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Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this “Agreement”) is dated as of August
11, 2010 among Jinhao Motor Company, a Nevada corporation (the “Company”), the
investors listed on the Schedule of Buyers attached hereto as Exhibit A and
identified on the signature pages hereto (each, an “Investor” and collectively,
the “Investors”), Mr. Tsoi Chak Shing (the “Major Shareholder”), Jinhao Power
Holdings Limited, a British Virgin Islands company (the “BVI Company”), Jinhao
Motorcycle Company Limited, a Hong Kong company (the “HK Company”), Guangdong
Jinhao Motorcycle Co., Ltd., a Sino-Foreign Joint Venture organized under the
laws of the PRC (“SFJV”) and Jinhao New Energy (Zhaoqing) Development Co, Ltd.,
a wholly foreign-owned enterprise organized under the laws of the PRC (the
“WFOE,” and together with the Company, the BVI Company, the HK Company and SFJV,
the “Existing Company Entities”).

     WHEREAS, subject to the terms and conditions set forth in this Agreement,
and effected in reliance upon the exemption from securities registration
afforded by the provisions of Regulation D (as defined below) or Regulation S
(as defined below), as the case may be, as promulgated by the Commission (as
defined below) under the Securities Act (as defined below), the Company desires
to issue and sell to each Investor, and each Investor, severally and not
jointly, desires to purchase from the Company certain securities of the Company,
as more fully described in this Agreement.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:

ARTICLE 1
DEFINITIONS

     1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:

     “Action” means any action, suit, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation pending
or threatened in writing against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator, Governmental
Body or administrative agency, regulatory authority (foreign, federal, state,
county or local), stock market, stock exchange or trading facility.

     “Affiliate” means any Person that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with a Person.

     “Balance Sheet Date” has the meaning set forth in Section 3.1(h)(ii) .

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     “Big Four Accounting Firm” means KPMG, PricewaterhouseCoopers, Deloitte
Touche Tohmatsu or Ernst & Young, including their respective member firms in the
PRC and Hong Kong, or any other global accounting firm agreed to by the
Investors and the Company, in each case so long as it is registered with the
Public Company Accounting Oversight Board.

     “Business Day” means any day except Saturday, Sunday or any day which is a
legal holiday or a day on which banking institutions in the State of New York,
Hong Kong, Singapore or the PRC are authorized or required by law or other
governmental action to close.

     “Certificate of Designation” means a Certificate of Designation to be filed
prior to the Closing by the Company with the Secretary of State of the State of
Nevada, setting forth the rights, preferences and privileges of the Series A
Preferred Stock, in the form attached as Exhibit B hereto.

     “Closing” means the closing of the purchase and sale of the Units pursuant
to Article 2.

     “Closing Date” means the date on which the Closing occurs.

     “Commission” means the United States Securities and Exchange Commission.

     “Common Stock” means the common stock of the Company, par value $0.001, per
share.

     “Common Stock Equivalents” has the meaning set forth in Section 3.1(g) .

     “Company Deliverables” has the meaning set forth in Section 2.2(a) .

     “Company Entities” means the Company, the HK Company, SFJV, WFOE and all
existing Subsidiaries of any such entities and any other entities which
hereafter become Subsidiaries of any such entities.

     “Conversion Shares” means shares of Common Stock issuable upon conversion
of the Series A Preferred Stock.

     “Environmental Laws” means all applicable Legal Requirements, or other
legally binding requirements, of the PRC or any other applicable jurisdiction,
relating to: (1) the Release or threatened Release of Hazardous Substances; (2)
the reporting, licensing and/or clean-up of such Release or otherwise relating
to the generation, use, storage, disposal, transport or handling of Hazardous
Substances; (3) occupational health and safety statutes and regulations; and (4)
product related health and safety Laws and regulations.

     “Escrow Account” has the meaning set forth in Section 2.1(b) .

     “Escrow Agreement” means the escrow agreement by and among the Company, the
Placement Agent and Citibank, N.A., Hong Kong Branch.

     “EV” has the meaning set forth in Section 4.4.

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     “EV Laws” means all applicable Legal Requirements, or other legally binding
requirements, of the PRC or any other applicable jurisdiction, relating to EVs.

     “Evaluation Date” has the meaning set forth in Section 3.1(cc) .

     “Exchange Cap” has the meaning set forth in Section 6.2 hereof.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Existing Company Entities” has the meaning set forth in the preamble.
“Financial Statements” has the meaning set forth in Section 3.1(h)(ii) .

     “Governmental Body” shall mean any: (a) nation, state, commonwealth,
province, territory, county, municipality, district or other jurisdiction or
political subdivision of any nature; (b) federal, state, local, municipal,
foreign or other government; or (c) governmental or quasi-governmental authority
of any nature (including any governmental or administrative division,
department, board, agency, commission, instrumentality, official, organization,
unit, body or entity) and any court, arbitrator or other tribunal, and any self
regulatory organization.

     “Haoyan” means Zhaoqing Haoyan Industrial Co., Ltd., a PRC company.

     “Hazardous Substances” means (1) any oil, petroleum or petroleum product or
petroleum derivatives, radioactive materials, asbestos, any equipment containing
polychlorinated biphenyls and radon gas, and (2) any chemicals, materials or
substances referred to as being toxic substances, hazardous wastes, hazardous
materials, or hazardous substances, contaminants or pollutants or words of
similar import under any Environmental Laws.

     “Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

     “HK Company” has the meaning set forth in the preamble.

     “IFRS” means International Financial Reporting Standards adopted by the
International Accounting Standards Board (IASB).

     “Incentives” has the meaning set forth in Section 3.1(t)(ii) .

     “Indemnification Agreement” means the Indemnification Agreement entered
into by and among the Company and the Investor Director, in the form attached
hereto as Exhibit F.

     “Indemnifying Party” and “Indemnifying Parties” have the meanings set forth
in Section 4.5(a) .

     “Indemnified Party” and “Indemnified Parties” have the meanings set forth
in Section 4.5(a) .

     “Intellectual Property Rights” has the meaning set forth in Section 3.1(o)
.

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     “Investment Amount” means, with respect to each Investor, the Investment
Amount indicated on such Investor’s signature page and set forth opposite such
Investor’s name on Exhibit A to this Agreement.

     “Investment Company Act” means the Investment Company Act of 1940, as
amended.

     “Investor Deliverables” has the meaning set forth in Section 2.2(b) .

     “Investor Director” means a member of the board of directors of the Company
who, pursuant to the terms of the Investors Rights Agreement and the Certificate
of Designation, is exclusively appointed by the Lead Investor.

     “Investors’ Rights Agreement” means the Investors’ Rights Agreement entered
into by and among the Company, the Major Shareholder and the Investors, in the
form attached hereto as Exhibit E.

     “Knowledge”, “to the Knowledge” or words of similar import means the actual
and constructive knowledge, that would have been acquired when exercising the
duties and responsibilities of the position of the relevant Person in a
reasonable and diligent manner.

     “Lead Investor” means DBS Nominees (Private) Limited, a Singapore Company.

     “Legal Requirement” shall mean (i) any national, international,
supra-national, federal state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, rule, regulation, interpretation, ruling or requirement issued, enacted,
adopted, promulgated, implemented or otherwise put into effect by or under the
authority of any Governmental Body (or under the authority of any national
securities exchange upon which the Common Stock is then listed or traded) and
(ii) final judgments, orders, determinations or awards of any court, arbitral
body, administrative body or tribunal from which there is no right of appeal or
if there is a right of appeal such appeal is not prosecuted within the allowable
time. Reference to any Legal Requirement means such Legal Requirement as
amended, modified, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, and reference to any section or other provision of any
Legal Requirement means that provision of such Legal Requirement from time to
time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other provision.

     “Lien” means any mortgage, lien, charge, encumbrance, security interest,
pledge, easements, rights of first refusal, options, restrictions, defect of
title, encumbrance or other charge of any kind.

     “Losses” has the meaning set forth in Section 4.5(a) .

     “Material Adverse Effect” means any change, event or effect that (i) is or
would reasonably be expected to have a material and adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) is or
would reasonably be expected to have a material and adverse effect on the
results of operations, assets, liabilities, prospects, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole
or (iii) is or would reasonably be expected to have an adverse impairment to the
Company’s ability to perform on a timely basis its obligations under any
Transaction Document.

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     “Material Contract” has the meaning set forth in Section 3.1(v) .

     “OFAC” means the Office of Foreign Assets Control of the United States
Treasury Department.

     “Outside Date” means the ninety (90) calendar day (if such calendar day is
a Trading Day and if not, then the first Trading Day following such ninety (90)
calendar day) following the date of this Agreement.

     “Per Unit Purchase Price” equals $4.37496.

     “Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.

     “Placement Agent” means Hudson Securities, Inc.

     “Pledge Agreement” means the Pledge Agreement entered into by and among the
Major Shareholder and the Investors, in the form attached hereto as Exhibit G.

     “PRC” means the People’s Republic of China, not including Taiwan, Hong Kong
and Macau Special Administrative Region of the PRC.

     “PRC Entities” means SFJV or the WFOE.

     “Proceeding” means an action, claim, suit, investigation or proceeding
(including an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

     “Regulation D” means Regulation D under the Securities Act or any successor
provision.

     “Regulation S” means Regulation S under the Securities Act or any successor
provision.

     “Reimbursable Fees and Expenses” means, with respect to each Investor, fees
and expenses of such Investor and its advisors relating to the transactions
contemplated by the Transaction Documents, which shall be agreed on between the
Investors and the Company before the Closing.

     “Release” means any release, spill, leak, emission, discharge, injection,
escape, leach, emptying, pumping, pouring, dumping or other disposal.

     “Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

     “SAIC” means the State Administration for Industry and Commerce of the PRC
or, with respect to the issuance of any business license or filing or
registration to be effected with or by the State Administration for Industry and
Commerce, any Governmental Body which is similarly competent to issue such
business license or accept such filing or registration under the laws of the
PRC, including its relevant local bureaus, as applicable.

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     “SEC Reports” has the meaning set forth in Section 3.1(h) .

     “Securities” means the Series A Preferred Stock and the Warrants.

     “Securities Act” means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

     “Series A Preferred Stock” means the Series A Redeemable Convertible
Preferred Stock of the Company, par value $0.001 per share.

     “SFJV” has the meaning set forth in the preamble.

     “Shares” means the Conversion Shares and the Warrant Shares.

     “Short Sales” include all “short sales” as defined in Rule 200 promulgated
under Regulation SHO under the Exchange Act and all types of direct and indirect
stock pledges, forward sale contracts, options, puts, calls, swaps and similar
arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated brokers.

     “Subsidiary” means with respect to any specified Person, any Person of
which the specified Person, directly or indirectly, owns more than fifty percent
(50%) of the issued and outstanding authorized capital, share capital, voting
interests or registered capital.

     “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means any and
all taxes including, without limitation, (i) any income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, value added, net worth, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty, governmental fee or other
like assessment or charge in the nature of tax, or other tax of any kind
whatsoever, together with any interest or any penalty, addition to tax or
additional amount imposed by any Tax Authority, (ii) any liability for the
payment of any amounts of the type described in (i) as a result of being a
member of an affiliated, consolidated, combined or unitary group for any taxable
period or as the result of being a transferee or successor thereof and (iii) any
liability for the payment of any amounts of the type described in (i) or (ii) as
a result of any express or implied obligation to indemnify any other person.

     “Tax Authority” means any United States, British Virgin Islands, PRC, Hong
Kong or other local or foreign Governmental Body or regulatory body responsible
for the imposition of any Taxes.

     “Tax Return” means any return, declaration, report, claim for refund,
information return or similar statement filed or required to be filed with
respect to any Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

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     “Trading Day” means (i) a day on which the Common Stock is traded on a
Trading Market, or (ii) if the Common Stock is not quoted on any Trading Market,
a day on which the Common Stock is quoted in the over-the-counter market as
reported by the Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i) and (ii)
hereof, then Trading Day shall mean a Business Day.

