
 operation records, recording the actual power generated for every hour, the
 operating conditions for all equipments, the planned and unplanned power cut
 and any abnormal condition during the overhaul period. The date and time (the
 time shall be in twenty-four hour format) for each record shall be clearly
 listed out on the records and such materials shall be provided at proper time
 after being required by the dispatching center. 

 

18

	
  

 	
  

 	
  

 
	
  

 	
 The operation records of the Power Plant
 shall be kept for record in accordance with the requirements of archive
 management.

 
	
  

 	
  

 	
  

 
	
 7.10

 	
 The electric energy billing equipments of
 the Power Plant shall be put into normal operation, and realize the remote
 delivery to the electric energy billing system of dispatching center. The
 dispatching center shall carry out statistics and settlement of electricity
 volume basing on the data of electricity volume collected from the electric
 energy billing system. In case of malfunction of the electric energy billing
 equipments of the Power Plant, the Power Plant shall report to the
 dispatching center and apply to exit due to malfunctions. In the meanwhile,
 the Power Plant shall resolve the malfunctions as soon as possible.

 
	
  

 	
  

 	
  

 
	
 7.11

 	
 The Power Plant shall regularly conduct the
 safety evaluation work on the network and ensure to reach the requirements of
 the safety evaluation. The Power Plant shall report the evaluation result
 related to the safe and stable operation of the power grid to Ningde Local
 Dispatching for recordation and shall make relevant correction within certain
 time limit. In the mean time, the Power Plant shall conduct the leading phase
 test involving the participation of the qualified departments (including the
 dispatching department) according to the operation status of Fujian power
 grid and shall report the test to Ningde Local Dispatching. After the test is
 approved, it shall serve as a basis for the leading phase capability of the
 generator set. 

 
	
  

 	
  

 	
  

 
	
 7.12

 	
 The Power Plant shall strictly implement
 the “Fujian Administrative Rules on Discipline Appraisal on Power Grid
 Dispatching”, otherwise it shall be deemed to breach the dispatching
 discipline.

 
	
  

 	
  

 	
  

 
	
 7.13

 	
 To ensure the safe and stable operation of
 the power grid, the management of the malfunction, standby and other aspects
 of the Power Plant’s generator set shall meet the following requirements.
 Where any of the following events occurs, Party B shall bear the liabilities
 for breach of contract toward Party A according to Chapter XVI of this
 Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The frequency of the trip-off of the Power
 Plant’s generator set under normal operation in one year shall not exceed 4
 times /set (except the force majeure events or the reasons not ascribe to the
 Power Plant). For the generator under commissioning, the frequency of the
 accidental trip-off shall not exceed 1 time/day and shall not exceed 4 times
 /month.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The times of the forced outage of the Power
 Plant’s generator set in one year shall not exceed twice/set.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The standby generator shall start up
 (independently) and run according to the dispatching curve within 15 minutes
 after receiving the dispatching orders; and the delayed start-up duration
 shall be deemed as the forced outage duration

 

Chapter VIII Equipment overhaul and Maintenance

	
  

 	
  

 
	
 8.1

 	
 Party B’s Power Plant shall conduct its
 equipment overhaul management strictly in accordance with “Fujian Power
 System Dispatching Codes” and shall proceed relevant application, approval
 and implementation procedures.

 

19

	
  

 	
  

 
	
 8.2

 	
 Party B’s Power Plant shall report its
 annual overhaul plan to Party A for approval according to relevant rules, and
 Party A will issue a unified annual equipment overhaul plan for the area
 within the jurisdiction of Ningde Local Dispatching. Party B shall arrange
 the preliminary work for the equipment overhaul according to the issued
 annual overhaul plan.

 
	
  

 	
  

 
	
 8.3

 	
 The Power Plant shall submit its overhaul
 plan for the next month to Ningde Local Dispatching via the dispatching and
 overhaul management system or the fax according to the “Dispatching Codes”.
 Ningde Local Dispatching shall work out the monthly dispatching plan
 according to the issued annual (quarterly) power generating plan and the
 annual overhaul plan, as well as according to the monthly overhaul plan and
 the power grid operation status submitted by the Power Plant. 

 
	
  

 	
  

 
	
 8.4

 	
 The Power Plant shall arrange the planned
 equipment overhaul according to the time schedule provided in the monthly
 dispatching plan. The Power Plant shall apply to Ningde Local Dispatching for
 each planned equipment overhaul according to the “Dispatching Codes”, and
 Ningde Local Dispatching shall also reply to or approve the application
 within the time limit as provided in the “Dispatching Codes”. The Power Plant
 shall strictly carry out the approved overhaul plan and complete all kinds of
 repair work on a timely basis. The progress of the Power Plant’s equipment
 overhaul shall be subject to the unified arrangement and coordination of
 Ningde Local Dispatching.

 
	
  

 	
  

 
	
 8.5

 	
 If the overhaul cannot be conducted on
 schedule due to the Power Plant’s reason, Ningde Local Dispatching is entitled
 to cancel the planned overhaul of this time to satisfy the power grid loading
 demand and its safe and stable operation demand.

 
	
  

 	
  

 
	
 8.6

 	
 Ningde Local Dispatching shall properly
 arrange the overhaul on the power grid, the relay protection and automatic safety
 device of the Power Plant, the power dispatching automation, the power
 dispatching communication system and other secondary equipment, within its
 dispatching jurisdiction. In general, the overhaul on the secondary equipment
 shall not affect the normal operation of the primary equipment; otherwise,
 the secondary equipment overhaul and the primary equipment overhaul shall be
 in cooperation with each other as far as possible.

 
	
  

 	
  

 
	
 8.7

 	
 After completing the equipment overhaul,
 the Power Plant shall promptly report to Ningde Local Dispatching and shall
 recover the equipment operation or the standby according to the applicable
 rules. If any important experiment is required after the equipment overhaul
 or the technical innovation, the Power Plant shall provide the experimental
 proposal to Ningde Local Dispatching 5 working days before the Connection,
 which include the unusual action scope of the equipment, the required
 experimental items and the experimental steps; Party B shall report the
 parameters of the new equipment as well and shall apply for the start-up in
 advance according to the “Dispatching Codes”. Ningde Local Dispatching shall
 take the said situation into consideration when making its daily dispatching
 plan.

 
	
  

 	
  

 
	
 8.8

 	
 If the Power Plant requires the Unplanned
 Outage or output decrease due to the defect of the equipment, the Power Plant
 shall file an application to Ningde Local Dispatching in advance as well
 according to the “Dispatching Codes” (except under the Emergencies). After
 approving the application, Ningde Local Dispatching shall modify its
 dispatching plan immediately and 

 

20

	
  

 	
  

 	
  

 
	
  

 	
 arrange the equipment outage or the output
 decrease. The said application shall not affect the appraisal statistics on
 other aspects of the Power Plant.

 
	
  

 	
  

 	
  

 
	
 8.9

 	
 The conclusion time of the generator sets
 overhaul shall be calculated based on the time of the generator re-connection
 or the time when recovering the standby. If the overhaul period is not
 sufficient, the Power Plant shall apply the extension formalities in advance,
 and such application shall be submitted at least before the approved time
 period of the overhaul elapses half.

 
	
  

 	
  

 	
  

 
	
 8.10

 	
 If the Power Plant cannot conduct the
 generator sets overhaul on schedule due to the operation needs of the power
 system, the power dispatching institute shall consult with the Power Plant in
 advance, to adjust the overhaul plan and to notify the Power Plant. If the
 generator sets needs to operate for an extended period, the parties shall
 discuss on the emergency measures for the Emergencies which may happen during
 the said extended period as well as switching to the overhaul procedures, and
 shall handle such situation according to relevant rules.

 
	
  

 	
  

 	
  

 
	
 8.11

 	
 Under the following circumstances, Party B
 shall bear the liability of breach of contract toward Party A according to
 Chapter XVI of this Agreement: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The repeated outage of the major electric
 transmission and transformation equipment (such as circuit, switch, busbar,
 generator transformer, etc.) caused by the Power Plant’s reason.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The planned overhaul period for the Power
 Plant’s main equipment exceeds the approved time period (except under the
 approval of the dispatching institute).

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The application for the outage of the
 equipment which already put into operation, and under the situation that the
 equipment overhaul cannot be completed on schedule due to the Power Plant’s
 reason and that the Power Plant fails to apply for the extension within the
 time limit provided in the “Dispatching Codes”. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 The application for the outage of the
 equipment and applying for the extension for more than twice without reason
 (except for the force majeure).

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 If the on-site primary equipment and
 secondary equipment have any abnormal action during the equipment outage
 period, which need to arrange relevant start-up work for recovering the
 operation of the equipment, such as arranging the raising voltage from zero,
 raising the current from zero, the total pressure impulsion, checking phase,
 and protecting vector test, etc., Party B shall provide the explanation on
 the equipment unusual action, the start-up proposal (which shall elaborate
 the required experimental items) and the start-up application to the
 dispatching department for its approval 5 working days in advance. Party B
 fails to perform the forgoing provision, and Party B expands its work scope
 on site without authorization during the equipment outage which results in
 temporarily bringing forward a start-up work when the equipment recovers the
 power transmission.

 

21

	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 The overhaul cannot be conducted on
 schedule or the application is canceled due to the Power Plant’s reason (such
 as inadequate organization for the preliminary work on the overhaul), after
 Ningde Local Dispatching approves the application on the planned equipment
 overhaul and after the dispatcher completed its equipment manipulation,
 except under the bad weather.

 

Chapter IX Power Generation Plan

	
  

 	
  

 
	
 9.1

 	
 Party A shall work out and promulgate its
 power generation plan for next month by the end of the given month according
 to the annual power generation dispatching plan issued by the power
 administrative department, and according to the actual operation status (such
 as the water inflow of the power grid, overhaul, etc.).

 
	
  

 	
  

 
	
 9.2

 	
 Ningde Local Dispatching shall work out the
 Power Plant’s Power Generation Dispatching Plan Curve of the following day
 based on the total output of the single set or of the plant, according to the
 actual operation status, such as the load prediction, water situation,
 overhaul during the power cut of the power grid, the security constraint,
 etc. and shall send the said Power Generation Dispatching Plan Curve to the
 Power Plant via Party A’s EMS system before 17:00 of each current day (the
 Power Plant shall equipment with relevant receiving apparatus).

 
	
  

 	
  

 
	
 9.3

 	
 The Power Plant shall strictly implement
 the Daily Power Generation Dispatching Plan Curve (including the curve
 temporarily modified by the dispatcher on duty) and the dispatching order
 issued by Ningde Local Dispatching, shall promptly adjust the active power
 output of the generator sets, and shall organize its safe production and
 operation. The error between the overall power of the Power Plant’s generator
 sets and the Daily Power Generation Dispatching Plan Curve shall be within
 3%.

 
	
  

 	
  

 
	
 9.4

 	
 If any equipment outage or urgent output
 decrease occurs due to accident, the Power Plant shall notify Ningde Local
 Dispatching of such outage or decrease as soon as possible. If the Power
 Plant cannot recover it timely, it shall supplement submitting relevant
 applications as soon as possible; upon receiving such application, Ningde
 Local Dispatching may modify the power generation plan. Upon the Power
 Plant’s requirement, Ningde Local Dispatching may modify the power generation
 plan after the malfunction outage, approve the unplanned outage of the
 generator sets or recognize the output decrease of the generator sets, which
 shall not release or alleviate the impact on the appraisal statistics on the
 planned outage hours, unplanned outage hours (including the forced outage
 hours), as well as planned output decrease hours and unplanned output
 decrease hours (converted into the equivalent outage hours) which are caused
 by Party B’s reason.

 
	
  

 	
  

 
	
 9.5

 	
 Ningde Local Dispatching shall count up and
 collect the starting time, recovery time, reasons and the decreased
 capacities of all kinds of equipment outage or output decrease of each month,
 which shall be confirmed by the parties. The said statistic data shall serve
 as a basis for the appraisal on the Power Plant’s annual utilization hours,
 annual power generation plan, power security, etc.

 

22

	
  

 	
  

 	
  

 
	
 9.6

 	
 The power generation curve (active power
 and reactive power), the voltage at the testing point, and the system
 frequency curve or the power value of the tie-line shall be subject to the
 data collected from the dispatching automation system of Ningde Local
 Dispatching, which shall serve as a basis for relevant statistic appraisal.
 If the Power Plant raises any objection to the data collected from the
 dispatching automation system of Ningde Local Dispatching, it may promptly
 provide relevant evidences for both parties to verify and confirm.

 
	
  

 	
  

 	
  

 
	
 9.7

 	
 Under the following circumstances, the
 equivalent available factors of Party B’s generator sets shall satisfy the
 following requirements, in addition, Party B shall bear the liability of
 breach of contract toward Party A according to Chapter 16 of this Agreement:

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The annual eqivalent available rate of each
 generator set of Party B’s Power Plant fails to reach 92% (or 86% for the
 first year on which the generator set is put into operation, or 83% when the
 normal overhaul on the generator set is carried out, or 75% when the enlarged
 overhaul on the generator set is carried out).

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Under the unplanned derated -output
 operation due to the malfunction of the accessory equipment of the generator
 set, deduct the actual power grid generation output for each occurrence, P =
 output derated hours of the generator set * derated output quantity * 0.4.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Note: The trip-off of the generator and the
 outage duration shall refer to the time period from the interruption of the
 circuit breaker till the generator set switches to the standby or till the
 re-connection. The evaluation time for the accidental trip-off of the
 generator set, the forced outage and the unplanned output decrease shall not
 exceed 72 hours; if exceeding 72 hours, then the start-up duration of the
 generator set without standby system shall not exceed 144 hours.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Remark: the annual equivalent available
 factors of each generator set = 1- (annual planned outage hours + annual
 unplanned outage hours + annual equivalent outage hours converted from the
 annual planned and unplanned output derated hours) /8760.

 

Chapter X Reservoir dispatching

	
  

 	
  

 
	
 10.1

 	
 Reservoir Flood Dispatching

 
	
  

 	
  

 
	
 10.1.1

 	
 The Power Plant shall file the flood
 dispatching plan, flood counter measures and the plan of defending
 beyond-standard flood with the dispatching center at the end of March each
 year.

 
	
  

 	
  

 
	
 10.1.2

 	
 The Power Plant shall make an analysis of
 the flood within one week after the flood, and submit the analysis to
 relevant authority with a copy to the dispatching center.

 
	
  

 	
  

 
	
 10.1.3

 	
 The Power Plant shall finish the summary of
 the annual flood preventions within one month after the flood season, and
 submit the summary to relevant authority with a copy to the dispatching
 center.

 

23

	
  

 	
  

 	
  

 
	
 10.1.4

 	
 In case of major alteration of the
 anticipated reservoir water inflow, the Power Plant shall report to the
 dispatching center in advance, so as to timely adjust the load and improve
 the utilization rate of water resources.

 
	
  

 	
  

 	
  

 
	
 10.1.5

 	
 The Power Plant shall report to the Local
 Dispatching center as of water discharge and power output loss within 10
 minutes from the start of water discharge.

 
	
  

 	
  

 	
  

 
	
 10.2

 	
 The Reservoir Dispatching Plans, Reports
 and Summary

 
	
  

 	
  

 	
  

 
	
 10.2.1

 	
 Reservoir power generation dispatching plan

 
	
  

 	
  

 	
  

 
	
  

 	
 10.2.1.1

 	
 The daily power generation plan for the
 reservoir. Before 9:00 of normal working days, the Power Plant shall report
 the anticipated average reservoir water inflow, the anticipated power
 generation output and the feasible capacity of the Power Plant for the next
 day (for the subsequent three to eight days in case of holidays and
 vacations) to the dispatching center.

 
	
  

 	
  

 	
  

 
	
  

 	
 10.2.1.2

 	
 The monthly power generation plan for the
 reservoir. Before the 18th day of every month, the Power Plant
 shall report the power generation plan proposals for the next month to the
 dispatching center and other relevant authorities.

 
	
  

 	
  

 	
  

 
	
  

 	
 10.2.1.3

 	
 The annual power generation plan for the
 reservoir. The Power Plant shall, before the end of October of each year,
 submit the reservoir control and operation proposal for the next year to the
 dispatching center and other relevant authorities, which shall mainly include
 the month-specific water inflow, power generation capacity, the month-end
 water control level and other requirements of the reservoir from water
 utility departments.

 
	
  

 	
  

 	
  

 
	
 10.2.2

 	
 Relevant reports and statements concerning
 the reservoir dispatching

 
	
  

 	
  

 	
  

 
	
  

 	
 10.2.2.1

 	
 The daily dispatching report for reservoir.
 The Power Plant shall, before 9:00 of every day, report to the dispatching
 center the up and down stream reservoir water level, the reservoir water
 inflow and the discharge capacity at 8:00 of the current day, and the
 previous day’s reservoir water inflow, power generation capacity, discharge
 capacity, the reservoir water outflow, the drainage area average rainfall and
 the lost electricity volume due to the peak regulation and water discard.

 
	
  

 	
  

 	
  

 
	
  

 	
 10.2.2.2

 	
 The monthly dispatching report for
 reservoir. The Power Plant shall, before the 3rd day of each
 month, correctly fill in the monthly dispatching report and send such report
 by facsimile or e-mail, or send the original by mail to the dispatching
 center, the main content for which shall include given monthly and the yearly
 aggregated active and reactive actual power generation output (ten thousand
 kwh), the assessment power generation output (ten thousand kwh), the maximum
 daily power generation output (ten thousand kwh), the maximum output (Mw),
 the minimum output (Mw), the monthly average maximum output (Mw), the monthly
 average minimum output (Mw), the term end installed capacity (Mw), the power
 generation dispatching plan (ten thousand kwh), the term end adjustable
 output (Mw), the 

 

24

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 installed utilization hour (h), the plant’s
 utilizing electricity volume (ten thousand kwh), the total reservoir water
 inflow (ten thousand m3), the average reservoir water inflow (m3/s),
 the drainage rainfall (mm), the maximum rainfall (mm)/date, the maximum
 reservoir water inflow (m3/s)/date, the minimum reservoir water
 inflow (m3/s)/date, the maximum water discharge (m3/s)/date,
 the rain days (day), the water discard water days (day), the aggregated water
 consumption volume (ten thousand m3), the power generation water
 consumption volume (ten thousand m3), the discharging water volume
 (ten thousand m3), shipping and log water volume (ten thousand m3),
 other lost water volume (ten thousand m3), the average water head
 (m), the checking water head (m), the highest water level (m)/date, the
 lowest water level (m)/date, the month-end actual water level (m), the
 month-end checking water level (m), the month-end adjustable water volume
 (ten thousand m3), the month-end stored energy (ten thousand kwh),
 the water consumption rate (m3/kwh), the water utilization ratio
 (%), the water head proportion, the water discarding period power generation
 load ratio (%), the accuracy rate for load estimation (%), the value of
 composite factor K, the energy-saving electricity volume (ten thousand kwh),
 the total water saving volume (ten thousand m3), the lost
 electricity volume due to water discarding (ten thousand kwh), the average
 reservoir water inflow for the beginning, middle and end of each month (m3/s),
 etc.

