EXHIBIT 10.3

Mortgage Agreement

(This document is an English summary from the original Chinese version)

The Mortgagor: Jinzhou Halla Electrical Equipment Co., Ltd.

The Mortgagee: Bank of China (Jinzhou Tiebei Branch)

In order to ensure the performance of one or several credit agreements entered
or to be entered into between the Mortgagor and the Mortgagee, the Mortgagor
hereby enters into this agreement (the “Agreement”) with the Mortgagee and
grants the Mortgagee security interests on certain of its properties to secure
its obligations under those credit agreements. All terms have the meaning as
defined in the credit agreements unless otherwise provided herein.

Section 1 Credit Facility Agreements

The Agreement is entered into pursuant to one or several Credit Facility
Agreements entered or to be entered into by the Mortgagor and Mortgagee between
September 27, 2007 and September 24, 2008, and any other agreements now or
hereafter entered into in connection with the Credit Facility Agreements
(collectively, the “Credit Facility Agreements”).

The Mortgagee hereby confirms that it shall provide the credit facility to the
Mortgagor pursuant to the Credit Facility Agreements and permit the Mortgagor,
subject to the terms of the Credit Facility Agreement, to use the credit
facilities for the use of RMB short-term loan, foreign currency short-term loan,
bank’s acceptance bill and settlement.
 
Section 2 Security Scope

The obligations covered by the Agreement are: the outstanding loan obligations
up to RMB 80 million owed by the Mortgagor to the Mortgagee incurred during
September 27, 2007 to September 24, 2008 (the “Secured Obligations”).

The Secured Obligations shall include all principal, interest, damage and
related costs (including, but not limited to attorney’s fee, notarization fee
and execution fee, etc.).

Section 3 Secured Liabilities

Should the Mortgagor default for failing to make mortgage payments due under the
Credit Facility Agreements, the Mortgagee has the right to foreclose on the
collateral.
 
 

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Section 4 Settlement Date

The settlement date for the Secured Obligations shall be the earlier of (i)
September 24, 2008 as provided in Section 2; or (ii) the date when the amount of
the Secured Obligation can be determined pursuant to the applicable laws.

Section 5 Collaterals

The assessed value of the collateral is RMB 93.75 million. If at any time before
the full repayment of the Secured Obligations, the total value of the collateral
decreases and is insufficient to secure all Secured Obligations, the Mortgagee
shall have the rights to request the Mortgagor to recover the value of the
collaterals or provide additional collaterals acceptable to the Mortgagee with
value equals to the decreased value.

In case the collaterals are the properties of which the circulation is
restricted, the Mortgagor shall coordinate with the Mortgagee to go through
examination, approval and registration formalities in accordance with the
stipulations by law.

If the value of the collaterals decreases due to natural disaster, unexpected
events, torts or other reasons, the Mortgagor shall take necessary actions to
prevent further damage and shall provide written notice to the Mortgagee
promptly.
 
Section 6 Possession of the Collaterals

The collateral under the Agreement shall be possessed by the Mortgagor but the
title and other ownership documents shall be possessed by the Mortgagee. The
Mortgagor agrees to accept and effectively coordinate the examination to the
collateral by the Mortgagee and its delegated organizations and individuals at
any time. The Mortgagor shall properly keep and maintain the collateral and take
effective measures to safeguard the safety and completeness of the collateral.
The collateral shall not be transferred, lend, leased, or disposed by the
Mortgagor without prior written consent of the Mortgagee, otherwise the
Mortgagee is entitled to declare such activities to be invalid and take the
remedies specified under section 12.

Section 7 Insurance for the Collaterals

The Mortgagor shall insure the collateral with an insurer in such manner and for
a term agreed upon by the Mortgagor and the Mortgagee. The coverage for the
insurance shall be no less than the book value of the collaterals. The insurance
policy shall comply with the requirements of the Mortgagee and contain no
restrictive clauses which impair the interests of the Mortgagee.

Before repaying off the Secured Obligations, the Mortgagor shall not cease,
terminate or amend the insurance policy by any reasons and shall take all
reasonable and necessary measures to maintain the validity of the insurance
policy. In case the Mortgagor fails to purchase insurance for the collaterals or
breaches the aforesaid stipulation, the Mortgagee is entitled to purchase
insurance or continue to purchase insurance for the collaterals. In such
occasion, the insurance fee shall be borne by the Mortgagor.
 
