Unassociated Document


    Trader
      Acceptance Bill Discount Limit Contract

     

    Contract
      No.: Shen Fa Ai Guo Lu Shang Zi No. 816070618014

     

    o
Out
      of
      limit

     

    o
Within
      limit                   
Comprehensive Credit Line Contract No.:

     

    Shen
      Fa                                   Zong
      Zi No. 

     

     

    This
      Contract is entered by and between:

     

    Party
      A
      (the “Discounter”): Shenzhen Development Bank Shenzhen Aiguolu Sub-Branch, with
      its address at F/l 1, Jintong Building, No. 1058, Aiguo Road,
      Shenzhen;

    Tel:
      25409815, Fax: 25420425

    Person
      in
      Charge: Fu Nannan Title: President

     

    And

     

    Party
      B
      (the “Applicant”): Shenzhen Highpower Technology Company Limited, with its
      address at Building A2, Luoshan Industrial Zone, Shanxia, Pinghu Town, Longgang
      District, Shenzhen

    Tel:
      Fax:


    Person
      in
      Charge: Pan Dangyu Title: Chairman

     

    Party
      B
      has applied to Party A for discount limit for guaranteed trader acceptance
      bills, and Party A, upon review, has agreed to grant the said discount limit
      for
      guaranteed trader acceptance bills (the “Discount Limit”). In accordance with
      the relevant laws and regulations, the Parties, upon consultation, hereby enter
      into this agreement as follows, and are willing to abide by all the terms
      hereof. 

     

    Article
      1     Type
      of
      Discount Limit

     

    
      	1.   
              	
              Bill
                of exchange discount: Party A undertakes to discount following trader
                acceptance bill(s) (marked with “√”), subject to its review in accordance
                with Party A's rules.

            


    

     

    o√ Trader
      acceptance bill(s) issued by Party B

     

    o
Trader
      acceptance bill(s) endorsed and
      transferred by Party B

     

    o
Trader
      acceptance bill(s) held by Party
      B

     

    
      	2.   
              	
              Maximum
                amount of limit: (converted to) RMB
                (currency)
                (in words) Fifty
                Million Yuan Only .
                

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	3.   
              	
              Valid
                term of limit: 12
                months
                from 20
                June 2007
                to
                20
                June 2008 ,
                during which any applicant in virtue of a trader acceptance bill(s)
                accepted or endorsed for transfer by Party B, or Party B itself,
                may apply
                for discount granted by Party A. The discount limit may be used on
                a
                rolling basis for multiple times, and the amount, term and other
                items of
                each discount shall be agreed upon by the Discounter and the discount
                applicant and set forth in a relevant contract, provided that the
                outstanding amount within the credit limit shall be no more than
                the
                maximum credit limit.

               

              The starting date of any such
                discount
                hereunder shall be within the valid term of credit limit, and the
                termination date of the discount shall be subject to the provisions
                set
                forth in the related contract for discount of accepted
                bill.

            


    

     

    
      	4.   
              	
              Security:
                Party B shall pay a security equal to /
                %
                of the credit limit, and the account No. of the security is: /
                ,
                and the interest rate on the security shall be /
                .
                This section 4 shall remain valid where any other provision hereof
                becomes
                invalid.

            


    

     

    Article
      2     Trader
      acceptance bill

     

    Any
      trader acceptance bill as referred to in Section 1.1 hereof shall be based
      on
      true and lawful commodity trading.

     

    Article
      3     Discounter

     

    Party
      A
      is the Discounter.

     

    Party
      A
      may authorize any other subsidiary of Shenzhen Development Bank as a
      Discounter.

     

    Article
      4     Discount
      Applicant (holder of trader acceptance bill) (marked with “√”)

     

    o
A
      discount applicant must be a direct
      customer of Party B, which means the payee on a trader acceptance bill issued
      and accepted by Party B, and the said acceptance bill has not been endorsed
      for
      transfer.

     

    o
A
      discount applicant must be the holder
      of a trader acceptance bill issued and accepted by Party B.

     

    o
A
      discount applicant must be the holder
      of a trader acceptance bill endorsed for transfer by Party B.

     

    o
A
      discount applicant must be Party
      B.