 
	
  

 	
  

 	
  

 
	
 10.2.3

 	
 Summary of the reservoir dispatching for
 the past year and summary of operation of water regime automation monitoring
 and reporting system shall be reported to the Ningde Local Dispatching before
 January 10th of each year.

 
	
  

 	
  

 	
  

 
	
 10.3

 	
 The automatic hydrological forecasting
 system and water dispatching automation system

 
	
  

 	
  

 	
  

 
	
 10.3.1

 	
 In case of malfunctions of the automatic
 hydrological forecasting system of the Power Plant or the water dispatching
 automation system of the sub-center of the Power Plant, the Power Plant shall
 immediately make restorations and report to the dispatching center, so as to
 collect the real time rain and water conditions for the reservoir drainage
 and serve to improve the economic operation level of the Power Plant and
 ensure the flood prevention for the up and down stream of the reservoir. 

 
	
  

 	
  

 	
  

 
	
 10.3.2

 	
 In the event that the overhaul and
 equipment maintenance for the automatic hydrological forecasting system of
 the Power Plant and the water dispatching automation system of the sub-center
 of the Power Plant have caused the outage of the forecasting system, the
 approval from the dispatching center shall be procured.

 
	
  

 	
  

 	
  

 
	
 10.3.3

 	
 The transformation and upgrading plan for
 the automatic hydrologic forecasting system of the Power Plant and the water
 dispatching automation system of the sub- center of the Power Plant shall be
 submitted to the dispatching center for examination.

 
	
  

 	
  

 	
  

 
	
 10.4

 	
 The determination of the liabilities for
 breach of contract on the reservoir dispatching. Where any of the following
 events occurs, Party B shall bear the liabilities for breach of contract
 toward Party A according to Chapter XVI of this Agreement:

 

25

	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 Party B does not assist the Local
 Dispatching to conduct the upgrading on the hydrological automation system of
 the Power Plant. The Power Plant conducts equipment overhaul/outage to its
 automatic hydrological forecast system or conducts the renovation and
 upgrading to its sub-center system, without the prior consent of the Local
 Dispatching. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The entire outage or unusual situation
 occurs to the automatic hydrological forecast system of the Power Plant and
 Party B fails to timely report to the Local Dispatching and the water
 dispatching on such situation, or fails to provide written malfunction
 analysis to the Local Dispatching and the water dispatching according to
 relevant rules after such occurrence.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The malfunction of the automatic
 hydrological forecast system of the Power Plant which causes the interruption
 of the key information (such as the water-level of the dam, areal rainfall,
 reservoir inflow, etc.) constantly lasting more than 24 hours or
 accumulatively lasting 36 hours in a month.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 The monthly channel patency rate or the
 monthly data pass-rate of the automatic hydrological forecast system of the
 Power Plant is lower than 95%.

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 The daily statement on water situation of
 the Power Plant is not filled out and reported on schedule, which occurs
 twice or more in a month.

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 The monthly statement on hydropower
 dispatching of the Power Plant is not filled out and reported on schedule or
 has errors, which occurs twice or more in a year.

 
	
  

 	
  

 	
  

 
	
  

 	
 (7)

 	
 The Power Plant fails to timely report to
 the Local Dispatching on its flood-discharge information during the flood
 period.

 
	
  

 	
  

 	
  

 
	
  

 	
 (8)

 	
 Party B starts up or stops the operation
 without authorization and not according to the daily power generation
 dispatching plan, which results in the abandoned water of the reservoir.

 
	
  

 	
  

 	
  

 
	
  

 	
 (9)

 	
 The improper equipment maintenance of the
 Power Plant leads to forced outage of the generator set during the wet season
 and thus causes the abandoned water of the reservoir.

 

Chapter XI Relay protection and automatic safety devices

	
  

 	
  

 	
  

 
	
 11.1

 	
 Party A shall strictly abide by the codes
 and specifications concerning the design, operation and management of relay
 protection and automatic safety devices, take charge of operation and
 management of relay protection and automatic safety devices within the range
 of dispatching, and conform to the following requirements:

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 Taking charge of calculation of settings
 and the operation of relay protection and automatic safety devices within the
 range of dispatching, and making analysis and assessment of the movements of
 the devices. 

 

26

	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Being responsible for the commissioning and
 regular testing and maintenance of the relay protection and automatic safety
 devices within its jurisdiction, making such devices satisfy the set
 technical requirements and conform to the setting requirements of the Ningde
 Local Dispatching, and keeping complete commissioning reports and records.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Once the relay protection and automatic
 safety devices of the power grid have started running, Party A shall
 immediately analyze the reasons and take measures in accordance with the
 codes, and submit relevant materials to the Ningde Local Dispatching. In case
 the Power Plant is concerned, Party A shall cooperate with the Power Plant to
 analyze and handle the accidents.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 In case of any malfunction or defect of the
 relay protection and automatic safety devices of the power grid, Party A
 shall immediately take measures in accordance with the codes, analyze the
 causes and promptly take precautionary measures. In case the Power Plant is
 concerned, Party A shall inform the Power Plant of relevant information in
 written form.

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 Providing instructions and assistance to
 the Power Plant in respect of the setting and operation of relevant relay
 protection and automatic safety devices, and necessary technical support.

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 Strictly implementing the counter measures
 against accidents for relay protection and automatic safety devices
 promulgated by the State and relevant authorities.

 
	
  

 	
  

 	
  

 
	
  

 	
 (7)

 	
 Before the 15th day of each month,
 finishing the analysis report on the operation of relay protection and
 automatic safety devices and provide access for Party B to download from
 internet.

 
	
  

 	
  

 	
  

 
	
 11.2

 	
 Party B shall strictly abide by the codes
 and specifications concerning the design, operation and management of relay
 protection and automatic safety devices and relevant relay protection counter
 measures against accidents, abide by the relevant regulations of the
 dispatching center concerning the grid safe operation, take charge of operation
 management of relay protection and automatic safety devices within its
 jurisdiction, and conform to the following requirements:

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 Party B must, during the period for the
 preliminary design of the Power Plant, provide the principle designing instructions
 for the adopted relay protection equipments to Party A and ensure the
 implementation of opinions proposed by Party A according to the requirements
 of safe operation of the power grid and counter measures against accidents.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Taking charge of calculation of settings
 and the operation of the relay protection and automatic safety devices
 belonging to the Power Plant, and making analysis and assessment of the
 running conditions of the devices which shall be applied to the dispatching
 center for filing and record.

 

27

	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Taking charge of the settings of relay
 protection and automatic safety devices within the jurisdiction of the
 dispatching center and being responsible for its correctness and
 completeness, and pursuant to the administration requirements of the
 dispatching center, conducting the setting conversion management in the DMIS
 system.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Being responsible for the commissioning and
 regular testing and maintenance of the relay protection and automatic safety
 devices within its jurisdiction, making such devices satisfy the set
 technical requirements and conform to the setting requirements, and keeping
 complete commissioning reports and records.

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 The relay protection and automatic safety
 devices related to the grid operation must be matched up with the relay
 protection and automatic safety devices of the power grid, the settings shall
 be made by the dispatching center, and the selection of types of relevant
 equipments shall be subject to the approval of the Ningde Local Dispatching.

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 In case of any change of operation status
 of the relay protection and automatic safety devices of Party A, the Power
 Plant shall timely modify the settings and operation status of the relay
 protection and automatic safety devices within its jurisdiction according to
 the requirements of the Ningde Local Dispatching.

 
	
  

 	
  

 	
  

 
	
  

 	
 (7)

 	
 In case of any running of the relay
 protection and automatic safety devices of the Power Plant, Party B shall
 immediately report to relevant on-duty dispatcher of the Ningde Local
 Dispatching, analyze the causes and take measures in accordance with the
 codes, and submit relevant materials to the Ningde Local Dispatching
 according to the requirements. In case the power grid is concerned, Party B
 shall cooperate with Party A in assisting in analyzing and handling the
 accidents.

 
	
  

 	
  

 	
  

 
	
  

 	
 (8)

 	
 In case of malfunction or defect of the
 relay protection and automatic safety devices of the Power Plant, Party B
 shall immediately report to relevant on-duty dispatcher of the Ningde Local
 Dispatching, handle the accidents, analyze the causes and take measures in a
 timely fashion in accordance with the codes. In case the power grid is
 concerned, Party B shall submit relevant status to the Ningde Local
 Dispatching in a written form.

 
	
  

 	
  

 	
  

 
	
  

 	
 (9)

 	
 Strictly implementing the counter measures
 against accidents for relay protection and automatic safety devices
 promulgated by the State and relevant authorities.

 
	
  

 	
  

 	
  

 
	
  

 	
 (10)

 	
 Before the 5th day of each
 month, finishing the analysis report on the operation of the relay protection
 (including line protection, transformer protection, generator protection and
 busbar protection, etc.) and automatic safety devices of
 the Power Plant for the previous month, and report to the Ningde Local
 Dispatching via DMIS system.

 
	
  

 	
  

 	
  

 
	
 11.3

 	
 In the event that the relay protection and
 automatic safety protection devices for the equipments belonging to the Power
 Plant but within the jurisdiction of the dispatching center (including direct
 dispatching and licensing dispatching equipments) need technological
 transformation, the relevant technological transformation plan must be
 examined and approved by Party A.

 

28

	
  

 	
  

 	
  

 
	
  

 	
 Failure recording facility in form of
 computer of the Power Plant shall be capable of remote communication and
 shall be connected with failure recording remote communication system of the
 dispatching center via communication networks.

 
	
  

 	
  

 	
  

 
	
 11.4

 	
 In order to improve the stability of the
 electric power system, both Parties shall upgrade and transform the
 equipments in a timely manner.

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 Both Parties’ upgrading and transformation
 for the relay protection and automatic safety devices shall be coordinated
 with each other, so as to ensure the compatibility and consistency between
 the equipments of both Parties.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The equipments after transformation shall
 not be put into operation until being commissioned and passing the acceptance
 and being confirmed as qualified through specific procedures.

 
	
  

 	
  

 	
  

 
	
 11.5

 	
 Both Parties shall respectively designate
 staff to take charge of the maintenance for the operation of relay protection
 and automatic safety devices, and ensure the normal operation of the relay
 protection and automatic safety protection devices.

 
	
  

 	
  

 	
  

 
	
 11.6

 	
 The relay protection and automatic safety
 devices of Party B shall reach the following main operation standards
 (excluding the malfunction and missing operation caused by Party A’s Reason):

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The service factor for the main protection
of relay protections >99%. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The accuracy rate for the running of protections
 with 220 kv reaches100%.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The availability for fault recording
 reaches 100%.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 The operation rate of automatic safety
devices > 99%. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 The accuracy rate for the running of
 automatic safety devices reaches 100%.

 
	
  

 	
  

 	
  

 
	
 11.7

 	
 If any of the following event occurs, then
 Party B shall bear the liabilities for breach of contract toward Party A
 according to Chapter XVI of this Agreement:

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The mal-operation or the wrongful action of
 the relay protection and automation safety devices under the Power Plant’s
 maintenance causes destruction to the stability of the power grid or a
 widespread blackout (except the reasons not ascribed to the Power Plant).

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The mal-operation or the wrongful action of
 the relay protection and automation safety devices under the Power Plant’s
 maintenance (except the reasons not ascribe to the Power Plant), which does
 not cause destruction to the stability of the power grid or a widespread
 blackout.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The main protection and automation safety
 devices under the Power Plant’s maintenance cannot run normally; the
 unplanned outage of the main protection device 

 

29

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 lasts more than 24 hours; and the unplanned
 outage of the automation safety device lasts more than 24 hours.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Any of the following event occurs to the
 failure recording system of the Power Plant:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The unplanned outrage of failure recording
 system lasts more than 24 hours;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The recording system fails to record
 accurately in the event of any accident of the grid or the Power Plant.

 

Chapter XII Dispatching automation

	
  

 	
  

 	
  

 
	
 12.1

 	
 Party A shall strictly abide by the codes
 and specifications concerning the design, operation and management of the
 dispatching automation system, take charge of operation and maintenance for
 the dispatching automation system at the dispatching end, and conform to the
 following requirements:

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 Supervising the reliable operation of the
 dispatching automation system, being responsible for monitoring the operating
 condition of the dispatching automation system and coordinating the material
 problems arising out of the operation.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Facilitating the connection of automation
 signals of the Power Plant according to the design requirements.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Making timely analysis of the fault causes
 for the dispatching automation system and taking precautionary measures.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Providing instruction and assistance to
 Party B in the operation maintenance of the dispatching automation system,
 and cooperating with Party B in respect of the investigation on accidents.

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 The computer monitoring and control system
 shall conform to Administrative Rules on Secondary System Safe
 Guarding of Power Dispatching (No.5 Decree issued by the State
 Power Regulatory Commission)

 
	
  

 	
  

 	
  

 
	
 12.2

 	
 Party B shall strictly abide by the codes
 and specifications concerning the design, operation and management of the
 dispatching automation system, abide by relevant regulations formulated by
 the dispatching center, take charge of the operation and maintenance for the
 dispatching automation equipments at the Power Plant end, and conform to the
 following requirements:

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The telecontrol data from the Power Plant
 RTU or the computer monitoring and control system or the energy acquisition
 and transmission devices and the electric energy metering data shall be
 transmitted to the dispatching automation system and the electric energy
 metering system of the Ningde Local Dispatching according to the transmission
 protocols in line with the national standards or industry standards. The
 electric energy metering system shall pass the testing organized by a
 qualified testing agency

 

30

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 recognized by both Parties, so as to ensure the accuracy of data
 transmission. The quantity and accuracy of the real time messages concerning
 the operating equipments of the Power Plant shall satisfy the relevant
 regulations of the State and the operation requirements of the Ningde Local
 Dispatching.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Making timely analysis of the fault causes for the dispatching
 automation system within its jurisdiction and taking precautionary measures.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Providing assistance to Party A in respect of the operation
 maintenance of the dispatching automation system, and cooperating with Party
 A in respect of the investigations on accidents.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 The computer monitoring and control system of the Power Plant shall
 conform to the Administrative Rules on Secondary System Safe Guarding of Power
 Dispatching (No.5 Decree issued by the State Power Regulatory
 Commission) to make sure the effective isolation of the Power Plant’s
 computer monitoring and control system from the management information system
 and the office automation system, and the physical isolation of the
 dispatching special data network from the comprehensive information network
 and outside internet.

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 Where the generator set equipped with AVC participates in the voltage
 control of the power grid, the AVC command signal issued by Ningde Local
 Dispatching shall pass through the Power Plant’s RTU system or computer
 monitor system to reach the Power Plant’s AVC system.

 
	
  

 	
  

 	
  

 
	
 12.3

 	
 Both Parties shall operate and maintain the automation equipments in
 accordance with the Dispatching Code for Electric Power System and the
 dispatching automation operation code, and shall not exit or shut down the
 equipments at random.

 
	
  

 	
  

 
	
 12.4

 	
 In the event that the equipments which belong to the Power Plant but
 within the dispatching range (including the equipments under the direct and
 licensing dispatching) of the dispatching center and the dispatching
 automation and communication equipments need technological transformation,
 the plan must be examined and approved by the dispatching center. The Power
 Plant shall submit to the dispatching center all and complete design
 materials and requisite testing data. When and if the dispatching centre
 undertakes technical remolding and need cooperation from the Power Plant, then
 the Power Plant shall act accordingly.

 
	
  

 	
  

 
	
 12.5

 	
 Both Parties shall respectively designate staff to take charge of the
 operation and maintenance of the dispatching automation systems within their
 respective jurisdictions, and ensure the normal operation of the dispatching
 automation system. 

 
	
  

 	
  

 
	
 12.6

 	
 The RTU or the computer monitoring and control system, the electric
 energy collection and transmission devices of the Power Plant shall reach the
 following main operation standards:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 The availability of RTU or the tele-control station of the computer monitoring
and control system (monthly) > 99.9%. 

 

31

	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The accuracy error of telemeter <1%. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Service factor of AVC of the generator set >99%. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Responding accuracy rate of remote signal at the occurrence of the
 accident: 100%.

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 Annual tele-metering pass-rate > 99% 

 

Chapter XIII Dispatching Communication

	
  

 	
  

 
	
 13.1

 	
 Party B shall strictly follow the design, operation and management
 codes, and technical standards and plans in relation to the power dispatching
 communication system, which are elaborated as below:

 
	
  

 	
  

 
	
 13.1.1

 	
 There shall be two communication channels, one is OPGW optical
 communication and the other is carrier communication, between Party A and
 Party B. The transmission capacity of the route communication channel with independent
 interconnection point shall synchronize with Party A’s clock network. Party B
 shall well equip with relevant voice exchange system which meeting the
 requirements for network admittance, the communication monitoring
 sub-station, the data equipment for connection with provincial ATM wide-area
 backbone data network, the dispatching video system, the dispatching phone
 call recording device, the DC power supply exclusively for communication, the
 communication machinery room, the communication distribution frame/cabling
 rack, as well as corresponding instrument and meter, special tools, spare
 parts, etc., to ensure Party B’s communication facilities can run safely and
 stably. The type selection and configuration of the communication (network)
 equipment at the interconnection point of the power communication network of
 Party A and Party B shall be provided to Party A for review.

