Document:

Exhibit 4.116

	
  

 	
  

 
	
 Schedule 1

 	
 Serial No.: 53010420100000014

 
	
  

 	
  

 
	
 ABCS [2009] 1002

 	
  

 

Agricultural Bank
of China

Fixed Assets Loan Contract

 1

Dear clients,

To protect your rights and interests, please
carefully read all terms (those in bold type in particular), be attentive to
your rights and obligations prescribed in the Contract before signing this
Contract. In case of any query, please consult the lending bank.

Content

	
  

 	
  

 	
  

 
	
 1

 	
 Definition

 	
 3

 
	
  

 	
  

 	
  

 
	
 2

 	
 The
 Borrower’s Undertakings

 	
 4

 
	
  

 	
  

 	
  

 
	
 3

 	
 Basic Terms

 	
 5

 
	
  

 	
  

 	
  

 
	
 4

 	
 Supplementary
 Clauses

 	
 14

 
	
  

 	
  

 	
  

 
	
 5

 	
 Legal
 Liabilities

 	
 16

 
	
  

 	
  

 	
  

 
	
 6

 	
 Miscellaneous

 	
 17

 

 2

The Borrower (full name): Yunnan Huabang
Electric Power Development Co,. Ltd.

Domicile (address): No.171 Tuanjie Road,
Mangshi, Luxi City, Dehong Prefecture

Legal Representative / Person in Charge: JOHN
DOUGLAS KUHNS

Postal Code: 679300

Handling Person: Luo Yuejin

Tel No.: 2127078

Fax No.: 2127078

The Lender (full name): Yingjiang
Sub-branch of the Agricultural Bank of China Limited

Domicile (address): No.18 Yongsheng Road,
Pingyuan Town, Yingjiang County

Legal Representative / Person in Charge):
Yang Wanming

Postal Code: 679300

Handling Person: Ye Shenghong

Tel No.: 8118328

Fax No.: 8118328

The Borrower applies for a fixed assets loan from the Lender in order
to purchase the Husa River Cascade 3 Hydroelectric Station, Cascade 4
Hydroelectric Station and Mangxian Hydroelectric Station. The two Parties
have reached an agreement through consultations and hereby enter into this
Contract.

	
  

 	
  

 
	
 1

 	
 Definition

 
	
  

 	
  

 
	
  

 	
 Unless provided otherwise, the
 following terms shall have the following meanings in this Contract:

 
	
  

 	
  

 
	
 1.1

 	
 “Term of
 the Loan” means a period including the total loan period and the
 single loan instalment period. The total loan period means a period from the
 date of the first provision of the loan to the date of repayment of all the
 principal and interest of the loan by the Borrower in accordance with the
 terms of this Contract. The single loan installment period means a period
 from the date of provision of the single loan installment among a number of
 utilizations to the date of repayment of all the principal and interest of
 this particular loan installment by the Borrower as agreed.

 
	
  

 	
  

 
	
 1.2

 	
 “Availability
 Period” means the period in which the Borrower may make the
 utilization according to the terms of the Contract, including the extended
 period agreed by both Parties after consultations.

 
	
  

 	
  

 
	
 1.3

 	
 “Utilization
 Date” means the date on which each loan installment is transferred
 to the account of the Borrower.

 
	
  

 	
  

 
	
 1.4

 	
 “Repayment
 Period” means the period from the date of repayment of the
 principal and interest of the first loan installment by the Borrower as
 agreed in the Contract to the date of repayment of all the principal and
 interest of the loan, including the period re-determined after consultations
 by both Parties.

 
	
  

 	
  

 
	
 1.5

 	
 “Project
 Construction Period” means the period from the date of
 commencement of the construction of the Project to the date of completion of
 the construction of the Project.

 
	
  

 	
  

 
	
 1.6

 	
 “Project
 Operation Period” means the period from the date of completion of
 the construction of the Project to the end of the operation period.

 

 3

	
  

 	
  

 
	
 1.7

 	
 “Project
 Completion” means that the Project under this Contract has passed
 the acceptance inspection (including the acceptance inspection of the
 engineering quality and the overall acceptance inspection which must be
 conducted according to relevant provisions) conducted by the relevant
 authorities and been delivered for use.

 
	
  

 	
  

 
	
 1.8

 	
 “Day”
 means business day. If the last day of the period is a statutory festival or
 public holiday, it may be extended to the first business day after that
 festival or public holiday. 

 
	
  

 	
  

 
	
 1.9

 	
 “LIBOR /
 HIBOR” means the London / Hong Kong interbank offered rate
 announced by the Reuters of the period corresponding to 2 business days
 before the interest period.

 
	
  

 	
  

 
	
 1.10

 	
 “Loan
 Ratio” means the ratio of the loan amount provided by the Lender
 for this Project against the total loan amount for this Project.

 
	
  

 	
  

 
	
 1.11

 	
 “Total
 Project Investment” means the sum of the fixed assets investment
 necessary for the proposed Project and the basic working capital, reflecting
 the total amount of funds needed for the Project.

 
	
  

 	
  

 
	
 1.12

 	
 “Laws and
 Regulations” means laws, administrative regulations, local
 regulations, rules, judicial interpretations and any other provisions that
 have the legal effect.

 
	
  

 	
  

 
	
 2

 	
 The Borrower’s Undertakings

 
	
  

 	
  

 
	
  

 	
 The Borrower undertakes:

 
	
  

 	
  

 
	
 2.1

 	
 The Project construction and the loan
 application are legitimate and in compliance with Laws and Regulations: It is
 an enterprise (public institution) with the legal person status established
 under and registered with competent authorities in accordance with laws or
 any other entity entitled to act as a borrower in accordance with relevant
 state provisions. It has met the requirements of the state that it has the
 qualifications of the principal investor and operator for the proposed
 Project investment. It and its controlling shareholder (the legal person of
 the newly-established Project) are of good standing, and free of any material
 bad records. The purpose and the source of funds for repayment are clear and
 legal. The Project is in compliance with relevant state policies in terms of
 industry, land and environment, etc., and has carried out procedures for
 legal management, leasing or selling of the fixed assets investment project
 in accordance with relevant provisions. It has abided by the state provisions
 in respect of the investment project capital funds. It has paid relevant fees
 in accordance with Laws and Regulations and the terms of this Contract, and
 has committed no violation of any Laws and Regulations. 

 
	
  

 	
  

 
	
 2.2

 	
 The execution of this Contract is free of
 any defects: It has carried out all procedures necessary for the execution of
 this Contract and performance of its obligations under this Contract in
 accordance with Laws and Regulations and the articles of association of the
 company. The signatory of this Contract or the person affixing the official
 seal on this Contract must be the legal representative / person in charge or
 authorized representative of the Borrower. It will actively assist the Lender
 in conducting the procedures for the approval, registration or filing of this
 Contract. There exists no defect with the effectiveness of the Loan Contract
 caused by any other reasons that might be attributed to it.

 
	
  

 	
  

 
	
 2.3

 	
 The security provided is legitimate and
 effective: It ensures that the guarantor has carried out necessary procedures
 in accordance with Laws and Regulations and the articles of association of
 the company in order to execute this Contract or perform its obligations
 under this Contract. The guarantor has the right to create the security with
 this collateral. The signatory of the security contract must be a person who
 has the authority to sign such contract. It will urge the guarantor to
 actively carry out, or assist the Lender to carry out, the procedures for the
 approval, registration or filing for the security contract as well as the
 security. There exists no defect with the effectiveness of the security contract,
 nor any circumstance that may result in any material adverse change. 

 

 4

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.4

 	
 It will exercise its rights and perform its
 obligations under the Contract in good faith: It will utilize the loan in a
 legitimate manner in accordance with the Term, purpose, form as agreed in the
 Contract, and will not use the loan for any illegal activities. It will
 actively cooperate with relevant competent government departments and the
 Lender in conducting supervision and inspection on the loan and the security.
 It will repay the loan in full in a timely manner in accordance with the
 terms of the Contract, and will not evade debts in whatever form. There
 exists no circumstance that contravenes its obligations under the Contract.

 
	
  

 	
  

 
	
 2.5

 	
 All documents and information in respect of
 the Lender, guarantor, shareholders, the Project and financial matters are
 truthful, complete, accurate, legal and effective.

 
	
  

 	
  

 
	
 3

 	
 Basic Terms

 
	
  

 	
  

 	
  

 
	
 3.1

 	
 Loan

 
	
  

 	
  

 	
  

 
	
  

 	
 3.1.1

 	
 Purpose: purchasing the Husa
 River Cascade 3 and Cascade 4 hydroelectric stations as well as the Mangxian
 Hydroelectric Station.

 
	
  

 	
  

 	
  

 
	
  

 	
 3.1.2

 	
 Currency and amount (spelt
 out): RMB fifty million.

 
	
  

 	
  

 	
  

 
	
  

 	
 3.1.3

 	
 the total loan period: eight
 years (spelt out) (year / month).

 
	
  

 	
  

 	
  

 
	
 3.2

 	
 Interest rate, default interest rate and
 compound interest rate

 
	
  

 	
  

 	
  

 
	
  

 	
 3.2.1

 	
 Interest rate 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.2.1.1

 	
 In the case of the loan in
 RMB, the interest rate shall be determined by (B) below:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (1)

 	
 Fixed interest rate: to be calculated from __________(Utilization Date of each
 loan installment / date of execution of this Contract) of _______________
 (the single loan instalment period / the total loan period) to the date when
 the loan is due at the benchmark interest rate ______(plus / minus) ____% of
 the same period and the same category announced by the People’s Bank of
 China;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (2)

 	
 Floating interest rate: to be calculated
 from Utilization Date of each loan installment (Utilization Date of
 each loan installment / date of execution of this Contract) of the single
 loan instalment period (the single loan instalment period / the total
 loan period) to the date when the loan is due at the benchmark interest rate
 plus (plus / minus)   20 % of the same period and the same
 category announced by the People’s Bank of China. The circle of time of
 adjustment of the floating interest rate is twelve (spelt out) months.
 Commencing on the date, corresponding to
 the date of the loan, of the first month of the next circle of the adjustment
 of RMB benchmark interest rate of the People’s Bank of China, the loan
 interest rate will be determined by the benchmark interest rate of the same
 period and the same category after the adjustment, and the Lender may not
 separately notify the Borrower of the same. In case of absence of
 such a corresponding date, the last Day of that month
 will be deemed as the corresponding date of the loan.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (3)

 	
 Others:
 _________________________________________________.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.2.1.2

 	
 In the case of the loan in
 foreign currency, the interest rate shall be determined by ______ below:

 

 5

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (1)

 	
 The floating loan interest
 rate of the _____(spelt out) months on the basis of the interest spreads of
 _____________ (LIBOR / HIBOR) plus ____% of ____ (spelt out) months;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (2)

 	
 The annual interest rate of
 ____% shall apply until the date of expiry of the loan;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (3)

 	
 Others:
 _________________________________________________.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.2.2

 	
 Methods of interest calculation
 and settlement

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.2.2.1

 	
 The interest on the loan shall
 be calculated on a quarterly (monthly / quarterly) basis, and the date
 of interest settlement shall be the 20th of each last month of the quarter
 (month / last month of the quarter).

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.2.2.2

 	
 For the loan subject to the fixed interest
 rate, the interest shall be calculated on the basis of the agreed rate. For
 the loan subject to the floating interest rate, the interest shall be
 calculated on the basis of the contemporary interest rate of each floating
 period. If the interest rate fluctuates several times in a single interest
 period, first calculate the interest of each floating period, then add up
 interest of all those periods. If other interest rate is adopted, calculate the
 interest in an agreed way.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.2.2.3

 	
 If the date of expiry of the loan is a
 statutory festival or public holiday, the date of repayment may be extended
 to the first business day after that festival or public holiday. Interest of
 the extended period shall be calculated on the basis of agreed interest
 calculation method.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.2.3

 	
 Default interest

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.2.3.1

 	
 If the Borrower fails to repay the
 principal of the loan as scheduled in the Contract, the Lender shall increase
 and collect an additional fifty (spelt out) percent of the agreed
 interest rate as a default interest on the due amount of the loan from the
 date of default until the date of full repayment of the principal and
 interest of the loan.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.2.3.2

 	
 If the Borrower uses the loan for a purpose
 other than that specified in the Contract, the Lender shall increase and
 collect an additional one hundred (spelt out) percent of the agreed
 interest rate on the amount of the loan misused from the date of default
 until the date of full repayment of the principal and interest of the loan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.2.3.3

 	
 If a loan is not repaid as scheduled and
 used for any other purpose other than that specified in the Contract, the
 default interest shall be the higher of them.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.2.4

 	
 Compound interest

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If the Borrower fails to repay the interest
 as scheduled, the Lender shall calculate and collect the interest at the
 compound interest rate on a monthly (quarterly / monthly) basis from
 the date of default. If the Borrower fails to repay the interest as scheduled
 before the expiry date of the loan, it shall calculate and collect the
 interest at the compound interest rate as specified in the Contract. If the
 Borrower fails to repay the interest after the expiry date of the loan, it shall
 calculate and collect the default interest at the compound interest rate as
 specified in the Contract. If the Borrower uses loan in breach of contract or
 fails to repay the interest as scheduled during the period of default, it
 shall calculate and collect the default interest at the compound interest
 rate as specified in the Contract.