     “Trading Market” means whichever of the New York Stock Exchange, NYSE Amex,
the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market, OTC Bulletin Board, or the Hong Kong Stock Exchange (main board), the
Singapore Exchange, on which the Common Stock is listed or quoted for trading on
the date in question.

     “Transaction Documents” means this Agreement, the Certificate of
Designation, the Warrants, the Indemnification Agreement and the Investors’
Rights Agreement.

     “Units” has the meaning set forth in Section 2.1(a) .

     “VIE Documents” means the following documents: (i) exclusive option
agreement by and between the WFOE, Haoyan and SFJV dated as of July 19, 2010,
(ii) Shareholder’s Right Proxy and Operation Management Service Agreement by and
between the WFOE, Haoyan and SFJV dated as of July 19, 2010, and (iii) share
pledge agreement by and between the WFOE, Haoyan and SFJV dated as of July 19,
2010.

     “Warrants” means the Common Stock purchase warrants in the form of Exhibit
C, which are issuable to the Investors at the Closing.

     “Warrant Shares” means shares of Common Stock issuable upon exercise of the
Warrants, subject to adjustments as set forth in the Warrants.

     “WFOE” has the meaning set forth in the preamble.

ARTICLE 2
PURCHASE AND SALE

     2.1 Purchase Price and Closing.

          (a) Subject to the terms and conditions hereof, the Company agrees to
issue and sell to the Investors and, in consideration of and in express reliance
upon the representations, warranties, covenants, terms and conditions of this
Agreement, the Investors, severally but not jointly, agree to purchase, an
aggregate of 6,857,204 of Units (the “Units”), each consisting of (i) one (1)
share of Series A Preferred Stock convertible into one (1) share of Common Stock
and (ii) a Warrant to purchase one-half (0.5) share of Common Stock.

          (b) The Closing of the purchase and sale of the Units to be acquired
by the Investors from the Company under this Agreement shall take place at the
offices of Simpson Thacher & Bartlett LLP, 35th Floor, ICBC Tower, 3 Garden
Road, Central Hong Kong, at 10 a.m., Hong Kong time on such date as the
Investors and the Company may agree upon; provided, that all of the conditions
set forth in Article 5 hereof and applicable to the Closing shall have been
fulfilled or waived in accordance herewith. Subject to the terms and conditions
of this Agreement, at the Closing the Company shall deliver or cause to be
delivered to each Investor (x) a certificate evidencing a number of shares of
Series A Preferred Stock as determined pursuant to Section 2.2(a)(i) hereof, and
(y) a Warrant to purchase such number of shares of Common Stock as determined
pursuant to Section 2.2(a)(ii) hereof. At or prior to the Closing, each Investor
shall deliver its Investment Amount, after deducting its Reimbursable Fees and
Expenses, by wire transfer to the escrow account (the “Escrow Account”) mutually
agreed by the Company and the Placement Agent:

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Pay to: Citibank, N.A., New York
SWIFT code: CITIUS33
For Account of: Citibank, N.A., Hong Kong
SWIFT Code: CITIHKHX
For Further Credit to: Citi AT Escrow Jinhao/Hudson
Account Number: 61704857
Reference: Attn : Regional Loans Agency, Jinhao/Hudson escrow acc

          For the avoidance of doubt, receipt of the aforementioned amounts by
the Company shall constitute receipt of the full purchase price for the Units.

          (c) No Fractional Shares. Notwithstanding anything to the contrary
herein, no certificate or scrip representing fractional shares of the Series A
Preferred Stock or Warrant shall be issued and any such fractional share will be
rounded up to the nearest whole number.

          (d) Regulation D and Regulation S. The Company and the Investors are
executing and delivering this Agreement in accordance with and in reliance upon
the exemption from securities registration afforded by Regulation D or
Regulation S, as the case may be, as promulgated by the Commission under the
Securities Act.

     2.2 Closing Deliveries.

          (a) At the Closing, the Company shall deliver or cause to be delivered
to each Investor the following (the “Company Deliverables”):

               (i) a certificate representing the shares of Series A Preferred
Stock equal to such Investor’s Investment Amount divided by the Per Unit
Purchase Price as is set forth opposite the name of such Investor on Exhibit A
attached hereto;

               (ii) a Warrant to purchase such number of shares of Common Stock
equal to 50% of such Investor’s Investment Amount divided by the Per Unit
Purchase Price, as is set forth opposite the name of such Investor on Exhibit A
attached hereto;

               (iii) an officer’s certificate, in agreed form, certifying the
satisfaction of each of the conditions precedent to the Investors’ obligation to
purchase Shares;

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               (iv) the Investors’ Rights Agreement, duly executed by the
Company, the Major Shareholder and the Investors;

               (v) the Pledge Agreement, duly executed by the Major Shareholder
and the Investors; and

               (vi) the Indemnification Agreement, duly executed by the Company
and the Investor Director.

          (b) At or prior to the Closing, each Investor shall deliver or cause
to be delivered to the Company the following (the “Investor Deliverables”):

               (i) Such Investor’s investor questionnaire substantially in the
form of Exhibit D hereto;

               (ii) such Investor’s Investment Amount, after deducting such
Investors’ Reimbursable Fees and Expenses, in immediately available funds, by
wire transfer to the Escrow Account; and

               (iii) the Investors’ Rights Agreement, duly executed by such
Investor.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company. Subject to exceptions
set forth on the Disclosure Schedules attached hereto as Schedule 1 (the
“Disclosure Schedules”) or in the SEC Reports (as hereinafter defined), each of
the the Major Shareholder and the Existing Company Entities (the “Warrantors”)
jointly and severally makes the following representations and warranties to each
Investor as of the date hereof and as of the Closing Date:

          (a) Subsidiaries. The Existing Company Entities have no direct or
indirect Subsidiaries other than as disclosed in Section 3.1(a) of the
Disclosure Schedules. Except as disclosed in Section 3.1(a) of the Disclosure
Schedules, the Company owns, directly or indirectly, all of the capital stock of
each Subsidiary free and clear of any and all Liens, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid except as permitted under PRC laws, non-assessable and free of
preemptive and similar rights.

          (b) Organization and Qualification. Except as disclosed in Section
3.1(b) of the Disclosure Schedules, each of the Existing Company Entities is
duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. No
Existing Company Entity is in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each Existing Company Entity is duly
qualified to conduct its respective businesses and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

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          (c) Authorization; Enforcement. The Company has the requisite
corporate and other power and authority to enter into and to consummate the
transactions contemplated by each Transaction Document to which it is a party
and otherwise to carry out its obligations thereunder. The execution and
delivery of the Transaction Documents, by the Company and the consummation by
the Company of the transactions contemplated thereby have been duly authorized
by all necessary action on the part of the Company, and no further action is
required by the Company in connection with such authorization. Each Transaction
Document has been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Company, enforceable against the Company
each in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar Legal Requirement relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or by other equitable principles of general
application.

          (d) No Conflicts. Except as set forth on Section 3.1(d) of the
Disclosure Schedules, the execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated thereby do not and will not (i) conflict with or violate any
provision of the Company’s, or any Existing Company Entity’s certificate of
incorporation or bylaws, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing any of the debt of any
Existing Company Entity’s debt or otherwise) or other understanding to which any
of the Existing Company Entities is a party or by which any property or asset of
any of the Existing Company Entities is bound or affected, or (iii) result in a
violation of any Legal Requirement, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of any
Existing Company Entity is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect. It is
understood that the failure by the Company to timely make payments of cash
dividends on the Series A Preferred Stock would be a Material Adverse Effect for
purposes of the foregoing sentence and Section 3.1(d) of the Disclosure
Schedules contains an explanation of the Company’s intended method of
transmitting dividend payment funds from the PRC to the holders from time to
time of the Series A Preferred Stock.

          (e) Filings, Consents and Approvals. None of the Existing Company
Entities is required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any Governmental
Body in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than (i) the filing with the Commission of
one or more registration statements in accordance with the requirements of this
agreement, (ii) filings required by state securities laws, (iii) the filing of a
Notice of Sale of Securities on Form D with the Commission under Regulation D of
the Securities Act, (iv) the filings required in accordance with Section 4.3,
(v) such filing as required to be made under the rules and regulations of the
applicable Trading Market, and (vi) those that have been made or obtained prior
to the date of this Agreement.

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          (f) Issuance of the Securities. The Securities have been duly
authorized and when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens. The Warrants are valid and binding obligations of the
Company, enforceable in accordance with their terms. The Company has reserved
from its duly authorized capital stock the shares of Common Stock issuable
pursuant to all Securities sold to the Investors.

          (g) Capitalization.

                    (i) The number of shares and type of all authorized, issued
and outstanding capital stock of the Company, and all shares of Common Stock
reserved for issuance under the Company’s various option and incentive plans, is
specified on Section 3.1(g)(i) of the Disclosure Schedules. Except as specified
on Section 3.1(g)(i) of the Disclosure Schedules, no securities of the Company
are entitled to preemptive or similar rights, and no Person has any right of
first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents.
Except as specified on Section 3.1(g)(i) of the Disclosure Schedules, there are
no outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock
(“Common Stock Equivalents”). The sale of Shares to the Investors will not,
immediately or with the passage of time, obligate the Company to issue shares of
Common Stock or other securities to any Person (other than the Placement Agent
pursuant to the placement agent agreement dated as of November 16, 2009) or
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.

               (ii) Immediately before the Closing, the authorized capital of
the Company shall consist of 200,000,000 shares of Common Stock with a par value
of US$0.001 each, 48,000,436 of which will be issued and outstanding, and
7,000,000 shares of Series A Preferred Stock with a par value of US$0.001 each,
none of which will be issued and outstanding. Section 3.1(g)(ii) of the
Disclosure Schedules sets forth the capitalization of the Company immediately
before the Closing, including the number of shares of the following: (1) issued
and outstanding Common Stock (or other equity interests (whether in the form of
securities convertible into, exchangeable or exercisable for shares of Common
Stock or other equity interests)), (2) issued and outstanding share options, (3)
share options not yet issued but reserved for issuance, including vesting
schedule and exercise price and (4) issued and outstanding warrants.

          (h) SEC Reports; Financial Statements.

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               (i) The Company has filed all reports required to be filed by it
under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such
shorter period as the Company was required by law to file such reports) (the
foregoing materials being collectively referred to herein as the “SEC Reports”)
on a timely basis or has timely filed a valid extension of such time of filing
and has filed any such SEC Reports prior to the expiration of any such
extension. The Company is not aware of any event occurring or expected to occur
on or prior to the Closing Date (other than the transactions contemplated by the
Transaction Documents and quarterly releases of financial results) that would
require the filing of, or with respect to which the Company intends to file, a
Form 8-K after the Closing. All documents required to be filed as exhibits to
the SEC Reports have been filed as required. As of their respective dates, the
SEC Reports complied, as to form, in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company and each Subsidiary included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with IFRS applied on a consistent basis during the
periods involved, except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by IFRS for full year financial
statements, and fairly present in all material respects the financial position
of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.

               (ii) Each Existing Company Entity has delivered to the Lead
Investor (x) its consolidated financial statements (including balance sheet,
income statement and statement of cash flow, and the notes thereto) as at and
for the fiscal years ended December 31, 2007, 2008 and 2009; and (y) its
consolidated management account for the six months ended June 30, 2010 (the
“Balance Sheet Date”) (collectively, the “Financial Statements”). The foregoing
has been prepared in accordance with IFRS throughout the periods indicated. The
Financial Statements are complete and correct in all material respects and
fairly present the financial condition and operating results of the Company as
of the dates, and for the periods, indicated therein, subject in the case of the
unaudited Financial Statements to normal year end audit adjustments.

