Unassociated Document


    Blanks
      in
      Contract are blank in executed contract       
      EXHIBIT
      10.4

     

     

     

    GF
      - 2000 - 2601

     

     

    Contract
      No.: 441302 - B - 112

     

     

     

    State-owned
      Land Use Rights Grant Contract

     

    


     

    Formulated
      under the Supervision of 

     

    Ministry
      of Land and Resources of the People’s
      Republic of China 

     

    State
      Administration for Industry and Commerce of the People’s Republic of
      China

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Instructions
      for Use

     

    A. The
      State-owned Land Use Rights Grant Contract contains the main body and Appendix:
      Map of Boundary of the Land Plot to Be Granted. 

     

    B. The
      Grantor under this Contract shall be the land administration department of
      the
      people’s government entitled to grant the land use rights.

     

    C. The
      land
      use purposes in Article 4 hereof shall be filled in pursuant to the stipulations
      in Investigation Procedures on Urban and Township Cadastral with respect to
      Class II Land; where comprehensive uses are intended, please specify all
      specific use purposes and their respective percentage of land occupancy
      area.

     

    D. The
      land
      conditions in Article 5 hereof shall be selected and filled in based on the
      actual agreements reached between the parties. Where it involves processing
      of
      grant formalities for previously allocated land use rights, select Article
      5.3;
      where it involves land for development and construction, select Article 5.1
      or
      5.2 in accordance with the degree of land development at the time of delivery
      as
      promised by the Grantor. If demolition and ground leveling have been completed
      at the time of delivery as promised by the Grantor, select Article 5.1; if
      demolition and ground leveling have not been completed, select Article 5.2
      and
      indicate the status of area etc in respect of the buildings and other
      aboveground fixtures that need to be removed. In respect of infrastructure
      conditions, fill in “seven connections”, “three connections” etc and
      specifically indicate the contents of infrastructure, such as “connection of
      road, electricity and water” etc. 

     

    E. With
      respect to the methods to pay the grant fee for land use rights as stipulated
      in
      Article 9 hereof, if the parties agree to adopt lump-sum payment in respect
      of
      the grant fee, select Article 9.1; if the grant fee is to be paid in
      installments, select Article 9.2. 

     

    F. In
      Article 20 hereof, if it involves house development, select Article 20.1; if
      it
      involves land development as a whole lot, select Article 20.2.

     

    G. In
      the
      provisions in connection with the effectiveness of this Contract in Article
      40
      hereof, where the Land Plot grant plan has been approved by the competent
      people’s government, the Contract shall come into force in accordance with
      provisions of Article 20.1; where the Land Plot grant plan has not been approved
      by the competent people’s government, the Contract shall come into force in
      accordance with provisions of Article 20.2. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    State-Owned
      Land Use Rights Grant Contract

     

    Chapter
      I General Provisions

     

    Article
      1 The
      Parties to this Contract:

     

    The
      Grantor:  Land
      and Resources Bureau of Huizhou City, Guangdong Province;

     

    The
      Grantee:  Shenzhen
      Highpower Technology Company Limited

     

    In
      accordance with the Land
      Administration Law of the People's Republic of China,
      the
Law
      of the People’s Republic of China on Administration of Urban Real
      Estate,
      the
Contract
      Law of the People’s Republic of China
      and
      other laws, administrative regulations and local regulations, and in the
      principles of equality, voluntariness, due compensation and good faith, the
      Parties hereby enter into this Contract.

     

    Article
      2 The
      Grantor grants the land use rights as authorized by the laws. The ownership
      of
      the land so granted belongs to the People’s Republic of China. The State
      possesses the jurisdiction and administrative powers over such land as granted
      by the Constitution and laws as well as other powers to be exercised by the
      State as stipulated in the laws of the People’s Republic of China and other
      rights necessary to safeguard social and public interests. All underground
      resources, buried articles and municipal public utilities are excluded from
      the
      scope of land use rights grant. 