 

 6

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.3

 	
 Utilization
 and payment of the loan

 
	
  

 	
  

 
	
  

 	
 3.3.1

 	
 Utilization
 conditions

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Where the Borrower applies for utilization,
 it shall simultaneously satisfy the following conditions:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 The Borrower must have the qualification of
 a borrower, and its relevant decision body or authorised body has duly
 adopted a resolution to obtain a loan, and the approval of the resolution has
 been obtained from relevant authorities;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 The Borrower of the Project loan has
 carried out legal management procedures for the Project, including but not
 limited to obtaining the approval or filing documents of the government
 departments, as well as legal documents in respect of environmental
 protection, land and planning, etc. Its loan of working capital for the
 Project has satisfied requirements of relevant state authorities; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
 In respect of the loan to be used for the
 real estate development projects, the Certificate of the State-owned Land Use
 Rights, the Construction Land Planning Permit, the Construction Works
 Planning Permit and the Construction Works Commencement Permit concerned with
 such projects have been obtained; in case the sale or pre-sale has commenced,
 Sale/Pre-sale Permit shall be obtained; land premiums and relevant fees have
 been paid off;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)

 	
 The source of capital funds for the Project
 shall be in compliance with Laws and Regulations, and have been all (all
 / partially) in place before the funding of the loan. If the actual
 investment for the Project exceeds the planned amount and the Lender has
 provided more funds, the increased capital funds for the Project shall all
 (all / proportionally) be in place before the funding of the loan. The
 work progress of the Project shall match the amount of funds provided; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (5)

 	
 The security-related procedures required by
 the Lender have been appropriately conducted, and the security shall be legal
 and effective; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (6)

 	
 The purpose of the loan shall be in
 compliance with Laws and Regulations, the loan contract and the transaction
 contract;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (7)

 	
 The undertakings made by the Borrower on
 the date of execution of the Contract shall, on each utilization, be
 truthful, effective, and free of any material or substantial adverse change,
 nor any other material adverse circumstance which may affect the performance
 of this Contract;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (8)

 	
 Other agreements:
 _________________________________________.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.3.2

 	
 Form of utilization

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.3.2.1

 	
 The utilization of the loan shall adopt (1)
 below:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (1)

 	
 In the case of onerous utilization, adopt
 (ii) below:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 The Utilization Date shall be ____________;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 The Utilization Period shall commence on 27
 August 2010 and end on 26 August 2011;

 

 7

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (2)

 	
 In the case of utilization by instalment,
 the Utilization Period shall commence on __________ and end on ___________.
 The detailed utilization plan shall be as follows: ______________________________,
 of which the amount of the loan drawn in the period from ________________ to
 _______________ must not be less than __________________.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 If the Borrower fails to carry out the
 procedures for utilization on the Utilization Date, Utilization Period or the
 utilization plan as specified in the Contract, nor does it apply for the
 postponement of utilization, the Lender shall have the right to notify the
 Borrower to carry out relevant procedures in a designated period of time. If
 the Borrower fails to do so, the Lender may cancel all or part of the
 unutilized loan, and collect  5 % of the cancelled loan as an
 indemnity fee, and may reconsider whether to provide the loan or not and the
 conditions for utilization. If the Borrower fails to draw the minimum amount
 of the utilization as agreed in the agreed period, the Lender shall have the
 right to notify the Borrower to draw the loan in a designated period of time.
 If the Borrower fails to do so, the Lender may collect  5 % of the minimum
 amount of utilization as an indemnity fee, and may reconsider whether to
 provide the loan or not and the conditions for utilization.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.3.2.2

 	
 When the Borrower conducts utilization, it
 shall submit a written utilization notice  3  Days in advance. If the
 Borrower needs to adjust its utilization plan, it shall apply to the Lender  3  Days in advance, and the adjustment may take place upon the consent of
 the Lender.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.3.3

 	
 Payment of the loan

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.3.3.1

 	
 Payment on entrustment

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 3.3.3.1.1

 	
 In occurrence of any one of the following
 circumstances, the Borrower may entrust the Lender to provide the loan to its
 transaction counterparty to be used for the purpose specified in this
 Contract and the transaction contract:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 The amount of a single utilization exceeds
 5% of the Total Project Investment;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 (ii)

 	
 The amount of a single utilization exceeds
 RMB5,000,000 (including the equivalent in foreign currency);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 (iii)

 	
 Other circumstances as agreed by both
 Parties: _________________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 3.3.3.1.2

 	
 In the event of payment on entrustment, the
 Borrower shall send to the Lender a utilization request and the Notification
 of Payment of Loans on Entrustment 2 Days in advance, together with
 relevant materials required by the Lender. After examination and approval,
 the Lender may provide the loan directly to the transaction counterparty of
 the Borrower via the account of the latter. If the Borrower’s utilization
 request fails to meet the conditions of utilization specified in the
 Contract, or the request for the payment of the loan on entrustment is not in
 compliance with the terms of the Contract, or the transaction materials are
 not complete or not truthful, the Lender may elect not to provide the loan
 requested. If this results in the
 Borrower’s default to its transaction counterparty or any other damages, the
 Lender shall assume no liability.

 

 8

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 3.3.3.1.3

 	
 In the event of payment on entrustment for
 the Project financing, the Lender may, if necessary, inspect the equipment
 manufacturing, the progress of the construction together with the Borrower,
 independent intermediary agency designated by the Lender and the contractor,
 and fund the loan in accordance with their joint statement in compliance with
 the agreements between them.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 3.3.3.1.4

 	
 If the Borrower applies to delay the
 payment or withdraw the payment on entrustment, it shall notify the Lender in
 writing before the payment made by the Lender. After examination and approval,
 the Lender may suspend the payment on entrustment, and recover the relevant
 loan.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 3.3.3.1.5

 	
 If the Borrower’s creditability decreases,
 or the Borrower fails to repay the loan, or the work progress of the Project
 is lagged behind the use of the proceeds, or the Borrower avoids the payment
 on entrustment by the Lender by way of breaking up the whole into parts, the
 Lender may discuss conditions for additional loan grant and payment, or
 cessation of loan grant and payment.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 3.3.3.1.6

 	
 Payment on
 entrustment must not be attached with any conditions. If the Borrower
 attaches any condition to its Notification of Payment of Loans on
 Entrustment, such condition shall not constitute any obligation to the
 Lender. Unless otherwise agreed in writing by the two Parties, the Lender
 shall not be obliged to notify the recipient of the loan when providing loans
 on entrustment, suspending provision of the loan, withdrawing the loan, or
 restoring provision of the loan.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.3.3.2

 	
 Discretion to issue the loan

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Except the provisions in Clause 3.3.3.1.1
 and Clause 4.1.1 of this Contract, after a loan is delivered into the account
 of the Borrower, the Borrower shall have the discretion to issue the loan in
 accordance with the Contract. The Borrower shall inform the Lender the
 issuance of the loan if so required by the Lender. The Lender may verify
 whether the loan provided is used for the purpose as agreed by way of account
 analysis, checking evidential documents, on-spot investigation, etc.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.4

 	
 Repayment of the loan

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.4.1

 	
 Source of repayment

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower shall repay the principal and
 interest of the loan with its own assets, including but not limited to:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 revenue from this Project;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 depreciation and amortization;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
 general income of the Borrower.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.4.2

 	
 Repayment plan

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower shall pay the interest in full
 as scheduled, and repay the principal of the loan in the form of (2) below
 (the first two methods may be used together with the method 3):

 

 9

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 repaying the principal in a lump sum; the date of repayment shall be
 ________;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
 repaying the principal by instalment; the detailed repayment plan is
 as follows: each year from 2011 to 2012, repaying RMB 500,000 in the first
 quarter, RMB 500,000 in the second quarter, RMB 500,000 in the third
 quarter, RMB 500,000 in the fourth quarter; each year from 2013 to
 2017, repaying RMB 1,000,000 in the first quarter, RMB 3,000,000 in the
 second quarter, RMB 3,000,000 in the third quarter, RMB 1,000,000 in the
 fourth quarter; in 2018, repaying RMB 1,000,000 in the first quarter, RMB
 3,000,000 in the second quarter, RMB 2,000,000 in the third quarter, and
 clear all payments before the expiry date of the loan.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
 When _______________________ (the revenue from leasing and selling of
 the Project reaches RMB_______ / the ratio of the leasing and selling
 reaches______%, etc.), the Borrower shall repay the due loan with ____% of
 the revenue from leasing and selling of the Project; When ___________________
 (the revenue from the Project reaches RMB_______ / the ratio of the leasing
 and selling reaches______%, etc.), the Borrower shall repay all the loan. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.4.3

 	
 Form of repayment

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.4.3.1

 	
 The Borrower shall deposit the due principal and interest of the loan
 of the current period into the repayment account designated by the Lender,
 and irrevocably authorize the Lender to collect the payment. If the balance
 in the designated repayment account is insufficient, the Lender shall collect
 such payment from any other accounts opened by the Borrower with the
 institutions of the Lender in accordance with laws.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.4.3.2

 	
 If the Lender exercises the set-off right
 according to law or the terms of the Contract, the demurrer period shall be
 seven Days, commencing from the date of notification to the Borrower in
 written or oral form or otherwise. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.4.4

 	
 Order of repayment

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.4.4.1

 	
 Unless agreed otherwise by the Parties, the repayment of the Borrower
 shall be made in the following order:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (1)

 	
 The Borrower expressly pinpoints a particular loan that should be
 repaid, repay such a loan;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (2)

 	
 If the Borrower has not pinpointed any
 particular loan to be repaid, and there exists a number of due debts between
 the Borrower and the Lender and the Borrower’s amount of repayment is not
 sufficient to clear all the due loans, the order of debts to be repaid by the
 Borrower and the order of such debts to be set off shall be determined by the
 Lender;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (3)

 	
 If the Lender exercises its right to set off any debt to the Borrower
 in accordance with law or the terms of the Contract, the debts to be set off
 and the order of such debts to be set off shall be determined by the Lender.
 If the Lender exercises the subrogation in accordance with laws, the debts to
 be repaid with the funds paid by the secondary creditors to the Lender and
 the order of such debts to be set off shall be determined by the Lender. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.4.4.2

 	
 If the Borrower’s amount of repayment is not sufficient to clear the
 due loans, the Lender may elect to use such amount for the repayment of the
 principal, 

 

 10

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 interest, default interest, compound
 interest or the costs for materializing the creditor’s rights.