          (i) Material Changes. Since the Balance Sheet Date, except as
disclosed in the SEC Reports and the Disclosure Schedules, there has been not
been:

               (i) any event, occurrence, fact, condition, change, effect or
development that, individually or in the aggregate, has or could become or
result in a Material Adverse Effect;

               (ii) any liabilities (contingent or otherwise) incurred by any
Existing Company Entity other than (A) trade payables, accrued expenses and
other liabilities incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to IFRS;

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               (iii) any alteration of any method of accounting or the identity
of any auditors, legal counsels, brokers, and consultants of any Existing
Existing Company Entity;

               (iv) any declaration, setting aside or payment or other
distribution in respect of any of the capital stock of any Existing Company
Entity, or any direct or indirect redemption, purchase, or other acquisition of
any of such capital stock by any Existing Company Entity;

               (v) any material damage, destruction or loss, whether or not
covered by insurance;

               (vi) any waiver or compromise by any Existing Company Entity of a
valuable right or of a material debt owed to it;

               (vii) any satisfaction or discharge of any Lien or claim or
payment of any obligation by any Existing Company Entity, except in the ordinary
course of business;

               (viii) any material change to a contract or agreement by which
any Existing Company Entity or any of its assets is bound or subject;

               (ix) any material change in any compensation arrangement or
agreement with any employee, officer, or director of any Existing Company
Entity;

               (x) any resignation or termination of employment of any senior
officer, executive or other key employee of any Existing Company Entity;

               (xi) any mortgage, pledge, transfer of a security interest in, or
other Lien, created by any Existing Company Entity, with respect to any of its
properties or assets, except Liens for taxes not yet due or payable and Liens
that arise in the ordinary course of business and do not materially impair such
Existing Company Entity’s ownership or use of such property or assets;

               (xii) any loans or guarantees made by any Existing Company Entity
to or for the benefit of its employees, officers or directors, or any members of
their immediate families, other than travel advances and other advances made in
the ordinary course of its business;

               (xiii) any sale, assignment or transfer of any intellectual
property owned by any Existing Group Entity outside the ordinary course of
business;

               (xiv) receipt of notice that there has been a loss of, or
material order cancellation by, any major customer of any Existing Group Entity;
or

               (xv) any arrangement or commitment by any Existing Group Entity
to do any of the things described in this Section 3.1(i) .

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          (j) Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) except as disclosed in the SEC Reports and
the Disclosure Schedules, could, if there were an unfavorable decision,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Existing Company Entities, nor any director
or officer thereof (in his or her capacity as such), is or has been the subject
of any Action involving a claim of violation of or liability under federal or
state securities laws or a claim of breach of fiduciary duty, except as
disclosed in the SEC Reports and the Disclosure Schedules. There has not been
and to the Knowledge of the Company, there is not pending any investigation by
the Commission involving any Existing Company Entity or any current or former
director or officer of an Existing Company Entity (in his or her capacity as
such).

          (k) Labor Relations. No material labor dispute exists or, to the
Knowledge of the Existing Company Entities, is imminent with respect to any of
the employees of the Existing Company Entities.

          (l) Compliance. Except as disclosed in Section 3.1(l) of the
Disclosure Schedules, none of the Existing Company Entities (i) is in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by an
Existing Company Entity under), nor has any Existing Company Entity received
notice of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental authority,
including all federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and
employment and labor matters, except in each case, such as could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.

          (m) Regulatory Permits. Except as disclosed in Section 3.1(m) of the
Disclosure Schedules, the Existing Company Entities possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses,
except where the failure to possess such permits could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, and the Existing Company Entities have not received any notice of
proceedings relating to the revocation or modification of any such permits.

          (n) Title to Assets. Except as disclosed in Section 3.1(n) of the
Disclosure Schedules, the Existing Company Entities own or have valid land use
rights to all real property that is material to their respective businesses and
good and marketable title in all personal property owned by them that is
material to their respective businesses, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Existing Company Entities. Except as disclosed in Section
3.1(n) of the Disclosure Schedules, the Existing Company Entities have paid all
land grant premiums in full (and there are no such amounts outstanding),
obtained all granted land use rights as listed on Section 3.1(n) of the
Disclosure Schedules and complied with all land grant conditions and land use
conditions in relation to its properties, and all such land use rights are
valid, binding and enforceable in accordance with their respective terms. Any
real property and facilities held under lease by the Existing Company Entities
are held by them under valid, subsisting and enforceable leases.

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          (o) Patents and Trademarks. The Existing Company Entities have, or
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights (collectively, the “Intellectual Property Rights”) that are necessary or
material for use in connection with their respective businesses and which the
failure to so have could, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect. No Existing Company Entity
has received a written notice that the Intellectual Property Rights used by such
Existing Company Entity violates or infringes upon the rights of any Person.
Except as set forth in SEC Reports and the Disclosure Schedules, to the
Knowledge of the Existing Company Entities, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.

          (p) Insurance. Section 3.1(p) of the Disclosure Schedules contains a
true and complete list (including the names and addresses of the insurers, the
expiration date thereof, the annual premiums and payment terms thereof and a
brief description of the interests insured thereby) of property and other
insurance policies currently in effect that insure the business, operations or
employees of each Existing Company Entity or affect or relate to the ownership,
use or operation of any of the material assets or properties of any Existing
Company Entity and that (i) have been issued to any Existing Company Entity or
(ii) have been issued to any Person (other than a Existing Company Entity) for
the benefit of any Existing Company Entity. The insurance coverage provided by
the policies described in clause (i) above will not terminate or lapse by reason
of the transactions contemplated by the Transaction Documents to be delivered or
executed on or prior to the Closing. Each policy listed in Section 3.1(p) of the
Disclosure Schedules is valid and binding and in full force and effect, no
premiums due thereunder have not been paid and none of the respective Company
Entities to whom any such policy has been issued has received any notice of
cancellation or termination in respect of any such policy or is in default
thereunder. The insurance policies listed in Section 3.1(p) of the Disclosure
Schedules were placed with financially sound and reputable insurers at the
relevant time when the insurance policies were placed and, in light of the
respective assets and properties of the Existing Company Entities, are in
amounts and have coverages that are reasonable and customary for the assets and
properties of similar businesses and operations in the PRC. None of the Existing
Company Entities has received any notice that any insurer under any policy
referred to in this Section 3.1(p) is denying liability with respect to a claim
thereunder or defending under a reservation of rights clause. The insurance
policies listed in Section 3.1(p) of the Disclosure Schedules are sufficient in
term of coverage amount and to the extent required by all applicable Legal
Requirements, and to the extent it is normal to do so by companies engaged in
business of a nature and scale similar to the Existing Company Entities for the
assets and properties.

          (q) Certain Registration Matters. Assuming the accuracy of the
Investors’ representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the
Securities by the Company to the Investors under the Transaction Documents. The
Company is eligible to register its Common Stock underlying the Securities for
resale by the Investors under the Securities Act.

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          (r) Certain Fees. Except as described in Section 3.1(r) of the
Disclosure Schedules, no brokerage or finder’s fees or commissions are or will
be payable by the Existing Company Entities to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement. The Investors
shall have no obligation with respect to any fees or with respect to any claims
(other than such fees or commissions owed by an Investor pursuant to written
agreements executed by such Investor which fees or commissions shall be the sole
responsibility of such Investor) made by or on behalf of other Persons for fees
of a type contemplated in this Section 3.1(r) that may be due in connection with
the transactions contemplated by this Agreement.

          (s) Transactions with Affiliates and Employees. Except as described in
the SEC Reports and the Disclosure Schedules, none of the officers or directors
of the Company, and none of the employees of the Company, is presently a party
to any transaction of a value of $50,000 or greater with the Company or any of
its Subsidiaries which would be required to be reported under Item 404
Regulation S-K (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such Person
or any entity in which any officer, director, or such employee or 5% or more
shareholder has a substantial interest or is an officer, director, trustee or
partner. None of the Existing Company Entities owes any money or other
compensation to any of their respective officers or directors or shareholders,
except to the extent of ordinary course compensation arrangements and
reimbursement for expenses incurred on behalf of the Company.

          (t) Tax Returns and Payments.

               (i) Except as disclosed in Section 3.1(t)(i) of the Disclosure
Schedules, each of the Existing Company Entities, has timely filed all Tax
Returns required pursuant to applicable Legal Requirement to be filed with any
Tax Authority, all such Tax Returns are accurate, complete and correct in all
material respects, and each Existing Company Entity, has timely paid all Taxes
due and owing. Since their respective date of incorporation, none of the
Existing Company Entities has incurred any Taxes or assessments other than in
the ordinary course of business. Each Existing Company Entity (1) has timely,
properly and accurately withheld and collected, from payments made to any
employee, independent contractor, creditor, shareholder or any other applicable
person, the amount of Taxes (including, but not limited to, United States, the
British Virgin Islands, the PRC and Hong Kong income Taxes and other local or
foreign Taxes) required to be withheld or collected therefrom that, individually
or in the aggregate, would have a Material Adverse Effect, and (2) has timely
paid the same to the proper Tax Authority.

               (ii) Section 3.1(t) of the Disclosure Schedules lists each
jurisdiction in which any Existing Company Entity benefits from Incentives and
describes the details of such Incentives. No non-compliance with the terms and
conditions of any of such Incentives exists which would result in any Existing
Company Entity losing any of the benefits of any of such Incentives or such
Incentives not being available to any of the Existing Company Entities in the
future, and no Existing Company Entity has received any written notice from any
Governmental Authority claiming that such Incentives were not, or will not in
the future, be available. To the Company’s Knowledge, the consummation of the
transactions contemplated by this Agreement will not have any adverse effect on
the continued validity and effectiveness of any such Incentives, nor will it
cause any such Incentive to lapse or result in a requirement to repay any
Incentives already received. For purposes of this Agreement, the term
“Incentives” means exemptions from taxation, Tax holidays, reduction in Tax rate
or similar Tax reliefs and other financial grants, subsidies or similar
incentives granted by a Governmental Authority, solely relating to Taxes.

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               (iii) There are no federal, state, local or foreign audits,
actions, suits, proceedings, investigations or claims relating to Taxes or any
Tax Returns of the Existing Company Entities (or in which the Existing Company
Entities are included) now pending, and none of the Existing Company Entities
has received any written notice, or has Knowledge of any threatened or proposed
Tax audit, examination, refund litigation, investigation, claim, administrative
proceeding or adjustment in controversy relating to Taxes with respect to any of
the Existing Company Entities. There is no agreement in effect to extend the
period of limitations for the assessment or collection of any Tax for which each
Existing Company Entity may be liable.

               (iv) The Company has made available to the Lead Investor true and
correct copies of all material income Tax Returns filed by the Existing Company
Entities for the fiscal years starting from 2007. Each of the Existing Company
Entities has made available to the Lead Investor copies of all examination or
audit reports, and statements of deficiencies assessed against or agreed to by
any of the Existing Company Entities received since 2007, and each of Existing
Company Entities will make available to the Lead Investor all materials with
respect to the foregoing for all matters arising after the date hereof through
the Closing Date.

               (v) No claim, which remains unresolved, has ever been made by any
authority in any jurisdiction where none of the Existing Company Entities files
Tax Returns that an Existing Company Entity is required to file Tax Returns or
that it is or may be subject to taxation by that jurisdiction.

               (vi) None of the Existing Company Entities has any liability
(including potential liability) for any Tax or any portion of a Tax (or any
amount calculated with reference to any portion of a Tax) of any Person other
than each of the Existing Company Entities as transferee or successor, by
contract, intercompany account system or otherwise.

               (vii) None of the Existing Company Entities has any liability for
the Taxes of any Person under U.S. Treasury Regulation Section 1.1502 -6 (or any
similar provision of state, local or foreign Legal Requirements).

          (u) Customers and Suppliers

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               (i) Section 3.1(u)(i) of the Disclosure Schedules sets forth a
true, correct and complete list of the Company’s twenty (20) most significant
customers (excluding export agents and as measured by annual revenue) during the
twelve (12) month period ended on December 31, 2009 and the six (6) month period
ended on June 30, 2010. No material customer of any of the Existing Company
Entities has indicated their intention to diminish their relationship with such
Existing Company Entity and none of the Existing Company Entities has any
Knowledge from which it could reasonably conclude that any such customer
relationship may be adversely affected.