 
	
  

 	
  

 
	
 13.1.2

 	
 Party B shall report its arrangement on carrier frequency, microwave
 frequency and other radio frequencies to Party A for inspection, and can
 implement the said arrangement after obtaining Party A’s written approval.

 
	
  

 	
  

 
	
 13.1.3

 	
 Party B shall ensure its construction of grid-connection system be in
 consistent with Party A’s administrative implementation rules on the grid connection,
 and shall ensure its grid-connection capital construction, technical
 renovation and overhaul meeting the requirements of the plan and construction
 guidelines of the provincial power communication network.

 
	
  

 	
  

 
	
 13.1.4

 	
 Party B shall discuss with Party A on the technical parameters (such
 as power, error rate, equipment type selection, configuration, and interface
 mode) of the interconnection of the communication networks and on the
 connection dispatching outline of the communication system, and shall obtain
 Party A’s written permission thereon.

 
	
  

 	
  

 
	
 13.2

 	
 Upon negotiation, Party A arranges for Party B two communication
 transmission networks with different running modes, different bandwidths, and
 different signals to meet different application demands of the dispatching
 system, to be interconnected with the provincial power communication network
 and to input relevant signals to Ningde Local Dispatching. Party B

 

32

	
  

 	
  

 	
  

 
	
  

 	
 shall ensure various professional information on dispatching
 (including the performance of the interface) transmitted to Party A is
 reliable, accurate and safe, which shall reach the power industry standards.

 
	
  

 	
  

 
	
 13.3

 	
 Party B’s power dispatching system shall reach the following annual
 (monthly) operation standards:

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 The service factor of the carrier equipment >99.9%; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The service factor of the optical communication equipment (including
 PCM equipment) > 99.9%;

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The service factor of the microwave communication equipment
 (including PCM equipment) > 99.9%;

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 The service factor of the program-control exchange equipment
 >99.9%;

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 The service factor of the program-control management exchange
 equipment >99.9%;

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 The service factor of the communication monitoring equipment >
 99.9%;

 
	
  

 	
  

 	
  

 
	
  

 	
 (7)

 	
 The service factor of the cable line equipment> 99.9%;

 
	
  

 	
  

 	
  

 
	
  

 	
 (8)

 	
 The service factor of the access device of the wide-area
 comprehensive data communication network > 99.9%.

 
	
  

 	
  

 	
  

 
	
 13.4

 	
 Party A is responsible for operating and maintaining the
 communication system at the dispatching end, which shall meet the following
 requirements:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 Party A shall supervise the reliable running of the dispatching
 communication system, shall be responsible for monitoring, dispatching and
 commanding the operation status of the dispatching communication system and
 shall coordinate any major issues occurs during the operation.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Party A shall be responsible for operating and maintaining the
 communication equipment and lines at the dispatching end and shall ensure
 their reliable operation.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Party A shall timely analyze the malfunction reasons of the
 dispatching communication system and adopt relevant precautionary measures.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Party A shall guide and assist Party B to conduct operation and
 maintenance on the dispatching communication system, and shall assist Party B
 to conduct the investigation into the accidents.

 
	
  

 	
  

 	
  

 
	
 13.5

 	
 Party B is responsible for operating and maintaining the dispatching
 communication system at the Power Plant end, which shall meet the following
 requirements:

 

33

	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 Party B shall be responsible for operating and maintaining the
 dispatching communication system at the Power Plant end, and ensure its
 reliable operation.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Party B shall timely analyze the malfunction reasons of the
 dispatching communication system and adopt relevant precautionary measures.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Party B shall assist Party A to conduct operation and maintenance on
 the dispatching communication system, and shall assist Party A to conduct the
 investigation into the accidents.

 
	
  

 	
  

 	
  

 
	
 13.6

 	
 Party B shall have relevant maintenance personnel to ensure 24-hour
 on-site maintenance on the fault circuit of the network, and shall submit
 itself to the dispatching orders of the power dispatching system as well as
 the management and maintenance of the communication network.

 
	
  

 	
  

 
	
 13.7

 	
 The Parties shall have emergency communication system for standby to
 ensure a smooth communication network during the emergencies of the power
 grid or the Power Plant.

 
	
  

 	
  

 
	
 13.8

 	
 Where any of the following events occurs, Party B shall bear the
 liabilities for breach of contract according to Chapter XVI of this
 Agreement:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 The Power Plant causes the power-grid class-I obstacle, communication
 barrier, communication accident and other communication malfunctions which
 seriously impairing the safe production of the power grid.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The
 “other communication malfunctions which seriously impairing the safe
 production of the power grid” generally refers to any communication method,
 content and mode which are sufficient to affect or delay the treatment on the
 power-grid accidents, which are indispensable to the safe production of the
 power grid, and which are irreplaceable by any temporary proposal.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Party B does not abide by the communication dispatching orders or
 does not well implement the precautionary measures, or unfamiliar with its
 business operation, which seriously affects the timely recovery of relevant
 communication line block.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Party B has conduct any manipulation (such as the unusual action,
 outage, decommission, network adjustment and overhaul of the communication
 equipment and circuit in relation to Ningde Local Dispatching) without
 getting the approval of Ningde Local Dispatching according to relevant
 network management rules, which changes the status of the communication
 equipment.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Party B does not implement Party A’s requirement on technical
 supervision according to relevant administrative communication rules, which
 results in a baneful influence.

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 Party B causes other wrong manipulation, judgment and command to the
 dispatching, operation and management on the communication, which result in a
 delayed treatment or overtime block of the communication network.

 

34

Chapter XIV Accident management and investigation

	
  

 	
  

 	
  

 
	
 14.1

 	
 The dispatching center and the Power Plant shall, within their
 respective jurisdiction and in accordance with relevant regulations of the
 Dispatching Code for Electric Power System and the Power Plant field
 operation codes, handle the accidents in a correct and prompt manner and
 timely inform each other of the handling results.

 
	
  

 	
  

 
	
 14.2

 	
 The equipment accidents within the dispatching range of the
 dispatching center shall be handled by strictly following the instructions of
 the on-duty dispatchers of the dispatching center (excluding those that can
 be handled without dispatching instructions as clearly specified in the field
 codes).

 
	
  

 	
  

 
	
 14.3

 	
 In case of any tripping or unit derated volume and other abnormal
 conditions or accidents occurred to the equipments within the dispatching jurisdiction
 of the dispatching center, the Power Plant shall strictly abide by the
 provisions of the Dispatching Code to verify the reasons for such abnormality
 or accidental tripping, report the actual conditions accurately, obey the
 directions of the dispatching center and resolve the default of the
 equipments. Otherwise, the dispatching center shall be entitled to order
 outage of relevant equipments or limit the active output of units, and the
 units unplanned derated output hours caused therefrom shall be converted into
 equivalent outage hours; in case of unit outage, shall be counted as Forced
 Outage hours. 

 
	
  

 	
  

 
	
 14.4

 	
 In case of breaker tripping occurred to the units or circuits of the
 Power Plant, the staff of the Power Plant shall report by telephone to the
 dispatching center and submit the following malfunction events, including but
 not limited to:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 The tripping of circuit breaker;

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The location of the circuit breaker (on/off);

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The tripping time;

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Any information which will help to analyze the tripping reasons for
 circuit breaker;

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 The tripping times of circuit breakers due to the malfunctions;

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 The output records from false recording devices.

 
	
  

 	
  

 	
  

 
	
  

 	
 The staff of the Power Plant shall immediately report the
 above-mentioned events set forth in items (1), (2) and (3), the events set
 forth in items (4), (5), (6) shall be reported as soon as the preparation of
 the field is ready. In case of any abnormity of the far transmission function
 of false recording devices, the event provided in item (6) shall be provided
 within twenty-four hours to the dispatching center.

 
	
  

 	
  

 	
  

 
	
 14.5

 	
 The dispatching center shall, according to the Guide on Safety and Stability for
 Power System (DL 755-2001), the Dispatching Code for Electric
 Power System and other relevant regulations, and considering the grid
 structure, operation characteristics and specific conditions of the

 

35

	
  

 	
  

 	
  

 
	
  

 	
 Power Plant, formulate principles for accident management and
 specific counter measures against accidents, and raise specific requirements
 on the necessary measures to be taken by the Power Plant.

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 In case of any Emergencies that threaten the safety of the power
 grid, the on-duty dispatchers of the dispatching center may take necessary
 measures to ensure and restore the safe operation of the power grid,
 including adjusting the power generation output of the Power Plant, issuing
 instructions to start or shut down units, and disconnecting the Power Plant, etc.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 In case that the Power Plant or any of the units has to be
 disconnected, the dispatching center shall, after the termination or remedy
 of the Emergencies, restore the connection and operation of the Power Plant
 or the unit.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The dispatching center shall explain to Party B the reasons for
 disconnecting the Power Plant or the unit after the accident.

 
	
  

 	
  

 	
  

 
	
 14.6

 	
 The Party or Parties suffering from accident(s) shall carry out
 accident investigation according to the Codes of Investigation for Electric Power
 Production Accidents. The conclusions of the investigation shall
 include causes of accident, responsible party for the accident and the
 liabilities, and the counter measures against accidents to prevent similar
 accidents. The responsible Party for the accident shall assume the liabilities
 according to the investigation conclusion, and timely implement the counter
 measures against accidents.

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 During the grid accident investigation carried out by Party A, Party
 B shall be invited to participate when it is involved. Party B shall provide
 support to the work of Party A and cooperate in the field investigation by
 providing accident analysis materials such as the fault recording diagrams,
 the operating conditions at the time of accident and relevant data, etc.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 During the Power Plant accident investigation carried out by Party B,
 Party A shall be invited to participate when it is involved. Party A shall
 provide support to the work of Party B and cooperate in the field
 investigation by providing accident analysis materials such as fault
 recording diagram, the operating conditions at the time of accident and
 relevant data, etc.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 As for the accidents involving both Parties, if the Parties cannot
 reach an agreement within a short period of time on the cause of accident, a
 special investigation panel shall be set up according to relevant regulations
 of the State to carry out accident investigation.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 The investigation report on the accident involving one Party or both
 Parties shall be published, which shall cover: causes of the accident,
 dealing progress of the accident, responsible party for the accident and the
 liabilities, the rectification plan and accident preventive measures, etc.

 

36

	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 The responsible party for the accident shall timely correct the errors
 and implement the rectification plan and accident preventive measures. In
 case that the other Party is involved in such rectification plan and
 preventive measures, the consent of the other Party shall be obtained.

 

Chapter XV Force majeure

	
  

 	
  

 	
  

 
	
 15.1

 	
 If the occurrence of any Force
 Majeure event completely or partially impedes one Party from
 fulfilling any obligation under this Agreement, such Party may be exempted
 from or postpone to perform its contractual obligations, provided that:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 the scope and duration of the exempted or postponed performance shall
 not extend beyond the reasonable needs of eliminating the impact of Force
 Majeure.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 the Party affected by Force Majeure shall continue to perform
 its other obligations hereunder which have not been affected by the Force
 Majeure.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 in case the events of Force Majeure come to an end, the Party
 claiming Force
 Majeure shall resume the performance of this Agreement as soon as
 possible.

 
	
  

 	
  

 	
  

 
	
 15.2

 	
 In the event that any Party is unable to perform
 this Agreement due to Force Majeure, such Party shall promptly
 inform the other Party, and shall send a written notice to the other Party
 within three (3) days thereafter. Such written notice shall indicate the date
 of the occurrence of Force Majeure, the anticipated duration,
 the nature of the events, the impact on its performance of this Agreement and
 the measures it has taken to mitigate the impact of such Force Majeure events.

 
	
  

 	
  

 
	
  

 	
 Upon the other Party’s request, the Party
 affected by the Force Majeure shall furnish the other Party with an
 evidential document issued by the competent local notary public where the Force
 Majeure event occurs within seven (7) days commencing from the
 date when the Force Majeure event occurs (in the event of communication
 interruption, from the restoration date of the communication).

 
	
  

 	
  

 
	
 15.3

 	
 The Parties affected by the Force
 Majeure shall take reasonable measures to mitigate the losses
 incurred by either or both Parties caused by Force Majeure. The Parties
 shall immediately consult with each other to formulate and implement a remedy
 plan and reasonable alternative measures to minimize or eliminate the impact
 of Force
 Majeure.

 
	
  

 	
  

 	
  

 
	
  

 	
 In the event that the Party affected by the
 Force
 Majeure fails to use all endeavors to take reasonable measures to
 mitigate the impact of Force Majeure, that Party shall be
 responsible for the enlarged losses arising therefrom.

 
	
  

 	
  

 
	
 15.4

 	
 In the event that the Force Majeure has
 prevented a Party from performing its obligations under this Agreement for a
 continuous period of over thirty (30) days, the Parties hereto shall
 consult with each other to determine the conditions for continuing the
 performance of this Agreement or to terminate this Agreement. If the Parties
 hereto fail to reach agreement concerning the conditions for continuing the
 performance of this Agreement or the termination

 

37

	
  

 	
  

 	
  

 
	
  

 	
 of this Agreement within Sixty (60) days
 after the occurrence of Force Majeure, any Party shall be
 entitled to terminate this Agreement with a notice to the other Party, unless
 otherwise provided herein.

 

Chapter XVI Liabilities for Breach of contract

	
  

 	
  

 	
  

 
	
 16.1

 	
 Either Party’s violation of the provisions
 of this Agreement shall be deemed as a breach of contract, and the other Party shall be
 entitled to require the breaching Party to assume the liabilities for breach
 of contract.

 
	
  

 	
  

 
	
 16.2

 	
 Party A, in case of any of the following breach of contract, shall
 assume the liabilities for breach of contract to Party B in the manner
 provided in Article 16.3 hereof:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 Failure to perform the obligations provided in Chapter III, which has
 caused direct economic losses to Party B.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Violation of the provisions of Article 6.2, which has resulted in the
 incapability of the Power Plant to generate power on schedule or which has
 caused direct economic losses to Party B.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Violation of the Dispatching Code for Electric Power System, which
 has caused direct economic losses to Party B.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Party A requires the Power Plant (units) to conduct peak regulation,
 frequency modulation or voltage regulation beyond its operation capacity or
 the provisions of this Agreement (excluding for handling accidents), which
 has caused direct economic losses to Party B.

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 Setting or commanding error of the primary and secondary equipments
 of the power grid due to Party A’s Reason, which has caused direct economic
 losses to Party B.

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 When implementing Article 14.5 (1) of this Agreement, Party A
 conducts any improper action, which causes direct economic loss to Party B.

 
	
  

 	
  

 	
  

 
	
  

 	
 (7)

 	
 Party A causes the malfunctions of the relay protection, automation
 safety device, dispatching automation system and dispatching communication
 system, which causes direct economic damages to Party B.

 
	
  

 	
  

 	
  

 
	
  

 	
 (8)

 	
 Party A’s improper dispatching causes unnecessary electricity loss of
 the abandoned water to Party B.

 
	
  

 	
  

 	
  

 
	
 16.3

 	
 For each time of breach of Contract, Party A shall undertake the
 liabilities for breach of contract by the following ways:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 Paying to Party B the electricity output of 100,000 kwh in a lump sum
 as a compensation for its breach.

 

38

	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 In case of any direct economic losses of Party B which cannot be
 fully compensated by the electric power output paid in a lump sum provided in
 Item (1) above, the electric power output corresponding to the direct
 expenses of Party B for repairing equipments and restoring normal operations
 shall be complemented by Party A (calculated by the on-grid tariff of the
 Power Plant).

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 In case of causing electricity output losses to Party B, the relevant
 provisions provided in the Power Purchase and Sale Contract entered into by
 both Parties shall be resorted to for the treatment.

 
	
  

 	
  

 	
  

 
	
 16.4

 	
 Party B, in case of any of the following breach of contract, shall
 assume the liabilities for breach of contract to Party A by the method
 provided in 16.5:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 Failure to perform the obligations provided in Chapter III, which has
 caused direct economic losses to Party A.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Failure to complete the grid connection preparation works in
 accordance with the provisions of Chapter IV hereof, which has caused direct
 economic losses to Party A. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Violation of the provisions of Articles 6.4, 7.4.1 to 7.4.4, 7.12 to
 7.13, 8.11, 9.7,10.4,11.7, 12.2 and 13.8.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Abnormity or malfunction of the primary and secondary equipments of
 the Power Plant related to the grid operation due to Party B’s Reason, which
 has caused direct economic losses to Party A or any third party.

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 The failure of the electric power automatic system of the Power
 Plant, which has caused an accident or the amplification of accidents and
 caused direct economic losses to Party A.

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 The failure of the dispatching communication system of the Power
 Plant due to Party B’s Reason, which has caused an accident or the
 amplification of accidents and caused direct economic losses to Party A.

 
	
  

 	
  

 	
  

 
	
 16.5

 	
 For each time of breaching, Party B shall assume the liabilities for
 breach of contract by the following ways:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 Paying to Party A the electricity output of 100,000 kwh in a lump sum
 as a compensation for its breach.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 In case of any direct economic losses of Party A which cannot be
 fully compensated by the electric power output paid in a lump sum provided in
 Item (1) hereof, the electricity output corresponding to the direct expenses
 of Party A for repairing equipments and restoring normal operations shall be
 complemented by Party A.

 
	
  

 	
  

 	
  

 
	
 16.6

 	
 If Party B causes the accidents provided in Article 11.7 (1) and (2),
 which is that Party B causes malfunctions or incorrect actions of the relay
 protection and automation safety device,

 

39

	
  

 	
  

 	
  

 
	
  

 	
 and which does not cause destruction to the stability of the power
 grid or a widespread blackout, for each occurrence of the said accident,
 deduct and fine 30,000 kilowatt hours on-grid output; if causing destruction
 to the stability of the power grid or vast area power cut, deduct and fine
 300,000 kilowatt hours on-grid output for each occurrence.