 
	
  

 	
  

 	
  

 
	
  

 	
 3.4.5

 	
 Prepayment

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.4.5.1

 	
 Where the Borrower prepays the loan, it
 shall submit a written request to the Lender 3 Days in advance. Once
 approved, it may make prepayment. The order of debts to be prepaid shall
 apply to the Clause 3.4.4 of this Contract. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.4.5.2

 	
 Where the Borrower prepays the loan, the
 interest on the part to be repaid shall be calculated according (1)
 below, and the interest shall be paid together with the principal:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (1)

 	
 The interest is calculated on the basis of
 actual single (total/single) loan period and the agreed interest rate;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (2)

 	
 The interest is calculated on the basis of
 actual ______ (total/single) loan period and interest rate plus ____% as
 agreed in the Contract;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (3)

 	
 Others:
 ________________________________________________.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.4.5.3

 	
 Where the Borrower prepays the loan, the
 repaid principal must not be less than RMB 1,000,000 , and should be
 the integral multiple of RMB 1,000,000.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.4.5.4

 	
 Where the Borrower prepays the loan, the
 Lender may charge a service fee for the prepayment of the Borrower, which
 shall be calculated according to the formula of (1)below:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (1)

 	
 remaining Term (taking month as unit; if the
 period is less than a month, it shall be taken as a month) X amount of
 prepayment X 1‰

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (2)

 	
 Others:
 __________________________________________________.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.4.5.5

 	
 Where the Borrower prepays part of the
 loan, the remaining part shall still be subject to an interest calculated at
 the loan interest rate agreed in the Contract.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.4.6

 	
 Extension

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If the Borrower is unable to repay a loan
 in accordance with the agreed repayment schedule, it may request to the
 Lender for an extension. The Borrower shall submit the request to the Lender
 15 Days in advance of the due date of that loan. If agreed by the Lender, the
 two Parties shall enter into an extension agreement.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.5

 	
 Vouchers of the loan

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The vouchers of the
 loan shall be an integral part of this Contract. In case the loan amount,
 utilization amount, repayment amount, date of the loan, date of repayment, or
 loan interest rate in this Contract is inconsistent with that in the vouchers
 of the loan, the latter shall prevail. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.6

 	
 Security

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.6.1

 	
 The form of security for the loan under
 this Contract is as follows: The entire assets of the Husa River Cascade 3
 Hydroelectric Station, Cascade 4 Hydroelectric Station and the Mangxian
 Hydroelectric Station owned by Yingjiang County Qinrui Husahe Hydropower Co.,
 Ltd., shall be the collateral of the security; the tariff collected at the
 Husa River Cascade 3 Hydroelectric Station, Cascade 4 Hydroelectric Station
 and the Mangxian Hydroelectric Station under Yingjiang County Qinrui Husahe
 Electric Hydropower Co., Ltd., shall be pledged for the security.

 

 11

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.6.2

 	
 The security contracts shall be entered
 into separately by the Lender, the Borrower and the security-provider.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.7

 	
 Rights and Obligations

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.7.1

 	
 Rights and Obligations of the Borrower

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
  

 	
 It shall utilise loans according to this
 Contract;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
  

 	
 it shall repay the principal and interests
 in full as scheduled;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
  

 	
 it shall use the loans in accordance with
 Laws and Regulations or the purpose and method as agreed in the Contract;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)

 	
  

 	
 it shall accept and actively cooperate with
 the Lender and its authorised representative in respect of their supervision
 and examination on the project construction, financial affairs, usage of the
 loans and other relevant issues. At the request of the Lender, it shall
 promptly provide the Lender with data and information related to the Project,
 the usage of the loans, financial issues and other information as required by
 the Lender;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (5)

 	
  

 	
 the Borrower shall notify the Lender in
 writing in advance and obtain consent from the Lender in the event that:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 it is involved in contracting, leasing,
 shareholding system restructuring, association, consolidation, merger,
 M&A, split-off, decrease of registered capital, joint venture, transfer
 of main assets, significant external investment, bond issuance, application
 for suspension of business, application for dissolution or bankruptcy, etc;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 it provides a guarantee of large amount for
 a third party’s debt or creates mortgage and pledge over its main assets
 in favour of a third party, as a result of
 which the repayment ability of the Borrower is affected;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 prior to the repayment of the principal and
 interests in full, the Borrower does not create mortgage and pledge over the
 Project assets or earnings (including anticipated earnings) arising from the
 loans in favour of the Lender (including the syndicate of which the Lender is
 a member), and the Borrower creates mortgage and pledge in favour of a third
 party;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iv)

 	
 material adjustments occurs to the
 construction plan or the budgetary estimate of the Project during the
 implementation of the Project;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (V)

 	
 any other material adverse circumstance on
 the Borrower’s side which may cause material change to the debtor-creditor
 relationship under this Contract or affect the creditor’s rights of the
 Lender;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (6)

 	
  

 	
 the Borrower shall notify the Lender within
 5 Days in writing if any of the following events occurs:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 the Borrower, its legal representative,
 principal person in charge or actual controller engage in any illegal
 activity;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 the Borrower is ordered to suspend its
 production or business, deregistered, or its business license is revoked, or
 it is terminated;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 the Borrower’s financial condition is
 deteriorating; its production and operation is under server hardship; or any
 material adverse dispute occurs;

 

 12

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iv)

 	
 any other circumstance occurs on the
 Borrower which may have adverse affect on the creditor’s rights.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (7)

 	
  

 	
 the Borrower shall notify the Lender within
 7 Days in writing in the event of:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 any change of relationship of
 administrative subordination, any material change of high-level personnel and
 any material adjustment of the organisation’s structure;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 any material change of its name, domicile,
 business scope and other industrial and commercial registration matters or
 other matters that require special approval;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 any increase of the registered capital or
 any material amendment to the articles of association;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iv)

 	
 any change of other material matters on the
 side of the Borrower which might affect the performance of obligations;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (8)

 	
  

 	
 the Borrower and its investors shall not
 avoid their obligations owed to the Lender by way of withdrawing funds
 secretly, transferring of assets or transferring its shares to a third party.
 It shall not conduct any other behaviour that might damage the interests of
 the Lender;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (9)

 	
  

 	
 the Borrower shall bear any necessary fees
 for the legal service, insurance, transportation, evaluation, registration,
 custody, authentication, notarization in relation to this Contract and the
 security under this Contract;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (10)

 	
  

 	
 it shall perform any other obligation as
 required by Laws and Regulations or agreed by the Parties.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.7.2

 	
 Rights and Obligations of the Lender

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
  

 	
 It shall provide the loans to the Borrower in
 full as scheduled. However, it shall not be liable for any delay caused by
 the reasons which are not attributable to the Borrower or a person other than
 the Lender.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
  

 	
 It is entitled to conduct on-site and
 off-site supervision and examination on the Project construction, production
 and operation, financial condition, inventory, usage of loans and other
 aspects, and require the Borrower to provide relevant documents, materials and
 information in order to check:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 whether the capital, self-raised funds of
 the Project and other associated funds is in place as scheduled; whether the
 Project has any material change; whether the accumulative financial expenses
 match the progress of the Project;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 whether the Borrower use the loans for the
 purpose as agreed in advance; whether the loans are used for investment in
 equity capital, securities, futures or other speculations;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 any other matters which the Lender wants to
 examine;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
  

 	
 if the Borrower takes any step that may
 affect the safety of the loans or the performance of its obligations, the
 Lender may require the Borrower to remedy within a reasonable period, carry
 out the measures which may protect the creditor’s rights, provide other valid
 security, or the Lender may cease to provide loans, or declare the
 acceleration of the loans under this Contract and other contracts, or require
 the loans to be repaid in advance;

 

 13

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)

 	
  

 	
 if the guarantor is ordered to suspend its
 production or business, deregistered, or its business license is revoked, or
 it becomes bankrupt or suffers material operations loss, as a result of which
 its part or total capability as a guarantor may lose, or the value of the
 assets on which the mortgage or pledge has been created suffers decrease,
 unexpected damage or loss, or other circumstances which may jeopardise the
 security occurs, the Lender may require the Borrower to provide other valid
 security;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (5)

 	
  

 	
 it shall perform any other obligation as
 required by Laws and Regulations or agreed by the Parties.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.7.3

 	
 Other Obligations

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.7.3.1

 	
 The Parties shall treat as confidential any
 business secret and other information in respect of interests of the other
 Party which are acquired during the execution and the performance of this
 Contract. Without the consent of such other Party, the Party shall not
 divulge any information above to any third party, unless as otherwise
 required by Laws and Regulations.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 3.7.3.2

 	
 After the termination of the rights and
 obligations in this Contract, the Parties shall continue to perform their
 obligations of notification and assistance in good faith.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4

 	
 Supplementary Clauses

 
	
  

 	
  

 
	
  

 	
 The Clauses 4.1, 4.2, 4.3, 4.4, and 4.5
 below shall be applicable to the loans under this Contract and binding upon
 the Parties. Other provisions in this Clause shall not be binding upon the
 Parties.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.1

 	
 Conditions to the Usage of the Loans

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.1.1

 	
 In respect of the loans which have been
 provided to the Borrower’s account by the Lender according to this Contract,
 the Borrower shall obtain the Lender’s consent for using such loans if the
 conditions listed below have not been satisfied: 1. the Borrower shall
 submit to the Lender an Request Form for Using the Loans; and 2. the Borrower
 shall assist the Lender in managing the usage of the loans regularly, and the
 Borrower shall submit materials related to the payment of the loans and
 relevant acknowledgements of receipt to the Lender after the loans have been
 provided.

 
	
  

 	
  

 	
  

 
	
  

 	
 4.1.2

 	
 In respect of the period during which the
 loans can be used, the interests shall be calculated according to the
 provisions as agreed.

 
	
  

 	
  

 	
  

 
	
  

 	
 4.1.3

 	
 If the funds of the Borrower are inquired,
 frozen or deducted or any third party makes claims against the Borrower prior
 to the satisfaction of the conditions to the usage of the loans, the Borrower
 shall notify the Lender promptly.

 
	
  

 	
  

 	
  

 
	
 4.2

 	
 Monitoring Account

 
	
  

 	
  

 
	
  

 	
 4.2.1

 	
 The Borrower shall open a monitoring
 account with the Lender, and deposit the amount in sub-clause (2) into
 such account:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
  

 	
 the project capital that is corresponding
 to the percentage of the loans provided by the Lender;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
  

 	
 all (all / the
 corresponding percentage of the loans) of the operational or leasing incomes;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
  

 	
 other: __________________________________.

 

 14

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.2.2

 	
 If the Borrower change or cancel such
 account prior to the entire termination of the contractual rights and
 obligations, the Borrower shall obtain the Lender’s consent.

 
	
  

 	
  

 	
  

 
	
  

 	
 4.2.3

 	
 Other:_______________________________________.

 
	
  

 	
  

 	
  

 
	
 4.3

 	
 Insurance

 
	
  

 	
  

 
	
  

 	
 4.3.1

 	
 The Borrower shall take out engineering
 insurance, property insurance and other insurances related to this Project
 with an insurance company which is recognized by the Lender in accordance
 with Laws and Regulations, industry provisions or requirements of the Lender
 within 10 Days prior to the utilization. The types of the insurance include
 but not limited to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
  

 	
 property comprehensive insurance;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
  

 	
 machinery breakdown and electronic
 equipment breakdown additional insurance;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
  

 	
 _________________________________________________.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.3.2

 	
 The insurance amount of the policy taken
 out by the Borrower shall be not less than the loans (the total value of the
 Project/loans) under this Contract; the insurance period shall be extended to
 the date that is half a year after the expiry of the period of the total
 loan under this Contract (the date on which the Project is accepted and
 delivered for production after the completion / the date that is half a year
 after the expiry of the period of the total loan under this Contract). The
 Borrower shall renew the insurance according to relevant regulations and the
 requirements of the Lender, such insurance shall not be suspended or
 cancelled prior to the full repayment of the loans.

 
	
  

 	
  

 	
  

 
	
  

 	
 4.3.3

 	
 The insurance premium shall be borne by the
 Borrower and it shall pay the insurance premium on time. In the case that the
 Lender advances the insurance premium for the Borrower, it may recover the
 insurance premium and other necessary costs from the Borrower.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.3.4

 	
 During the insurance period, if any
 accident covered by the insurance occurs, the Borrower shall promptly notify
 the insurance company and the Lender. The insurance proceeds shall be first
 used to repay the principal and interests of the loans. If such insurance
 proceeds are not sufficient, the Lender may recover relevant amount from the
 Borrower or require the Borrower to provide a separate security. With the
 consent of the Lender, the insurance proceeds may also be used to remedy the
 losses arising from the accident.

 
	
  

 	
  

 	
  

 
	
  

 	
 4.3.5

 	
 Other:__________________________.

 
	
  

 	
  

 	
  

 
	
 4.4

 	
 Financial Monitoring

 
	
  

 	
  

 
	
  

 	
 In the event of (1), (2), (3), (4)
 below, the Borrower shall take measures which are recognised by the Lender to
 guarantee the debt at the request of the Lender, otherwise, the Lender may
 exercise the rights as agreed in Clause 5.3 in this Contract:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 the actual income of the Project during the
 operational period is less than 60% of the evaluation level;

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 the debt to asset ratio of the Borrower is
 more than 70%;

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 the Borrower gets bad creditability;

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 the Borrower’s contingent liability ratio
 is over 50%;

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 other:______________________________.