     

    Article
      5 Guaranteed
      discount/enquiry of a trader acceptance bill (marked with “√”)

     

    o
Party
      B shall, before it issues and
      accepts or endorses for transfer any trader acceptance bill, apply to Party
      A
      and obtain Shenzhen Development Bank Letter of Guaranteed Discount for Trader
      Acceptance Bill, or otherwise Party A shall not be obliged to perform any
      guaranteed discount for such trader acceptance bill.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    o
Before
      Party A grants discount to any
      trader acceptance bill issued and accepted or endorsed for transfer by Party
      B,
      it shall obtain confirmation from Party B on such trader acceptance bill. The
      method of enquiry as agreed upon by the Parties is: upon the receipt of the
      discount application by a holder, Party A will fill in and complete the Shenzhen
      Development Bank Enquiry and Reply Letter for Trader Acceptance Bill, which
      will
      be delivered in person to Party B together with a photocopy of the trader
      acceptance bill in question. After having received and verified the said trader
      acceptance bill, Party B shall render its reply in writing, affix the corporate
      seal of Party B, the seal of the legal representative of Party B and the
      signature of the handling person, and return the said letter to Party A in
      person. Party B shall leave in advance with Party A the imprints of its seals
      and signatures to be affixed on such Shenzhen Development Bank Enquiry And
      Reply
      Letter for Trader Acceptance Bill.

     

    o                 
       /                                                                           


     

                      /                                                                           

     

                      /                                                                           
      

     

    Article
      6     Party
      B’s
      Responsibilities

     

    Where
      any
      discounted amount paid by Party A in accordance with this Contract and a
      contract for discount of accepted bill has not be repaid upon maturity
      (including any early maturity), Party B shall be liable to repay the said amount
      (where Party B is the discount applicant) or shall bear joint and several
      liability for the repayment of the said amount (where Party B is not the
      discount applicant). The term of guarantee shall be two years in addition to
      the
      period from the first date when the specific contract for discounting of trader
      acceptance bill takes effect to mature date of the amount under the said
      contract.

     

    Article
      7     Guarantee
      for the discount credit limit (marked with “√”)

     

    o
By
      credit, no guarantee required from
      Party B.

     

    o√ The
      guarantee for the discount credit limit shall be in the form of 1
      as
      follows:

     

    
      	
            	1.   
              	
              All
                debts of Party B hereunder shall be guaranteed by Huizhou Huali Energy
                Materials Co., Ltd., who shall have joint and several liability for
                such
                debts, and enter into a guarantee contract of maximum amount with
                Party A
                (Contract No.: Shen Fa Ai Guo Lu Er Bao Zi No.
                816070618015).

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	2.   
                	
                All
                  debts of Party B hereunder shall be secured/pledged by _______/_______,
                  with all or any of its _________/__________ (property) disposable
                  under
                  the law, who shall enter into a mortgage/pledge guarantee contract
                  of
                  maximum amount with Party A (Contract No. Shen Fa _/_ Er Di/Zhi
                  Zi No.
                  ________/_________).

              


      

      
         

        
          	
                	3.   
                  	
                  All
                    debts of Party B hereunder shall be guaranteed by Pan Dangyu,
                    who shall
                    have joint and several liability for such debts, and enter into
                    a
                    guarantee contract of maximum amount with Party A (Contract No.:
                    Shen Fa
                    Ai Guo Lu Er Bao Zi No.
                    816070618016).

                


        

      

    

     

    Article
      8 Early
      Maturity 

     

    In
      case
      of any of the following events, all debts of Party B hereunder shall be deemed
      as mature, and Party A shall immediately have the right of recourse against
      Party B upon discovery of such case, and shall be entitled to cease the grant
      of
      any outstanding discount amount hereunder.

     

    
      	
            	1.    
              	
              Party
                B has breached any of its obligations hereunder, or Party B has expressly
                stated that it will not perform any obligation hereunder or has indicated
                so through its acts;

            


    

    
       

      
        	
              	2     	
                Party
                  B winds up against or out of its own
                  will;

              


      

      
         

        
          	
                	3     
                  	
                  Party
                    B has provided false documents or covered up important business
                    or
                    financial facts;

                


        

        
           

          
            	
                  	4     	
                    Party
                      B has experienced financial losses;

                  


          

          
             

            
              	
                    	5     	
                      Party
                        B’s relevant project plan was cancelled or unable to be
                        implemented;

                    


            

            
               

              
                	
                      	6     
                             	
                        Party
                          B has obtained any loan or credit limit from Party A or
                          any other bank by
                          way of any false contract with any of its affiliates, through
                          discount or
                          pledge of any creditor’s rights such as notes receivable based on no
                          actual trade transactions;

                      


              

              
                 

                
                  	
                        	7.    
                          	