 
	
  

 	
  

 
	
 16.7

 	
 If the performance indexes of the Power Plant’s generator set do not
 reach the standard agreed in this Agreement, Party B shall bear the
 liabilities for breach of contract according to the following methods: 

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 If
 breaching Article 7.13 (1), (2) and (3):

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 For each
 additional time of the trip-off of the generator set, Party B’s noncompliance
 power output = outage hours of the generator set * rated capacity of the
 generator set * 0.5.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 For each
 additional time of the forced outage of the generator set, Party B’s
 noncompliance power output = outage hours of the generator set * rated
 capacity of the generator set * 0.4.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 If the
 generator set fails to start up on schedule, Party B’s noncompliance power
 output = rated capacity of the generator set * delayed start-up time * 0.4.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 If breaching
 Article 9.3, Party B’s noncompliance power output shall be subject to the
 appraisal data recorded in the EMS system of Ningde Local Dispatching.

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 If the
 Power Plant doest assume the responsibility of the frequency modulation
 plant, as for the excessively generated power output resulting from that the
 active power of the actual power generation of the Power Plant is higher than
 103% of the given active power provided in the Active Power Curve of Daily
 Power Generation Plan issued by Ningde Local Dispatching lasting for 3
 minutes, Ningde Local Dispatching can conduct an appraisal on the excessively
 generated power output and can deduct it from the Power Plant’s monthly
 on-grid power output.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 If the
 Power Plant doest assume the responsibility of the frequency modulation
 plant, as for the decreasingly generated power output resulting from that the
 active power of the actual power generation of the Power Plant is lower than
 97% of the given active power provided in the Active Power Curve of Daily
 Power Generation Plan issued by Ningde Local Dispatching lasting for 3
 minutes, Ningde Local Dispatching can conduct an appraisal on the absolute
 value of the decreasingly generated power output and can deduct it from the
 Power Plant’s monthly on-grid power output.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Where
 the system frequency exceeds the setting value of the artificial dead zone of
 the speed regulator of the Power Plant’s generator set, which leads to the
 active power of the actual power generation of the Power Plant exceeds ± 3%
 of the Active Power Curve of Daily Power Generation Plan issued by Ningde
 Local Dispatching, then such increased or decreased power generation shall
 not be taken into the appraisal. Where the power grid frequency exceeds the
 setting value of the artificial dead zone of the

 

40

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 speed
 regulator of the Power Plant’s generator set and where the Power Plant’s
 generator set does not participate in the frequency adjustment of the power
 grid, then a non-compliance appraisal shall be conducted on the Power Plant’s
 generator set for its nonparticipation in the frequency adjustment of the
 power grid. The evaluated power output shall be subject to the automatically
 evaluated sum-up recorded in the automation system of Ningde Local
 Dispatching.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The
 aforementioned Active Power Curve of Daily Power Generation Plan issued by
 Ningde Local Dispatching shall include the curve modified by the on-duty
 dispatcher of Ningde Local Dispatching or the curve modified according to the
 start-up and outage dispatching orders.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 If
 breaching Article 9.7 (1), then Party B’s annual noncompliance power output
 shall be: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Among
 which:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Q refers
 to Party B’s annual noncompliance power output (unit: 10,000 kilowatt hours).

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 i refers
 to the 1st installed generator of the Power Plant.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 EAFis
 refers to the annual actual equivalent available factors of the 1st generator
 set.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 EAFis =
 1- (annual planned outage hours + annual unplanned outage hours + annual
 equivalent outage hours converted from the annual planned and unplanned
 output decrease hours)/ annual calendar hours.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 EAFib
 refers to the annual standard equivalent available factors of the 1st
 generator set, i.e. the value defined in Article 9.7.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Ci: the installed
 capacity value of the 1st generator set.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 If
 breaching Article 9.7 (2), then Party B’s annual noncompliance power output
 shall be:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Deductable
 actual on-grid energy upon each occurrence = output decrease hours of the
 generator set * decreased output quantity * 0.4.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Note:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)

 	
 If it
 applies for the equipment outage with the on-duty dispatcher 12 hours in
 advance and obtains the consent from the dispatcher or the dispatching, then
 it can immediately stop operation and it can be exempted from the appraisal.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
 Upon the
 consent from the dispatching, it can make an application for repairing its
 defective equipment during the valley period (i.e. from 23:00 to 6:00 am of

 

41

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 next
 day), which shall not affect the balance of the provincial power generation
 and utilization, and under the said situation it can be exempted from the
 appraisal. If it fails to connect with the power grid after 6:00 am, then the
 appraisal shall be conducted after 6:00 am.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (c)

 	
 When the
 planned overhaul ends, the trip-off of the generator set within 24 hours
 after the first connection shall be exempted from the appraisal.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (d)

 	
 The trip-off of the generator and the outage duration shall refer to
 the time period from the interruption of the circuit breaker till the
 generator set switches to the standby or till the re-connection. The
 evaluation time for the accidental trip-off of the generator set, the forced
 outage and the unplanned output decrease shall not exceed 72 hours; if exceeding
 72 hours, then the start-up duration of the generator set without standby
 system shall not exceed 144 hours. The generator set under commissioning
 shall not exceed 24 hours.

 
	
  

 	
  

 	
  

 	
  

 
	
 16.8

 	
 If Party B has one of the following serious events of default, Party
 B may adopt enforcement measures till it disconnects the Power Plant
 (generator set) in breach. Party B shall not claim against Party A for any
 loss caused by such disconnection.

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 The
 Power Plant starts up for the connection or shuts down for disconnection
 without the consent of Ningde Local Dispatching.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The
 Power Plant breaches Article 7.1 (1) under Emergencies.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Under
 Emergencies, the Power Plant does not faithfully report the actual status of
 the Power Plant’s equipment (such as generator, water turbine, furnace,
 electric equipment, etc.) and other facilities to Ningde Local Dispatching.

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 It has
 twice or more breaches of contract within 1 (calendar) year during the
 performance of this Agreement.

 
	
  

 	
  

 	
  

 
	
 16.9

 	
 Unless otherwise prescribed in this Agreement, once there is any
 breach of contract, the non-breaching party shall immediately notify the
 breaching party to stop its breach and shall issue a written notice to the
 breaching party as soon as possible requiring the breaching party to correct
 its breach and bear the liabilities for breach of contract according to this
 Agreement.

 
	
  

 	
  

 
	
 16.10

 	
 The breaching party shall immediately adopt relevant measures to
 correct its breach, reconfirm its breach according to this Agreement and bear
 the liabilities for breach of contract.

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 The
 non-compliance power output shall be counted up and accumulated on a monthly
 basis and shall be settled on a yearly basis.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 If the
 direct economic losses exceed the agreed non-compliance power output in (1)
 above, after the recognition, such excessive part shall be paid together with
 the settlement of the on-grid energy of the current month of the recognition.

 

42

	
  

 	
  

 	
  

 	
  

 
	
 16.11

 	
 Before the expiration of this Agreement, if either Party expressly
 indicates or indicates by its action that it will not perform the obligations
 under this Agreement, then the counter Party may require the Party to bear
 the liabilities for breach of contract.

 
	
  

 	
  

 
	
 16.12

 	
 The Parties agree that, during the effective term of Min Jing Mao
 Dian Li [2004] No. 14 (and its amendments if any), the Party shall not
 repeatedly bear the liabilities for breach of contract if the Parties conduct
 the appraisal and settlement according to the “Appraisal Measures on
 Operation and Management of Power Plant of Unified-dispatching of Fujian
 Power Grid (For Trial Implementation)”. However, for any issues which are not
 covered in the appraisal provided in Min Jing Mao Dian Li [2004] No. 14, then
 such issues shall be settled according to this Agreement. If the Min Jing Mao
 Dian Li [2004] No. 14 is not implemented any longer by Fujian power grid due
 to the policy change, then the Parties shall their own liabilities for breach
 of contract according to this Agreement.

 

Chapter XVII Effectiveness and valid Term

	
  

 	
  

 
	
 17.1

 	
 This Agreement shall come into effect upon being signed by the legal
 representatives or authorized agents of both Parties and affixed with their
 official seals.

 
	
  

 	
  

 
	
 17.2

 	
 The valid term of this Agreement shall be from the execution date
 hereof to December 31, 2015. 

 
	
  

 	
  

 
	
 17.3

 	
 Within three (3) months prior to the
 expiration of this Agreement, Parties hereof shall negotiate as of renewal of
 this Agreement; in the event that either of the Parties has any objection,
 this Agreement shall continue to be valid.

 

Chapter XVIII Modification, Assignment and Termination of this Agreement

	
  

 	
  

 	
  

 
	
 18.1

 	
 Any modification, amendment or supplement
 to this Agreement must be conducted in written form, and the conditions for coming into effect shall be the same
 as specified in Article 17.1.

 
	
  

 	
  

 
	
 18.2

 	
 Both Parties explicitly express that neither Party shall be entitled
 to assign all or part of its rights or obligations hereunder to any third
 party without the written consent of the other Party.

 
	
  

 	
  

 
	
 18.3

 	
 Within the valid term of this Agreement,
 both Parties agree to adjust or amend this Agreement if any of the following
 events occurs:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 Alteration of relevant laws and regulations, rules and policies of
 the State;

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Any clause of this Agreement conflicting with any relevant compulsory
 rules, measures and regulations issued by the State electric power regulatory
 authority;

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The regular operation of electricity power market of East-China,
 bidding for on-grid tariff or implementation of other policies.

 
	
  

 	
  

 	
  

 
	
 18.4

 	
 Termination of Agreement

 

43

	
  

 	
  

 	
  

 
	
  

 	
 In the event that any of the following
 events occurred to any Party, the other Party shall be entitled to terminate
 this Agreement after thirty (30) days from sending a notice of termination:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 Either Party goes bankrupt or liquidated, or the business license or
 the electric power business license of either Party or the Power Plant is
 revoked.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 One Party is merged with the other Party or
 all or majority parts of its assets have been transferred to another entity,
 and the surviving enterprise cannot reasonably perform its obligations under
 this Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Serious breaching for twice or above in one calendar year while
 performing this Agreement.

 

Chapter XIX Dispute resolution

	
  

 	
  

 
	
 19.1

 	
 Any dispute arising out of performance of
 this Agreement or any dispute in relation to this Agreement shall be firstly
 resolved by the Parties through consultations, or submitted to the power
 regulatory agency for mediation. If the disputes cannot be resolved through
 consultation or mediation, the Parties shall resolve the disputes by the
 following method:

 
	
  

 	
  

 
	
  

 	
 Both Parties agree to submit the dispute to Fuzhou Arbitration
 Committee for arbitration in
 accordance with its prevailing arbitration rules. The arbitration award shall
 be final and binding on the Parties to this Agreement.

 
	
  

 	
  

 
	
 19.2

 	
 In the process of negotiation or
 arbitration, excluding the provisions in dispute, the remaining provisions of
 this Agreement shall continue to be valid and performed.

 

Chapter XX Applicable Law

	
  

 	
  

 
	
 20.1

 	
 The establishment, effectiveness,
 interpretation, performance and dispute resolution of this Agreement shall be
 governed by the laws of the People’s Republic of China.

 

Chapter XXI Miscellaneous

	
  

 	
  

 
	
 21.1

 	
 Confidentiality

 
	
  

 	
  

 
	
  

 	
 Both Parties warrant to maintain
 confidential all information and documents which are procured from the other
 Party and may not be procured from public channels. Without the prior
 approval from the original provider of such information and documents, the
 other Party shall not disclose to any third Party all or part of the
 information and documents, unless otherwise provided by the regulations of
 the State.

 
	
  

 	
  

 
	
 21.2

 	
 Appendices 

 

	
  

 	
  

 	
  

 
	
  

 	
 Appendix I:

 	
 Diagram for the
 Metering Points

 
	
  

 	
  

 	
  

 
	
  

 	
 Appendix II:

 	
 Technical
 Parameters of the Power Plant

 

44

	
  

 	
  

 	
  

 
	
  

 	
 Appendix III:

 	
 Division of
 Dispatching Range for the Power Plant’s Equipments

 

	
  

 	
  

 
	
  

 	
 The Appendices to this Agreement (including the special provisions)
 shall constitute an integral part of this Agreement, and shall have the same
 legal effect as this Agreement. In case of any discrepancy between this
 Agreement and its appendices, according to the nature of discrepancy, the
 content most related to and dealing more deeply with the point of dispute
 shall prevail. In case that the discrepancy and contradiction still exist
 after applying the aforesaid principle, the Parties shall, on the principle
 of good faith, consult with each other to make determinations according to
 the purpose of this Agreement.

 
	
  

 	
  

 
	
 21.3

 	
 Entire Agreement

 
	
  

 	
  

 
	
  

 	
 This Agreement (including the special provisions) and the appendices
 hereto constitute the entire agreement between the Parties pertaining to the
 subject matter of this Agreement, and shall replace all previous discussions,
 negotiations, contracts and agreements conducted by both Parties in respect
 of this Agreement.

 
	
  

 	
  

 
	
 21.4

 	
 Notification and Service

 
	
  

 	
  

 
	
  

 	
 Any notification and document pertaining to this Agreement shall be
 conducted in written form. A notification shall be deemed as having been served
 upon the confirmation with signature by the recipient when delivered by way
 of registered mail, express mail or in person, or upon confirmation as being
 received when sent via fax. All notifications and documents shall come into
 effect upon service and receipt. All notifications shall be delivered to the
 following addresses as provided in this Agreement or to a modified address
 when either Party has notified the other Party with a written notice.

 

	
  

 	
  

 	
  

 
	
  

 	
 Party A: 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Attention:

 	
 Sun Yu Bo

 
	
  

 	
  

 	
  

 
	
  

 	
 Telephone Number:

 	
 0593-2802008 

 
	
  

 	
  

 	
  

 
	
  

 	
 Facsimile Number:

 	
 0593-2802161

 
	
  

 	
  

 	
  

 
	
  

 	
 Zip Code:

 	
 352100

 
	
  

 	
  

 	
  

 
	
  

 	
 E-mail:

 	
 nddd@126.com

 
	
  

 	
  

 	
  

 
	
  

 	
 Mail Address:

 	
 Power Dispatching
 Building, No.48, Hefeng Road, Ningde City

 
	
  

 	
  

 	
  

 
	
  

 	
 Party B: 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Attention:

 	
 Wu Zong Can

 
	
  

 	
  

 	
  

 
	
  

 	
 Telephone Number:

 	
 0593-3385938

 

45

	
  

 	
  

 	
  

 
	
  

 	
 Facsimile Number:

 	
 0593-3332698

 
	
  

 	
  

 	
  

 
	
  

 	
 Zip Code:

 	
 352300

 
	
  

 	
  

 	
  

 
	
  

 	
 E-mail:

 	
 pnwzc@163.com

 
	
  

 	
  

 	
  

 
	
  

 	
 Mail address:

 	
 5th
 Floor, Cuibai Building, Pingnan County, Fujian

 

	
  

 	
  

 
	
 21.5

 	
 No Waiver

 
	
  

 	
  

 
	
  

 	
 Either Party’s failure to waive any of its rights under this
 Agreement through written statement shall not be deemed as a waiver thereof.
 Either Party’s failure to exercise any of its rights under this Agreement
 shall not operate as having waived or will waive any of its rights under this
 Agreement in the future.

 
	
  

 	
  

 
	
 21.6

 	
 Continuing Effect

 
	
  

 	
  

 
	
  

 	
 The provisions with respect to arbitration and confidentiality of
 this Agreement shall remain effective after the termination of this
 Agreement.

 
	
  

 	
  

 
	
 21.7

 	
 Text

 
	
  

 	
  

 
	
  

 	
 This Agreement comprises Thirty-seven (37) pages, and shall be
 signed in four (4) counterparts. Each Party shall hold two (2)
 counterparts.

 

46

	
  

 	
  

 	
  

 
	
 Party A: Fujian Province Electric Power
 Co., Ltd. Ningde Electric Power Industry Bureau

 	
  

 	
 Party B: Pingnan County Wangkeng
 Hydroelectric Co., Ltd.

 
	
  

 	
  

 	
  

 
	
 (Seal)

 	
  

 	
 (Seal)

 
	
  

 	
  

 	
  

 
	
 Legal
 Representative:

 	
  

 	
 Legal
 Representative:

 
	
  

 	
  

 	
  

 
	
 Authorized
 Representative:

 	
  

 	
 Authorized
 Representative:

 

Signing Date: September 30, 2010

Signing Place: Meeting Roon on 12th Floor, Electricity
Power Dispatching Building, Ningde Power Industry Bureau

47

Appendix I. Diagram for metering Points 

48

Appendix II.
Technical Parameters for the Power Plant

Technical Parameters for the Power Plant

	
  

 	
  

 
	
 1.

 	
 Nameplate
 Parameters for the Generator Units of the Power Plant

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Unit

 No.

 	
  

 	
 Type

 	
  

 	
 Rated

 Capacity

 (MVA)

 	
  

 	
 Active Power

 (MW)

 	
  

 	
 Rated

 Power

 Factor

 	
  

 	
 Rated

 Speed

 (r/min)

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 
	
 1#

 	
  

 	
 SF4-J20-10/3000

 	
  

 	
 25

 	
  

 	
 20

 	
  

 	
 0.8

 	
  

 	
 600

 
	
 2#

 	
  

 	
 SF4-J20-10/3000

 	
  

 	
 25

 	
  

 	
 20

 	
  

 	
 0.8

 	
  

 	
 600

 

	
  

 	
  

 	
  

 
	
 2.

 	
 Connection lines between the Power Plant and the power grid of Party
 A

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 Name of the line: 110 KV Wangdai Line, Wangjia Line.

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Voltage level: 110 kV.

 
	
  

 	
  

 	
  

 
	
 3.

 	
 Party B shall provide other accurate technical parameters of the
 Power Plant according to the design parameters for the equipments and the
 connection commissioning results (the parameters below are filled in
 according to general design. Party B shall circulate such parameters to Party
 A for confirmation within one (1) month after commissioning and start of
 commercial operation, for failure of which Party B shall be liable).