     

    Chapter
      II Delivery of Land so Granted and Payment of Grant Fee

     

    Article
      3 The
      Land
      Plot to be granted by the Grantor to the Grantee is located at Xinhu
      Industrial Zone, Ma’an Township, Huicheng District. The
      Land
      Plot number is:
      (in
      blank) .
      The
      total area of the Land Plot is One
      Hundred and Twenty Six Thousand Six Hundred and Five
      square
      meters (126,605 square meters), of which the area of the land to be granted
      is
(in
      blank)
      (in
      words) ((in
      blank)
      (in
      figures)) square meters. The four ends of the Land Plot to be granted hereunder
      and the coordinates of its boundary marking points are detailed in Appendix:
      Map
      of Boundary of the Land Plot to be Granted. 

     

    Article
      4 The
      Land
      Plot to be granted under this Contract is for
      industrial purposes.
      

     

    Article
      5 [This
      clause is marked as blank]

     

    The
      Grantor agrees to deliver the Land Plot so granted to the Grantee before
      __________ (date) and the Grantor agrees that at the time of delivery such
      Land
      Plot shall meet the land conditions as stipulated in Article __________
below:

     

    5.1 The
      ground has been leveled and the surrounding infrastructure has achieved
      __________ 
      connections, namely connection of __________;

     

    5.2 The
      surrounding infrastructure has achieved __________ connections, namely the
      connection of __________, however, relocation and ground leveling have not
      been
      completed at the site. The status of buildings and other aboveground fixtures
      are as follows: __________;

     

    5.3 The
      existing land conditions.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Article
      6 The
      term
      of grant of land use rights hereunder is fifty
      years,
      commencing from the date on which the Grantor actually delivers the land to
      the
      Grantee. As for any previously allocated land for which land use right grant
      formalities are being processed in arrear, the term of grant shall commence
      from
      the date of execution of the land use right grant contract. 

     

    Article
      7 The
      grant
      fee for land use rights in respect of the Land Plot (the “Grant Fee”) hereunder
      is RMB
      One Hundred and Fourteen per square meters (RMB 114.00 per square
      meter);
      totaling RMB
      Fourteen Million Four Hundred and Forty Thousand (RMB
      14,440,000.00).

     

    Article
      8 [This
      clause is marked as blank]

     

    The
      Grantee shall, within
      (in
      blank) days
      after both Parties have signed this Contract, pay to the Grantor RMB
      (in
      blank) (in
      words) (RMB
      (in
      blank) (in
      figure)) as deposit for performance of this Contract. The deposit shall serve
      as
      part of the Grant Fee.

     

    Article
      9 The
      Grantee agrees to pay to the Grantor the Grant Fee in accordance with Article
      9.1 below. 

     

    9.1 Within
      30
      days
      from the date of execution of this Contract, pay off the above Grant Fee in
      one
      lump sum.

     

    9.2 Pay
      to
      the Grantor the above grant fee for land use rights in __________
installments
      at the time and amount as stipulated as follows:

     

    No.1
      Installment  RMB
      (in
      blank) (in
      words) (RMB
      (in
      blank) (in
      figure)), time of payment: before __________ (date).

     

    No.2
      Installment  RMB
      (in
      blank) (in
      words) (RMB
      (in
      blank) (in
      figure)), time of payment: before __________ (date).

     

    No.
      Installment  RMB
      (in
      blank) (in
      words) (RMB
      (in
      blank) (in
      figure)), time of payment: before __________ (date).

     

    No.
      Installment  RMB
      (in
      blank) (in
      words) (RMB
      (in
      blank) (in
      figure)), time of payment: before __________ (date).

     

    Where
      the
      Grant Fee is to be paid in installments, the Grantee shall, at the time of
      paying the No.2 Installment and the subsequent installments of the Grant Fee,
      pay to the Grantor the accrued interest at the rate of bank loans of
      corresponding term.