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Within 10 days after execution of the Agreement, the Mortgagor shall provide the
Mortgagee the original of the insurance policy for the collaterals and transfer
the insurance rights to the Mortgagee.

In case the collaterals include any machinery equipments which have not been
installed, after completion of installation of those equipments, the Mortgagor
shall handle insurance formalities for those equipments according to
stipulations under this Section.

Section 8 Mortgage Registration

The Mortgagor shall make the necessary filing with the relevant government
authority for registration of the collaterals within ten days after the
Agreement is entered into. After filing the registration formalities for the
collaterals, the Mortgagor shall provide the duplicate of the relevant
registration certificate to the Mortgagee within three days. In case the
collaterals include any machinery equipments which have not been installed,
within ten days after completion of installation of those equipments, the
Mortgagor shall make the necessary filing with the relevant government authority
for registration of those equipments.

Section 9 Execution of Mortgage Rights

Should the Mortgagor default for performing its obligations due under the Credit
Facility Agreements, the Mortgagee shall have the right to convert or sell the
collaterals at the agreed price. If the price is not agreed, the Mortgagee may
apply with the court to auction or sell the collateral. The amount from disposal
of the collaterals shall set-off the debts under the Credit Facility Agreements
after paying the disposal fees and fees payable by the Mortgagor to the
Mortgagee under this Agreement. When the Mortgagee claims to execute the
mortgage rights, the Mortgagor shall not refuse by any excuses.

Section 10 Relationship between the Mortgagee Agreement and the Credit Facility
Agreement

The Agreement is independent from the Credit Facility Agreement and this
Agreement shall not be voided or revoked because of the unenforceability of the
Credit Facility Agreement. The parties to the Credit Facility Agreement
terminate the Credit Facility Agreement or make it expire in advance, this
Agreement shall still be valid and the Mortgagor shall be liable for the debts
occurred and losses caused by the Mortgagor to the Mortgagee.

Amendment to the Credit Facility Agreement and to the letter of credit opened
and guarantee letter issued in accordance with the Credit Facility Agreement
require no written consent of the Mortgagor who shall be liable for the amended
Credit Facility Agreement and the obligations of the Mortgagor to the Mortgagee
due to the amended letter of credit and guarantee letter.

The adjustment to the credit line by the Mortgagee in accordance with the Credit
Facility Agreement and assignment of the rights and obligations under the Credit
Facility Agreement by the Mortgagee to other branches of Bank of China or
assignment of credit rights by the Mortgagee under the Credit Facility Agreement
require no written consent of the Mortgagor whose liabilities shall not
decreased or exempted thereof.
 
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Section 11 Representation and Warranties

The Mortgagor hereby represents and warrants that

1.  
Among other things, that it is duly organized and in good standing under Chinese
laws, and has legal ownership of or right to dispose the collateral.

2.  
No other co-owners exist on the collaterals, or though co-owners exist on the
collaterals, the Mortgagor has obtained all written permit from all other
co-owners. Such written permit has been delivered to the Mortgagee before
conclusion of this Agreement.

3.  
It has fully understood the Credit Facility Agreement. The execution and
performance of this Agreement are voluntary and true expression of intent of the
Mortgagor. The legal representative or authorized representative who executes
this Agreement on behalf of the Mortgagor has fully obtained the lawful and
valid corporate authorization. Execution and performance of this Agreement will
not violate any contracts, agreements or other legal documents having legal
binding effect on the Mortgagor. The Mortgagor has obtained or will obtain all
necessary permit, license, record or registration for this mortgage.

4.  
All documents and materials provided by the Mortgagor to the Mortgagee are true,
complete, accurate and valid.

5.  
The Mortgagor has not disguised, as of the date when this Agreement is entered
into, any mortgage, pledge, lien or other securities existing on the
collaterals.

6.  
It shall immediately inform the Mortgagee of dissolution, bankruptcy of the
Mortgagor and occurrence of other events which will have adverse impact on the
financial status of the Mortgagor or creation of material new obligations on the
collaterals.

7.  
In case the collaterals are buildings under construction, no preemptive rights
of a third party for payment exist on such collaterals. In case such preemptive
rights of a third party exist, such third party will issue a written statement
to waive such preemptive rights.