               (ii) Section 3.1(u)(ii) of the Disclosure Schedules sets forth a
true, correct and complete list of the Company’s twenty (20) most significant
suppliers (as measured by annual spending) during the twelve (12) month period
ended on December 31, 2009 and the six (6) month period ended on June 30, 2010.
No material supplier of any of the Existing Company Entities has indicated their
intention to diminish their relationship with such Existing Company Entity and
none of the Existing Company Entities has any Knowledge from which it could
reasonably conclude that any such supplier relationship may be adversely
affected.

          (v) Material Contracts.

               (i) Section 3.1(v) of the Disclosure Schedules lists all
contracts to which any Existing Company Entity is a party or by which any of
their respective properties or assets may be bound or affected that (1) cannot
be terminated on less than thirty (30) days notice and involves payment of
US$500,000 (or the equivalent thereof in another currency), (2) involves
payments (or a series of payments), contingent or otherwise, of US$1,000,000 (or
the equivalent thereof in another currency) or more with respect to a series of
related agreements, in cash, property or services, (3) is with a Governmental
Body, (4) limits or restricts any Existing Company Entity’s ability to compete
or otherwise conduct its business as now conducted and as presently proposed to
be conducted in any manner, time or place, or that contains any exclusivity
provision, (5) grants a power of attorney, agency or similar authority, in each
case, in written form other than out of the ordinary course of business, (6)
relates to indebtedness of US$3,800,000 or more for money borrowed, provides for
an extension of credit, provides for indemnification or any guaranty, or
provides for a “keep well” or other agreement to maintain any financial
condition of another Person, (7) relates to Intellectual Property Rights (other
than “shrink-wrap” or “off-the-shelf” commercially available software), (8) is
an insurance policy other than out of the ordinary course of business, (9)
grants the right to manufacture, produce, assemble, market or sells its products
to any other Person other than out of the ordinary course of business or affect
the exclusive right of the Existing Company Entity to develop, manufacture,
assemble, distribute, market or sell its products, (10) is otherwise outside the
ordinary course of business, (11) is otherwise material to any Existing Company
Entity or is an agreement on which any Existing Company Entity is substantially
dependent, or (12) is a commitment to enter into any of the agreements
identified in (1) through (11) above (each of the foregoing, a “Material
Contract”).

               (ii) A true, fully-executed copy of each Material Contract has
been made available for review to the Lead Investor. Each Material Contract is a
valid and binding agreement of the Existing Company Entity that is a party
thereto, the performance of which does not and will not violate any applicable
Legal Requirement, and is in full force and effect, and such Existing Company
Entity has duly performed in all material respects all of its obligations under
each Material Contract to the extent that such obligations to perform have
accrued or not waived by the contracting party of such Material Contract, and no
breach or default, alleged breach or alleged default, or event which would (with
the passage of time, notice or both) constitute a material breach or default
thereunder by such Existing Company Entity or to the Knowledge of the Company,
any other party or obligor with respect thereto, has occurred, or to the
Knowledge of the Company as a result of this Agreement or performance hereof
will occur. No Existing Company Entity has given notice (whether or not written)
that it intends to terminate a Material Contract. No Existing Company Entity has
received any notice (whether or not written) that (1) it has breached, violated
or defaulted under any Material Contract or (2) any other party thereto intends
to terminate such Material Contract.

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          (w) No Additional Agreements. None of the Existing Company Entities
has any agreement or understanding with any Investor with respect to the
transactions contemplated by the Transaction Documents other than as specified
in the Transaction Documents.

          (x) Undisclosed Liabilities. No Existing Company Entity has any
liabilities or obligations of any nature (absolute, accrued, contingent or
otherwise) which are not properly reflected or reserved against in the financial
statements described in Section 3.1(h) hereof to the extent required to be so
reflected or reserved against in accordance with IFRS as of the Balance Sheet
Date.

          (y) Environmental, Health and Safety Laws.

               (i) The Existing Company Entities are in compliance in all
material respects with Environmental Laws.

               (ii) None of the Existing Company Entities has Released,
generated or disposed of any Hazardous Substance in a manner which would
reasonably be expected to give rise to a material liability under or relating to
any Environmental Laws. To the Knowledge of the Company after due inquiry, no
Release of any Hazardous Substances has occurred on or from the properties or
other assets owned by any Existing Company Entity or otherwise leased or used by
any Existing Company Entity which would reasonably be expected to give rise to a
material liability under or relating to any Environmental Laws.

               (iii) There is no claim, notice of violation or administrative
proceeding under or relating to Environmental Laws pending or, to the Knowledge
of the Company after due inquiry, threatened against any Existing Company Entity
or, to the Knowledge of the Company after due inquiry, pending or threatened
against any other Person whose liability for any environmental claim any
Existing Company Entity has retained or assumed either contractually or by
operation of law (including any capital or operating expenditures required for
clean-up, closure of properties or compliance with such Environmental Laws or to
acquire or comply with the terms and conditions of any permit, certificate,
authorization, registration, or approval under any such Laws, any constraints on
operating activities and any potential liabilities to third parties). To the
Knowledge of the Company after due inquiry, no facts or circumstances exist
which would give rise to such claim, notice of violation or administrative
proceeding. Except as would not reasonably be expected to give rise to a
material liability under or relating to any Environmental Laws, to the Knowledge
of the Company after due inquiry (i) no real property currently or formerly
owned, occupied, operated or leased by any Existing Company Entity has been
impacted by any Release or threatened Release of any Hazardous Substance, and
(ii) no such real property or other assets or equipment currently or formerly
owned, occupied, operated, used or leased by any Existing Company Entity have
involved the use or storage of radioactive substances, asbestos or any
polychlorinated biphenyl.

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          (z) Foreign Corrupt Practices Act. None of the Existing Company
Entities nor to the Knowledge of the Company, any agent or other person acting
on behalf of the Existing Company Entities, has, directly or indirectly, (i)
used any funds, or will use any proceeds from the sale of the Securities, for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company, or any such Existing
Company Entity (or made by any Person acting on their behalf of which the
Company is aware) or, to the Knowledge of the Existing Company Entities, any
members of their respective management which is in violation of any Legal
Requirement, or (iv) has violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder which was applicable to the Existing Company Entities.

          (aa) Investment Company Status. The Company is not, and immediately
after receipt of payment for the Securities issued under this Agreement will not
be, an “investment company” or an entity “controlled” by an “investment company”
within the meaning of the Investment Company Act, and shall conduct its business
in a manner so that it will not become subject to the Investment Company Act.

          (bb) OFAC. No Existing Company Entity, or, to the Knowledge of the
Company, any other Existing Company Entity Affiliate is currently subject to any
regulation or statute administered by OFAC (“U.S. Economic Sanctions”). The
Existing Company Entities derive no revenues from the governments, entities or
nationals of Cuba, Sudan, Iran, Myanmar or any other country with respect to
which U.S. persons, as defined in U.S. Economic Sanctions, are prohibited from
doing business and the Existing Company Entities have no assets located in any
such countries. The Existing Company Entities will not take any action with
respect to the use of the proceeds from the sale of the Securities that would
result in a violation by any Investor of any U.S. Economic Sanctions, including,
without limitation, using the proceeds of the sale of the Securities to fund,
any business activities with, or for the benefit of, a government, national,
resident or legal entity of Cuba, Sudan, Iran, Myanmar, or any other country
with respect to which U.S. persons, as defined in U.S. Economic Sanctions, are
prohibited from doing business.

          (cc) Sarbanes-Oxley; Internal Accounting Controls. The Company is in
material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which
are applicable to it as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
IFRS and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that material
information relating to the Company, including its Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company’s most recently filed periodic report under the
Exchange Act, as the case may be, is being prepared. The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and
procedures as of the date prior to the filing date of the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no significant
changes in the Company’s internal controls (as such term is defined in Item
307(b) of Regulation S-K under the Exchange Act) or, to the best Knowledge of
the Company, in other factors that could significantly affect the Company’s
internal controls.

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          (dd) Other Representations and Warranties Relating to WFOE.

               (i) All material consents, approvals, authorizations or licenses
requisite under PRC Legal Requirements for the due and proper establishment and
operation of WFOE have been duly obtained from the relevant PRC Governmental
Bodies and are in full force and effect.

               (ii) All filings and registrations with the PRC Governmental
Bodies required in respect of WFOE and its capital structure and operations
including, without limitation, the registration with the Ministry of Commerce,
the State Administration of Industry and Commerce and or their respective local
divisions of Commerce, the State Administration of Foreign Exchange, tax bureau
and customs authorities have been duly completed in accordance with the relevant
PRC Legal Requirements, except where, the failure to complete such filings and
registrations does not, and would not, individually or in the aggregate, have a
Material Adverse Effect.

               (iii) Except as disclose in Section 3.1(dd)(iii) of the
Disclosure Schedules, WFOE has complied with all relevant PRC Legal Requirements
regarding the contribution and payment of its registered share capital, the
payment schedule of which has been approved by the relevant PRC Governmental
Bodies. There are no outstanding commitments made by the Company or any
Subsidiary (or any of their shareholders) to sell any equity interest in WFOE.

               (iv) WFOE has not received any letter or notice from any relevant
PRC Governmental Body notifying it of revocation of any licenses or
qualifications issued to it or any subsidy granted to it by any PRC Governmental
Body for non-compliance with the terms thereof or with applicable PRC Legal
Requirements, or the lack of compliance or remedial actions in respect of the
activities carried out by WFOE.

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               (v) WFOE has conducted its business activities within the
permitted scope of business or has otherwise operated its business in compliance
with all relevant Legal Requirements and with all requisite licenses and
approvals granted by competent PRC Governmental Bodies in all material respects.
As to licenses, approvals and government grants and concessions requisite or
material for the conduct of any material part of WFOE’s business which is
subject to periodic renewal, the Company has no Knowledge of any reasons related
to the WFOE for which such requisite renewals will not be granted by the
relevant PRC Governmental Bodies.

               (vi) With regard to employment and staff or labor, WFOE has
complied with all applicable PRC Legal Requirements in all material respects,
including without limitation, those pertaining to welfare funds, social
benefits, medical benefits, insurance, retirement benefits, pensions or the
like.

          (ee) Other Representations and Warranties Relating to SFJV.

               (i) All material consents, approvals, authorizations or licenses
requisite under PRC Legal Requirements for the due and proper establishment and
operation of SFJV have been duly obtained from the relevant PRC Governmental
Bodies and are in full force and effect.

               (ii) All filings and registrations with the PRC Governmental
Bodies required in respect of SFJV and its capital structure and operations
including, without limitation, the registration with the National Development
and Reform Commission, Ministry of Commerce, the State Administration of
Industry and or their respective local divisions of Commerce, the State
Administration of Foreign Exchange, tax bureau and customs authorities have been
duly completed in accordance with the relevant PRC Legal Requirements, except
where, the failure to complete such filings and registrations does not, and
would not, individually or in the aggregate, have a Material Adverse Effect.

               (iii) SFJV has complied with all relevant PRC Legal Requirements
regarding the contribution and payment of its registered share capital, the
payment schedule of which has been approved by the relevant PRC Governmental
Bodies. Except for those transactions as a necessity to comply with PRC’s
foreign investment restrictions subject to and contingent on the Closing, there
are no outstanding commitments made by the Company or any Subsidiary (or any of
their shareholders) to sell any equity interest in SFJV.

               (iv) SFJV has not received any letter or notice from any relevant
PRC Governmental Body notifying it of revocation of any licenses or
qualifications issued to it or any subsidy granted to it by any PRC Governmental
Body for non-compliance with the terms thereof or with applicable PRC Legal
Requirements, or the lack of compliance or remedial actions in respect of the
activities carried out by SFJV.

               (v) Except as disclosed in Section 3.1(ee)(v) of the Disclosure
Schedules, SFJV has conducted its business activities within the permitted scope
of business or has otherwise operated its business in compliance with all
relevant Legal Requirements and with all requisite licenses and approvals
granted by competent PRC Governmental Bodies in all material respects. As to
licenses, approvals and government grants and concessions requisite or material
for the conduct of any material part of SFJV’s business which is subject to
periodic renewal, the Company has no Knowledge of any reasons related to the
SFJV for which such requisite renewals will not be granted by the relevant PRC
Governmental Bodies.