 
	
  

 	
  

 
	
 3.1

 	
 Normal Operation Output Range

 
	
  

 	
  

 
	
  

 	
 The maximum output for the normal operation of the No.1 and No. 2
 units of the Power Plant shall be 110% of the rated capacity, and the
 minimum output for the normal operation shall be 0% of the rated
 capacity.

 
	
  

 	
  

 
	
 3.2

 	
 Under the special condition of Emergencies and abnormal situation,
 the minimum output of the No. 1 and No. 2 units of the Power Plant shall be
 0% of the rated capacity. 

 
	
  

 	
  

 
	
 3.3

 	
 Power regulation rate of units during normal operation

 
	
  

 	
  

 
	
  

 	
 No. 1 and No. 2 Units are 10 MW/min.

 
	
  

 	
  

 
	
 3.4

 	
 The shortest time for the units from receiving a dispatching
 instruction to reaching the grid connection output or from zero output to
 rated output is 15 min.

 
	
  

 	
  

 
	
 3.5

 	
 The shortest time from full load output to zero load after receiving
 a dispatching instruction is 5 min.

 
	
  

 	
  

 
	
 3.6

 	
 Leading-phase depth of No.1 & No.2 units is 10 MVAR.

 
	
  

 	
  

 
	
 4.

 	
 When the Power Plant has been put into commercial operation, if Party
 B finds any change in the operation parameters of the units which fail to
 meet the technical indicators as set out in

 

49

	
  

 	
  

 
	
  

 	
 Article 3 above and need modifications, explanations shall be made to
 the dispatching center, and a testing report issued by a qualified agency
 shall be submitted as well.

 

50

Appendix III. Division of Dispatching Range of Power Plant Equipments

	
  

 	
  

 	
  

 
	
 1.

 	
 The equipments within the jurisdiction of the Ningde Local
 Dispatching licensed by Party A and direct jurisdiction of Party A.

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 No.1 and No. 2 generator units

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Relay protection and automatic safety devices related to the
 operation of the power grid of Party A

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 No. 1 and No. 2 generator units’ high-frequency generator tripping
 and low-freqency self-startup protection, automatic adjustment excitation
 system

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Dispatching automation and communication facilities related power
 dispatching

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Power dispatching automation,
 dispatching communication, water dispatching automation system, power output
 information collection facility; remote information data sent to Ningde Local
 Dispatching, then forwarded to dispatching communication center; fiber-optics
 links Ningde Local Dispatching and the dispatching communication center.

 
	
  

 	
  

 	
  

 
	
 2.

 	
 The equipments within the direct jurisdiction of the Ningde Local
 Dispatching

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 Primary Equiments

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 No. 1 and No. 2 power generation units, 110KV Wangdai Line and
 Wangjia Line, 110KV generatrix, #1 main transformer, 10KV generatrix, and
 related switches, brakes, CT and PT equipments;

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Relay protection and automatic safety devices related to the
 operation of the power grid of Party A

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 110 KV line protection, No.1&2 generator transformer units
 protection, line reclosing facilities, high-frequency generator tripping,
 low-frequency auto-start and other grid safety automation facility, units
 exciter and speeder, 110KV failure recording system and failure information
 system.

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 Dispatching automation and communication facilities related to the
 dispatching operations of Party A

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Computer monitoring and controlling system (remote movement
 facility), electric power metering facility, AVC, AGC, water automation
 monitoring and reporting system (including water dispatching automation
 system), electric power billing information collection device, dispatching
 data equipment, the optical-fiber communication channel (including OPGW
 optical-fiber, SDH Fenghuo optical transmitter and receiver, Fenghuo PCM).

 
	
  

 	
  

 	
  

 
	
 3.

 	
 The equipments within licensed jurisdiction of the dispatching and
 communication center

 

51

	
  

 	
  

 	
  

 
	
  

 	
 Auxiliary equipments influencing output of generating units

 
	
  

 	
  

 	
  

 
	
 4.

 	
 Equipments within jurisdiction of the Power Plant

 
	
  

 	
  

 	
  

 
	
  

 	
 Power utilization system of the Power Plant

 
	
  

 	
  

 	
  

 
	
 5.

 	
 Parties hereof agree that: in the event that there is any change to
 equipment dispatching range of the Power Plant, there is no need to amend
 Appendix III hereof, and the notice promulgated by the dispatching agency shall be applicable.

 

52Exhibit 4.119

SHARE TRANSFER
CONTRACT

FOR

JINPING KANGHONG
HYDROELECTRIC DEVELOPMENT CO., LTD.

1

CONTENTS

	
  

 	
  

 	
  

 
	
 Chapter
 I.     Definitions

 	
  

 	
 5

 
	
  

 	
  

 	
  

 
	
 Article
 1     Definitions

 	
  

 	
 5

 
	
  

 	
  

 	
  

 
	
 Chapter
 II.     Sale Equity Stake

 	
  

 	
 6

 
	
  

 	
  

 	
  

 
	
 Article
 2     Sale Equity Stake

 	
  

 	
 6

 
	
  

 	
  

 	
  

 
	
 Article
 3     Transfer Price for the Sale Equity Stake

 	
  

 	
 6

 
	
  

 	
  

 	
  

 
	
 Article
 4     Conditions Precedent for the Payment of the
 Transfer Price

 	
  

 	
 7

 
	
  

 	
  

 	
  

 
	
 Article
 5     Payment

 	
  

 	
 7

 
	
  

 	
  

 	
  

 
	
 Article
 6     Taxes Payable under the Transfer of the Sale
 Equity Stake

 	
  

 	
 8

 
	
  

 	
  

 	
  

 
	
 Chapter III.     Representations and
 Warranties by All Parties

 	
  

 	
 8

 
	
  

 	
  

 	
  

 
	
 Article
 7     Representations and Warranties by All Parties

 	
  

 	
 8

 
	
  

 	
  

 	
  

 
	
 Chapter
 IV.     Disclosures, Representations and Warranties
 by Transferors

 	
  

 	
 9

 
	
  

 	
  

 	
  

 
	
 Article
 8     Disclosures, Representations and Warranties by
 Transferors

 	
  

 	
 9

 
	
  

 	
  

 	
  

 
	
 Article
 9     General Representations and Warranties by
 Transferors

 	
  

 	
 9

 
	
  

 	
  

 	
  

 
	
 Article
 10     Ownership

 	
  

 	
 10

 
	
  

 	
  

 	
  

 
	
 Article
 11     The Company and the Hydroelectric Project

 	
  

 	
 10

 
	
  

 	
  

 	
  

 
	
 Chapter
 V.     Disclosures, Representations and Warranties
 by Transferee

 	
  

 	
 15

 
	
  

 	
  

 	
  

 
	
 Article
 12     Disclosures, Representations and Warranties
 by Transferee

 	
  

 	
 15

 
	
  

 	
  

 	
  

 
	
 Chapter
 VI.     Delivery and Entrustment Management

 	
  

 	
 15

 
	
  

 	
  

 	
  

 
	
 Article
 13     Delivery

 	
  

 	
 15

 
	
  

 	
  

 	
  

 
	
 Article
 14     Entrustment Management

 	
  

 	
 16

 
	
  

 	
  

 	
  

 
	
 Chapter VII.     Debt Arrangement and
 Allocation of Employees

 	
  

 	
 18

 
	
  

 	
  

 	
  

 
	
 Article
 15     Debt Arrangement

 	
  

 	
 18

 
	
  

 	
  

 	
  

 
	
 Article
 16     Allocation of Employees

 	
  

 	
 18

 
	
  

 	
  

 	
  

 
	
 Chapter VIII.     Confidentiality

 	
  

 	
 18

 
	
  

 	
  

 	
  

 
	
 Article
 17     Confidentiality

 	
  

 	
 18

 
	
  

 	
  

 	
  

 
	
 Chapter
 IX.     Breach of Contract

 	
  

 	
 19

 
	
  

 	
  

 	
  

 
	
 Article
 18     Liability for Breach of a Representation or
 Warranty

 	
  

 	
 19

 
	
  

 	
  

 	
  

 
	
 Article
 19     Liability for Breach of Contract

 	
  

 	
 19

 

2

	
  

 	
  

 	
  

 
	
 Chapter
 X.     Force Majeure

 	
  

 	
 20

 
	
  

 	
  

 	
  

 
	
 Article
 20     Force Majeure

 	
  

 	
 20

 
	
  

 	
  

 	
  

 
	
 Chapter XI.     Resolution of Disputes

 	
  

 	
 20

 
	
  

 	
  

 	
  

 
	
 Article
 21     Arbitration

 	
  

 	
 20

 
	
  

 	
  

 	
  

 
	
 Article
 22     Validity of the Arbitration Award

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Article
 23     Continuation of Rights and Obligations

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Chapter XII.     Applicable Law

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Article
 24     Applicable Law

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Chapter XIII.     Miscellaneous

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Article
 25     Waiver

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Article
 26     Transfer

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Article
 27     Amendment

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Article
 28     Severability

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Article
 29     Language

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Article
 30     Validity of the Text and Appendices

 	
  

 	
 21

 
	
  

 	
  

 	
  

 
	
 Article
 31     Notification

 	
  

 	
 22

 
	
  

 	
  

 	
  

 
	
 Article
 32     The Entire Agreement

 	
  

 	
 22

 
	
  

 	
  

 	
  

 
	
 Appendix
 I     Existing Securities of the Company

 	
  

 	
 25

 

3

Share Transfer Contract

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 This Share Transfer Contract (hereinafter
referred to as “this Contract”) is executed by the following Parties on
November 6, 2010 in Kunming, China. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
  

 	
 Party A: Luquan Xiaopengzu
Power Generation Co., Ltd. (hereinafter referred to as
the “Transferee”), a limited liability enterprise registered and established
in accordance with the laws of the People’s Republic of China, with its
registration number of 530128000000331 and registered address at Xiaopengzu Village, Xinglong
Village Committee, Cuihua Township, Luquan County, Kunming City, the legal representative of which is John
Douglas Kuhns, whose position is
chairman and nationality is the United States of America; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
  

 	
 Party B: Mao Ding Gou, a PRC
 citizen with the ID card number of 330326195701127514;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
  

 	
 Party C: Zeng Jie, a PRC
 citizen with the ID card number of 330326195306241819;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
  

 	
 Party D: Xu Xuan Bo, a PRC
 citizen with the ID card number of 330326196309287518;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
  

 	
 Party E: Lin Lin, a PRC
 citizen with the ID card number of 330326471103181;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
  

 	
 Party F: Su Xiao Dong, a PRC
 citizen with the ID card number of 330326196810070048;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (7)

 	
  

 	
 Party G: Dong Xian Min, a PRC
 citizen with the ID card number of 330302196404114876;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (8)

 	
  

 	
 Party H: Wang Meng Zhang, a PRC citizen
with the ID card number of 33032619611226761X;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Party B, Party C, Party D, Party E, Party
 F, Party G and Party H are hereinafter collectively referred to as the “Transferors”. The Transferors and the
 Transferee are hereinafter collectively referred to as “all Parties” as well as each of the Transferors
 and the Transferee is hereinafter referred to as “Party”.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WHEREAS:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
  

 	
 Jinping Kanghong Hydroelectric Development
 Co., Ltd. (hereinafter referred to as the “Company”)
 is a company incorporated in China for the purpose of hydropower generation,
 power development and operation with the registered capital of RMB12,000,000,
 the registration number of which is 532530100000991;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
  

 	
 Party B owns seventeen percent (17%) of the
 equity stake of the Company, and can exercise all of his full rights as a
 shareholder;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
  

 	
 Party C owns seventeen percent (17%) of the
 equity stake of the Company, and can exercise all of his full rights as a
 shareholder;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
  

 	
 Party D owns eight percent (8%) of the
 equity stake of the Company, and can exercise all of his full rights as a
 shareholder;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
  

 	
 Party E owns seventeen percent (17%) of the
 equity stake of the Company, and can exercise all of his full rights as a
 shareholder;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
  

 	
 Party F owns seventeen percent (17%) of the
 equity stake of the Company, and can exercise all of his full rights as a
 shareholder;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (7)

 	
  

 	
 Party G owns seventeen percent (17%) of the
 equity stake of the Company, and can exercise all of his full rights as a
 shareholder;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (8)

 	
  

 	
 Party H owns seven percent (7%) of the
 equity stake of the Company, and can exercise all of his full rights as a
 shareholder;

 

4

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (9)

 	
  

 	
 Subject to the terms and conditions set out in this Contract, Party B
 is willing to transfer seventeen percent
 (17%) of the equity stake of the
 Company held by him, Party C is willing to transfer seventeen percent (17%) of the equity
 stake of the Company held by him,
 Party D is willing to transfer eight
 percent (8%) of the equity stake of the Company held by him, Party E is willing to transfer seventeen percent (17%) of the equity
 stake of the Company held by him,
 Party F is willing to transfer seventeen
 percent (17%) of the equity stake of the Company held by him, Party G is willing to transfer seventeen percent (17%) of the equity
 stake of the Company held by him,
 and Party H is willing to transfer seven
 percent (7%) of the equity stake of the Company held by him to the Transferee, all of which
 represent one hundred percent (100%) of the equity stake of the Company (hereinafter referred to as
 the “Sale Equity Stake”); 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (10)

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

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

 

Chapter I. Definitions

	
  

 	
  

 	
  

 
	
 Article 1

 	
 Definitions

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 The “Company” refers to
 Jinping Kanghong Hydroelectric Development Co., Ltd., a limited liability
 company registered and established in accordance with the laws of PRC, with
 its registration number being 523530100000991, registered capital (paid-up
 capital) being RMB12,000,000 and registered address at Kuchumian
 Village, Maka Village Committee, Mengqiao Township.

 
	
  

 	
  

 	
  

 
	
  

 	
 The “Hydroelectric Project” refers to
 the Dazhaihe Cascade III Hydroelectric Project with the total installed capacity
 of 15,000 KW which is legally owned and operated by the Company.

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 “Transfer Price” refers to
 price as specified in Article 3.1 hereof.

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Effective Date” refers to
 the date on which this Contract takes effective according to Article 30.1
 hereof.

 
	
  

 	
  

 	
  

 
	
  

 	
  “First Payment Date” refers to
 the date as defined in Article 5.1 hereof.

 
	
  

 	
  

 	
  

 
	
  

 	
  “Second Payment Date” refers to
 the date as defined in Article 5.1 hereof.

 
	
  

 	
  

 	
  

 
	
  

 	
  “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, without limitation:

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 any interest or right
 granted or reserved in or over or affecting the Sale Equity Stake; or

 

5

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 the interest or right created or otherwise arising in
 or over the Sale Equity Stake under a fiduciary transfer, charge, lien,
 pledge, power of attorney or other form of encumbrance; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 any security over the Sale Equity Stake for the
 payment of a debt or any other monetary obligation or the performance of any
 other obligation.

 
	
  

 	
  

 	
  

 
	
  

 	
  “Material Adverse Change” refers to:

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 involvement with any litigation, arbitration or any
 other judicial proceedings by the Company; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (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.

 
	
  

 	
  

 	
  

 
	
  

 	
  “Deposit” refers to
 payment as provided in Article 5.4 hereof.

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Transferors’ Bank Accounts” refers to,
 for the purpose of this Contract, the bank accounts opened separately by
 Party B, Party C, Party D, Party E, Party F, Party G and Party H under their
 respective names for receiving the Transfer Price.

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Working Day” refers to
 the statutory working day provided by the State Council of the PRC.

 
	
  

 	
  

 	
  

 
	
 Chapter II. Sale Equity Stake

 
	
  

 	
  

 	
  

 
	
 Article 2

 	
  

 	
 Sale Equity Stake

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 Article 3

 	
  

 	
 Transfer Price for the Sale Equity Stake

 
	
  

 	
  

 	
  

 
	
 3.1

 	
  

 	
 The Transferors and the Transferee after
 consultations have finally determined that the total consideration shall be
 agreed at RMB118, 000,000.00, including price for the Sale Equity Stake of
 RMB 59, 000,000 (hereinafter referred to as the “Transfer Price”) and debt of the Company of RMB 59,000,000
 (as shown in Appendix II hereto) assumed by the Transferee. Specifically, the
 amount respectively payable to the Transferors shall be as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Party B:
 RMB10,030,000;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Party C:
 RMB10, 030,000;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Party D: RMB4,720,000;

 

6

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Party E: RMB10, 030,000;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Party F:
 RMB10, 030,000;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Party G:
 RMB10, 030,000;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Party H:
 RMB4, 130,000.

 
	
  

 	
  

 	
  

 	
  

 
	
 3.2

 	
  

 	
 The Transfer Price shall be paid in two (2) instalments: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 The first instalment of the Transfer Price, namely, RMB29,500,000, shall be paid within ten (10) Working Days
 after the Transferors have completed all conditions precedent
 stipulated in Article 4.1 hereof. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 The second instalment of the Transfer Price
 (deposit deducted), namely, RMB26, 500,000, shall be paid within ten (10)
 Working Days after the Transferors have completed all conditions precedent
 stipulated in Article 4.2 hereof. 

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 4

 	
  

 	
 Conditions Precedent for the Payment of the Transfer Price 

 
	
  

 	
  

 	
  

 	
  

 
	
 4.1

 	
  

 	
 Under this Contract, the conditions
 precedent for the payment of the first instalment of the Transfer Price in
 the amount of RMB29,500,000 by the Transferee are set out as follows: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 Parties hereof have duly executed this
 Contract; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 From the Signing Date to the First Payment
 Date (including), there has been no Material Adverse Change to the Company.

 
	
  

 	
  

 	
  

 	
  

 
	
 4.2

 	
  

 	
 Under this Contract, the conditions
 precedent for the payment of the Second Instalment of the Transfer Price by
 Transferee are set out as follows: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 Transferors obtain Power Generation Permit
 (Power Generation Type) in the name of the Company at its own cost and
 deliver the original of Power Generation Permit (Power Generation Type) to
 the Transferee; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 Share transfer registration of Sale Equity
 Stake has been completed and the Transferee is registered as holder of the
 Sale Equity Stake;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
 The Company has obtained renewed business
 license; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)

 	
 During the period from the First Payment
 Date to the Second Payment Date (inclusive), there has been no Material
 Adverse Change to the Company.