                          Party
                            B has deliberately tried to evade creditor’s rights of any bank, by way of
                            affiliated trade or otherwise;

                        


                

                
                   

                  
                    	
                          	8     
                                 	
                            Party
                              is subject to any administrative sanctions or investigation
                              with
                              threatened administrative sanctions by relevant authorities
                              due to its
                              business operations in violation of any law or
                              regulations;

                          


                  

                  
                     

                    
                      	
                            	9.    
                              	
                              Party
                                B has undergone any split, merger, significant consolidation,
                                acquisition
                                for restructuring, liquidation, reorganization, cancellation,
                                declared
                                bankruptcy, or dissolution;

                            


                    

                     

                    
                      
                        
                        

                      

                      
                        4

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      
                        	
                              	10   
                                	
                                
                                  Party
                                    B is subject to any litigation or arbitration
                                    due to its breach of any
                                    other similar contract with Party A or any other
                                    third party, or due to
                                    any dispute arising there
                                    from;

                                

                              


                      

                       

                      
                        	
                              	11.  
                                	
                                The
                                  controlling shareholder of Party B has transferred
                                  any share of Party B
                                  held by it, or there has been any material change
                                  with the controlling
                                  shareholder, actual controller, legal representative,
                                  or senior management
                                  of Party B, including but not limited to any administrative
                                  or criminal
                                  sanctions already imposed or subject to investigation
                                  with threatened
                                  administrative or criminal sanctions due to its
                                  business operations in
                                  violation of any law or regulations, occurrence
                                  of any litigation or
                                  arbitration, serious deterioration of financial
                                  situation, declaration of
                                  bankruptcy or dissolution.

                              


                      

                      
                         

                        
                          	
                                	12   
                                     	
                                  Any
                                    guarantor of a guarantee contract is in breach
                                    of contract, including but
                                    not limited to any false statements in the documents
                                    or formalities in
                                    connection with the guarantee, any breach by
                                    the guarantor of any credit
                                    line contract, guarantee contract or any other
                                    similar contract between
                                    the guarantor and Party A or any other third
                                    party, or any litigation or
                                    arbitration arising from such contracts, winding
                                    up against or out of its
                                    own will, any material business mismanagement,
                                    any administrative or
                                    criminal sanctions already imposed or subject
                                    to investigation with
                                    threatened administrative or criminal sanctions
                                    due to its business
                                    operations in violation of any law or regulations,
                                    evading or neglecting
                                    creditor’s rights of any bank, merger, acquisition for
                                    restructuring, or
                                    any other circumstance which may impair the guarantee
                                    capability of the
                                    guarantor.

                                


                        

                        
                           

                          
                            	
                                  	13.  
                                    	
                                    Any
                                      other circumstance which endangers or threatens
                                      to endanger the security
                                      of loans granted by Party A

                                  


                          

                           

                        

                      

                    

                  

                

              

            

          

        

      

    

    Article
      9 Special
      covenants on credit line and affiliated transactions of institutional
      client

     

    I.    
      An
      institutional client refers to a legal person enterprise or entity having the
      following characteristics: 

     

    
      	
            	1.	
              controlling,
                or controlled by, directly or indirectly, through ownership shares
                or
                business management, any other legal person enterprises or entity;
                

            


    

     

    
      	
            	2.	
              under
                the common control of a third party legal person enterprise or
                entity;

            


    

     

    
      	
            	3.	
              under
                the common control, directly or indirectly, of the major individual
                investor, key management member or family members in close relation
                therewith (including lineal family members of 3 generations and collateral
                family members of 2 generations)

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
            	4.	
              any
                other affiliation where assets or profits may not be transferred
                at a fair
                price, which shall be deemed as an institutional client in terms
                of credit
                management.

            


    

     

    II.    
      In
      case
      of an institutional client, Party B shall report to Party A in writing any
      affiliated transaction with a total value equals to over 10% of its net assets,
      within 10 days after such transaction. The report shall cover the affiliation
      of
      the parties to the transaction, items and nature, amount or corresponding
      proportion of the transaction, and pricing polices (including any transaction
      without a price or with a virtual price).

     

    Article
      10.     Amendments and Termination

     

    This
      agreement may be amended or terminated upon consensus through consultation
      of
      the Parties in the form of writing.

     

    Article
      11     Miscellaneous

     

    
      	
            	1.	
              During
                the effective term of this Contract, any excuse or grace of Party
                A on any
                breach of Party B, or any delay in exercising the rights Party A
                is
                entitled to hereunder during the term hereof, shall not damage, impair
                or
                restrict Party A from all the rights Party A is entitled as a creditor
                hereunder and any applicable law and regulations, nor shall it constitute
                as a persimmon or acceptance by Party A of any act impairing this
                Contract, nor as a waiver by Party A of any right, now or in the
                future,
                to take actions against such
                breach.