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               (vi) Except as set forth on Section 3.1(ee)(vi) of the Disclosure
Schedules, with regard to employment and staff or labor, SFJV has complied with
all applicable PRC Legal Requirements in all material respects, including
without limitation, those pertaining to welfare funds, social benefits, medical
benefits, insurance, retirement benefits, pensions or the like.

          (ff) Acknowledgement Regarding Investors’ Trading Activity. Except as
set forth in Section 3.2(f), anything in this Agreement or elsewhere herein to
the contrary notwithstanding, but subject to compliance by the Investors with
applicable law, it is understood and agreed by the Company (i) that past or
future open market or other transactions by any Investor, including Short Sales,
and specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (ii) that any Investor, and counter parties in
“derivative” transactions to which any such Investor is a party, directly or
indirectly, presently may have a “short” position in the Common Stock, and (iv)
that each Investor shall not be deemed to have any affiliation with or control
over any arm’s length counter-party in any “derivative” transaction. The Company
further understands and acknowledges that (a) one or more Investors may engage
in hedging activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value of
the shares deliverable with respect to Securities are being determined and (b)
such hedging activities (if any) could reduce the value of the existing
shareholders’ equity interests in the Company at and after the time that the
hedging activities are being conducted.

          (gg) Manipulation of Price. The Company has not, and to its Knowledge
no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities (other than for the Placement
Agent’s placement of the Securities), or (iii) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company, other than commissions payable to the Placement Agent.

          (hh) Disclosure. Other than the Transactions contemplated by the
Transaction Documents, the Company confirms that neither it nor, to its
Knowledge, any other Person acting on its behalf has provided any of the
Investors or their agents or counsel with any information that constitutes or
might constitute material, nonpublic information. The Company understands and
confirms that the Investors will rely on the foregoing representations and
covenants in effecting transactions in securities of the Company. All disclosure
provided to the Investors in connection with the transactions contemplated
hereunder regarding the Company, its business and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, furnished by or on
behalf of the Company with respect to the representations and warranties made
herein are true and correct in all material respects with respect to such
representations and warranties and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.

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               (ii) Other Representations and Warranties Relating to Major
Shareholder. Except as set forth in Section 3.1(ii) of the Disclosure Schedule,
none of Jiangmen Jinhao Motorcycle Co., Ltd. ( ) or Shenzhen Jinhao Dawang
Export & Import Co., Ltd. ( ) competes, or has ever competed, with the business
of manufacture of motorcycle, motor and components, electric vehicle, electric
vehicle components (including without limitation frequency-variable controller),
battery, agricultural machine, diesel engine, generator, stern engine and
agricultural tractor.

     3.2 Representations and Warranties of the Investors. Each Investor hereby,
for itself and for no other Investor, represents and warrants to the Company as
of the date hereof and as of Closing Date as follows:

          (a) Organization; Authority. If such Investor is a business entity,
such Investor is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with the requisite
corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents and otherwise
to carry out its obligations thereunder. The execution, delivery and performance
by such Investor of the transactions contemplated by this Agreement has been
duly authorized by all necessary corporate or, if such Investor is not a
corporation, such partnership, limited liability company or other applicable
like action, on the part of such Investor. Each Transaction Document to which it
is a party has been duly executed by such Investor, and when delivered by such
Investor in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Investor, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.

          (b) Investment Intent. Such Investor is acquiring the Securities as
principal for its own account for investment purposes only and not with a view
towards, or resale in connection with, a public sale or distribution of such
Securities or any part thereof, without prejudice, however, to such Investor’s
right at all times to sell or otherwise dispose of all or any part of such
Securities in compliance with applicable federal and state securities laws.
Subject to the immediately preceding sentence, nothing contained herein shall be
deemed a representation or warranty by such Investor to hold the Securities for
any period of time. Such Investor is acquiring the Securities hereunder in the
ordinary course of its business. Such Investor does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities.

          (c) Investor Status. At the time such Investor was offered the
Securities, it was an “accredited investor” as defined in Rule 501(a) under the
Securities Act or is not a “U.S. person” within the meaning of Regulation S.
Such Investor is not a registered broker dealer under Section 15 of the Exchange
Act.

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          (d) General Solicitation. Such Investor is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio.

          (e) Access to Information. Such Investor acknowledges that it has
reviewed the Disclosure Schedules and SEC Reports (the “Disclosure Materials”)
and has been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Securities and the
merits and risks of investing in the Securities; (ii) access to information
about the Company and the Subsidiaries and their respective financial condition,
results of operations, business, properties, management and prospects sufficient
to enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Investor or its representatives
or counsel shall modify, amend or affect such Investor’s right to rely on the
truthfulness, accuracy and completeness of the Disclosure Materials and the
Company’s representations and warranties contained in the Transaction Documents.

          (f) Certain Trading Activities. Such Investor has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Investor, engaged in any transactions in the securities
of the Company (including any Short Sales involving the Company’s securities)
since the time that such Investor was first contacted by the Company, the
Placement Agent, or any other Person acting on behalf of the Company regarding
the investment in the Company contemplated by this Agreement. Such Investor
covenants that, other than the transactions contemplated under the Transaction
Documents, neither it nor any Person acting on its behalf or pursuant to any
understanding with it will engage in any transactions in the securities of the
Company (including Short Sales) prior to the time that the transactions
contemplated by this Agreement are publicly disclosed.

          (g) Independent Investment Decision. Such Investor has independently
evaluated the merits of its decision to purchase the Securities pursuant to the
Transaction Documents, and such Investor confirms that it has not relied on the
advice of any other Investor’s business and/or legal counsel in making such
decision. Such Investor has not relied on the business or legal advice of the
Placement Agent or any of its agents, counsel, or Affiliates in making its
investment decision hereunder, and confirms that none of such Persons has made
any representations or warranties to such Investor in connection with the
transactions contemplated by the Transaction Documents.

          (h) Rule 144. Such Investor understands that the Securities cannot be
sold unless such Securities are registered under the Securities Act, an
exemption from registration is available or such sale is not subject to the
Securities Act. Such Investor acknowledges that it is familiar with Rule 144 and
that such Investor has been advised that Rule 144 permits resales only under
certain circumstances.

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          (i) General. Such Investor understands that the Securities are being
offered and sold in reliance on a transactional exemption from the registration
requirements of federal and state securities laws and the Company is relying
upon the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Investor set forth herein in order to
determine the applicability of such exemptions and the suitability of such
Investor to acquire the Securities. Such Investor understands that no United
States federal or state agency or any Governmental Body has passed upon or made
any recommendation or endorsement of the Securities.

          (j) Regulation S. If such Investor is not a U.S. Person (as such term
is defined in Section 902(a) of Regulation S), such Investor (i) acknowledges
that the certificate(s) representing or evidencing the Securities contain a
customary restrictive legend restricting the offer, sale or transfer of any
Securities except in accordance with the provisions of Regulation S, pursuant to
registration under the Securities Act, or pursuant to an available exemption
from registration, (ii) agrees that all offers and sales by such Investor of the
Securities shall be made pursuant to an effective registration statement under
the Securities Act or pursuant to an exemption from, or a transaction not
subject to the registration requirements of, the Securities Act, (iii)
represents that the offer to purchase the Securities was made to such Investor
outside of the United States, and such Investor was, at the time of the offer
and will be, at the time of the sale and is now, outside the United States, (iv)
has not engaged in or directed any unsolicited offers to purchase Securities in
the United States, (v) is neither a U.S. Person nor a Distributor (as such terms
are defined in Section 902(a) and 902(c), respectively, of Regulation S), (vi)
has purchased the Securities for its own account and not for the account or
benefit of any U.S. Person, (vii) has not pre-arranged any sale with an investor
in the United States, and (ix) is familiar with and understands the terms and
conditions and requirements contained in Regulation S, specifically, without
limitation, each Investor understands that the statutory basis for the exemption
claimed for the sale of the Securities would not be present if the sale,
although in technical compliance with Regulation S, is part of a plan or scheme
to evade the registration provisions of the Securities Act.

ARTICLE 4
OTHER AGREEMENTS OF THE PARTIES

     4.1 Compliance with Securities Laws.

          (a) Securities may only be disposed of in compliance with state and
federal securities laws. In connection with any transfer of the Securities,
other than pursuant to an effective registration statement, pursuant to Rule
144, or to the Company, to an Affiliate of an Investor or in connection with a
pledge as contemplated in Section 4.1(b), the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor, the substance of which opinion shall be reasonably acceptable to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act. Notwithstanding the foregoing,
the Company hereby consents to and agrees to register on the books of the
Company and with its transfer agent, without any such legal opinion, any
transfer of Securities by an Investor to an Affiliate of such Investor, provided
that the transferee certifies to the Company that it is an “accredited investor”
as defined in Rule 501(a) under Regulation D or is not a “U.S. person” within
the meaning of Regulation S.

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          (b) Certificates evidencing the Securities will contain the following
legend, until such time as they are not required under Section 4.1(c):

NEITHER THESE SECURITIES NOR THE SHARES OF COMMON STOCK ISSUABLE PURSUANT HERETO
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, NEITHER THESE SECURITIES NOR ANY SUCH SHARES OF COMMON
STOCK MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
BY SUCH SECURITIES.

     The Company acknowledges and agrees that an Investor may from time to time
pledge, and/or grant a security interest in some or all of the Securities
pursuant to a bona fide margin agreement in connection with a bona fide margin
account and, if required under the terms of such agreement or account, such
Investor may transfer pledged or secured Securities to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval or consent
of the Company and no legal opinion of legal counsel to the pledgee, secured
party or pledgor shall be required in connection with the pledge but such legal
opinion may be required in connection with a subsequent transfer following
default by the Investor transferee of the pledge.. No notice shall be required
of such pledge. At the appropriate Investor’s expense, the Company will execute
and deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of the
Securities including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling
Stockholders thereunder. Except as otherwise provided in Section 4.1(c), any
Securities subject to a pledge or security interest as contemplated by this
Section 4.1(b) shall continue to bear the legend set forth in this Section
4.1(b) and be subject to the restrictions on transfer set forth in Section
4.1(a) .

          (c) Certificates evidencing Securities shall not contain any legend
(including the legend set forth in Section 4.1(b)):

               (i) following a sale or transfer of such Securities pursuant to
an effective registration statement, or

               (ii) following a sale or transfer of such Securities pursuant to
Rule 144 (assuming the transferee is not an Affiliate of the Company), or

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               (iii) when the restriction described in such legend otherwise
cease to be applicable to such Securities.

     4.2 Integration. The Company shall not, and shall use its best efforts to
ensure that no Affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Investors, or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market in a manner that would require stockholder
approval of the sale of the securities to the Investors.

     4.3 Securities Laws Disclosure; Publicity. By (i) 9:30 a.m. (New York time)
on the Trading Day following the Closing Date, the Company shall issue a press
release, in a form acceptable to the Lead Investor, disclosing the transactions
contemplated by the Transaction Documents and the Closing and by (ii) 5:30 p.m.
(New York time) on the Trading Day following the Closing Date, the Company will
file a Current Report on Form 8-K, disclosing the material terms of the
Transaction Documents (and attach as exhibits thereto any Transaction Documents
required to be filed under the Securities Act and the Exchange Act). The Company
covenants that following such disclosure, the Investors shall no longer be in
possession of any material, non-public information with respect to any of the
Existing Company Entities. In addition, the Company will make such other filings
and notices in the manner and time required by the Commission and the Trading
Market on which the Common Stock is listed. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Investor, or include the
name of any Investor in any filing with the Commission (other than the
registration statement and any exhibits to filings made in respect of this
transaction in accordance with periodic filing requirements under the Exchange
Act) or any regulatory agency or Trading Market, without the prior written
consent of such Investor, except to the extent such disclosure is required by
law or Trading Market regulations.

     4.4 Use of Proceeds. The Company will use the net proceeds from the sale of
the Securities hereunder for expansion of its electric vehicles (“EV”)
manufacturing capacity, marketing of new EV products and for working capital
purposes, acquisitions and/or capital expenditures.