 

 15

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.5

 	
 Other Agreement

 
	
  

 	
  

 
	
  

 	
 The Parties further agree that: 1. the
 shareholders of the project company undertakes that: where it income of this
 Project is not adequate to repay the loans, the comprehensive income may
 become the source for repayment. 2. no dividends will be paid before the
 principal and interests of the loans have been fully paid. 3. the Borrower
 shall open a special account for collecting electricity fees with the
 Agricultural Bank of China. All the electricity fees shall be managed through
 this special account. 4, an instalment repayment schedule shall be
 formulated, and a special account for repayment shall be opened. An amount
 shall be withdrawn from the comprehensive income according to the repayment
 percentage and deposited into the special account for repayment on quarterly
 basis.

 
	
  

 	
  

 
	
 5

 	
 Legal Liabilities

 
	
  

 	
  

 
	
 5.1

 	
 The Borrower shall be deemed to breach this
 Contract if:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 it breaches the obligations as agreed in
 this Contract;

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 it fails to perform the undertakings in the
 Clause 2 of this Contract;

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 it expressly shows or indicates by
 behaviour that it does not want to repay any due or undue debts;

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 it fails to perform part or all of its
 obligations under other contracts entered into by the Borrower and the
 Lender, or the Lender declares that the Borrower has breached the contracts;

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 the Borrower fails to perform or partially
 perform the contracts.

 
	
  

 	
  

 
	
 5.2

 	
 The Lender may terminate this Contract and
 other contracts entered into by the Parties if:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 the Borrower or the guarantor breaches a
 contract;

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 the repayment capability of the Borrower or
 the guarantor may suffer material adverse change;

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 the assets over which the mortgage or
 pledge has been created may suffer material damage or the value of such
 assets may decrease;

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 any state policy is adjusted, as a result
 of which it may cause material adverse affect on the safety of the loans;

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 the Borrower constitute a material breach
 against other creditors;

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 other circumstances under which a contract
 may be terminated according to laws and regulations occur.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If the Lender
 terminates the Contract, the discussion period is 7 Days from the date on
 which the Lender notifies the Borrower in written, spoken from or other
 forms.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.3

 	
 If the any of the events in
 Clauses 5.1 and 5.2 occurs on the Borrower, the Lender may adopt following
 remedial steps:

 
	
  

 	
  

 
	
  

 	
 (1)

 	
 the Lender may require the Borrower or the
 security-provider to remedy their events of default or other circumstances
 which might have adverse affect on the safety of the loans within a
 reasonable period, and implement other debt protection measures or provide
 other effective security;

 

 16

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 if the Borrower fails to use the loans for
 the purpose as agreed, fails to repay the loans or pay due interests as agreed,
 it will be charged compound interests for such default until the principal
 and the interests have been fully repaid;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 the Lender may cease to provide loans,
 recover the provided loans in advance and declare the accelerate the loans
 under other loan agreements entered into by the Borrower and the Lender;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 the Lender may exercise legal rights or
 other rights as agreed against the Borrower, such as set-off rights;

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 the Lender may require the Borrower to bear
 any compensation for damages and other legal liabilities;

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 the Lender may take any step to protect the
 assets and other legal measures;

 
	
  

 	
  

 	
  

 
	
  

 	
 (7)

 	
 the Lender may disclose any breach of the
 Borrower;

 
	
  

 	
  

 	
  

 
	
  

 	
 (8)

 	
 other remedies:________________________.

 
	
  

 	
  

 	
  

 
	
 5.4

 	
 In the event that the Borrower breaches the
 Contract, as a result of which the Lender claims against the Lender through
 litigation or arbitration, the legal fee, business travel expense,
 implementation fee, evaluation fee and other necessary fees paid by the
 Lender shall be reimbursed by the Borrower.

 
	
  

 	
  

 
	
 5.5

 	
 In the event that the Borrower fully
 performs its obligations under the Contract but the Lender fails to provide
 loans in full to the Borrower as scheduled, the Lender shall indemnify the Borrower
 against any loss arising therefrom.

 
	
  

 	
  

 
	
 6

 	
 Miscellaneous

 
	
  

 	
  

 
	
 6.1

 	
 Notice

 
	
  

 	
  

 
	
  

 	
 Any notice or other
 communication by one Party to the other Party shall be sufficiently served by
 facsimile or by hand to the other Party’s address as set forth in this
 Contract, until the same is changed by prompt notice given to the other
 Party.

 
	
  

 	
  

 
	
 6.2

 	
 Dispute Settlement

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.2.1

 	
 Any dispute arising out of
 this Contract shall be settled by both Parties though negotiation. If an
 agreement fails to be reached, either party may adopt the method of (1)
 as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
  

 	
 bring a lawsuit in competent people’s of
 the place where the Lender is located;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)

 	
  

 	
 submit the dispute to
 ___________________for arbitration.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.2.2

 	
 During the litigation or
 arbitration, remaining clauses in this Contract which are irrelevant to the
 dispute shall continue.

 
	
  

 	
  

 
	
 6.3

 	
 Effectiveness

 
	
  

 	
  

 
	
  

 	
 6.3.1

 	
 This Contract shall come into
 force upon the execution or affixture of seals by both Parties.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.3.2

 	
 Place of execution: Yingjiang
 Sub-branch of the Agricultural Bank of China Limited.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.3.3

 	
 Any matters uncovered by this
 Contract shall be negotiated separately by both Parties.

 

 17

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.3.4

 	
 This Contract shall be
 executed in three original copies. The Borrower, the Lender and the
 security-provider shall hold one copy respectively. The three copies
 shall have same legal effect.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 The Borrower
 hereby certifies that the Lender has specified relevant clauses (especially
 those in bold) to us and has explained the definition, content and legal
 effect of relevant clauses at the request of us. We have been aware of and
 understood the clauses above.

 

Borrower (seal)

Legal Representative/Person in charge or
Authorized Representative (signed):

Date: 26 August 2010

Lender (seal)

Legal Representative/Person in charge or
Authorized Representative (signed):

Date: 26 August 2010

 18

Instalment Repayment Agreement

Party A: Yingjiang Sub-branch of the
Agricultural Bank of China Limited (“Party A”)

Party B: Yunnan Huabang Electric Power
Development Co., Ltd. (“Party B”)

In accordance with the loan contract entered into by Party A and Party
B on 26 August 2010 (Contract No.: 53010420100000014), Party A shall provide
Party B with RMB 50 million general fixed assets loan and Party B shall repay
such loans by instalments. Both Parties, after negotiation, have entered into
the Instalment Repayment Agreement (this “Agreement”) as follows:

	
  

 	
  

 
	
 1

 	
 The instalment repayment schedule shall be as follows:

 

Table of Repayment Schedule

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Unit: 10000yuan

 
	
 Year

 	
  

 	
 Q1

 	
  

 	
 Q2

 	
  

 	
 Q3

 	
  

 	
 Q4

 	
  

 	
 Total

 	
  

 	
 Remarks

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 
	
 2011

 	
  

 	
 50

 	
  

 	
 50

 	
  

 	
 50

 	
  

 	
 50

 	
  

 	
 200

 	
  

 	
  

 
	
 2012

 	
  

 	
 50

 	
  

 	
 50

 	
  

 	
 50

 	
  

 	
 50

 	
  

 	
 200

 	
  

 	
  

 
	
 2013

 	
  

 	
 100

 	
  

 	
 300

 	
  

 	
 300

 	
  

 	
 100

 	
  

 	
 800

 	
  

 	
  

 
	
 2014

 	
  

 	
 100

 	
  

 	
 300

 	
  

 	
 300

 	
  

 	
 100

 	
  

 	
 800

 	
  

 	
  

 
	
 2015

 	
  

 	
 100

 	
  

 	
 300

 	
  

 	
 300

 	
  

 	
 100

 	
  

 	
 800

 	
  

 	
  

 
	
 2016

 	
  

 	
 100

 	
  

 	
 300

 	
  

 	
 300

 	
  

 	
 100

 	
  

 	
 800

 	
  

 	
  

 
	
 2017

 	
  

 	
 100

 	
  

 	
 300

 	
  

 	
 300

 	
  

 	
 100

 	
  

 	
 800

 	
  

 	
  

 
	
 2018

 	
  

 	
 100

 	
  

 	
 300

 	
  

 	
 200

 	
  

 	
  

 	
  

 	
 600

 	
  

 	
 All the loans will be fully
 repaid before they are due.

 
	
 Total

 	
  

 	
 700

 	
  

 	
 1900

 	
  

 	
 1800

 	
  

 	
 600

 	
  

 	
 5000

 	
  

 	
  

 

	
  

 	
  

 
	
 2

 	
 Party A shall provide the
 loans according to the loan contract and Party B shall perform its repayment
 obligation pursuant to the repayment schedule above. If Party B fails to
 perform such obligation according to the instalment repayment schedule of
 this Agreement, Party A may collect default interests on the overdue amount,
 freeze the Borrower’s settlement account, sell the Borrower’s power station
 by auction or take other steps to protect the safety of the loans according
 to the Loan Contract.

 
	
  

 	
  

 
	
 3

 	
 This Agreement shall be an
 integral part of the Loan Contract (No. 53010420100000014) and has the
 same legal effect as the Loan Contract.

 

 19

	
  

 	
  

 
	
 4

 	
 In the event that any change
 shall be made to this Agreement, both Parties shall, after negotiation, sign
 a new repayment agreement.

 
	
  

 	
  

 
	
 5

 	
 This Agreement shall be
 executed in two original copies. Each Party shall hold one
 copy. This Agreement shall come into force upon the execution by both
 Parties.

 

	
  

 	
  

 	
  

 
	
 Party A: Yingjiang Sub-branch of the Agricultural Bank of
 China Limited (seal)

 	 	
 Party B: Yunnan Huabang Electric Power Development Co., Ltd.(seal)

 
	
  

 	 	
  

 
	
 Person in charge or Authorized Representative (seal):

 	 	
 Legal Representative or Authorized Representative (signed):

 

Date of Execution: 26 August 2010

Place of Execution: Yingjiang Sub-branch of the Agricultural Bank of
China Limited 

 20Exhibit 4.117

BETWEEN

FUJIAN TAIYU INVESTMENT (GROUP) CO., LTD.

SHAOWU CITY FENGYI POWER DEVELOPMENT CO., LTD.

JIANYANG CITY XINGUANG POWER DEVELOPMENT CO., LTD.

AND

FUJIAN HUABANG HYDROELECTRIC INVESTMENT CO., LTD.

	
  

 
	
 SHARE PURCHASE AGREEMENT

 For

 
	
 SHAOWU CITY JINLING POWER GENERATION CO.,
 LTD.

 

1

CONTENTS

	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER I DEFINITIONS

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 1

 	
 Definitions

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER II SALE EQUITY STAKE

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 2

 	
 Sale Equity Stake

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 3

 	
 Transfer Price

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 4

 	
 Payment of the Transfer Price

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 5

 	
 Taxes Payable under the Transfer of the Sale Equity Stake

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER III REPRESENTATIONS AND WARRANTIES BY THE PARTIES 

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 6

 	
 Representations and Warranties by The Parties

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER IV DISCLOSURES, REPRESENTATIONS AND WARRANTIES BY
 THE TRANSFERORS

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 7

 	
 Disclosures, Representations and Warranties by the Transferors

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 8

 	
 General Representations and Warranties by the Transferors

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 9

 	
 Ownership

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 10

 	
 The Target Company

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER V DISCLOSURES, REPRESENTATIONS AND WARRANTIES BY
 TRANSFEREE

 	
  

 	
 20

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 11

 	
 Disclosures, Representations and Warranties by Transferee

 	
  

 	
 20

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER VI DELIVERY

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 12

 	
 Delivery

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER VII DEBT ARRANGEMENT AND EMPLOYEES RELOCATION OF
 TARGET COMPANY

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 13

 	
 Debts Arrangement

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 14

 	
 Relocation of Employees

 	
  

 	
 25

 

2

	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER VIII
 GUARANTEE FUND

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 15

 	
 Guarantee Fund

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER IX CONFIDENTIALITY

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 16

 	
 Confidentiality

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER X BREACH OF CONTRACT

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 17

 	
 Liability for Breach of a Representation or Warranty

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 18

 	
 Liability for Breach of Contract

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER XI FORCE MAJEURE

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 19

 	
 Force Majeure

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER XII RESOLUTION OF DISPUTES

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 20

 	
 Arbitration

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 21

 	
 Validity of the Arbitration Award

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 22

 	
 Continuation of Rights and Obligations

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER XIII APPLICABLE LAW

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 23

 	
 Applicable Law

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 
	
 CHAPTER XIV MISCELLANEOUS

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 24

 	
 Waiver

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 25

 	
 Transfer

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 26

 	
 Amendment

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 27

 	
 Severability

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 28

 	
 Language

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 29

 	
 Validity of the Text and Appendices

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 30

 	
 Notification

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 
	
 Article 31

 	
 The Entire Agreement

 	
  

 	
 34

 

3

Share
Purchase Agreement

	
  

 	
  

 
	
 This Share
 Purchase Agreement (hereinafter referred to as “this Agreement”) is executed by the following Parties in
 Fujian China on November 3, 2010. 