Section 12 Events of Default

After conclusion of this Agreement, in case the mortgage rights can not be
realized because the Mortgagor refuses or delays to go through registration
formalities or due to other reasons, the Mortgagor, if he is the debtor, shall
be liable to the Mortgagee for the Secured Obligations; if the Mortgagor is a
third party, the Mortgagor shall be severally and jointly liable for the Secured
Obligations under the Credit Facility Agreement.

Any of the following events shall constitute the breach of contract by the
Mortgagor:

1.  
transferring, leasing, lending, reconstruction or disposing of all or some of
the collaterals by other means at will in violation of the stipulations
specified under Section 6;

 
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2.  
preventing the Mortgagee from disposing of the collaterals in accordance with
this Agreement by any means;

3.  
refusing or delaying to coordinate the Mortgagee to renew the registration of
mortgage so as to invalidate the mortgage before full repayment of the Secured
Obligations;

4.  
the insurer refuses to compensate the destroy or loss of the collaterals
occupied by the Mortgagor due to the Mortgagor has not purchased insurance for
the collaterals; and

5.  
Any representation furnished by the Mortgagor under this Agreement proves to be
incorrect or the Mortgagor breaches any of its representations/warranties under
this Agreement.

In the event of breach of contract by the Mortgagor, the Mortgagee is entitled
to take one or all of following actions:

1.  
reducing or canceling the line of credit;

2.  
declaring early expiration of the Loan Agreement and the Credit Facility
Agreement entered into between the Mortgagor and the Mortgagee;

3.  
requiring the Mortgagor to compensate the Mortgagee all and any direct or
indirect losses suffered therefrom;

4.  
offsetting the money of the Mortgagor saved in the Mortgagee or other branches
of Bank of China against the Secured Obligations.

Section 13 Fees

All costs incurred in connection with the Agreement or the collateral thereunder
shall be borne by the Mortgagor.

Section 14 Offset and Reservation of Rights

Unless the Mortgagee agrees otherwise, the Mortgagor has no rights to offset any
payment made to the Mortgagee.

Any tolerance, extension and preference given by the Mortgagor to the Mortgagee
or any delay to execute the rights under this Agreement by the Mortgagee shall
not affect, impair or restrict any enjoyable rights of the Mortgagee according
to this Agreement and other laws and regulations, nor be deemed a waiver of the
aforesaid rights of the Mortgagee under this Agreements, nor exempt any
obligations of the Mortgagor under this Agreement.
 
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Section 15 Amendment, Termination and Interpretation of the Agreement

This Agreement may be amended, supplemented or terminated based on mutual
written agreement between both Parties. Any amendments and supplements to this
Agreement shall constitute an integral part of this Agreement.

Any matters that are not covered by this Agreement shall be interpreted or
handled according to the relevant provisions of the Credit Facility Agreements.

Any unenforceable provision of this Agreement will not affect the enforceability
of all the remaining provisions of this Agreement. 

Section 16 Application of Laws, Disputes Resolution and Jurisdiction

The Agreement is governed by the laws of the People’s Republic of China.

Disputes, which cannot be settled through consultation, shall be adjudicated by
the court which has the jurisdiction pursuant to the Credit Facility Agreements.

Section 17 Attachments to the Agreement

Attached to this Agreement are: (i) list of collaterals; (ii) ownership
certificate of collaterals; (iii) original copies of insurance policies of
collaterals; (iv) mortgage registration certificate; and (v) assessment reports
of collaterals. These attachments shall be integral part of this Agreement.

Section 18 Effectiveness of the Agreement

The Agreement shall take into effect after (i) signature by the legal
representatives or authorized representatives of both Parties, affixed with
corporate seals; and (ii) registration by the Mortgagor.

Section 19 Special Note

The Parties have conducted sufficient negotiations on all terms of this
Agreement. The Mortgagee has reminded the Mortgagor of paying special attentions
to all the terms regarding the rights and obligations of both Parties and of
understanding these terms comprehensively and accurately. Upon the request of
the Borrower, the Mortgagee has respectively informed and explained the
aforesaid terms to the Mortgagor.

 
Jinzhou Halla Electrical Equipment Co., Ltd.
 
/s/ Yuncong Ma
 
Seal
 
September 27, 2007
 
Place: Jinzhou Tiebei Branch
     
Bank of China (Jinzhou Tiebei Branch)
 
/s/ Jun Wang
 
Seal
 
September 27, 2007
 
Place: Jinzhou Tiebei Branch

 
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