     4.5 Indemnification of Investors.

          (a) The Company Entities and the Major Shareholder (each, an
“Indemnifying Party” and together, the “Indemnifying Parties”) will jointly and
severally indemnify, defend and hold harmless each of the Investors and its
Affiliates and their respective directors, officers, shareholders, subsidiaries,
members, controlling persons, partners, employees and agents (each, an
“Indemnified Party” and together, the “Indemnified Parties”) to the fullest
extent permitted by Legal Requirement from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses (including
reasonable fees, disbursements and other charges of counsel incurred by any
Indemnified Party in any action between the Indemnifying Parties and such
Indemnified Party or between any Indemnified Party and any third party or
otherwise), including all judgments, disbursements, amounts paid in settlements,
court costs and costs of investigation in respect thereof (collectively,
“Losses”) that any such Indemnified Party may suffer or incur as a result of or
relating to any misrepresentation, breach or inaccuracy of any representation,
warranty, covenant or agreement made by any of the Company Entities in any
Transaction Document. The foregoing indemnification shall be subject to the
following: (i) no claims made under this Section 4.5 shall be brought against
the Company unless such claims exceed in the aggregate $50,000, at which point
claims may be made for the full amount of any losses or damages, (ii) the
maximum aggregate amount of indemnity under this Section 4.5 shall not exceed
the aggregate Investment Amount of the Investor on whose behalf the claim is
being made except with respect to fraud and willful misrepresentation, in which
case the Company Entities and the Major Shareholder shall be jointly and
severally liable for all such Losses. In addition to the indemnity contained
herein, the Company will reimburse each Indemnified Party for its reasonable
legal and other expenses (including the cost of any investigation, preparation
and travel in connection therewith) incurred in connection therewith, as such
expenses are incurred.

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          (b) Each Indemnified Party under this Section 4.5 shall, promptly
after the receipt of notice of the commencement of any claim against such
Indemnified Party in respect of which indemnity may be sought from the
Indemnifying Parties under this Section 4.5, notify the Indemnifying Parties of
the commencement thereof. The omission of any Indemnified Party to so notify the
Indemnifying Parties of any such action shall not relieve the Indemnifying
Parties from any liability which it may have to such Indemnified Party (i) other
than pursuant to this Section 4.5 or (ii) under this Section 4.5 unless, and
only to the extent that, such omission results in the Indemnifying Parties’
forfeiture of substantive and/or procedural rights or defenses. In case any such
claim shall be brought against any Indemnified Party, and it shall notify the
Indemnifying Parties of the commencement thereof, the Indemnifying Parties shall
be entitled to assume the defense thereof at its own expense, with counsel
satisfactory to such Indemnified Party in its reasonable judgment; provided,
however, that any Indemnified Party may, at its own expense, retain separate
counsel to participate in such defense. Notwithstanding the foregoing, in any
claim in which both the Indemnifying Parties, on the one hand, and an
Indemnified Party, on the other hand, are, or are reasonably likely to become, a
party, such Indemnified Party shall have the right to employ separate counsel
and to control its own defense of such claim if, in the reasonable opinion of
counsel to such Indemnified Party, either (1) one or more defenses are available
to the Indemnified Party that are not available to the Indemnifying Parties or
(2) a conflict or potential conflict exists between the Indemnifying Parties, on
the one hand, and such Indemnified Party, on the other hand that would make such
separate representation advisable; provided, however, that the Indemnifying
Parties (x) shall not be liable for the fees and expenses of more than one
counsel to all Indemnified Parties and (y) shall reimburse the Indemnified
Parties for all of such reasonable fees and expenses of such counsel incurred in
any action between the Indemnifying Parties and the Indemnified Parties or
between the Indemnified Parties and any third party, as such expenses are
incurred. Each of the Indemnifying Parties agrees that it will not, without the
prior written consent of the relevant Indemnified Party, settle, compromise or
consent to the entry of any judgment in any pending or threatened claim relating
to the matters contemplated hereby (if any Indemnified Party is a party thereto
or has been actually threatened to be made a party thereto) unless such
settlement, compromise or consent includes an unconditional release of each
Indemnified Party from all liability arising or that may arise out of such
claim. The Indemnifying Parties shall not be liable for any settlement of any
claim effected against an Indemnified Party without its written consent, which
consent shall not be unreasonably withheld. Nothing in this Section 4.5 shall
restrict or limit any rights that any Indemnified Party may have to seek
equitable relief.

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     4.6 Conversion Shares. At the Closing, the Company shall have authorized
and reserved and shall continue to reserve, free of preemptive rights and other
similar contractual rights of stockholders, a number of shares of Common Stock
equal to one hundred thirty percent (130%) of the number of shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
of the Series A Preferred Stock and exercise of the Warrants then outstanding.

     4.7 Trading Market Rules and Regulations. The Company shall, if applicable:
(i) in the time and manner required by the Trading Market, prepare and file with
such Trading Market an additional shares listing application covering a number
of shares of Common Stock at least equal to one hundred percent (100%) of the
number of shares of Common Stock as shall be sufficient to effect the conversion
of all of the Series A Preferred Stock and exercise of the Warrants on the date
of such application, (ii) take all steps necessary to cause such shares of
Common Stock to be approved for listing on the Trading Market as soon as
possible thereafter, (iii) provide to the Investors evidence of such listing,
and (iv) maintain the listing of such Common Stock on any date on such Trading
Market or another Trading Market. Prior to the Closing Date, the Company shall
obtain the Shareholder Approval, and the Company shall, within thirty (30)
calendar days after the Closing Date, file a Preliminary Information Statement
on Schedule 14C with the Commission, and, if such Preliminary Information
Statement is not reviewed by the Commission, ten (10) calendar days thereafter,
shall mail a Definitive Information Statement on Schedule 14C to the
non-consenting shareholders in connection therewith (if such Preliminary
Information Statement is reviewed by the Commission, the Company shall use their
best efforts to respond to any comments the Commission may have to such
Preliminary Information Statement and shall mail a Definitive Information
Statement to the non-consenting shareholders as soon as practicable following
the date such Preliminary Information Statement is cleared by the Commission).

     4.8 [Intentional Omitted].

     4.9 Compliance Covenants Relating to Interim Operations. The Company and
the Major Shareholder undertake to the Investors that, unless otherwise approved
by the Investors, the Company shall, and the Company and the Major Shareholder
shall cause the other Existing Company Entities to, conduct their respective
businesses in the ordinary course consistent with past practices and in a
prudent manner. From the date hereof and up to Closing, the Existing Company
Entities and the Major Shareholder shall inform the Lead Investor of and discuss
with the Lead Investor on a regular and ongoing basis (i) any material
developments or decisions with respect to the management of the business and
assets of the Existing Company Entities or prospects, including, without
limitation, any significant new agreements or transactions proposed to be
entered into or persons proposed to be employed or terminated in executive
management positions, and any other significant developments relating to the
business, assets or prospects of the Existing Company Entities and (ii) the
status of the Existing Company Entities’ and the Major Shareholder’s progress in
fulfilling the closing conditions set forth in Section 4 and consents and/or
waivers of third parties, if any. Without limiting the generality of the
foregoing, from the date hereof and up to Closing, the Company and the Major
Shareholder undertake to the Investors that, unless otherwise approved by the
Investors having interest in at least 66 2/3% of the aggregate Investment
Amounts, the Company shall not, and the Company and the Major Shareholder shall
cause the other Existing Company Entities not to: (i) declare, set aside, make
or pay any dividend or other distribution (whether in cash, shares or property
or otherwise) or make any other payment on or in respect of its shares; or (ii)
incur any indebtedness (other than trade payables and other payables out of the
ordinary course of business) of an aggregate amount in excess of US$2 million.
From the date hereof and up to Closing, the Company and the Existing Company
Entities shall, and the Company and the Existing Company Entities shall within
its power cause each other Existing Company Entity to, enter into and conduct
any material transactions with any Interested Party on no worse (from Company’s
perspective) than an arm’s length basis unless approved by the Investors.

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     4.10 Commitment Fee. The Company agrees to pay the Lead Investor a
commitment fee of US$290,000. The commitment fee shall be included as a portion
of the Reimbursable Fees and Expenses and shall be deducted from the Lead
Investor’s Investment Amount pursuant to Section 2.1(b) .

     4.11 EV Qualification.

          (a) Company agrees to cause an appropriate PRC Entity to acquire a car
manufacturing company (the “Car Manufacturer”) through acquisition or otherwise
within six (6) months after the Closing. Such Car Manufacturer must be listed in
the Public Notice on Road Motor Vehicle Production Enterprises and Products (»)
approved by the Ministry of Industry and Information Technology.

          (b) Each Existing Company Entity agrees to materially comply with any
and all EV Laws (including, without limitation, export regulations) applicable
to such Existing Company Entity.

     4.12 VIE Documents. The Company agrees to cause the revision of the VIE
Documents promptly following any change in the equity interest in SFJV held by
Haoyan.

     4.13 Construction. Within six (6) months of the Closing Date, the Company
shall obtain the following in connection with the finished products warehouse (
), dormitory ( ) and office building ( ) of the PRC Entities: (1) the
construction project planning permits (») from the competent planning authority;
and (2) the project construction permits (») with the Zhaoqing High-and-New
Technology Development Zone Planning and Construction Bureau. Within eighteen
(18) months of the Closing Date, the Company shall obtain the requisite property
ownership certificates with respect to the foregoing properties.

     4.14 Environment. Within six (6) months of the Closing Date, the Company
shall obtain the specification approval certificates of National Standard III
for pollutants emissions for all its currently manufactured motorcycles
specifications for domestic sale

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     4.15 Off-road All-terrain Vehicles. Within six (6) months of the Closing
Date, the Company shall obtain Special Purpose Equipment Production Permit ( )
for off-road all-terrain vehicles sold within territory of the PRC.

     4.16 Security Pledge. Within forty-five (45) days of the Closing, the Major
Shareholder shall cause the charge over shares evidenced by the a stock pledge
agreement relating to up to 51% of the outstanding equity in Haoyan to be
approved by the Zhaoqing MOFCOM and the Foreign Trade and Economic Bureau in
Zhaoqing High-and-New Technology Development Zone and to be registered with the
local branch of SAIC.

     4.17 Auditors. Within thirty (30) days of the Closing, the Company shall
appoint a Big Four Accounting Firm to serve as the Company’s independent
registered public accounting firm. All necessary stockholder ratifications
related thereto shall be obtained and all necessary SEC Reports related thereto
shall be properly filed.

     4.18 D&O Insurance. Within thirty (30) days of the Closing, the Company
shall (i) purchase and maintain directors’ and officers’ liability insurance
policies for the benefit of the Investor Director for an insured amount to be
reasonably determined by the Lead Investor; and (ii) deliver to the Investor
Director (or his alternate), a copy of the policy documents in relation to such
insurance.

     4.19 Jiangmen Jinhao. Within sixty (60) days of the Closing, the Company
and the Major Shareholder shall cause the completion of the dissolution of
Jiangmen Jinhao Motorcycle Co., Ltd. ( ).

     4.20 Compliance with Companies Ordinance. As soon as possible, but in any
event within ninety (90) days, following the Closing, the HK Company shall, and
the other Warrantors shall cause the HK Company to, report to the Hong Kong
Companies Registry the failure by the sole director of the HK Company to lay
before the HK Company at the HK Company’s annual general meetings the profit and
loss accounts and balance sheets of the Company and use its best efforts to
obtain from the Hong Kong Companies Registry a decision as to whether
enforcement actions will be pursued by the Hong Kong Companies Registry in
connection with such failure. The HK Company shall, and the other Warrantors
shall cause the HK Company to, comply with applicable provisions of the Hong
Kong Companies Ordinance (Chapter 32, Laws of Hong Kong) in all material
respects.