 
	
  

 	
  

 
	
 (1)

 	
 Party
 A: Fujian Huabang Hydroelectric Investment Co., Ltd. (hereinafter referred to as the “Transferee”), a wholly foreign owned
 enterprise registered and established in accordance with the laws of the PRC,
 with its registration number of 350000400003598 and registered address at the
 3rd Floor of East Building A, No.349, Guangda Road, Taijiang
 District, Fuzhou 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: Fujian Taiyu Investment (Group) Co., Ltd., a company registered and
 established in accordance with the laws of the PRC, with its registration
 number of 350700100005376 and its registered address at No.211, Bayi Road,
 Nanping City, the legal representative of which is Ding Hui, whose
 nationality is the PRC; 

 
	
  

 	
  

 
	
 (3)

 	
 Party
 C: Shaowu City Fengyi Power Development Co., Ltd., a company registered and
 established in accordance with the laws of the PRC, with its registration
 number of 350781100001758 and its registered address at No.185, Xichun Road,
 Shaowu City, the legal representative of which is Ding Qiang, whose
 nationality is the PRC; and 

 
	
  

 	
  

 
	
 (4)

 	
 Party
 D: Jianyang City Xinguang Power Development Co., Ltd., a company registered and
 established in accordance with the laws of the PRC, with its registration
 number of 350784100009806 and its registered address at No.59, West Street,
 Jianyang City, the legal representative of which is Chen Dingyong, whose nationality
 is the PRC. 

 
	
  

 	
  

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

 
	
  

 	
  

 
	
 WHEREAS,

 

4

	
  

 	
  

 
	
 (1)

 	
 Shaowu City Jinling Power Generation Co., Ltd. (hereinafter referred
 to as “Target Company”) is a
 company incorporated in China for the purpose of power generation, power
 sales and hydroelectric development; 

 
	
  

 	
  

 
	
 (2)

 	
 Party B holds sixty-two per cent (62%) of the equity stake of Jinling
 Company, and can exercise all of its full rights as a shareholder; 

 
	
  

 	
  

 
	
 (3)

 	
 Party C owns thirty-three per cent (33%) of the equity stake of Jinling
 Company, and can exercise all of its full rights as a shareholder; 

 
	
  

 	
  

 
	
 (4)

 	
 Party D owns five per cent (5%) of the equity stake of Jinling
 Company, and can exercise all of its full rights as a shareholder; 

 
	
  

 	
  

 
	
 (5)

 	
 Subject to the terms and conditions set out in this Agreement, the
 Transferors are willing to transfer one hundred per cent (100%) of the equity
 stake of Jinling Company (hereinafter referred to as “ Sale Equity Stake”) to the Transferee; 

 
	
  

 	
  

 
	
 (6)

 	
 The Transferee is willing to acquire the Sale Equity Stake subject to
 the terms and conditions set out in this Agreement; 

 

For this purpose, after friendly
consultations, on the principles of equality and mutual benefit, the Parties to
this Agreement have reached the following agreement in accordance with the
provisions of the Contract Law of the
People’s Republic of China, Company
Law of the People’s Republic of China, Provisions on Mergers and Acquisitions
of Domestic Enterprises by Foreign Investors 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 Agreement shall have the meanings set forth as
follows: 

“Sale
Equity Stake” refers to one hundred per cent (100%) of the equity
stake of Jinling Company transferred by the Transferors to the Transferee. 

5

“Jinling
Company” refers to Shaowu City Jinling Power Generation Co., Ltd., a
limited liability company registered and established in accordance with the
laws of PRC, with its registration number being 350781100003671, registered
capital (paid-up capital) being RMB51,800,000 and registered address at
Zhuangshang Village, Nakou Town, Shaowu City. 

“Target
Company” refers to Jinling Company. 

“New
Articles of Association” refers to the new Articles of Association
of Shaowu City Jinling Power Generation Co., Ltd. after the completion of the
share transfer contemplated in this Agreement, which has been approved by the
Examination and Approval Authority. 

“Transfer
Price” shall have the meaning provided in Article 3.1 hereof,
namely, RMB75,060,000. 

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

“Effective
Date” refers to the date when this Agreement is approved by the
Examination and Approval Authority. 

“First
Payment Date” refers to the date when the Transferee pays the first
instalment of the Transfer Price in accordance with Article 4.1 of this
Agreement. 

“Second
Payment Date” refers to the date when the Transferee pays the
balance of the Transfer Price in accordance with Article 4.1 of this Agreement.

“Completion
Date of Delivery” refers to the date provided in Art.12.6 hereof. 

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

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

“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: 

6

	
  

 	
  

 	
  

 
	
  

 	
 (1)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (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. 

 

“Examination
and Approval Authority” refers to the relevant PRC governmental
department having the authority to examine and approve this Agreement, the New
Articles of Association of the Company and to grant approval for the share
transfer contemplated in this Agreement pursuant to the provisions for the
examination and approval of projects which have investments by foreign
investors in the PRC. 

“Material
Adverse Change” refers to: 

	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 investigations (which may cause the Target Company to be punished)
 and penalties upon the Target Company by relevant governmental authorities,
 which may materially affect the normal operation of the Target Company; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 involvement with any litigation, arbitration or any other judicial
 proceedings by the Target Company which may have material impact on the
 normal operation of the Target Company; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 any change which may have impact on the financials, business, assets,
 or debts in the amount of RMB100,000 or more. 

 

“Guarantee
Fund” refers to the fund to be transferred by the Transferors to the
bank account designated by the Transferee in accordance with Art.15.1 hereof. 

“RMB” or “Renminbi” refers to the legal currency of
the PRC. Unless otherwise provided, it is the denominating currency of this
Agreement. 

7

“Transferors’
Bank Accounts” refer to, for the purpose of this Agreement, the bank
accounts respectively opened by Transferors under their respective names for
receiving the Transfer Price (as defined in Art 3.1), the detailed information
of which is set out in Art.4.2 hereof. 

“Senior
Officers” refers to general manager, deputy general manager and
financial manager. 

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

“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 

	
  

 	
  

 
	
 2.1

 	
 Pursuant to the terms and conditions stipulated in this Agreement,
 the Transferors agree to transfer to the Transferee and the Transferee agrees
 to acquire from the Transferors the Sale Equity Stake with all the rights and
 obligations of and attaching to the Sale Equity Stake including, without
 limiting the generality thereof, all the rights to receive dividends and to
 receive or subscribe for shares (if any) declared, paid or issued by Jinling
 Company and free of any Claims or Encumbrances. 

 
	
  

 	
  

 
	
 2.2

 	
 For the avoidance of doubt, all external investment by Jinling
 Company shall be included in the assets to be transferred and have been
 included in the Transfer Price. 

 

Article
3     Transfer Price 

	
  

 	
  

 
	
 3.1

 	
 The Transferors and the Transferee after consultations have finally
 determined that the price for the Sale Equity Stake shall be agreed at
 RMB75,060,000 (hereinafter referred to as the “Transfer Price”). For the avoidance of doubt, all external
 investment by Jinling Company has been included in the Transfer Price.
 

 

8

	
  

 	
  

 
	
 3.2

 	
 The Transfer Price
 shall be paid in two instalments. 

 

Article
4     Payment of the Transfer Price 

	
  

 	
  

 
	
 4.1

 	
 Within five (5) Working Days after this Agreement has been approved
 by the Examination and Approval Authority the certificate of approval for
 establishment of foreign invested enterprises of Jinling Company has been
 issued, the Transferee shall pay the Transferors 50% of the Transfer Price,
 namely, RMB37,530,000. During the period between First Payment Date
 (inclusive) and Completion Date of Delivery (inclusive) or the date when the
 Sale Equity Stake has been registered under the name of the Transferee
 (whichever is later), the Transferors shall pay interest of the first
 instalment of the Transfer Price calculated in 0.016% per day to the
 Transferee, which shall be fully paid to the bank account designated by the
 Transferee on Completion Date of Delivery or the date when the Sale Equity
 Stake has been registered under the name of the Transferee (whichever is
 later). 

 
	
  

 	
  

 
	
  

 	
 From the date when the Transferors have received the first instalment
 of the Transfer Price, the Parties shall start to cooperate in respect of
 alteration registration with the competent administration for industry and
 commerce. 

 
	
  

 	
  

 
	
  

 	
 The balance of the Transfer Price, namely, RMB37,530,000, shall be paid
 within five (5) Working Days after the foreign invested enterprise business
 license has been issued, the alteration registration of the Sale Equity Stake
 with the competent administration for industry and commerce has been
 completed and the Sale Equity Stake has been registered under the name of the
 Transferee, and the delivery provided in Chapter VI hereof has been
 accomplished. 

 
	
  

 	
  

 
	
  

 	
 When the Transfer Price has been fully transferred to the
 Transferors’ Bank Accounts, the obligations of the Transferee shall be deemed
 as completed and the Transferee shall have no liability or obligation to pay
 any Transfer Price. 

 
	
  

 	
  

 
	
 4.2

 	
 The detailed information of the Transferors’ Bank Accounts is set out
 below: 

 
	
  

 	
  

 
	
  

 	
 Bank account of Party B 

 
	
  

 	
 Account Bank: Nanping Sihe Branch, Agricultural Bank of China

 
	
  

 	
 Account Owner: Fujian Taiyu Investment (Group) Co., Ltd.
 

 

9

	
  

 	
  

 
	
  

 	
 Account No.: 910301040003510

 
	
  

 	
 Bank account of Party C 

 
	
  

 	
 Account Bank: Xichun Office, Shaowu City, Agricultural Bank of China 

 
	
  

 	
 Account Owner: Shaowu City Fengyi Power Development Co., Ltd 

 
	
  

 	
 Account No.: 920401040000082 

 
	
  

 	
  

 
	
  

 	
 Bank account of Party D 

 
	
  

 	
 Account Bank: Jianyang Branch, Agricultural Bank of China 

 
	
  

 	
 Account Owner: Jianyang City Xinguang Power Development Co., Ltd. 

 
	
  

 	
 Account No.: 35001677207050006953 

 
	
  

 	
  

 
	
 4.3

 	
 The Transferors shall, within five (5) Working Days after the Payment
 Date of each payment, issue to the Transferee the legal documents evidencing
 the receipt of the Transfer Price, i.e. the receipt with the Transferors’
 seals. In the event that the Transferors fail to issue the said documents
 within the prescribed time limit to the transferee, the Transferee shall be
 entitled to correspondingly delay its following payable instalment of the
 Transfer Price and charge a default fee at 0.05% of the Transfer Price per
 day. 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 Target Company to suffer from any damage or loss, the Transferors
 shall make full compensation on to Transferee and/or the Target Company. 

 

Article 5     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 Agreement 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 the Parties

Article
6     Representations and Warranties by The Parties 

	
  

 	
  

 
	
 6.1

 	
 At the time of signing this Agreement, 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 

 

10

	
  

 	
  

 
	
  

 	
 advisers, etc.) prior
 to the Signing Date are still valid and authentic and confirm that, should
 discrepancies appear between the latter and the terms of this Agreement, this
 Agreement shall prevail. 

 
	
  

 	
  

 
	
 6.2

 	
 The Parties to this Agreement 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, alteration registration with
 the competent administration for industry and commerce and filing for record,
 etc., and the expenses arising
 therefrom shall be respectively borne by the Parties. 

 

Chapter IV Disclosures,
Representations and Warranties by the Transferors 

  Article
7     Disclosures, Representations and Warranties by
the Transferors 

	
  

 	
  

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

 
	
  

 	
  

 
	
 7.1

 	
 All information and facts relating to the Target Company that are 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 Agreement 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 Agreement, 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. 

 
	
  

 	
  

 
	
 7.2

 	
 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
 Agreement or fulfil their obligations under this Agreement. 

 
	
  

 	
  

 
	
 7.3

 	
 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 and
 the Target Company; in case of requiring the consent of such Third Party, the
 Transferors have procured the written consent. 