            


    

     

    
      	
            	2.	
              Where
                this Contract is held invalid in part or in whole for any reason
                under the
                law, Party B shall continue to perform all of its obligations for
                repayment. In this event, Party A shall be entitled to terminate
                this
                Contract, and immediately recourse the loan principles and interests
                and
                any other amounts due hereunder from Party
                B.

            


    

     

    
      	
            	3.	
              Any
                notice in connection with this Contract between the Parties shall
                be given
                in writing.

            


    

     

    Article
      12     Representations
      and Warranties by Party B

     

    Party
      B
      has the qualification as required by the law to execute and perform this
      Contract, and the execution and performance of this Contract has been fully
      authorized by its Board of Directors and any other competent organization (where
      necessary).

     

    Party
      B
      warrants that all application documents are true, lawful and valid, free from
      any material mistake in non-compliance with any fact or omission of any material
      fact.

     

    Party
      B
      undertakes to notify Party A in writing within 10 days in case of any change
      in
      its domicile, correspondence address, telephone number, business scope or legal
      representative. If Party B fails to perform the above notification obligation,
      any notice or document given by Party A at the original correspondence address
      shall be considered duly delivered.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Party
      B
      is fully aware of and has understood all terms in this Contract and the
      execution of this Contract is its true will.

     

    Article
      13     Applicable
      Law and Dispute Settlement

     

    This
      Contract has been made in accordance with the law of the People’s Republic of
      China and shall be governed by the law of the People’s Republic of China. In
      case of any dispute arising during the performance of this Contract, the Parties
      shall resolve such dispute through consultation or mediation. Should such
      consultation or mediation fail to resolve such dispute, the dispute shall be
      resolved according to the method stipulated Section
      1
below.

     

    
      	
            	1.	
              Bringing
                the case before the People’s Court in jurisdiction over the place where
                Party A is located.

            


    

     

    
      	
            	2.	
              Bringing
                the case before  / for
                arbitration.

            


    

     

    
      	
            	3.	
              If
                after the notarization regarding the enforceability by the parties,
                Party
                B refuse to perform all or part of its obligations hereunder, Party
                A may
                apply for a certificate of enforcement to the original notarization
                body,
                and apply for enforcement to a competent people’s court (the people’s
                court with jurisdiction over the domicile of the person against whom
                enforcement is instituted or the location of the properties of the
                person
                against whom the enforcement is instituted) by submitting the original
                notary certificate and the said certificate of
                enforcement.

            


    

     

    4.    
      ____________________/__________________________________.

     

    Article
      14     Conditions
      for this Contract to take effect or loss effect

     

    
      	
            	1.	
              Conditions
                for this Contract to take effect (Mark the option with
                “√”)

            


    

     

    o
      The loans hereunder are
      guaranteed loans, so this Contract shall only take effect after following
      conditions are met:

     

    
      	
            	(1)	
              execution
                by and affixed with seals of the
                Parties.

            


    

     

    
      	
            	(2)	
              execution
                of the related guarantee contract (including provisions on the amount
                of
                security and security of guarantee), and the completion of the required
                formalities for registration.

            


    

     

     

    o
The
      loans hereunder are credit loans, so
      this Contract shall take effect upon execution by and affixed with seals of
      the
      Parties.

     

    
      	
            	2.	
              Conditions
                for this Contract to loss effect: Party B has paid up all the principles
                and interests as well as other costs and expenses arising
                hereunder.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Article
      15     Other
      matters agreed by the Parities: __________/____________

     

    _____________________________/________________________________

     

    _____________________________/________________________________

     

     

    Article
      16     This
      Contract shall be made in four
      counterparts,
      three for Party A, and one for Party B as well as each of ____/___, ___/____,
      ___/___. Each counterpart of this Contract shall have the same
      effect.

     

     

     

     

    Seal
      of
      Party A: (seal of Shenzhen Development Bank Shenzhen Ai Guo Lu
      Sub-Branch)

     

    Signature
      of person in charge or authorized representative: /s/ Fu Nannan

     

    18
      June
      2007

     

     

    Seal
      of
      Party B: (seal of Shenzhen Highpower Technology Company Limited)

     

    Signature
      of person in charge or authorized representative: /s/ Pan Dangyu

     

    18
      June
      2007

     

    
      
        
        

      

      
        8