     

    Chapter
      III Development, Construction and Land Use

     

    Article
      10 Within
      30
      days as
      of the date hereof, both Parties shall make on-spot verification of the boundary
      markers at each boundary point in accordance with the Appendix: Map of Boundary
      of the Land Plot to be Granted. The Grantee shall properly protect the land
      boundary markers and shall not remove them without any authorization. Where
      any
      boundary marker is damaged or removed, the Grantee shall immediately submit
      to
      the Grantor a written report applying for a re-measurement and restoration
      of
      the boundary markers.

     

    Article
      11 Where
      the
      Grantee intends to newly construct any building within the scope of the Land
      Plot hereunder, it shall comply with the following requirements:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Nature
      of
      the main building:        (in
      blank)      ;

    Nature
      of
      the accessory building:       
      (in blank)     ; 
      

    Floor-area
      ratio:      (in
      blank)      ;

    Building
      density:      (in
      blank)       ;

    Height
      limits of building:    
      (in blank)       ;

    Percentage
      of green area:     
      (in blank) ;

    Other
      land use requirements:       
      (in blank)       

    
      
        

      

    

    Article
      12 The
      Grantee agrees to jointly construct the following projects within the scope
      of
      the Land Plot hereunder, which shall be handed over the government without
      compensation after completion of their construction: 

     

    12.1
      ___(in
      blank)      ;

    12.2      
      (in
      blank)       ;

    12.3   
      (in
      blank)         
 .

     

    Article
      13 The
      Grantee agrees to commence construction work before November 23, 2007.


     

    Where
      it
      fails to commence the
      construction within the specified time period, the Grantee shall submit to
      the
      Grantor an application for extension 30 days in advance. However, the maximum
      period of extension shall not exceed one year. 

     

    Article
      14 When
      the
      Grantee carries out any construction work on the Land Plot so granted, it shall
      follow the relevant provisions regarding the interconnection of water, gas,
      sewage and other facilities inside the Land Plot with the main pipelines, power
      substations and access facilities located outside the Land Plot.

     

    The
      Grantee agrees that all kinds of pipes and lines to be laid by the government
      for public utilities may enter and exit, pass or cross the Land
      Plot.

     

    Article
      15 The
      Grantee shall, within 30 days after full payment of the Grant Fee as stipulated
      herein, presenting this Contract and payment receipt for the Grant Fee, apply
      to
      the Grantor for processing of land registration, receive the State-owned Land
      Use Certificate and obtain the land use rights in accordance with relevant
      provisions.

     

    The
      Grantor shall, within 30 days after accepting the application for land
      registration, process the land use rights registration formalities and issue
      the
      State-owned Land Use Certificate according to law.

     

    Article
      16 The
      Grantee must reasonably utilize the land according to law and no activities
      conducted by the Grantee on the Land Plot so granted shall damage or destroy
      the
      surrounding environment or facilities; where the State or other parties suffer
      any losses, the Grantee shall be responsible for compensation. 

     

    Article
      17 During
      the term of grant, the Grantee must utilize the land in accordance with the
      land
      use purposes and land use conditions as stipulated herein. Where the Grantee
      needs to change the land use purposes and land use conditions as stipulated
      herein, it must undergo the relevant approval formalities according to law
      and
      shall apply to the Grantor for its consent; the parties may then enter into
      an
      amendment agreement to the land use rights grant contract or sign a new land
      use
      rights grant contract, readjust the Grant Fee, and undergo registration for
      change of land use purposes.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Article
      18 The
      government reserves the right to adjust the urban planning in respect of the
      Land Plot hereunder; where there is any amendment to the original land
      utilization plan, the existing buildings on such Land Plot shall not be
      affected, provided that if any buildings or attachments on said Land Plot need
      to be reconstructed, renovated or rebuilt within the term of grant, or if the
      Grantee applies for renewal of this Contract upon expiration of the initial
      term, the then prevailing plan must be implemented.