 
	
  

 	
  

 	
  

 	
  

 
	
 4.3

 	
  

 	
 In the event that any of the conditions set
 out in the aforesaid Article 4.1 and/or Article 4.2 has not been fulfilled or
 satisfied, and the Transferee has not indicated its waiver of the said
 conditions or any one of them in writing, the Transferee shall not be obliged
 to pay the Transfer Price to the Transferors which shall not be deemed as
 breach of contract.

 
	
  

 	
  

 	
  

 	
  

 
	
 4.4

 	
  

 	
 Parties hereof shall make their best to
 proceed industry and commerce registrations related to Sale Equity Stake,
 including preparation of all the necessary documents.

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 5

 	
  

 	
 Payment

 
	
  

 	
  

 	
  

 	
  

 
	
 5.1

 	
  

 	
 The First Payment Date shall be within ten
 (10) Working Days after all conditions precedent set out in Article 4.1
 hereof have been completed. The
 Transferee shall, on the First Payment Date,
 remit the first instalment of the Transfer Price in the amount of
 RMB29,500,000 to the Transferors’ Bank Accounts. 

 

7

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Second Payment Date shall be within ten (10) Working Days after
 all conditions precedent set out in Article 4.2 hereof have been completed.
 The Transferee shall, on the Second Payment Date, remit the balance of the Transfer Price in the amount
 of RMB26,500,000 to the Transferors’ Bank Accounts.

 
	
  

 	
  

 	
  

 
	
 5.2

 	
  

 	
 The Transferors shall, within five (5)
 Working Days after the satisfaction of the conditions precedent to the
 payment, provide the Transferee in written form with the detailed information
 in relation to the Transferors’ Bank Accounts, otherwise, in the event that
 the Transferee cannot pay or cannot pay as scheduled the Transfer Price due
 to the Transferors’ failure to provide the detailed information of the Transferors’
 Bank Accounts in a timely fashion, or due to the reason of the opening banks
 of the Transferors’ Bank Accounts, the Transferee shall not assume any
 liability arising therefrom.

 
	
  

 	
  

 	
  

 
	
 5.3

 	
  

 	
 The Transferors shall issue to the
 Transferee the legal documents evidencing the receipt of the Transfer Price
 within five (5) Working Days after receiving each instalment of the Transfer
 Price paid by the Transferee. In the event that the Transferors fail to issue
 the said documents to the Transferee within the prescribed time limit, the
 Transferee shall be entitled to correspondingly delay its payment of the
 following payable instalment of the Transfer Price, which shall not be deemed
 as breach of contract. In the event that the said legal documents issued by the
 Transferors are not in compliance with the PRC laws and regulations which
 cause the Transferee and/or the Company to suffer from any damage or loss,
 the Transferors shall assume joint liability for the compensation on the
 Transferee and/or the Company.

 
	
  

 	
  

 	
  

 
	
 5.4

 	
  

 	
 The Transferors agree that the Transferee
 is entitled to deduct RMB3,000,000 from the Transfer Price and hold it as the
 guarantee fund (the “Guarantee Fund”) for the project quality of the
 hydropower station and the performance of all the obligations of the
 Transferors under this Contract. The guarantee duration shall commence from
 the Signing Date and terminate as of expiration of six months from completion
 of registration procedures with industry and commerce authority. Upon the
 expiration of the Guarantee Duration, the Transferee shall remit the balance
 of the guarantee fund (if any) without any interest to the bank account
 designated by Transferors.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Transferors hereby severally and jointly confirm and undertake that,
 during the Guarantee Duration, in case that the Transferee suffers from any
 loss due to any quality defects of the hydropower station, or Transferors’
 breach of any representation or warrants, or Transferors’ failure to fulfil
 its obligations hereof, or other breaches or illegal action made by the
 Transferors, then the Transferee is entitled to deduct an amount equals to
 the actual loss from the deposit as compensation and Transferors will not
 claim refunding of such amount; further, compensation hereof shall not
 prejudice the Company and/or the Transferee to seek remedies in accordance
 with the laws of PRC or other provisions of this Contract.

 
	
  

 	
  

 	
  

 
	
 Article 6

 	
  

 	
 Taxes Payable under the Transfer of the Sale Equity Stake

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 Chapter III. Representations and Warranties by All Parties

 
	
  

 	
  

 	
  

 
	
 Article 7

 	
  

 	
 Representations and Warranties by All Parties

 
	
  

 	
  

 	
  

 
	
 7.1

 	
  

 	
 If the signing party is an individual, such
 individual shall provide a photograph of his/her identification card together
 with the original of the identification card being shown. In case of proxy,
 power of attorney thereof and a copy of the identification card of the
 principal shall be delivered. 

 
	
  

 	
  

 	
  

 
	
 7.2

 	
  

 	
 At the time of signing this Contract, the
 Transferors and the Transferee hereby state that the documents and
 information provided to the Party (ies) or their agencies (including, without
 limitation, the lawyers, valuers, financial advisers, etc.) prior to the Signing Date are
 still valid

 

8

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 and authentic and confirm that, should discrepancies arise between
 the latter and the terms of this Contract, this Contract shall prevail.

 
	
  

 	
  

 	
  

 
	
 7.3

 	
  

 	
 The Transferors and the Transferee hereby
 agree that the contracts or documents pertaining to the transfer of Sale
 Equity Stake entered into among all Parties prior to this Contract shall
 lapse automatically upon this Contract coming into effect.

 
	
  

 	
  

 	
  

 
	
 7.4

 	
  

 	
 All Parties to this Contract agree to
 strive jointly in coordinating all the work pertaining to the transfer of the
 Sale Equity Stake, including but not limited to application for approvals,
 registration and filing for record, etc.,
 and the expenses arising therefrom shall be borne by the Company.

 
	
  

 	
  

 	
  

 
	
 Chapter IV. Disclosures, Representations and Warranties by
 Transferors

 
	
  

 	
  

 	
  

 
	
 Article 8

 	
  

 	
 Disclosures, Representations and Warranties by Transferors

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 8.1

 	
  

 	
 All information and facts relating to the
 Company that is in the possession of the Transferors or is known to any of
 the Transferors which will have a substantive effect on the Transferors’
 abilities to fulfil any of their obligations in this Contract or when
 disclosed to the Transferee shall have a substantive effect on the
 willingness of the Transferee to sign and fulfil its obligations under this
 Contract, have been disclosed to the Transferee and the information provided
 by the Transferors to the Transferee does not contain any representation that
 is untrue or misleading. 

 
	
  

 	
  

 	
  

 
	
 8.2

 	
  

 	
 No lawsuits, arbitrations, or other legal
 or administrative proceedings or governmental investigations are on-going
 against the Transferors that will materially affect their abilities to sign
 this Contract or fulfil their obligations under this Contract.

 
	
  

 	
  

 	
  

 
	
 8.3

 	
  

 	
 Up to the Signing Date, the Transferors
 have informed the whole matter of the transfer of the Sale Equity Stake to
 all Third Parties relating to the Sale Equity Stake, the Company and the
 Hydroelectric Project; in case of requiring the consent of such Third Party,
 the Transferors have procured the written consent from the Third Party.

 
	
  

 	
  

 	
  

 
	
 8.4

 	
  

 	
 The Transferors hereby undertake that none
 of them will take any action after the Signing Date which will cause any
 adverse impact on the Company/Hydroelectric Project.

 
	
  

 	
  

 	
  

 
	
 8.5

 	
  

 	
 Regarding the documents and information
 provided by Transferors to the Transferee and/or the Transferee’s agencies
 (including, without limitation, the lawyers, valuers, financial advisers, etc.) prior to the Signing Date, the
 Transferors hereby undertake that:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 8.5.1

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 8.5.2

 	
 all documents supplied to the Transferee and/or the Transferee’s
 agencies as originals are authentic and complete;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 8.5.3

 	
 all signatures (stamps) appearing on documents supplied to the
 Transferee and/or Transferee’s agencies as originals or copies of originals
 are genuine; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 8.5.4

 	
 The Transferors have drawn to the attention of Transferee and/or
 Transferee’s agencies all matters that are material for the Transferee to
 proceed with the transaction as contemplated in this Contract.

 
	
  

 	
  

 	
  

 
	
 Article 9

 	
  

 	
 General Representations and Warranties by Transferors

 
	
  

 	
  

 	
  

 
	
 9.1

 	
  

 	
 Each of Party B, Party C, Party D, Party E,
 Party F, Party G and Party H are a PRC citizen with all civil abilities to
 enter into this Contract and fulfil all of his obligations stipulated herein.
 Signing this Contract and fulfilling all of his obligations stipulated herein
 by Party B, Party C, 

 

9

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Party D, Party E, Party F, Party G and Party H shall not
 contravene or result in the violation of or constitute a failure to fulfil or
 an inability to fulfil any of the stipulations in any laws, regulations,
 stipulations, any authorization or approval from any government body or
 department or the stipulations of any contract or agreement
 that Party B, Party C, Party D, Party E, Party F, Party G and Party H is a
 party to or is bound.

 
	
  

 	
  

 	
  

 
	
 Article 10

 	
  

 	
 Ownership

 
	
  

 	
  

 	
  

 
	
 10.1

 	
  

 	
 The Transferors jointly and severally undertake and warrant that: the Transferors
 are the legal owners of the Sale Equity Stake and have full authority and
 right to transfer the Sale Equity Stake to the Transferee and the Sale Equity
 Stake does not involve any state-owned assets and interests. In case that the
 Transferee and/or Company suffer from any loss or damage due to the
 involvement of any state-owned assets and interests in the Sale Equity Stake,
 the Transferors shall assume the joint liability and compensate the
 Transferee and/or the Company in full. 

 
	
  

 	
  

 	
  

 
	
 10.2

 	
  

 	
 The Transferors jointly and severally undertake and warrant that: up to the Second
 Payment Date (inclusive), the Sale Equity Stake is not subject to any Claims
 or Encumbrances (including but not limited to any form of option, acquisition
 right, mortgage, pledge, guarantee, lien or any other form of Third Party
 rights); and there is no interest present and no agreement or undertaking in
 existence that may result in or create any Claim or Encumbrance on the Sale
 Equity Stake (including but not limited to the aforesaid option, acquisition
 right, mortgage, pledge, guarantee, lien or any other form of third party
 rights and interest).

 
	
  

 	
  

 	
  

 
	
 10.3

 	
  

 	
 The Transferors jointly and severally
 undertake and warrant that: all obligations as the shareholders of the Company which shall be assumed by
 the Transferors for the benefit of the Company and the Third Party have been
 fully fulfilled by the Transferors. Any Third Party or any level of the
 governmental authorities of the PRC shall not, due to the Transferors’
 failure to fulfil their due obligations as the shareholders of the Company,
 claim for rights against the Company or the Transferee or adopt
 administrative acts which are unfavourable to the Company or the Transferee,
 including but not limited to imposing fine, revoking the business license,
 requiring to make supplemental payment for the taxes or compelling to stop
 production, etc.

 
	
  

 	
  

 	
  

 
	
 10.4

 	
  

 	
 The Transferors jointly and severally undertake and warrant to
 provide all relevant materials which should be provided by the Transferors
 and are requisite for conducting the alteration registration of the Sale
 Equity Stake under the name of the Transferee with the competent administration of industry and commerce,
 including but not limited to the tax clearance certificate issued by the
 competent taxation authority.

 
	
  

 	
  

 	
  

 
	
 Article 11

 	
  

 	
 The Company and the Hydroelectric Project

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 11.1

 	
  

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

 
	
  

 	
  

 	
  

 
	
 11.2

 	
  

 	
 The registered capital of this Company has
 been fully paid up on schedule. The Transferors have completed their full
 obligations to contribute, and have procured valid verifications for their
 contributions according to PRC laws. There is no withdrawal of the registered
 capital by the Transferors.

 
	
  

 	
  

 	
  

 
	
 11.3

 	
  

 	
 The Company is the legal owner of the
 Hydroelectric Project, and has the full and complete ownership, operation
 right and right to profit over the Hydroelectric Project. 

 
	
  

 	
  

 	
  

 
	
 11.4

 	
  

 	
 The development, construction and operation
 of the Hydroelectric Project have been duly granted by relevant governmental
 authorities all requisite approvals and are fully complied with the PRC laws
 and regulations and the approvals and permits of relevant governmental
 authorities, in no violation of PRC laws and regulations and approvals and
 permits of relevant

 

10

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 governmental authorities, without any condition that
 leads to or may leads to the revocation or withdrawing of such approvals and
 permits. In the event that Transferee and/or the Company suffer from any
 damage or loss arising out of any violation and /or revocation and/or withdrawing,
 the Transferors shall be jointly liable for the full
 compensation on the Transferee and/or the Company.

 
	
  

 	
  

 	
  

 
	
 11.5

 	
  

 	
 Up to the Second Payment Date, the
 hydropower station project has completed electricity equipment prevention
 test and inspection & overhaul after one year’s operation in accordance
 with relevant laws and regulations, State or industry standard. In case that
 the Transferee and/or the Company suffers from any damage or loss, the
 Transferors shall bear several and joint liability and fully compensate the
 Company and/or the Transferee.

 
	
  

 	
  

 	
  

 
	
 11.6

 	
  

 	
 Up to the Second Payment Date, every aspect
 of the Hydroelectric Project, including but not limited to the hydrology,
 geology, water flow, dam safety and hydropower generating units, etc., is complied with the requirements
 of power generation under normal situations and is free from any defect or
 any other problem provided of the loss due to normal operation and usage. In
 the event that Transferee and/or the Company suffer from any damage or loss
 arising out of any defect or any other problem which already existed before
 the Delivery Completion Date, the Transferors shall be jointly liable for the
 full compensation on the Transferee and/or the Company.

 
	
  

 	
  

 	
  

 
	
 11.7

 	
  

 	
 Up to the Second Payment Date, the Company
 has never suffered and is not currently suffering from any administrative
 investigations, prosecutions, disputes, claims or other proceedings (ongoing,
 pending or threatened), nor the Company has been punished or the Transferors
 can foresee any punishment to be made by any administrative authorities of
 the PRC for the issues already existed before the transfer of the Sale Equity
 Stake. Up to the Delivery Completion Date, the Transferors have fully
 disclosed to the Transferee all information in respect of environmental
 protection, water and soil preservation, flood prevention plan, utilization
 of land (woodland), wood cutting, power generation, relocation,
 fire-prevention and work safety, etc.
 In addition, the Transferors hereby jointly and severally warrant that all
 fees (including, without limitation, water resources fees, land requisition
 and compensation fees, water and soil preservation facility compensation
 fees, etc.), charges, penalties
 and expenses payable to or being required to pay to any PRC governmental
 authority have been paid in full, and, as of the Second Payment Date, there
 is no arrears of such fees, charges, penalties and expenses, nor is there any
 arrears of 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 the event that the Transferee and/or
 the Company suffer from any penalty, damage, loss, etc. due to any such administrative investigations,
 prosecutions, disputes, claims, penalties and/or other proceedings which
 existed before the Second Payment Date, the Transferors shall assume joint
 liabilities and fully compensate the Transferee and/or the Company.

 
	
  

 	
  

 	
  

 
	
 11.8

 	
  

 	
 The Company legally owns all requisite real
 estate (including but not limited to land, buildings, dams, water supply
 system, electricity power transmission lines, structures and subsidiary
 facilities) and moveable assets (including but not limited to machineries,
 equipments, vehicles, furniture and office supplies), and such real estate
 and movable assets shall be not less than those real estate and movable
 assets listed out in the asset list confirmed jointly by the parties hereof.
 The Company does not provide any other security (including but not limited to
 mortgage, pledge and lien) or other restrictions on the real estate and
 movable assets, except for those listed out in Appendix I to this Contract.
 Up to the Delivery Completion Date, all material aspects of the buildings,
 dams, machineries and equipments, vehicles and other assets owned by the
 Company are in good, secure and operational conditions, which are anticipated
 not to need to be repaired (excluding the daily requisite repairs), replaced
 or supplemented within twelve (12) months after the Signing Date due to the
 issues before the Delivery Completion Date. The Transferors warrant and
 undertake that commencing from the Signing Date to the Delivery Completion
 Date, the above real estate and movable assets will not suffer from any loss
 or damage resulting from the actions of the Transferors or any Third Party.
 In case of any loss or damage suffered by the real estate and movable assets
 due to the above mentioned causes, the Transferors shall assume the joint
 liability and compensate Transferee and/or the Company in full.

 

11

	
  

 	
  

 	
  

 
	
 11.9

 	
  

 	
 The production, operation, construction and
 business of the Company are fully complied with all the relevant PRC laws and
 regulations, including but not limited to those laws and regulations in
 relation to hydropower generation, environmental protection, water and soil
 preservation, flood prevention plan, design and construction of water
 resource project, invitation and submission of bids, utilization of woodland, wood
 cutting, fire-prevention, work safety and relocation. The Transferors warrant
 that the environmental protection authorities, water resource authorities,
 power regulatory authorities, construction authorities, forestry authorities,
 fire-prevention authorities, planning authorities, safe production
 authorities, development and reform authorities and other governmental
 authorities will not punish the Company for the problems of environmental
 protection, water and soil preservation, water fetching, flood prevention
 planning, design and construction of water resources projects, invitation and
 submission of bids, power generation, utilization of woodland, wood cutting,
 fire-prevention, work safety and relocation, etc.
 which already existed before the Delivery Completion Date. In the event that
 the Company suffers from any loss or damage due to the punishment by local
 government, environmental protection authority, water resources authority,
 electricity regulatory authority, forest authority, construction authority,
 fire-prevention authority, planning authority, work safety authority,
 development and reform authorities or other governmental authorities, the
 Transferors shall fully compensate the Transferee and/or the Company so as to
 hold the Transferee and/or the Company harmless.

 
	
  

 	
  

 	
  

 
	
 11.10

 	
  

 	
 The fire-prevention design of all
 construction projects of the Company are complied with all PRC relevant laws
 and regulations and national fire-prevention standards.