 
	
  

 	
  

 
	
 7.4

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

 

11

	
  

 	
  

 	
  

 
	
 7.5

 	
 Regarding the documents and information
 provided by the 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: 

 
	
  

 	
  

 	
  

 
	
  

 	
 7.5.1

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

 
	
  

 	
  

 	
  

 
	
  

 	
 7.5.2

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

 
	
  

 	
  

 	
  

 
	
  

 	
 7.5.3

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

 
	
  

 	
  

 	
  

 
	
  

 	
 7.5.4

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

 
	
  

 	
  

 	
  

 
	
 7.6

 	
 The Transferors shall, at any moment upon
 the request by Transferee, on their own expenses, carry out and/or conduct in
 a way which is satisfactory to the Transferee, or to impel the Third Party to
 carry out and/or conduct in a way which is satisfactory to the Transferee,
 any action and/or document which the Transferee reasonably deems requisite,
 in order to realize the full effectiveness and implementation of this
 Agreement, provided that the aforesaid requests shall be fair and reasonable
 and in compliance with relevant laws, administrative regulations and rules. 

 

Article 8 General Representations and
Warranties by the Transferors 

	
  

 	
  

 
	
 8.1

 	
 The Transferors are legal entities that have been duly established
 according to the laws and regulations of China and they are validly and
 legally in existence and also operating normally in accordance with the laws
 and regulations of China. Signing this Agreement and fulfilling all of their
 obligations stipulated herein by the Transferors 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  

 

12

	
  

 	
  

 
	
  

 	
 laws, regulations, stipulations, any
 authorization or approval from any government body or department or the stipulations of any contract or
 agreement that any of the Transferors is a party to or is bound by. 

 

  Article
9     Ownership 

	
  

 	
  

 
	
 9.1

 	
 The Transferors 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. 

 
	
  

 	
  

 
	
 9.2

 	
 The Transferors undertake and warrant that: up to the Effective 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). 

 

  Article
10     The Target Company 

	
  

 	
  

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

 
	
  

 	
  

 
	
 10.1

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

 
	
  

 	
  

 
	
 10.2

 	
 The registered capital of the Target Company has been fully paid up
 on schedule. The Transferors and Jinling Company 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 and Jinling Company. 

 
	
  

 	
  

 
	
 10.3

 	
 The development, construction and operation of the Target Company
 have been duly granted by relevant governmental authorities all requisite
 approvals and are fully complied with all relevant PRC laws and regulations
 and the

 

13

	
  

 	
  

 
	
  

 	
 approvals and permits of relevant governmental authorities, in no
 violation of PRC laws and regulations and approvals and permits of relevant
 governmental authorities. 

 
	
  

 	
  

 
	
 10.4

 	
 Up to the Completion Date of Delivery, every aspect of the Target
 Company, including but not limited to the hydrology, geology, water flow, dam
 safety, hydroelectric generator, 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. The installed capacity of the Target Company
 conforms to that provided in relevant governmental approvals and the name
 plates of generator units of the Hydroelectric Projects. In the event that Transferee
 and/or the Target Company suffer from any damage or loss arising out of any
 defect or any other problem which already existed before the Completion Date
 of Delivery, the Transferors shall be jointly liable for the full
 compensation on the Transferee and/or the Target Company. 

 
	
  

 	
  

 
	
 10.5

 	
 Up to the Completion Date of Delivery (inclusive), the Target Company
 has never suffered and are not currently suffering from any other
 administrative investigations, prosecutions, arbitrations, disputes, Claims
 or other proceedings (ongoing, pending or threatened), nor the Target Company
 has been punished. 

 
	
  

 	
  

 
	
  

 	
 Up to the Completion Date of Delivery, 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, residents relocation,
 fire-prevention and work safety, etc. 

 
	
  

 	
  

 
	
  

 	
 The Transferors hereby warrant that except for the payables set out
 in this Agreement, all fees, charges, compensations, penalties and expenses
 payable to or being required to pay to any PRC governmental authority/or any
 other Third Party prior to the Completion Date of Delivery have been paid in
 full. 

 
	
  

 	
  

 
	
  

 	
 In the event that the Transferee and/or the Target Company suffer
 from any penalty, damage, loss, etc.
 due to any such administrative investigations, prosecutions, arbitrations,
 disputes, Claims, penalties and/or other

 

14

	
  

 	
  

 
	
  

 	
 proceedings which existed before the
 Completion Date of Delivery and have not been disclosed by the Transferors,
 the Transferors shall fully compensate the Transferee and/or the Target
 Company. 

 
	
  

 	
  

 
	
 10.6

 	
 Other than those disclosed in this Agreement, the Target Company
 legally owns all requisite real estates (including but not limited to land,
 buildings, water retaining dam, water diversion canal, power transmission
 lines, structures and affiliated facilities) and moveable assets (including
 but not limited to machinery, equipments, vehicles, furniture and office supplies),
 and such real estates and movable assets shall be not less than those real
 estate and movable assets listed out in the Breakdown of Assets Checking and
 Evaluation prepared by Guangdong Zhongtuo Zhengtai Assets Valuation and Land
 Appraisal Co., Ltd and jointly confirmed by the Transferors and the
 Transferee. The Transferors hereby confirm and warrant that from the Signing
 Date (inclusive) to the Completion Date of Delivery (inclusive), no loss or
 damages to such real estates and movables will be incurred due to any actions
 of the Transferors/or any Third Party. In the event that such real estates
 and movables incur any damage or loss due to any action of the Transferor/or
 any Third party, the Transferors shall assume joint liabilities and fully compensate
 the Transferee and/or the Target Company. 

 
	
  

 	
  

 
	
 10.7

 	
 Up to the Completion Date of Delivery (inclusive), the delivery of
 major machinery and equipments of Target Company shall be deemed as completed
 if the main machinery and equipments have been in good and consecutive
 operation for 72 hours. Up to the Completion Date of Delivery (inclusive),
 all hydro buildings and structures owned by the Target Company are in good
 and secure conditions. In the event that within twelve (12) months after the
 Completion Date of Delivery, the Target Company/or the Transferee suffer any
 loss or damage due to material or hidden defects which already existed before
 the Completion Date of Delivery (inclusive), the Transferors shall assume
 joint liabilities and fully compensate the Transferee and/or the Target
 Company. 

 
	
  

 	
  

 
	
 10.8

 	
 The production, operation, construction and business of the Target
 Company are fully complied with all applicable PRC laws and regulations and
 national and industrial standards, including but not limited to those laws
 and regulations and standards in relation to hydropower generation,
 environmental protection, water and soil preservation, flood prevention plan,
 design and construction of water resource projects, invitation and submission
 of bids, 

 

15

	
  

 	
  

 
	
  

 	
 utilization of woodland, wood cutting, fire-prevention, work safety
 and relocation. All construction projects of the Target Company (including
 complete and under construction projects) have obtained all required
 approvals and permits from relevant governmental authorities and have been
 constructed strictly in compliance with such approvals and permits without any violation. 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, relocation administration authorities and other
 governmental authorities will not punish the Target 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 Completion Date of Delivery (inclusive). In
 the event that the Target 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, relocation administration authorities or other governmental
 authorities, the Transferors shall fully compensate the Transferee and/or the
 Target Company so as to hold the Transferee and/or the Target Company
 harmless, excluding those already disclosed in this Agreement. 

 
	
  

 	
  

 
	
 10.9

 	
 Up to the Signing Date, the Transferors have already disclosed all
 information of the debts of the Target Company. As of the Completion Date of
 Delivery (inclusive), such information is still complete, reliable, accurate
 and true. Up to the Completion Date of Delivery (inclusive), all bank loans
 and other debts of the Target Company have been disclosed to the Transferee.
 As of the Completion Date of Delivery (inclusive), all due principal and
 interests of the bank loans and other debts have been fully paid off. The
 Transferors shall assume joint liabilities for any undisclosed debts of the
 Target Company and any unpaid due principal and interests (as of the
 Completion Date of Delivery (inclusive)) so as to hold the Transferee and/or
 the Target Company harmless. 

 
	
  

 	
  

 
	
 10.10

 	
 As of the Completion Date of Delivery (inclusive),
 all compensation fees for the land occupied and used by the Target Company
 have been fully paid off, however, the fees for the procurement of the
 state-owned land use right 

 

16

	
  

 	
  

 
	
  

 	
 certificates of workshop, dam, production area of
 the Target Company shall be executed pursuant to Article 15 hereof. As of the
 Completion Date of Delivery, the Target Company could not be involved in any
 legal action, arbitration, penalty or suffer from any other damage or loss
 due to the land issues. In the event that the Transferee and/the Target Company suffer from any
 penalty, damage or loss, etc.
 therefrom, the Transferors shall assume the joint liability to fully
 compensate Transferee and/or the Target Company.

 
	
  

 	
  

 
	
 10.11

 	
 As of the Completion Date of Delivery, except for the lease land
 disclosed by Transferors, the Target Company does not lease any moveable
 assets and real estate such as land, buildings equipments and facilities, etc. As of the Completion Date of
 Delivery (inclusive), the due rental and relevant fees have been fully paid
 off. In the event that the Target Company and/or the Transferee suffer from
 any penalty, damage or loss due to the undisclosed leased moveable assets and
 real estate, the Transferors shall assume joint liability and fully
 compensate the Transferee and/or the Target Company. 

 
	
  

 	
  

 
	
 10.12

 	
 During the period between the Signing Date and the Completion Date of
 Delivery, the Transferors shall normally operate and manage the Target
 Company and warrant that there will not be any Material Adverse Change of the
 operation, business and conditions of the Target Company. 

 
	
  

 	
  

 
	
 10.13

 	
 As of the Completion Date of Delivery, except for the external
 investment already disclosed, Jinling Company does not have any equity
 investment in any other companies, enterprises, or other economic
 organizations, or have any partnership or association with any other companies, enterprises, or
 other economic organizations or individuals. In the event that the Target
 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 Target Company. 

 
	
  

 	
  

 
	
 10.14

 	
 As of the Completion Date of Delivery, except for the securities already
 disclosed, the Target 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 Target 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 Target Company suffers from any damage or loss due to such
 undisclosed

 

17

	
  

 	
  

 
	
  

 	
 securities, the Transferors shall assume joint liabilities and
 fully compensate the Transferee and/or the Target Company. 

 
	
  

 	
  

 
	
 10.15

 	
 As of the Completion Date of Delivery, the Target 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, and water resources fees. The Transferors shall
 assume joint liabilities for any unpaid tax and fees to the Transferee and/or
 the Target Company so as to hold the Transferee and/or the Target Company
 harmless. 

 
	
  

 	
  

 
	
 10.16

 	
 The effectiveness of this Agreement will not cause any Third Party to
 terminate the contracts or agreements which are concluded with the Target
 Company prior to the Effective Date (inclusive) of this Agreement which are
 still valid on the Effective Date of this Agreement. 

 
	
  

 	
  

 
	
 10.17

 	
 As of the Completion Date of Delivery, the Target 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 Target Company suffers from any punishment, damage or
 loss due to any above issue, the Transferors shall assume joint liabilities
 and fully compensate the Target Company and/or Transferee. 

 
	
  

 	
  

 
	
 10.18

 	
 Labour Contracts between the Target Company and the employees who are
 still employed by the Target Company upon the Signing Date have been legally
 and validly concluded. The various social insurance premiums and housing
 provident fund, which shall be paid for the employees according to relevant
 PRC laws and regulations, have been fully and timely paid up, and the Target
 Company have not delayed any payment of the employees’ social insurance premiums,
 housing provident fund, salaries, and other welfares provided in PRC laws and
 the Target Company’ internal regulations. As of the Completion Date of
 Delivery (inclusive), the Target Company is free from any problem which may
 lead the employees to initiate labour arbitrations or lawsuits against the
 Target Company. In the event that the Target 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 Target Company.

 

18

	
  

 	
  

 
	
 10.19

 	
 All insurance policies of the Target Company are valid and all due
 fees have been fully paid off, and all the other key conditions have been
 fully fulfilled and complied with. As of the Completion Date of Delivery
 (inclusive), there are no conditions which have led or may lead the aforesaid insurance
 policies to be invalid or the Target Company cannot be compensated. As of the
 Completion Date of Delivery, there are no situations in which the Target
 Company may claim for compensations from the insurer according to the
 aforesaid insurance policies.

 
	
  

 	
  

 
	
 10.20

 	
 As of the Completion Date of Delivery (inclusive), relevant
 coordination fees, compensation fees and other liabilities and obligations,
 which are payable and assumed by the Target Company to any Third Party in
 accordance with relevant agreements for the purpose of the construction, land
 occupation and other issues of the Hydroelectric Projects, have been fully
 paid off or fulfilled, and there is no delayed or defaulted payment. In the
 event that the Target Company and/or the Transferee suffer from any loss or
 damage due to the reasons existed prior to the Completion Date of Delivery,
 the Transferors shall be jointly liable for the full compensation on the
 Transferee and/or the Target Company. 