ARTICLE 5
CONDITIONS PRECEDENT TO CLOSING

     5.1 Conditions Precedent to the Obligations of the Investors to Purchase
Units. The obligation of each Investor to acquire Units at the Closing is
subject to the satisfaction or waiver by such Investor, at or before the
Closing, of each of the following conditions:

          (a) Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing as though made on and as
of such date;

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          (b) Performance. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing;

          (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

          (d) Adverse Changes. Since the date of execution of this Agreement, no
event or series of events shall have occurred that reasonably could have or
result in a Material Adverse Effect;

          (e) Company Deliverables. The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a);

          (f) Series A Certificate of Designation. The Company shall have filed
with the Secretary of State of Nevada the Series A Certificate of Designation
substantially in the form of Exhibit B attached hereto;

          (g) Opinion of PRC Counsel. The Investors shall have received an
opinion of PRC counsel to the Company in form and substance reasonably
satisfactory to the Investors;

          (h) Opinion of Hong Kong Counsel. The Investors shall have received an
opinion of Hong Kong counsel to the Investors in form and substance reasonably
satisfactory to the Investors;

          (i) Opinion of Nevada Counsel. The Investors shall have received an
opinion of Nevada counsel to the Company in form and substance reasonably
satisfactory to the Investors;

          (j) Opinion of BVI Counsel. The Investors shall have received an
opinion of BVI counsel to the Investors in form and substance reasonably
satisfactory to the Investors;

          (k) Opinion of New York Counsel. The Investors shall have received an
opinion of New York counsel to the Company in form and substance reasonably
satisfactory to the Investors;

          (l) Completion of Due Diligence. The Lead Investor shall have
completed satisfactory financial, legal and accounting due diligence;

          (m) Stockholder Approval. If the Common Stock is listed on a Trading
Market and the issuance of the Shares as contemplated under the Transaction
Documents would exceed that number of shares of Common Stock which the Company
may issue without breaching the Company’s obligations under the rules or
regulations of the Trading Market on which it is listed, then the Company shall
have obtained the approval of its stockholders as required by the applicable
rules of the Trading Market for issuances of the Shares in excess of such
amount;

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          (n) Investment Committee Approval. The Lead Investor shall have
obtained the approvals from its Investment Committee, if any, on the purchase of
the Securities;

          (o) Termination. This Agreement shall not have been terminated as to
such Investor in accordance with Section 6.6;

          (p) Completion of RTO. The acquisition of the BVI Company by the
Company and the issuance of controlling stake of no less than 95% in the Company
to the Major Shareholder shall have been completed.

          (q) Investors’ Rights Agreement. The Company and the Major Shareholder
shall have executed and delivered an Investors’ Rights Agreement, substantially
in the form of Exhibit E.

          (r) Director Indemnification Agreement. The Company shall have
executed with and delivered to the Investor Director an Indemnification
Agreement, in the form of Exhibit F.

          (s) Intellectual Property.

               (i) The Company shall have stopped paying all patent use fees and
terminated three patent contracts with Lin Xiangzhong and Zhu Mingao entered
into on October 1, 2008 (the “Patent Contracts”) and shall have entered into a
license agreement with Lin Xiangzhong, pursuant to which the Company shall be
licensed to use the patents referenced in the Patent Contracts free of charge.

               (ii) Each key employee, senior management and employee who is or
was involved in the research and development or other technical aspects of any
Existing Company Entity has executed an agreement with such Existing Company
Entity regarding confidentiality, proprietary information, assignment of
inventions and non-competition in the form or forms delivered to the counsel for
the Lead Investor.

          (t) Reporting System. The Company shall provide to the Lead Investor,
and the Lead Investor shall approve, an improvement plan on the accounting and
reporting system of the Company.

          (u) Security Pledge. Each of the Major Shareholder and the Investors
shall have executed and delivered the Pledge Agreement.

          (v) Insurance Coverage. The Company shall obtain the insurance
policies to the extent required by all applicable Legal Requirements, and to the
extent it is normal to do so by companies engaged in business of a nature and
scale similar to the Company.

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          (w) Shenzhen Jinhao. The Major Shareholder shall have caused the
transfer of Shenzhen Jinhao Dawang Export & Import Co., Ltd. ( ) to an unrelated
third party.

          (x) Compliance Certificate. The Chief Executive Officer of the Company
shall deliver to the Investors at Closing a certificate certifying that the
conditions set forth in Sections 5.1(a), 5.1(b), 5.1(d), 5.1(f), 5.1(l), 5.1(p),
and 5.1(s) to 5.1(w) have been fulfilled.

          (y) Officer’s Certificate. The Chief Executive Officer of the Company
shall deliver to the Investors at the Closing a certificate attaching (i) a
certified copy of the Certificate of Designation as then in effect, (ii) copies
of all resolutions approved by the shareholders and board of directors of the
Company related to the transactions contemplated hereby, (iii) certificate of
incumbency of the Company, and (iv) such other documents or certificates as the
Investors may reasonably request.

          (z) Escrow Agreement and Payment Instruction. The Company, the
Placement Agent and the Escrow Agent shall have executed and delivered the
Escrow Agreement. The Company and the Placement Agent shall have executed and
delivered to the Escrow Agent an irrevocable payment instruction pursuant to the
Escrow Agreement and such irrevocable payment instruction is in form and
substance reasonably satisfactory to the Investors.

     5.2 Conditions Precedent to the Obligations of the Company to Sell Units.
The obligation of the Company to sell Units at the Closing is subject to the
satisfaction or waiver by the Company, at or before the Closing, of each of the
following conditions:

          (a) Representations and Warranties. The representations and warranties
of each Investor contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on
and as of such date;

          (b) Performance. Each Investor shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by such Investor at or prior to the Closing;

          (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

          (d) Investors Deliverables. Each Investor shall have delivered its
Investors Deliverables in accordance with Section 2.2(b); and

          (e) Termination. This Agreement shall not have been terminated as to
such Investor in accordance with Section 6.6.

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ARTICLE 6
MISCELLANEOUS

     6.1 Fees and Expenses.

          (a) Upon the occurrence of the Closing, the Company shall be
responsible for all fees, expenses and/or consideration due to: (i) the
Investors as provided in the Transaction Documents, (ii) the Placement Agent as
provided in the Syndication Engagement Letter for Guangdong JinHao Motorcycle
Company, Ltd. dated November 16, 2009 by and between the Company and the
Placement Agent (the “Placement Agent Agreement”), and (iii) to the respective
accountants, attorneys or other experts of the Company and the Investors, in the
amounts specified in a schedule provided to the Company before the Closing (the
“Closing Disbursements Schedule”), which shall be attached with all the invoices
evidencing such expenses. In the event that there are additional fees, expenses
and/or consideration in connection with the transactions contemplated herein due
to the Investors, Placement Agent, or their respective accountants, attorneys or
other experts, the Company shall pay such amounts within seven (7) days of the
receipt of an invoice from such party pursuant to this Section 6.1(a) .

          (b) In the event the Closing shall have not occurred as elected by the
Company or due to the non-fulfillment by the Company of the closing conditions
set forth in Section 5.1, the Company shall be responsible for all fees,
expenses and/or consideration due to: (i) the Investors as provided in the
Transaction Documents (to the extent such fees, expenses and/or consideration
are payable regardless of failure to close due to the events set forth herein),
(ii) the Placement Agent as provided in the Placement Agent Agreement (to the
extent such fees, expenses and/or consideration are payable regardless of
failure to close due to the events set forth herein), and (iii) to the
respective accountants, attorneys or other experts of the Company and the
Investors, in the amounts specified in a schedule (the “Company Non-Closing
Disbursement Schedule”) provided to the Company, which shall be attached with
all the invoices evidencing such expenses, on the date (the “Company Non-Closing
Date”) that is the earliest of (i) the date on which the Company elects not to
proceed with the Closing, (ii) the Investors have reasonably determined that the
closing conditions set forth in Section 5.1 cannot be satisfied by the Company,
and (iii) the Outside Date, and shall pay such costs within seven (7) days of
the Company Non-Closing Date. In the event that there are additional fees,
expenses and/or consideration in connection with the transactions contemplated
herein due to the Investors, Placement Agent, or their respective accountants,
attorneys or other experts, the Company shall pay such amounts within seven (7)
days of the receipt of an invoice from such party pursuant to this Section
6.1(b) .

          (c) In the event the Closing shall have not occurred as elected by the
Investors or due to the non-fulfillment by any Investor of the closing
conditions set forth in Section 5.2, the Company shall be responsible for: all
the fees, expenses and/or consideration due to: (i) the Investors as provided in
the Transaction Documents (to the extent such fees, expenses and/or
consideration are payable regardless of failure to close due to the events set
forth herein), (ii) the Placement Agent as provided in the Placement Agent
Agreement (to the extent such fees, expenses and/or consideration are payable
regardless of failure to close due to the events set forth herein), and (iii) to
the respective accountants, attorneys or other experts of the Company and the
Investors, in the amounts specified in the a schedule (the “Investor Non-Closing
Disbursement Schedule”) provided to the Company, which shall be attached with
all the invoices evidencing such expenses, on the date (the “Investor
Non-Closing Date”) that is the earlier of (i) the date on which the Investors
elect not to proceed with the Closing, (ii) the Company has reasonably
determined that the closing conditions set forth in Section 5.2 cannot be
satisfied by the Investors, and (iii) the Outside Date, and shall pay such costs
within seven (7) days of the Investor Non-Closing Date. In the event that there
are additional fees, expenses and/or consideration in connection with the
transactions contemplated herein due to the Investors, Placement Agent, or their
respective accountants, attorneys or other experts, the Company shall pay such
amounts within seven (7) days of the of the receipt of an invoice from such
party pursuant to this Section 6.1(c) .

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          (d) All amounts that any Investor or its accountants, attorneys or
other experts are entitled to pursuant to the Closing Disbursements Schedule
shall be included as a portion of the Reimbursable Fees and Expenses and shall
be deducted from such Investor’s Investment Amount pursuant to Section 2.1(b) .
The deduction of such accountable Reimbursable Fees and Expenses shall relieve
the Company from any liability for such accountable Reimbursable Fees and
Expenses of each respective Investor or to the attorneys, accountants, or other
experts of such Investor.

     6.2 Share Issuance Limitations. In the event (i) upon conversion of the
Series A Preferred Stock, or (ii) upon exercise of the Warrants, the aggregate
number of shares of Common Stock issued thereunder would exceed 9,599,607 shares
of Common Stock (the “Exchange Cap”), the Company will undertake all actions in
order to avoid breaching the Company’s obligations under the rules or
regulations of any applicable Trading Market, including, but not limited to: (A)
obtaining the approval of its stockholders as required by the applicable rules
of such Trading Market for issuances of Common Stock in excess of such amount or
(B) obtaining a written opinion from outside counsel to the Company that such
approval is not required, which opinion shall be reasonably satisfactory to the
Investors.

     6.3 Entire Agreement. The Transaction Documents, together with the Exhibits
and Schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.

     6.4 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile (provided the sender
receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section 6.4 prior to 5:30 p.m. (New York City
time) on a Business Day, (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section 6.4 on a day that is not a Business
Day or later than 5:30 p.m. (New York City time) on any Business Day, (c) the
Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as follows:

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If to the Company:

Jinhao Motor Company
Dawang Industrial Park
Zhaoqing Hi-Tech Exploit Area
Guangdong Province, PRC
Facsimile: (86) 0758-3625311
Attention: Chief Executive Officer

With a copy to:

Pillsbury Winthrop Shaw Pittman LLP
50 Fremont
San Francisco, CA 94105-2228
Facsimile: (415)983-1200
Attn.: Scott Kline, Esq.

If to an Investor:

To the address set forth under such Investor’s name on the signature pages
hereof;

If to the Major Shareholder:

Mr. Tsoi Chak Shing
Jinhao Motor Company
Dawang Industrial Park
Zhaoqing Hi-Tech Exploit Area
Guangdong Province, PRC
Facsimile: (86) 0758-3625311

With a copy to:

Pillsbury Winthrop Shaw Pittman LLP
50 Fremont
San Francisco, CA 94105-2228
Facsimile: (415)983-1200
Attn.: Scott Kline, Esq.