     

    Article
      19 The
      Grantor shall not take back the land use rights obtained by the Grantee
      according to law before expiration of the term as stipulated herein. If, under
      special circumstances, the land use rights are required to be taken back before
      expiration of the term for purpose of social and public interests, the Grantor
      shall report the matter for approval in accordance with the statutory procedures
      and offer appropriate compensation to the Grantee based on the value of the
      buildings and other aboveground fixtures at the time of take-back and the price
      of land use rights for the remaining term.

     

    Chapter
      IV Transfer, Lease and Mortgage of the Land Use Rights

     

    Article
      20 After
      the
      Grantee has paid in full the Grant Fee, received the State-owned Land Use
      Certificate and obtained the land use rights, it shall be entitled to transfer,
      lease or mortgage the land use rights granted hereunder in whole or in part,
      provided that when Grantee transfer (including sale, exchange and donation)
      the
      land use right with the remaining term for the first time, it shall report
      to
      the Grantor for determination that it has fulfilled the conditions set forth
      in
      Article
      20.1
      below:

     

    20.1
      It
      has carried out investment and development activities in accordance with the
      provisions hereof and has completed development activities valued at over 25%
      of
      the total investment;

     

    20.2
      It
      has carried out investment and development activities in accordance with the
      provisions hereof and has created conditions for the land to be used for
      industrial purposes or other construction purposes.

     

    Article
      21 Where
      the
      land use rights is to be transferred or mortgaged, the relevant parties to
      such
      transfer or mortgage shall enter into a transfer or mortgage contract in written
      form; where the lease term of land use rights exceeds six months, the lessor
      and
      the lessee shall also enter into a lease contract in written form.

     

    The
      transfer, mortgage or lease contract in respect of the land use rights shall
      not
      breach the State laws or regulations or the provisions of this Contract.


     

    Article
      22 In
      event
      of a transfer of the land use rights, the rights and obligations stated in
      this
      Contract and the registration documents shall also be transferred accordingly.
      After completion of transfer, the term of the land use rights shall be the
      remainder of the term specified herein minus the number of years that has
      already been used. In event that the land use rights hereunder are leased in
      whole or in part, the Grantee shall continue to assume the rights and
      obligations stated in this Contract and the registration documents.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Article
      23 In
      event
      of a transfer, lease or mortgage of the land use rights, the buildings and
      other
      aboveground fixtures shall be transferred, leased or mortgaged along therewith.
      In event of a transfer, lease or mortgage of the buildings and other aboveground
      fixtures, the land use rights shall be transferred, leased or mortgaged along
      therewith.

     

    Article
      24 In
      event
      of a transfer, lease or mortgage of the land use rights, the relevant parties
      to
      such transfer, lease or mortgage shall, within 30 days from the date of
      execution of the relevant contract, presenting this Contract and the relevant
      transfer, lease or mortgage contract as well as the State-owned Land Use
      Certificate, apply to the land administration department for handling the land
      registration formalities. 

     

    Chapter
      V Expiration of Term

     

    Article
      25 Upon
      expiration of the term of use as stipulated herein, if the land user requires
      continuing its use of the Land Plot hereunder, it shall, by no later than one
      year before expiration of the term, submit an application to the Grantor for
      renewal of the term. The Grantor shall grant its approval except for the
      circumstance that the Land Plot hereunder needs to be taken back based on the
      requirements of social and public interests.

     

    Where
      the
      Grantor agrees on the renewal, the Grantee shall undergo the formalities for
      compensated land use according to law and enter into a new contract with the
      Grantor for land use with compensation, and pay the land use fee.

     

    Article
      26 Where
      the
      Grantee fails to submit an application for renewal upon expiration of the term
      of grant, or fails to obtain approval pursuant to Article 25 hereof after it
      applies for renewal, it shall return the State-owned Land Use Certificate.
      The
      Grantor shall, on behalf of the State, take back the land use rights and process
      formalities for cancellation of registration in respect of the land use rights
      in accordance with the relevant stipulations.