 
	
  

 	
  

 
	
 10.21

 	
 All the accounts, books, ledgers and financial records of the Target
 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 Target Company and show the financial, contractual and other business
 conditions of the Target Company during every financial term. 

 
	
  

 	
  

 
	
 10.22

 	
 The Transferors undertake and warrant that after the Effective Date,
 the Target Company shall not illegally interfere with or hamper the
 Transferee in respect of amendments to articles of association, election of
 new directors and supervisors etc. and in the course of future production,
 operation and management. 

 
	
  

 	
  

 
	
 10.23

 	
 The Transferors undertake and warrant that they will, within six
 months from the Second Payment Date (inclusive), discharge the joint
 liabilities provided by Jinling Company for the benefit of Zhenghe County
 Jinhe Hydroelectric Co., 

 

19

	
  

 	
  

 
	
  

 	
 Ltd. and Fujian Province Nanping Minyan Power
 Construction Co., Ltd., and the Transferors shall provide security for the
 benefit of Jinling Company in respect of the release of the aforesaid
 security until the release of such security. In the event that Jinling Company suffers from any damage
 or loss, the Transferors shall fully compensate Jinling Company.

 
	
  

 	
  

 
	
 10.24

 	
 The Transferors undertake and warrant they would procure the
 shareholders’ resolution regarding the approval of the transfer of Sale
 Equity Stake in accordance with relevant provisions of the Company Law. 

 
	
  

 	
  

 
	
 10.25

 	
 Any representation and warranty made by the Transferors under this
 Agreement shall survive 12 months after the Completion Date of Delivery. 

 

Chapter V Disclosures,
Representations and Warranties by Transferee

  Article
11     Disclosures, Representations and Warranties by
Transferee

The Transferee hereby represents and warrants to the Transferors that: 

	
  

 	
  

 
	
 11.1

 	
 The Transferee is a foreign invested enterprise that has been duly
 established, validly and legally in existence and also operated normally in
 accordance with the laws and regulations of PRC. The Transferee is capable of
 fulfilling its obligation of paying the Transfer Price as set out in this
 Agreement. 

 
	
  

 	
  

 
	
 11.2

 	
 The Transferee in signing this Agreement 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. 

 
	
  

 	
  

 
	
 11.3

 	
 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 Agreement or fulfil its
 obligations under this Agreement. 

 
	
  

 	
  

 
	
 11.4

 	
 The Transferee undertakes that it will discharge the securities set
 out in Appendix VI to this Agreement that have been provided to the Target
 

 

20

	
  

 	
  

 
	
  

 	
 Company by the Transferors/or any Third Party within six (6) months from the
 Second Payment Date. The Transferee undertakes that it will provide
 securities to the Transferors/or any Third Party in respect of the said
 discharge of securities until the said discharge of securities have been legally completed.
 In the event that the Transferors/or any Third Party suffer from any loss or
 damage due to the said securities, the Transferee shall fully compensate the
 Transferors/or any Third Party.

 
	
  

 	
  

 
	
 11.5

 	
 Any representation and warranty made by the Transferee under this
 Agreement shall survive 12 months after the Completion Date of Delivery. 

 

Chapter VI Delivery

  Article
12     Delivery 

	
  

 	
  

 	
  

 
	
 12.1

 	
 After the Signing Date, the Transferors and the Transferee shall
 immediately organize a delivery team to make preparations for the delivery of
 the Target Company. 

 
	
  

 	
  

 	
  

 
	
 12.2

 	
 The Parties confirm that the delivery includes all equities interests
 in the power stations held by Jinling Company. 

 
	
  

 	
  

 	
  

 
	
 12.3

 	
 The Transferors warrant that prior to the delivery, they shall
 deliver the list of all documents and receipts and other materials of the
 Target Company to the Transferee, including but not limited to all financial
 vouchers, books, approvals, certificates, licenses, customers’ information,
 engineering materials, all contracts, agreements entered into by Target
 Company and employees’ materials, etc. 

 
	
  

 	
  

 	
  

 
	
 12.4

 	
 The Transferors shall warrant making a full and complete delivery and
 the Target Company’s movable assets and real estate delivered to the
 Transferee shall not be reduced or damaged comparing with those set out in
 the breakdown of assets checking and valuation issued by Guangdong Zhongtuo
 Zhengtai Assets Valuation and Land Valuation Co., Ltd. 

 
	
  

 	
  

 	
  

 
	
 12.5

 	
 The delivery includes but not limited to: 

 

21

	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 Delivery of the production, operation and management of the Target
 Company to the staff appointed by the Transferee; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Delivery of the Target Company’s seals, such as the official seal,
 financial seal and contract seal, etc.
 to the staff appointed by the Transferee; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (3)

 	
 The Transferors and the Transferee shall check and verify all the
 assets (including but not limited to the real estate and movable assets) of
 the Target Company, make a list of the Target Company’ assets, and complete
 the delivery, subject to the confirmation by way of signature by the
 representatives of both the Transferor and the Transferee on site; during the
 checking and verifying of the assets, the Transferors shall compensate for
 the damaged assets by reference to the valuation price; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (4)

 	
 Delivery of originals of all current approvals, certificates,
 licences, customers’ information of the Target Company to the staff appointed
 by the Transferee; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (5)

 	
 Originals of all the project drawings, contracts and agreements
 (including but not limited to grid connection and dispatching agreement,
 power purchase and sale contract, project contract, equipment contract,
 installation contract, materials contract) and other files shall be sorted
 out and delivered to the staff appointed by the Transferee; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (6)

 	
 Originals of all the financial accounting books, financial vouchers
 and the fiscal files shall be sorted out and delivered to the staff appointed
 by the Transferee and financial closing shall be done; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (7)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (8)

 	
 The delivery of other current materials and files of the Target
 Company. 

 

22

	
  

 	
  

 
	
 12.6

 	
 The specific delivery order of the Target Company shall be determined
 by both Parties separately, however, the delivery shall be completed within
 ten (10) Working Days after the First Payment Date, the completion of which
 shall be confirmed in writing by the Transferee. The Completion Date of
 Delivery shall be the issuance date of the written confirmation by the Transferee.

 
	
  

 	
  

 
	
 12.7

 	
 24:00 of the Completion Date of Delivery or 24:00 of the day when the
 Sale Equity Stake is registered under the name of the Transferee (the later
 of which shall prevail) shall be the settlement point of the rights closing
 of the Transferors and Transferee. All debts and interests of the Target
 Company prior to the settlement point shall be assumed by the Transferors,
 and all creditor’s rights and income (including depreciation) shall be owned
 by the Transferors. The debts inherited by the Target Company and/or debts
 and interests of the Target Company after the settlement point shall be
 assumed by the Transferee and all creditor’s rights and income shall be owned
 by the Transferee. 

 
	
  

 	
  

 
	
 12.8

 	
 After the completion of the delivery, as for the reasonable request
 of further delivery by the Transferee in writing, the Transferors shall
 cooperate actively. 

 
	
  

 	
  

 
	
 12.9

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

 
	
  

 	
  

 
	
 12.10

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

 
	
  

 	
  

 
	
 12.11

 	
 The Transferors undertake and warrant that the engineering and
 relevant equipments and facilities of the Target Company is in compliance
 with the Breakdown of Assets Checking and Evaluation prepared by Guangdong
 Zhongtuo Zhengtai Assets Valuation and Land Appraisal Co., Ltd. In the event
 that the Transferee incurs any loss arising therefrom, the Transferors shall
 fully compensate the Transferee. 

 

23

Chapter VII Debt Arrangement
and Employees Relocation of Target Company

  Article 13     Debts
Arrangement 

	
  

 	
  

 
	
 13.1

 	
 The Parties confirm that as of the Completion Date of Delivery, the
 banking loans of the Target Company shall be in the total amount of RMB
 204,000,000, and the bank loans inherited by the Transferee in proportion to
 shareholding ratio is RMB160,000,000; as of the Completion Date of Delivery,
 other debts of the Target Company shall be in the total amount of
 RMB191,896,370.23 and the other debts inherited by the Transferee in
 proportion to shareholding ratio is RMB175,940,000. 

 
	
  

 	
  

 
	
 13.2

 	
 In principle, the Transferee shall pay off the shareholders’ loans in
 the total amount of RMB126,211,772 within six months from the Completion Date
 of Delivery. Within eight months from the Completion Date of Delivery
 (exclusive), the Transferee shall pay interest (applicable annual interest
 rate is 6%) to the Transferors for the balance of the shareholders’ loans;
 within four months from the expiration date of the aforesaid eight-month
 period, the Transferee shall pay interest (applicable annual interest rate is
 10%) to the Transferors for the balance of such unpaid shareholders’ loans.
 The aforesaid interest shall be settled quarterly from the Completion Date of
 Delivery, and last interest shall be paid on the day when the principal of
 the shareholders’ loan is fully paid. 

 
	
  

 	
  

 
	
  

 	
 The escrow shall be ended on the Completion Date of Delivery for the
 deposit in the amount of RMB20,000,000 paid by the Transferee to the escrow
 account prior to the signing of this Agreement. Such fund shall be used by
 the Transferors and the interest for the corresponding portion of the
 shareholders’ loan shall be exempted.

 
	
  

 	
  

 
	
 13.3

 	
 Other than shareholders’ loans, other debts in the amount of
 RMB49,728,228 shall be paid by the Transferee after the Completion Date of
 Delivery. 

 
	
  

 	
  

 
	
 13.4

 	
 The debts and interests as of 24:00 of the Completion Date of
 Delivery or the date when the Sale Equity Stake is registered under the name
 of the Transferee (whichever is later) which exceed the total amount set out
 in this Agreement hereto shall be assumed by the Transferors and the balance
 after paying off the debts shall belong to the Transferors which shall be
 paid by the Transferee to the Transferors. 

 

24

	
  

 	
  

 	
  

 
	
 13.5

 	
 In case of the occurrence of any of the following circumstances and
 subject to the confirmation by the Parties, the Transferee is entitled to
 directly deduct relevant amount from the shareholders’ loans to be repaid set
 out in Appendix V thereto: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 the creditors of other debts of the Target Company which are not
 within the scope set out in this Agreement request the payment of the debts
 existing prior to the Completion Date of Delivery (inclusive); or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 other creditors of the Company request the payment of the debts which
 are more than those set out thereon.

 
	
  

 	
  

 	
  

 
	
  

 	
  In case of the occurrence of any of the
 above circumstances, in the event that the shareholders’ loans are not
 sufficient to pay off, the difference shall be fully borne by the
 Transferors, the Transferee and the Target Company shall not be liable. In
 the event that the Transferee and/or the Target Company incur any damage or
 loss, the Transferors shall assume joint liabilities to fully compensate the
 Transferee and/or the Target Company. 

 

  Article     14
Relocation of Employees 

	
  

 	
  

 
	
 14.1

 	
 After the completion of the transfer of equity interests, all
 existing employees shall be relocated in accordance with law. The terms and
 conditions of their employment shall be determined by reference to the
 current standards and implemented in accordance with the Labour Law of the PRC, Labour Contract Law of the PRC and other
 laws and regulations. 

 
	
  

 	
  

 
	
 14.2

 	
 The company shall protect legal rights of the employees in accordance
 with law. 

 

Chapter VIII Guarantee Fund

  Article
15     Guarantee Fund 

	
  

 	
  

 
	
 15.1

 	
 The Transferors agree that the Transferee can deduct RMB7,950,000
 from the shareholders’ loan to be repaid as the Guarantee Fund for the
 completion of all matters provided in Article 15.2 hereof (“Guarantee Fund”). The guarantee period
 shall commence from the Effective Date, and shall end when all obligations
 provided in Article 15.2 have been fulfilled or one year from the Effective
 Date (the later shall prevail). 

 

25

	
  

 	
  

 	
  

 
	
 15.2

 	
 The Guarantee Fund shall ensure the completion of the following
 matters: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 As for all land and buildings of the workshop, dam and production
 area of all power stations invested by Target Company, the Transferors shall
 procure the legal and valid State-owned Land Use Right Certificates (granted
 type) and Building Ownership Certificates and deliver the originals to the
 Transferee; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 The Transferors shall complete the overall completion acceptance for
 all power stations invested by Target Company, procure the acceptance
 verification letters and relevant approvals and deliver the originals to the
 Transferee. 