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

     6.5 Amendments; Waivers; No Additional Consideration. No provision of this
Agreement may be waived or amended except in a written instrument signed by the
Company, the Major Shareholder and the Investors holding a 66 2/3% majority of
the Securities subscribed for by Investors (excluding any Investors that are
Affiliates of the Company). No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right. No consideration shall be offered or paid
to any Investor to amend or consent to a waiver or modification of any provision
of any Transaction Document unless the same consideration is also offered to all
Investors who then hold Shares. With prior written approval from the Lead
Investor, a Person can, without the need for approval by any other Investors to
this Agreement, become a Party to this Agreement by executing and delivering a
joinder signature page hereto before the Outside Date, whereupon such Person
will be deemed an Investor for all purposes of this Agreement and will be
automatically added to Exhibit A hereto.

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     6.6 Termination. This Agreement may be terminated, and the transactions
contemplated thereby may be abandoned at any time prior to Closing:

          (a) by written agreement of an Investor (as to itself but no other
Investor) and the Company;

          (b) by the Company or an Investor (as to itself but no other Investor)
upon written notice to the other, if the Closing shall not have taken place by
6:30 p.m. Eastern time on the Outside Date; provided, that the right to
terminate this Agreement under this Section 6.6(b) shall not be available to any
Person whose failure to comply with its obligations under this Agreement has
been the cause of or resulted in the failure of the Closing to occur on or
before such time;

          (c) by either the Company or any Investor in the event that any
Governmental Body restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement shall have become final and
non-appealable; or

          (d) upon written notice from an Investor (as to itself but no other
Investor), in the event of a material breach of this Agreement by the Company or
the Major Shareholder, if such breach has not been cured within five (5)
Business Days following notification thereof.

     In the event of a termination pursuant to this Section 6.6, the Company
shall promptly notify all non-terminating Investors. Upon a termination in
accordance with this Section 6.6, the Company and the terminating Investor(s)
shall not have any further obligation or liability (including as arising from
such termination) to the other and no Investor will have any liability to any
other Investor under this Agreement as a result therefrom (other than for those
obligations which are intended, expressly or implicitly, to survive the
termination of this Agreement); provided, however, that no such termination of
this Agreement shall relieve any party of any liability for breaches of this
Agreement occurring prior to the date of termination.

     6.7 Construction; Interpretation. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party. This Agreement shall be construed as if drafted jointly by the
parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement or any of the Transaction Documents. The words “including,” “include”
and other words of similar import shall be deemed to be followed by the words
“without limitation.”

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     6.8 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors. Any Investor may assign any
or all of its rights under this Agreement to any Person to whom such Investor
assigns or transfers any Securities, provided such transferee agrees in writing
to be bound, with respect to the transferred Securities, by the provisions
hereof that apply to the Investors.

     6.9 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

     6.10 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Any dispute,
controversy or claim arising out of or relating to this Agreement or the
transactions contemplated hereof, or the breach, termination or invalidity
thereof, shall be settled by arbitration in Hong Kong under the UNCITRAL
Arbitration Rules in accordance with the Hong Kong International Arbitration
Centre Procedures for the Administration of International Arbitration in force
at the date hereof. The place of the arbitration shall be Hong Kong and the
language of the arbitration shall be English. There shall be only one
arbitrator.

     6.11 Survival. The representations, warranties, agreements and covenants
contained in or made pursuant to Section 3.1(a) through Section 3.1(g) shall
survive the execution and delivery of this Agreement and the Closing
indefinitely, (ii) the warranties, representations and covenants of the
contained in or made pursuant to Section 3.1(h) through Section 3.1(ii) (other
than Section 3.1(t)), shall survive the execution and delivery of this Agreement
and the Closing the until the date which is twenty-four (24) months from the
date of this Agreement, (iii) the warranties, representations and covenants of
the Warrantors contained in or made pursuant to Section 3.1(t) shall survive the
execution and delivery of this Agreement and the Closing the until the
expiration of the applicable statute of limitations (including all periods of
extension, whether automatic or permissive) with respect to matters covered by
such Section 3.1(t), and (iv) the warranties, representations and covenants
contained in or made pursuant to Section 3.2 shall survive the execution and
delivery of this Agreement and the Closing until the date which is twenty-four
(24) months from the date of this Agreement.

     6.12 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

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     6.13 Severability. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby.

     6.14 Replacement of Securities. If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities. If a replacement
certificate or instrument evidencing any Securities is requested due to a
mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.

     6.15 Independent Nature of Investors’ Obligations and Rights. The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the parties hereto as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the parties hereto are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Nothing in this Agreement shall be deemed to constitute
any party the trustee or agent of any other party for any other purpose, or
entitle any party to commit or bind any other party (or its Affiliates) in any
manner. Each Investor acknowledges that no other Investor has acted as agent for
such Investor in connection with making its investment hereunder and that no
Investor will be acting as agent of such Investor in connection with monitoring
its investment in the Shares or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including the rights arising out of this Agreement or out of the
other Transaction Documents, and it shall not be necessary for any other
Investor to be joined as an additional party in any proceeding for such purpose.
The Company acknowledges that each of the Investors has been provided with the
same Transaction Documents for the purpose of closing a transaction with
multiple Investors and not because it was required or requested to do so by any
Investor.

     6.16 Limitation of Liability. Notwithstanding anything herein to the
contrary, the Company acknowledges and agrees that the liability of an Investor
arising directly or indirectly, under any Transaction Document of any and every
nature whatsoever shall be satisfied solely out of the assets of such Investor,
and that no trustee, officer, other investment vehicle or any other Affiliate of
such Investor or any investor, shareholder or holder of shares of beneficial
interest of such a Investor shall be personally liable for any liabilities of
such Investor.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK --
SIGNATURE PAGES FOLLOW]

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Exhibit 10.1

     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

JINHAO MOTOR COMPANY         By: /s/ Tsoi Chak Shing Name: Tsoi Chak Shing
Title: Chairman                 JINHAO POWER HOLDINGS LIMITED         By: /s/
Tsoi Chak Shing Name: Tsoi Chak Shing Title: Director                 JINHAO
MOTORCYCLE COMPANY LIMITED         By: /s/ Tsoi Chak Shing Name: Tsoi Chak Shing
Title: Director                 GUANGDONG JINHAO MOTORCYCLE CO., LTD.        
By: /s/ Tsoi Chak Shing Name: Tsoi Chak Shing Title: Director

JINHAO MOTOR COMPANY – SERIES A SECURITIES PURCHASE AGREEMENT
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     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

JINHAO NEW ENERGY (ZHAOQING) DEVELOPMENT CO., LTD.         By: /s/ Tsoi Chak
Shing Name: Tsoi Chak Shing Title: Director                 TSOI CHAK SHING    
            /s/ Tsoi Chak Shing

JINHAO MOTOR COMPANY – SERIES A SECURITIES PURCHASE AGREEMENT
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Exhibit 10.1

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

4,342,896 Units Aggregate Subscription Price:   US$19,000,000    

Name and Address of Investor: Registration Instructions (if different):     DBS
Nominees (Private) Limited   Name of Investor (please print) Name     By: /s/
Stanley Leung   Authorized Signature Account Reference, if applicable Senior
Vice President   Official Capacity or Title (please print)           Stanley
Leung   (Please print name of signatory if different Address, including postal
code from the name of the Investor printed above.)     Delivery Instructions (if
different): Investor’s Address:         Name 6 Shenton Way, DBS Building Tower
One,       #30-01, Singapore 068809 Account Reference, if applicable            
Telephone Number: (+65)6878-6446       Fax Number: (+65)6220-7487     Address,
including postal code E-mail Address:     Telephone Number

JINHAO MOTOR COMPANY – SERIES A SECURITIES PURCHASE AGREEMENT
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     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

1,142,867 Units Aggregate Subscription Price:   US$5,000,000    

Name and Address of Investor: Registration Instructions (if different):     The
Islamic Bank of Asia Limited DBS NOMINEES (PRIVATE) LIMITED Name of Investor
(please print) Name     By: /s/ Tan Jeh Wuan The Islamic Bank of Asia Limited  
     Authorized Signature SG0700071323 Managing Director Account Reference, if
applicable Official Capacity or Title (please print)         DBS NOMINEES
(PRIVATE) LIMITED   60 ALEXANDRA TERRACE   #05-27 THE COMTECH   SINGAPORE 118502
Tan Jeh Wuan   (Please print name of signatory if different Address, including
postal code from the name of the Investor printed above.)     Delivery
Instructions (if different): Investor’s Address:       6 Shenton Way, DBS
Building Tower One, Name     #01-01/02, Singapore 068809 Account Reference, if
applicable             Telephone Number: +65 6878 9826         DBS NOMINEES
(PRIVATE) LIMITED   60 ALEXANDRA TERRACE Fax Number: +65 6878 8208 #05-27 THE
COMTECH, LOBBY C   SINGAPORE 118502       Address, including postal code    
E-mail Address: +65-68788257   Telephone Number     Name and Address of
Investor: Registration Instructions (if different):     The Islamic Bank of Asia
Limited DBS NOMINEES (PRIVATE) LIMITED

JINHAO MOTOR COMPANY – SERIES A SECURITIES PURCHASE AGREEMENT
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Name of Investor (please print) Name     By: /s/ Tan Jeh Wuan The Islamic Bank
of Asia Limited Authorized Signature SG0700071323 Managing Director Account
Reference, if applicable Official Capacity or Title (please print)         DBS
NOMINEES (PRIVATE) LIMITED   60 ALEXANDRA TERRACE   #05-27 THE COMTECH  
SINGAPORE 118502 Tan Jeh Wuan   (Please print name of signatory if different
Address, including postal code from the name of the Investor printed above.)    
Delivery Instructions (if different): Investor’s Address:       6 Shenton Way,
DBS Building Tower One, Name     #01-01/02, Singapore 068809 Account Reference,
if applicable             Telephone Number: +65 6878 9826         DBS NOMINEES
(PRIVATE) LIMITED   60 ALEXANDRA TERRACE   #05-27 THE COMTECH, LOBBY C Fax
Number: +65 6878 8208 SINGAPORE 118502       Address, including postal code    
E-mail Address: +65-68788257   Telephone Number

JINHAO MOTOR COMPANY – SERIES A SECURITIES PURCHASE AGREEMENT
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     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

1,371,441 Units Aggregate Subscription Price:   US$6,000,000    

Name and Address of Investor: Registration Instructions (if different):    
Profit Tone Global Investments   Name of Investor (please print) Name     By:
/s/ Liu, Hao   Authorized Signature Account Reference, if applicable     Sole
Owner   Official Capacity or Title (please print)           Liu, Hao   (Please
print name of signatory if different Address, including postal code from the
name of the Investor printed above.)     Delivery Instructions (if different):
Investor’s Address:       Suites 3702-04. 37/F, Tower 6, The Name Gateway,
Harbour City, TST, Kowloon   Hong Kong, China         Account Reference, if
applicable             Telephone Number: 852.3719.9399       Fax Number:
852.3719.9328     Address, including postal code             E-mail Address:    
Telephone Number

JINHAO MOTOR COMPANY – SERIES A SECURITIES PURCHASE AGREEMENT
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Exhibit 10.1

EXHIBIT A

______________________________________________

SCHEDULE OF BUYERS

      Investment   Shares of Series A Redeemable   No. Investor Name Investor
Address Amount (US$) Units Purchased Convertible Preferred Stock Warrants 1.

DBS Nominees
(Private) Limited
6 Shenton Way, #30-01
DBS Building Tower One
Singapore 068809 19,000,000

4,342,896

4,342,896

2,171,448

2.

The Islamic Bank of
Asia Limited

6 Shenton Way
#01-01/02
DBS Building Tower 1
Singapore 068809 5,000,000

1,142,867

1,142,867

571,433

3.

Profit Tone Global
Investments
Suites 3702-04. 37/F, Tower 6,
The Gateway, Harbour City, TST,
Kowloon Hong Kong, China 6,000,000

1,371,441

1,371,441

685,720

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