 
	
  

 	
  

 	
  

 
	
 11.11

 	
  

 	
 Prior to the signing of this Contract, the
 Transferors have already disclosed all information of the debts of the
 Company. As of the Second Payment Date, that information is still complete,
 liable, accurate and true. The Transferors shall assume joint liabilities for
 any undisclosed debts of the Company so as to hold the Transferee and/or the
 Company harmless.

 
	
  

 	
  

 	
  

 
	
 11.12

 	
  

 	
 The Company can legally own the land use
 right and building ownership for all the land and buildings currently
 occupied and used by the Company, and could not be involved in any legal
 action, arbitration, penalty or suffer from any other damage or loss due to
 the land and/or building issues. In the event that the Transferee and/the
 Company suffer from any penalty, damage or loss, etc. due to the use of land or building, the Transferors
 shall assume the joint liability to compensate Transferee and/or the Company
 in full.

 
	
  

 	
  

 	
  

 
	
 11.13

 	
  

 	
 The procurement of the state-owned land use
 right (obtained through allocation) for the land currently occupied and used
 by the Company with the State-owned Land Use Right Certificates (the serial
 numbers of which are: Jin Guo Yong [2008] No. 166, Jin Guo Yong [2008] No.
 167 and Jin Guo Yong [2008] No. 168) has been fully in compliance with the
 regulations of PRC laws and regulations, and relevant fees and taxes have
 been fully paid off in accordance with law. The aforesaid State-owned Land
 Use Right Certificates have covered all the land currently occupied and used
 by the Company. In the event that the Transferee and/or the Company suffer
 from any penalty, damage or loss, etc.
 due to such land, the Transferors shall assume the joint liability to
 compensate the Transferee and/or the Company in full.

 
	
  

 	
  

 	
  

 
	
 11.14

 	
  

 	
 The procurement of the building ownership
 certificates for all the building currently occupied and used by the Company
 has been in full compliance with the provisions of PRC laws and regulations,
 and relevant fees and taxes have been fully paid off in accordance with laws.
 In the event the Transferee and/or the Company suffer from any penalty,
 damage or loss, etc. due to the
 procurement of such building ownership, the Transferors shall assume the
 joint liability to compensate Transferee and/or the Company in full.

 
	
  

 	
  

 	
  

 
	
 11.15

 	
  

 	
 The mortgage created on the state-owned
 land use right of the land occupied by the Company, which has been obtained
 through allocation, has been approved by the competent state-owned land
 administration authorities, and the Company has completed relevant mortgage
 registration procedures for such state-owned land use right mortgage and paid
 off relevant fees. Such state-owned land use right mortgage has been in full
 compliance with relevant PRC laws and regulations without any violation, and
 the competent state-owned land administration authorities will not require
 any other fees for such mortgaged allocated state-owned land from the
 Transferee and/or the Company, neither will impose any fine or other
 administrative

 

12

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 penalties on the Transferee and/or the Company. In the event
 the Transferee and/or the Company suffer from any penalty, damage or loss, etc. due to such state-owned land use
 right mortgage, the Transferors shall assume the joint liability to
 compensate Transferee and/or the Company in full.

 
	
  

 	
  

 	
  

 
	
 11.16

 	
  

 	
 Up to the Second Payment Date, the Company
 does not lease any land, buildings, equipment or other movables or immovable.
 In the event the Transferee and/or the Company suffer from any penalty,
 damage or loss, etc. due to
 such state-owned land use right mortgage, the Transferors shall assume the
 joint liability to compensate Transferee and/or the Company in full.

 
	
  

 	
  

 	
  

 
	
 11.17

 	
  

 	
 The selection of the entities for the
 project survey and design, construction, substantial equipments and materials
 purchases and project supervisor have been in compliance with the regulations
 of all RPC laws and regulations without any violation, and the competent
 water resource authority will not impose any administrative penalty on the
 Transferee and/or the Company due to such selection. In the event the
 Transferee and/or the Company suffer from any penalty, damage or loss, etc. due to such selection of the
 entities for the project survey and design, construction, substantial
 equipments and materials purchases and project supervisor, the Transferors
 shall assume the joint liability to compensate the Transferee and/or the
 Company in full.

 
	
  

 	
  

 	
  

 
	
 11.18

 	
  

 	
 The Transferors hereby warrant and covenant
 that all the power output of the hydropower station can be fully on-grid
 output and free from any output restriction. In the event the Transferee
 and/or the Company suffer from any penalty, damage or loss, etc. due to such issue, the Transferors
 shall assume the joint liability to compensate Transferee and/or the Company
 in full.

 
	
  

 	
  

 	
  

 
	
 11.19

 	
  

 	
 As of the Second Payment Date, the Company
 does not have any equity investment or other investment in any other
 companies, enterprises, and other economic organizations, etc. In the event that the Company
 suffers from any damage or loss due to such undisclosed equity investment or
 other investments, the Transferors shall assume joint liabilities and fully
 compensate the Transferee and/or the Company in full.

 
	
  

 	
  

 	
  

 
	
 11.20

 	
  

 	
 As of the Second Payment Date, other than
 those securities set out in Appendix I to this Contract, the Company’s assets
 and rights are free from any other security (including but not limited to
 mortgage, pledge and lien) or any other restrictions, neither has the Company
 provided any security (including but not limited to mortgage, pledge and
 guarantee, etc.) 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
 securities, the Transferors shall assume joint liabilities and fully
 compensate the Transferee and/or the Company

 
	
  

 	
  

 	
  

 
	
 11.21

 	
  

 	
 The Company has completed relevant taxation
 registration effectively and obtained valid taxation registration
 certificates, and conducted relevant taxation declaration in accordance with
 PRC laws, with all contents declared being real and complete. As of the
 Second Payment Date, the Company has fully paid up all taxes required by the
 PRC laws and regulations, including but not limited to enterprise income tax,
 value-added tax, urban construction tax and educational surcharges. The
 Transferors shall assume joint liabilities for any unpaid tax and fine to the
 Transferee and/or the Company so as to hold the Transferee and/or the Company
 harmless. Transferors hereby warrant and covenant that taxation clearance of
 the Company will be completed as of April 30, 2011 at the Transferors’ cost
 and supporting documents evidencing taxation clearance has been completed
 shall be provided to the Transferee.

 
	
  

 	
  

 	
  

 
	
 11.22

 	
  

 	
 All construction projects (whether finished
 or under construction) of the Company have obtained all requisite
 governmental approvals and permits and are strictly complied with and without
 any violation of the approvals and permits issued by relevant governmental
 authorities. In the event that the Company is punished or suffers from any
 damage or loss after the completion of the transfer of the Sale Equity Stake
 by any governmental authority because of any above issue, the Transferors
 shall assume joint liabilities and fully compensate the Company and/or the
 Transferee.

 

13

	
  

 	
  

 	
  

 
	
 11.23

 	
  

 	
 The effectiveness of this Contract will not
 cause any Third Party to terminate the contracts or agreements which are
 concluded with the Company prior to the effective date (inclusive) of this
 Contract which are still effective on the effective date of this Contract,
 and will not create any security or restriction in any other form favourable to the Third Party on the assets and/or
 rights of the Company.

 
	
  

 	
  

 	
  

 
	
 11.24

 	
  

 	
 The effectiveness of this Contract will not
 cause any adverse effect on the development, operation and assets of the
 Hydroelectric Project owned by the Company, neither can or will cause the
 loss of the development right, operation right, ownership right and right to
 profit of the Hydroelectric Project, which has been obtained by the Company
 before the effective date of this Contract (inclusive).

 
	
  

 	
  

 	
  

 
	
 11.25

 	
  

 	
 The originals of all the material contacts
 (including, without limitation, the contracts and relevant supplemental
 agreements concerning project development, investment cooperation, land
 requisition, land compensation, woodland compensation, land lease, loan,
 security, counter security, insurance, design, construction, procurement,
 project supervisor, purchase, sales of certified emission reductions, grid
 connection and dispatching agreement, power purchase and sale contracts and
 relevant supplemental agreements, etc.)
 concluded by the Company prior to the Second Payment Date of this Contract
 (inclusive) have been preserved by the Company in complete form and there
 have been no violations thereof, and as far as the Transferors know, there
 does not exist any condition which may lead to the violation by the Company.
 In the event the Transferee and/or the Company suffer from any penalty,
 damage or loss, etc. due to
 such state-owned land use right mortgage, the Transferors shall assume the
 joint liability to compensate Transferee and/or the Company in full.

 
	
  

 	
  

 	
  

 
	
 11.26

 	
  

 	
 The Company’s production technology and
 procedures are in full compliance with relevant PRC laws, standards and norms,
 and there are no illegal actions of infringing upon intellectual property
 rights of others, such as patent, know-how, etc.
 In the event that the Company suffers from any punishment, damage or loss due
 to any above issue, the Transferors shall assume joint liabilities and fully
 compensate the Company and/or Transferee.

 
	
  

 	
  

 	
  

 
	
 11.27

 	
  

 	
 Labour Contracts between the Company and
 the employees who are still employed by the Company upon the Signing Date of
 this Contract have been legally and validly concluded. The various social
 insurance premiums, which shall be paid for the employees according to
 relevant PRC laws and regulations, have been fully and timely paid up, and
 the Company has not delayed any payment of the employees’ social insurance
 premiums, salaries, and other welfares provided in PRC laws and the Company’s
 internal regulations. As of the Second Payment Date, the Company is free from
 any problem which may lead the employees to initiate labour arbitrations or
 lawsuits against the Company. In the event that the Company and/or Transferee
 suffer from any punishment, loss or damage due to the aforesaid reasons, the
 Transferors shall be jointly liable for the full compensation on the
 Transferee and/or the Company.

 
	
  

 	
  

 	
  

 
	
 11.28

 	
  

 	
 As of the Second Payment Date, relevant
 coordination fees, compensation fees and other liabilities and obligations,
 which are payable and assumed by the Company to any Third Party in accordance
 with relevant agreements for the purpose of the construction, land occupation
 and other issues of the Hydroelectric Project, have been fully paid off or
 implemented, and relevant originals of the payment evidences and
 implementation supporting documents have been delivered to the Transferee.
 After the Signing Date, in the event that the Company and/or the Transferee
 suffer from any loss or damage due to the aforesaid reasons, the Transferors
 shall be jointly liable for the full compensation on Transferee and/or the
 Company.

 
	
  

 	
  

 	
  

 
	
 11.29

 	
  

 	
 The Transferors confirm that the Company
 has neither obtained approval in relation to Clean Development Mechanism
 (“CDM”) nor entered any CDM agreement or carbon emission reduction agreement
 with any third party. In the event that the Company suffers any punishment or
 fine by the government due to CDM project or carbon emission deduction
 transaction, as a result of which, Transferee suffer from any loss or damage,
 the Transferors shall be jointly liable for the full compensation to
 Transferee and/or the Company.

 

14

	
  

 	
  

 	
  

 	
  

 
	
 11.30

 	
  

 	
 Due to the reasonable needs of its
 production and operation, the Company has taken out requisite insurances
 which are usually purchased by other companies in the same industry, with all
 the insurance policies are valid, all the mature insurance premiums have been
 paid up, and all the other key conditions have been fully fulfilled and
 complied with. As of the Second Payment Date, there are no conditions which
 have caused or may cause the aforesaid insurance policies to be invalid. The
 aforesaid insurance policies are free from restrictions from any special or
 unusual articles. As of the Second Payment Date, there are no situations in
 which the Company may claim for compensations from the insurer according to
 the aforesaid insurance policies.

 
	
  

 	
  

 	
  

 
	
 11.31

 	
  

 	
 The Transferors have, at its own cost,
 procured the Company, Honghe Power Supply Bureau of Yunnan Power Grid
 Corporation to sign a power purchase and sale contract effective until
 December 31, 2011 and shall provide the original copy of the newly-signed
 sales and purchase power contract to the transferee. The Transferors shall
 guarantee that the on-grid tariff of the Hydroelectric Project provided in
 the said power purchase and sale contract be no less than 0.137 yuan/
 kilowatt hour for the wet season, 0.187 yuan/ kilowatt hour for the normal
 season, and 0.237yuan/ kilowatt hour for the dry season; the on-grid tariff
 for the wet season is 0.2055 yuan/ kilowatt hour at the peak section, 0.137
 yuan/ kilowatt hour at the middle section and 0.0685 yuan/ kilowatt hour at
 the low section.

 
	
  

 	
  

 	
  

 
	
 11.32

 	
  

 	
 All the accounts, books, ledgers and
 financial records of the Company have been formulated in accordance with the
 accounting procedures and rules provided by PRC accounting system, and have
 been fully, properly and accurately recorded and completed, which do not
 involve any material mistake and deviation, and truly and precisely reflect
 all transactions relating to the Company and show the financial, contractual
 and other business conditions of the Company during every financial term. 

 
	
  

 	
  

 	
  

 
	
 Chapter V. Disclosures, Representations and Warranties by
 Transferee

 
	
  

 	
  

 	
  

 
	
 Article 12

 	
  

 	
 Disclosures, Representations and Warranties by Transferee

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Transferee hereby represents and
 warrants to the Transferors that:

 
	
  

 	
  

 	
  

 
	
 12.1

 	
  

 	
 The Transferee is a legal entity that has
 been duly established, validly and legally in existence and also operated
 normally in accordance with the laws and regulations of PRC.

 
	
  

 	
  

 	
  

 
	
 12.2

 	
  

 	
 The Transferee in signing this Contract and
 fulfilling all of its obligations stipulated herein shall not contravene or
 result in the violation of or constitute a failure to fulfil or an inability
 to fulfil any of the stipulations of Transferee’s Articles of Association or
 its internal rules, any laws, regulations, stipulations, or any
 authorizations or approvals from any government body or department or any
 contract or agreement that Transferee is a party to or is bound by.

 
	
  

 	
  

 	
  

 
	
 12.3

 	
  

 	
 No lawsuits, arbitrations, or other legal
 or administrative proceedings or governmental investigations are on-going
 against Transferee that will materially affect its ability to sign this
 Contract or fulfil its obligations under this Contract.

 
	
  

 	
  

 	
  

 
	
 12.4

 	
  

 	
 The Transferee shall pay the Transfer Price
 in accordance with this Contract. In the event that the Transferee fails to
 perform its obligations in time which has caused economic losses to the
 Transferors, the Transferee shall assume corresponding compensation
 liability.

 
	
  

 	
  

 	
  

 
	
 Chapter VI. Delivery and Entrustment Management

 
	
  

 	
  

 	
  

 
	
 Article 13

 	
  

 	
 Delivery

 
	
  

 	
  

 	
  

 
	
 13.1

 	
  

 	
 From the Second Payment Date (inclusive),
 Transferors and Transferee shall immediately organize a Delivery Team to
 actively carry out the delivery of the Company and the Hydroelectric Project,
 including but not limited to the delivery of the production and operation management,
 finance, assets, files and records, certificates, approvals, seals and the

 

15

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 construction projects to the Transferee. The delivery shall be completed
 within 10 Working Days from the Second Payment Date.

 
	
  

 	
  

 	
  

 
	
 13.2

 	
  

 	
 Transferors shall warrant a full and
 complete delivery and the Company’s movable assets and real estate will be
 made and free from any decrease or damage comparing with asset clearance list
 confirmed by Parties hereof. Otherwise, the Transferors shall compensate
 Transferee and/or the Company in full.

 
	
  

 	
  

 	
  

 
	
 13.3

 	
  

 	
 The delivery includes but not limited to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 The production, operation and management of
 the Company;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 The Company’s seals, such as the official
 seal, financial seal and contract seal, etc.
 shall be delivered to the Transferee;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
 The originals of the accounts opening
 documents and seals for all the bank accounts of the Company;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)

 	
 The Transferors and Transferee shall check
 and verify all the assets (including but not limited to the real estate and
 movable assets) of the Company, make a list of the Company’s assets, and
 finish the delivery which shall be confirmed by Transferors and Transferee
 and signed on site; during the checking and verifying of the assets, the
 Transferors shall compensate for the damaged assets by reference to the
 assessed value;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (5)

 	
 Originals of all the approvals,
 certificates, permits, customer information and other materials of the
 Company shall be delivered to the Transferee, which shall include all the materials
 set out in materials list delivered to and confirmed by Transferee;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (6)

 	
 Originals of all the project drawings,
 agreements (including but not limited to grid connection and dispatching
 agreement, power sale and purchase contract, project contract, equipment
 contract, installation contract, project supervisor contract, materials
 contract, loan contract and mortgage contract) and other files shall be
 delivered to Transferee;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (7)

 	
 Originals of all the financial accounting
 books, financial vouchers and the fiscal files shall be delivered to the
 Transferee;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (8)

 	
 The Transferors shall deliver the specific
 technologies of the parties to the Hydroelectric Project contracts, such as
 the parties of construction, equipment manufacture, design, supervision,
 quality examination, etc. to
 the Transferee; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (9)

 	
 The delivery of other materials and files
 of the Company.

 
	
  

 	
  

 	
  

 	
  

 
	
 13.4

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 13.5

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 14

 	
  

 	
 Entrustment Management

 
	
  

 	
  

 	
  

 	
  

 
	
 14.1

 	
  

 	
 Transferee agrees that, from the Second Payment Date (inclusive) to
 the date of full payment of the debt listed on Appendix II of this Contract
 (hereinafter referred to as the “Duration of Entrustment Management”),
 the Transferee entrusts Transferors to manage the hydropower station project,
 and Transferors accept it hereof.

 

16

	
  

 	
  

 	
  

 	
  

 
	
 14.2

 	
  

 	
 The Parties hereby confirm that during the Duration of Entrustment
 Management, the Transferee is entitled to assign its employees to participate
 in operation and management of the Hydroelectric Project and the Transferors
 shall accept and fully cooperate with the work of the Transferee’s assigned
 employees.