 
	
  

 	
  

 	
  

 
	
 15.3

 	
 All fees and expenses arising from the matters set out in Article
 15.2 shall be assumed by the Transferors in proportion to shareholding ratio
 and deducted from the Guarantee Fund provided that the Transferors shall
 submit relevant legal receipts to the Transferee. In the event that the
 Guarantee Fund is not sufficient to pay the aforesaid fees and expenses, the
 exceeding portion shall be borne by the Transferors in proportion to
 shareholding ratio and the Transferee and Target Company shall not be liable.
 

 
	
  

 	
  

 	
  

 
	
 15.4

 	
 During the guarantee period, in the event that the Transferors breach
 any representation or warranty under this Agreement or commit any other
 defaulting actions and the Transferee incurs any damage or loss arising
 therefrom, the Transferee is entitled to directly deduct such amount from the
 Guarantee Fund and the Transferors shall not request the Transferee to refund.
 

 
	
  

 	
  

 	
  

 
	
 15.5

 	
 After the expiration of the guarantee period, in the event that no
 quality problems arise and the Transferors have no breach of this Agreement,
 the Transferee shall refund the balance of the Guarantee Fund (if any)
 without interest to the bank account designated by the Transferors within
 five (5) Working Days from the expiration date of the guarantee period. 

 
	
  

 	
  

 	
  

 
	
 15.6

 	
 The Parties confirm that notwithstanding the foregoing, within two
 (2) years from the Effective Date, the obligations set out in Article 15.2
 are not fulfilled due to Transferors’ reasons, then the balance of the
 Guarantee Fund (if any)

 

26

	
  

 	
  

 
	
  

 	
 and interest accrued thereon shall be owned by the Transferee and no
 need to refund it. 

 

Chapter IX Confidentiality

  Article 16     Confidentiality

	
  

 	
  

 	
  

 
	
 16.1

 	
 Unless otherwise provided for in another relevant confidentiality
 agreement, 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 Agreement pertaining to their respective businesses, or financial
 situations and other confidential matters, the Parties to this Agreement
 which have received the aforesaid confidential information (including written
 information and non-written information, hereinafter referred to as “Confidential Information”) shall: 

 
	
  

 	
  

 	
  

 
	
  

 	
 16.1.1

 	
 Keep the aforesaid Confidential Information confidential; 

 
	
  

 	
  

 	
  

 
	
  

 	
 16.1.2

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

 
	
  

 	
  

 	
  

 
	
 16.2

 	
 The provisions of the aforesaid Article 16.1 shall not apply to Confidential
 Information: 

 
	
  

 	
  

 	
  

 
	
  

 	
 16.2.1

 	
 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; 

 
	
  

 	
  

 	
  

 
	
  

 	
 16.2.2

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

 
	
  

 	
  

 	
  

 
	
  

 	
 16.2.3

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

 

27

	
  

 	
  

 
	
 16.3

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

 

Chapter X Breach of Contract

  Article
17     Liability for Breach of a Representation or
Warranty 

	
  

 	
  

 
	
 17.1

 	
 If any representation or warranty made by any Party to this Agreement
 is found to be an error, or if any fact that has or is likely to have a major
 or substantial effect on the signing of this Agreement by any Party has been
 omitted, or if any representation or warranty is found to be misleading or
 untrue in any respect, the non-breaching Party shall be entitled to 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. 

 
	
  

 	
  

 
	
 17.2

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

 

  Article
18     Liability for Breach of Contract 

	
  

 	
  

 
	
 18.1

 	
 In the event of a breach committed by any Party to this Agreement,
 the said defaulting Party shall be liable to the other Party (ies) for the
 losses and damages or any other liabilities arising out of that defaulting
 Party’s breach of contract in accordance with the provisions of this
 Agreement and the laws and regulations of PRC. In the event the Parties
 commit the breach of contract, one Party shall assume the liability to
 compensate the loss or damage or other obligations for the other Parties
 respectively.

 
	
  

 	
  

 
	
 18.2

 	
 The Parties hereby confirm that in the event that the transfer of the
 Sale Equity Stake has not been legally completed due to Transferee’s reasons,
 the deposit in the amount of RMB20,000,000 paid by the Transferee shall not
 be refunded; in the event that the transfer of the Sale Equity Stake has not
 been legally completed due to Transferors’ reasons, the Transferors shall
 refund the 

 

28

	
  

 	
  

 
	
  

 	
 double deposit paid by the Transferee to the bank account designated by the
 Transferee within five (5) Working Days from the date when such reason
 occurs; in the event that the transfer of the Sale Equity Stake has not been
 legally completed due to reasons of the Examination and Approval Authority or
 administration for industry and commerce, the Transferors shall refund the
 deposit in the amount of RMB20,000,000 paid by the Transferee and interest
 accrued thereon to the bank account designated by the Transferee within five
 (5) Working Days from the date when such reason occurs.

 
	
  

 	
  

 
	
 18.3

 	
 In the event that the undisclosed issues by Transferors prior to the
 signing of this Agreement which may influence the legal existence of the
 Target Company, actually influence the legal existence of the Target Company
 after the transfer of equity stake hereunder, the Transferee is entitled to
 apply to the Examination and Approval Authority for the termination of this
 Agreement and to require the Transferors to pay three per cent (3%) of the
 Transfer Price as liquidated damages; in addition, the Transferee is entitled
 to resort to other claims in accordance with the PRC laws and this Agreement.
 

 
	
  

 	
  

 
	
 18.4

 	
 Except for Transferee’s reasons, in the event that the delivery is
 not fully completed within the time limit as prescribed in Chapter VI due to
 Transferors’ reasons and the Transferors still fail to perform or refuse to
 perform within ten (10) days after the Transferee urges them in writing, then
 the Transferors shall pay RMB20,000,000 to the Transferee as liquidated damages
 within three (3) days after the expiration of the urgency period. 

 
	
  

 	
  

 
	
  

 	
 In the event that the Transferee fails to pay the Transfer Price on
 time in accordance with Article 4.1 hereof, the Transferee shall pay 0.03% of
 the unpaid Transfer Price per day as defaulted fines; in case the default
 period is longer than 30 days, then from the 31st day, the Transferee shall
 pay 0.05% of the unpaid Transfer Price per day as defaulted fines. In the
 event that the Transferee delays to pay the Transfer Price for more than six
 (6) months and/or fails to pay off the shareholders’ loans within one (1)
 year from the Completion Date of Delivery in accordance with Article 13.2
 hereof, such delay shall be deemed as material breach and the Transferee
 shall pay RMB20,000,000 to the Transferors as liquidated damages.

 
	
  

 	
  

 
	
 18.5

 	
 Any violation of the obligations, representations and warranties
 under this Agreement by any Party of the Transferors and Transferee shall
 constitute a

 

29

	
  

 	
  

 
	
  

 	
 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.

 
	
  

 	
  

 
	
 18.6

 	
 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 this Agreement committed by any of Transferors. 

 

Chapter XI Force Majeure

  Article 19     Force Majeure

	
  

 	
  

 
	
 19.1

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

 
	
  

 	
  

 
	
 19.2

 	
 In the event of the occurrence of a Force
 Majeure event, the obligations of the Party to this Agreement
 affected by this Force Majeure event
 shall cease during the period of the Force
 Majeure event and any term or period set out in this Agreement to
 which the affected party is subject shall automatically be extended by a
 period equal to the term or period of the Force
 Majeure event, 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 be liable for any losses and damages or any other liabilities
 arising out of a breach of contract as provided for in this Agreement for the
 duration of the Force Majeure. 

 
	
  

 	
  

 
	
 19.3

 	
 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 issued by the notary organization of the occurrence and
 the continuity of the Force Majeure
 event. It shall also do its best to eliminate the adverse effect of the Force Majeure event. 

 

Chapter XII Resolution of Disputes

  Article 20     Arbitration 

	
  

 	
  

 
	
 20.1

 	
 Any dispute arising out of or in connection with this Agreement
 between the Parties to this Agreement shall firstly be resolved through
 friendly consultation.

 

30

	
  

 	
  

 
	
  

 	
 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 China International Economic
 and Trade Arbitration Commission for arbitration in accordance with its
 prevailing valid arbitration rules. The place for arbitration shall be in
 Shanghai.

 
	
  

 	
  

 
	
 20.2

 	
 The arbitration tribunal shall consist of three (3) arbitrators and
 the arbitrators shall be proficient in Chinese Language. 

 

Article 21     Validity of the Arbitration Award 

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

Article 22     Continuation of Rights and Obligations 

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

Chapter XIII Applicable Law

Article
23     Applicable Law 

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

Chapter XIV Miscellaneous

Article
24     Waiver 

The non-exercise or delay in the exercise of
an entitlement stipulated in this Agreement by any Party to this Agreement
shall not be regarded as a waiver of the said

31

entitlement. Any single exercise or partial
exercise of an entitlement shall not rule out any future re-exercise of the
said entitlement. 

Article 25     Transfer 

Unless otherwise described and prescribed in
this Agreement, 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 Agreement shall transfer or assign that
Party’s entitlement or obligations as stipulated in this Agreement. 

Article 26     Amendment 

	
  

 	
  

 
	
 26.1

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

 
	
  

 	
  

 
	
 26.2

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

 

Article 27     Severability 

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

Article 28     Language 

This Agreement is written in both the Chinese
Language and the English Language. In case of any inconsistency between the
Chinese Language and the English Language, the Chinese Language shall prevail. 

Article
29     Validity of the Text and Appendices 

	
  

 	
  

 
	
 29.1

 	
 This Agreement shall become effective on the approval date by the
 Examination and Approval Authority. The Chinese text of this Agreement shall
 be signed in six (7) 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
 Examination and Approval Authority, the governing authority of industry and
 commerce and other governmental authorities as required. The remaining
 originals shall be filed and kept by the Jinling Company. 

 

32

	
  

 	
  

 
	
 29.2

 	
 The English text of this Agreement shall be signed in six (6) sets of
 original and one (1) set of original each shall be sent to the Examination
 and Approval Authority the governing authority of industry and commerce and
 other governmental authorities as required. The remaining originals shall be
 filed and kept by the Jinling Company. 

 
	
  

 	
  

 
	
 29.3

 	
 The Parties may enter into separate agreements regarding any matters
 not covered in this Agreement. Such agreements shall be integral part of this
 Agreement and shall have the same legal effect as this Agreement after being
 approved by the Examination and Approval Authority. 

 

Article
30     Notification 

	
  

 	
  

 	
  

 
	
 30.1

 	
 Unless otherwise specified and prescribed, any Party issuing any
 notification or written communication to the other Party (ies) according to
 the provisions of this Agreement shall have them written in the Chinese
 Language and shall send them as a letter by a courier service company or by
 facsimile. Letters sent by a courier service company 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 Agreement 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. 

 
	
  

 	
  

 
	
 30.2

 	
 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

 

33

	
  

 	
  

 	
  

 
	
  

 	
 The Address
 jointly designated by Transferors: 3rd Floor, Mindian Plaza, No. 53, Bin Jiang South
 Road, Nanping City, Fujian 

 
	
  

 	
 Telephone
 Number: 

 	
 0599-8843348

 
	
  

 	
 Facsimile
 Number:

 	
 0599-8843348

 
	
  

 	
 Addressee:

 	
 Shi Chengjian

 

Article 31     The
Entire Agreement 

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

	
  

 
	
  (REMAINDER OF PAGE INTENTIONALLY LEFT
 BLANK)

 
	

 

 

34

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

	
  

 	
  

 
	
 Party A:

 	
 Fujian
 Huabang Hydroelectric Investment Co., Ltd. 

 
	
  

 	
  

 
	
  

 	
 (Stamp)

 

Authorized Representative (Signature): ______________

	
  

 	
  

 
	
 Party B:

 	
 Fujian
 Taiyu Investment (Group) Co., Ltd. 

 
	
  

 	
  

 
	
  

 	
 (Stamp)

 

Authorized Representative (Signature): __________________

	
  

 	
  

 
	
 Party C:

 	
 Shaowu
 City Fengyi Power Development Co., Ltd. 

 
	
  

 	
  

 
	
  

 	
 (Stamp)

 

Authorized Representative (Signature): __________________

	
  

 	
  

 
	
 Party D:

 	
 Jianyang
 City Xinguang Power Development Co., Ltd. 

 
	
  

 	
  

 
	
  

 	
 (Stamp)

 

Authorized Representative (Signature): __________________

35

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