 
	
  

 	
  

 	
  

 	
  

 
	
 14.3

 	
  

 	
 The Parties hereby confirm that in the Duration of Entrustment
 Management, taxes and the normal operating expenses (excluding rectified fees
 upon the request of Transferee or other authorities, or fees to be paid by
 Transferors before transfer) of the Hydroelectric Project paid under the laws
 of People’s Republic of China are shared equally by the Parties. The 50% of
 corporation earnings deducted the foresaid taxes and normal operating
 expenses shall be owned by Transferors. The parties hereby confirm that since
 the expiration of Duration of Entrustment Management (including the
 expiration date), all earnings of the Company and the Hydroelectric Project
 shall be owned by Transferee.

 
	
  

 	
  

 	
  

 	
  

 
	
 14.4

 	
  

 	
 In the period from the Signing Date to expiration of Duration of
 Entrustment Management (i.e. the date of full payment of the debt listed on
 Appendix II of this Contract):

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 Transferors shall perform their obligations as Manager and trustee in
 good faith, and continue to operate and manage the Company in accordance with
 the requirements of the Transferee. Transferors neither requests nor agrees
 the Company to pay any third party, except the fees of the normal operating
 and spending programs identified (if the said expenditure is more than RMB
 50,000, the prior written consent of the Transferee is required). The
 Transferors shall not terminate any significant agreements and arrangements,
 or waive any significant rights without prior written consent of the
 Transferee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 In the Duration of Entrustment Management, Transferors shall not
 cause any debts in the name of the Company without prior written consent of
 the Transferee, except the debt listed on the Appendix II of this Contract.
 Otherwise the debt occurred hereof shall be assumed by Transferors.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
 Without prior written consent of the Transferee, Transferors shall
 not make any amendment to financing, loans, securities arrangements of the
 Company.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)

 	
 Transferors shall take any reasonable measures to preserve and
 protect the assets of the Company. Transferors shall not establish additional
 mortgage, pledge, and other types of security to the assets of the Company,
 and shall not provide any third party assurances and other types of security,
 except obtaining prior written consent of the Transferee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (5)

 	
 Without prior written consent of the Transferee, Transferors shall
 not represent the Company to make any reconciliation and relief, and shall
 not discharge any material litigation, arbitration and other proceedings, or
 any significant liability and rights claims, and shall not waive the rights
 related to the foregoing.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (6)

 	
 Without prior written consent of the Transferee, Transferors shall
 not relieve or write off any debts owed to the debtor contained in the books
 of the Company.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (7)

 	
 Transferors commits that the Company shall not participate in any
 partnership, joint venture or other forms of external equity and debt
 investment, except prior written consent of the Transferee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (8)

 	
 Once the Material Adverse Change happens, or any situations occurred
 which make the statements, guarantees and commitments of Transferors untrue,
 inaccurate, unachievable or misleading, Transferors shall notify Transferee
 in writing within 24 hours and provide Transferee with detailed and
 reasonable explanation; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (9)

 	
 Transferors and the Company shall not take any actions to breach the
 provisions of this contract, to affect the performance of the obligations,
 and to fulfil transfer transaction of shares for sale under this Contract.

 

17

	
  

 	
  

 	
  

 	
  

 
	
 14.5

 	
  

 	
 Transferors commit and guarantee that, during the Duration of
 Entrustment Management, they will perform the provisions of this contract
 strictly. If any damages or losses caused to corporation and/or hydropower
 project station for Transferors’ reason (whatever intentional or negligent),
 Transferors shall undertake joint liabilities, and make full compensation for
 Transferee.

 
	
  

 	
  

 	
  

 	
  

 
	
 14.6

 	
  

 	
 Entrustment Management relationship terminates on the expiration date
 of Duration of Entrustment Management, and Transferors shall transfer the
 Company and Hydroelectric Project to Transferee on the date of expiration of
 Duration of Entrustment Management.

 
	
  

 	
  

 	
  

 	
  

 
	
 Chapter VII. Debt Arrangement and Relocation of Employees

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 15

 	
  

 	
 Debt Arrangement

 
	
  

 	
  

 	
  

 	
  

 
	
 15.1

 	
  

 	
 The parties hereby confirm that up to the Second Payment Date
 (inclusive), all debts of the Company are listed on the Appendix II of this
 Contract, amounted to Renminbi Fifty Nine Million (RMB 59,000,000). Other
 debts (if any) of the Company occurred before the Second Payment Date
 (inclusive) will be assumed by Transferors, Transferee and/or the Company do
 not assume any liabilities. If the Company and/or Transferee suffer any
 damages or losses therefrom, the Transferors shall be jointly liable and make
 full compensation for Transferee and /or the Company. However, Transferors
 shall not undertake any liabilities if the said damages and losses are caused
 by Transferee.

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 16

 	
  

 	
 Relocation of Employees

 
	
  

 	
  

 	
  

 	
  

 
	
 16.1

 	
  

 	
 Prior to the Second Payment Date, the
 Transferors shall instruct the directors, supervisors and senior managers
 (including but not limited to manager, vice manager, and chief financial
 officer) assigned to the Company by Transferors to resign as requested by
 Transferee, and proceed full and complete work transfer with the personnel
 assigned by Transferee.

 
	
  

 	
  

 	
  

 	
  

 
	
 16.2

 	
  

 	
 After the Second Payment Date, the Transferee shall be entitled to
 choose to employ excellent employees from the current employees of the
 Company. The terms and conditions of their employment shall be determined by
 reference to the standards applied in the other
 domestic project companies currently owned by the Transferee in principle and
 implemented in accordance with the Labour
 Law of the PRC, the Labour
 Contract Law of the PRC and its implementation regulations and
 other relevant PRC laws and regulations. The Company shall execute new labour
 contracts with the employees and the Transferors shall be responsible for the
 relocation of those employees who are fired or not re-employed by the
 Company.

 
	
  

 	
  

 	
  

 	
  

 
	
 16.3

 	
  

 	
 The Transferors undertake and warrant that they will properly
 relocate the employees (including directors, supervisors and senior managers)
 who are fired or not re-employed by the Company and shall ensure that such
 employees will not make any trouble against the Company, nor will apply for
 arbitration, bring lawsuit or any other administrative or judicial
 proceedings against the Company. The Transferors shall make sure that the
 Company will not be punished by any competent governmental authority or incur any other adverse effect due
 to the relocation of the aforesaid employees.

 
	
  

 	
  

 	
  

 	
  

 
	
 16.4

 	
  

 	
 The Transferors undertake and warrant that all compensation,
 indemnity, costs and any other expenses in connection with the relocation of
 the employees (including directors, supervisors and senior managers) of the
 Company shall be assumed by the Transferors themselves. In the event that the
 Company and/or the Transferee suffer from any damage or loss due to the
 employee relocation issues of the Company, the Transferors shall be jointly
 liable for the full compensation on the Company and/or the Transferee.

 
	
  

 	
  

 	
  

 	
  

 
	
 Chapter VIII. Confidentiality

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 17

 	
  

 	
 Confidentiality

 

18

	
  

 	
  

 	
  

 	
  

 
	
 17.1

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 17.1.1

 	
 Keep the aforesaid Confidential Information
 confidential;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 17.1.2

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

 
	
  

 	
  

 	
  

 	
  

 
	
 17.2

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 17.2.1

 	
 which was available to the receiving Party
 from the written records made by the receiving Party and was approved to be
 known by the receiving Party by the written records before the disclosing
 Party disclosed the information to the receiving Party;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 17.2.2

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 17.2.3

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

 
	
  

 	
  

 	
  

 	
  

 
	
 17.3

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 Chapter IX. Breach of Contract

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 18

 	
  

 	
 Liability for Breach of a Representation or Warranty

 
	
  

 	
  

 	
  

 	
  

 
	
 18.1

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 18.2

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 18.3

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 19

 	
  

 	
 Liability for Breach of Contract 

 
	
  

 	
  

 	
  

 	
  

 
	
 19.1

 	
  

 	
 In the event of a breach committed by any
 Party to this Contract, the said defaulting Party shall be liable to the
 other Party (ies) for breach of contract in accordance with the provisions of
 this Contract and the laws and regulations of PRC. In the event all Parties
 commit the breach of contract, one Party shall assume the liability to
 compensate the loss or damage or other obligations as a result of its
 respective breach of contract to the other Parties respectively.

 
	
  

 	
  

 	
  

 	
  

 
	
 19.2

 	
  

 	
 In the event that the undisclosed issues by
 Transferors prior to the signing of this Contract which may influence the
 legal existence of the Company and the Hydroelectric Project, actually

 

19

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 influence the legal existence of the Company or the Hydroelectric Project
 after the transfer of the Sale Equity Stake, the Transferee is entitled to
 the termination of this Contract and to require Transferors to fully pay back
 the Transfer Price which has already paid by Transferee and ten percent (10%)
 of the Transfer Price as liquidated damages; in addition, the Transferee is
 entitled to resort to other applicable claims in accordance with the PRC
 laws.

 
	
  

 	
  

 	
  

 	
  

 
	
 19.3

 	
  

 	
 Any violation of the obligations,
 representations and warranties under this Contract by any Party of the
 Transferors or Transferee shall constitute a breach of contract, and the
 defaulting Party (ies) shall assume the liability to compensate all the
 losses due to the breach of contract to the other Party. 

 
	
  

 	
  

 	
  

 
	
 19.4

 	
  

 	
 Any delayed performance of the obligations
 or provisions under this Contract by any Party of the Transferors or
 Transferee shall constitute a breach of contract; however, the delayed
 performance or non-performance due to the other Party’s advance performance
 obligation shall not constitute a breach of contract.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 In the event that the Transferee fails to repay the Company’s debt as
 specified in the Appendix II within the time limit agreed hereof, then, as of
 the outstanding loan, the Transferee agrees to pay an interest (based on
 annual interest rate of 15%) to the creditors until such loan is paid off.

 
	
  

 	
  

 	
  

 
	
 19.5

 	
  

 	
 For the avoidance of doubt, Transferors
 hereby unconditionally and irrevocably agree and confirm that they shall be
 jointly liable for any liability for any breach of this Contract committed by
 any of Transferors.

 
	
  

 	
  

 	
  

 
	
 Chapter X. Force Majeure

 
	
  

 	
  

 	
  

 
	
 Article 20

 	
  

 	
 Force Majeure

 
	
  

 	
  

 	
  

 
	
 20.1

 	
  

 	
  “Force Majeure” refers to
 earthquake, typhoon, flood, fire, war, political unrest and such special
 incidents or other events that are deemed to be Force Majeure occurrences under the provisions of the
 relevant laws and regulations of PRC. 

 
	
  

 	
  

 	
  

 
	
 20.2

 	
  

 	
 In the event of the occurrence of a Force Majeure event, the obligations of
 the Party to this Contract affected by this
 Force Majeure event and any term or period set out in this
 Contract to which the affected Party is subject shall cease during the period
 of the Force Majeure event and
 shall automatically be extended, the period of extension shall be the same as
 the period of cessation of the obligations by reason of the Force Majeure event, and the said Party
 shall not assume any breach liabilities hereunder.

 
	
  

 	
  

 	
  

 
	
 20.3

 	
  

 	
 The Party claiming the occurrence of a Force Majeure event shall promptly
 inform the other Party (ies) in writing, and within seven (7) days
 thereafter, it shall provide sufficient evidence of the occurrence and the
 continuity of the Force Majeure
 event issued by the notary organization. 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 21

 	
  

 	
 Arbitration

 
	
  

 	
  

 	
  

 
	
 21.1

 	
  

 	
 Any dispute arising out of or in connection
 with this Contract shall firstly be resolved through friendly consultation by
 all Parties. In the event that thirty (30) Working Days after the
 commencement of the friendly consultations, the dispute cannot be resolved
 through such means, either Party may submit the dispute to the China
 International Economic and Trade Arbitration Commission for arbitration in
 accordance with its prevailing valid arbitration rules at the time of
 application. The place for arbitration shall be Shenzhen.

 
	
  

 	
  

 	
  

 
	
 21.2

 	
  

 	
 The arbitration tribunal shall be
 constituted by three (3) arbitrators and the arbitrators shall have a good
 knowledge of both English and Chinese Languages.

 

20

	
  

 	
  

 	
  

 
	
 Article 22

 	
  

 	
 Validity of the Arbitration Award

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 Article 23

 	
  

 	
 Continuation of Rights and Obligations 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 Chapter XII. Applicable Law

 
	
  

 	
  

 	
  

 
	
 Article 24

 	
  

 	
 Applicable Law

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 Chapter XIII. Miscellaneous

 
	
  

 	
  

 	
  

 
	
 Article 25

 	
  

 	
 Waiver

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 Article 26

 	
  

 	
 Transfer

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Unless otherwise described and prescribed
 in this Contract, without the prior written consents from the other Parties
 or the written approvals from the Examination and Approval Authority as
 required by laws, none of the Parties to this Contract shall transfer or
 assign that Party’s entitlement or obligations in part or total as stipulated
 in this Contract.

 
	
  

 	
  

 	
  

 
	
 Article 27

 	
  

 	
 Amendment

 
	
  

 	
  

 	
  

 
	
 27.1

 	
  

 	
 This Contract has been executed for the
 benefit of all Parties to this Contract and their respective lawful
 successor(s) and assignees, and shall have legal binding effect on them.

 
	
  

 	
  

 	
  

 
	
 27.2

 	
  

 	
 This Contract shall not be amended
 verbally. Only both of the written document signed by all Parties indicating
 their consent to such amendment shall any amendment to this Contract become
 effective. 

 
	
  

 	
  

 	
  

 
	
 Article 28

 	
  

 	
 Severability

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 Article 29

 	
  

 	
 Language

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 This Contract is written in the Chinese
 Language.

 
	
  

 	
  

 	
  

 
	
 Article 30

 	
  

 	
 Validity of the Text and Appendices

 

21

	
  

 	
  

 	
  

 	
  

 
	
 30.1

 	
  

 	
 This Contract shall come into effect from
 the Signing Date. This Contract shall be signed in ten (10) sets of original.
 Each Party shall each hold one (1) set of original, and one (1) set of
 original each shall be sent to the competent administration for industry and
 commerce and any other governmental authorities as required. The remaining
 originals shall be filed and kept by the Company.

 
	
  

 	
  

 	
  

 	
  

 
	
 30.2

 	
  

 	
 The Appendices to this Contract shall form
 an integral part of this Contract, and shall have the same effect as this
 Contract.

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 31

 	
  

 	
 Notification

 
	
  

 	
  

 	
  

 	
  

 
	
 31.1

 	
  

 	
 Unless otherwise specified and prescribed
 in this Contract, any Party issuing any notification or written communication
 to the other Party (ies) according to the provisions of this Contract shall
 have them written in the Chinese and English Language and shall send them as
 a letter by a courier service company or by facsimile. Letters sent by a
 courier service company will require a confirmation to be given seven (7)
 Working Days after handing over the notification or communication to the
 courier service company. Any notification or written communication sent in
 accordance with the stipulations of this Contract shall be deemed to be
 effective on the date of receipt. If they are sent by facsimile, the date of
 receipt shall be deemed to be three (3) Working Days after transmission,
 subject to a facsimile confirmation report evidencing this.

 
	
  

 	
  

 	
  

 	
  

 
	
 31.2

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Transferee’s Address:

 	
 25B, New Poly Plaza, No.1 Chaoyangmen North
 St., Dongcheng District, Beijing

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Telephone Number:

 	
 010-6492 8483

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Facsimile Number:

 	
 010-6496 1540

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Addressee:

 	
 Jin Lei

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Address jointly appointed
 by Transferors: Dazhaihe Cascade III Power
 Station, Kuzhuyi Village, Mengqiao Township, Jinping County, Yunnan Province

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Telephone Number:

 	
 13958123366

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Facsimile Number:

 	
 0873-2881042

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Addressee:

 	
 Hong Chu Yun

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 32

 	
  

 	
 The Entire Agreement

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)  

 
	
 

 

22

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 IN WITNESS WHEREOF, the duly authorised
 representative of Party A and Party B, Party C, Party D, Party E, Party F,
 Party G and Party H have signed this Contract with Party D on the date first
 above written.

 
	
  

 	
  

 	
  

 
	
  

 	
 Party A: Luquan Xiaopengzu Power Generation Co., Ltd.

 
	
  

 	
  

 	
  

 
	
  

 	
 (Stamp)

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signature:

 	
 

 	
  

 
	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Position: 

 	
  

 
	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Party B: 

 	
   Mao Ding Gou

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signature:

 	
 

 	
  

 
	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Party C: 

 	
   Zeng Jie

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signature:

 	
 

 	
  

 
	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Party D: 

 	
   Xu Xuan Bo

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signature:

 	
 

 	
  

 
	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Party E: 

 	
   Lin Lin

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signature:

 	
 

 	
  

 
	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Party F: 

 	
   Su Xiao Dong

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signature:

 	
 

 	
  

 
	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Party G: 

 	
   Dong Xian Min

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signature:

 	
 

 	
  

 
	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Party H: 

 	
   Wang Meng Zhang

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signature:

 	
 

 	
  

 
	
  

 	
  

 	
 

 	
  

 

23

	
  

 	
  

 
	
 Appendix I List of Securities

 

List of Securities

As of the Signing Date, the Transferors have
disclosed to the Transferee the following securities of the Company (including
but not limited to pledge, mortgage, guarantee and other forms): 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 No.

 	
  

 	
 Number of Security

 Contracts

 	
  

 	
 Creditor

 	
  

 	
 Debtor

 	
  

 	
 Form of
Security

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 
	
 1.

 	
  

 	
 Mortgage Contract 53012801-2008 Nian Lu Quan (Di) Zi No. 0002

 	
  

 	
 Agricultural Development Bank of China, Luquan Yi and Miao Ethnic
 County Sub-branch

 	
  

 	
 Luquan Xiaopengzu Power Generation Co.,
 Ltd.

 	
  

 	
 Mortgage of Chattels and Realty

 
	
  

 
	
 2.

 	
  

 	
 Right Pledge Contract 53012801-2008 Nian Lu Quan (Zhi) Zi No. 0002

 	
  

 	
 Agricultural Development Bank of China, Luquan Yi and Miao Ethnic
 County Sub-branch

 	
  

 	
 Luquan Xiaopengzu Power Generation Co.,
 Ltd.

 	
  

 	
 Pledge of right to collect electricity fees

 

24

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