     

    Article
      27 Where
      the
      Grantee fails to apply for renewal upon expiration of the term of grant, the
      land use rights hereunder, the buildings and other aboveground fixtures shall
      be
      taken back without compensation by the Grantor on behalf of the State. The
      Grantee shall maintain the normal use functions in respect of the buildings
      and
      other aboveground fixtures and shall not deliberately damage the same. Where
      the
      buildings and other aboveground fixtures have lost their normal use functions,
      the Grantor may require the Grantee to remove or demolish the same and restore
      the Land Plot to a leveled ground.

     

    Article
      28 Where
      the
      Grantee applies for renewal upon expiration of the term of grant and the Grantor
      fails to approve the renewal in accordance with the provisions of Article 25
      hereof, the land use rights shall be taken back without compensation by the
      Grantor on behalf of the State. However, the Grantor shall, based on the
      residual value of the buildings and other aboveground fixtures at the time
      of
      take-back, offer appropriate compensation to the Grantee.

    Chapter
      VI Force Majeure

     

    Article
      29 Neither
      Party shall be responsible for any non-performance of this Contract in whole
      or
      in part caused by any force majeure, provided that, if conditions permit, such
      Party shall take all necessary remedial measures to mitigate the losses
      resulting from such force majeure. Where any force majeure occurs after a Party
      delays its performance, such Party shall not be exempted from its
      responsibilities.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Article
      30 A
      Party
      encountering force majeure events shall notify the other Party within 24 hours
      of such force majeure by mailed letters, telegram, telex, fax or other written
      forms and shall, within 3 days after occurrence of such force majeure event,
      submit a report to the other Party specifying the reasons for its inability
      to
      perform this Contract in whole or in part or for its delayed
      performance.

     

    Chapter
      VII Default Liabilities

     

    Article
      31 The
      Grantee must pay the Grant Fee within the specified time period in accordance
      with provisions of this Contract. If the Grantee fails to pay the Grant Fee
      within the specified time limit, commencing from the date when any amount falls
      due and payable, the Grantee shall, for each day of delay, pay an overdue
      penalty to the Grantor in an amount equal to 0.2% of the overdue amount; where
      the period of delayed payment exceeds six months, the Grantor shall be entitled
      to cancel this Contract and take back the land, in which case the Grantee shall
      have no right to require a refund of its deposit and the Grantor shall be
      further entitled to claim damages from the Grantee for other losses incurred
      as
      a result of the Grantee’s breach of the Contract.

     

    Article
      32 Where
      the
      Grantee has paid the Grant Fee for the land use rights in accordance with
      provisions of this Contract, the Grantor must provide the granted land in a
      timely manner in accordance with provisions of this Contract. Where the
      possession by the Grantee of the Land Plot hereunder is delayed as a result
      of
      the Grantor’s failure to provide the granted land in a timely manner, the
      Grantor shall, for each day of delay, pay a default penalty to the Grantee
      in an
      amount equal to 0.2% of
      the
      Grant Fee so paid by the Grantee. Where the delivery by the Grantor of the
      land
      is delayed by more than six months, the Grantee shall be entitled to cancel
      this
      Contract, in which case the Grantor shall return the deposit in doubled amount
      and refund other portions of the Grant Fee already paid, and the Grantee may
      claim damages from the Grantor for other losses incurred as a result of the
      Grantor’s breach of the Contract.

     

    Article
      33 The
      Grantee shall carry out development and construction activities in accordance
      with the provisions of this Contract. Where the Grantee fails to start
      construction and development within one year from the prescribed date of
      commencement of construction and development as stipulated herein, the Grantor
      may impose a land idleness fee on the Grantee in an amount not exceeding 20%
      of
      the Grant Fee. Where the Grantee’s failure to start construction and development
      lasts for more than two years, the Grantor may take back the land use rights
      without compensation. impose a land idleness fee on the Grantee in an amount
      not
      exceeding 20% of the Grant Fee. However, exceptions are granted if such delayed
      commencement of construction and development is caused by force majeure, any
      action by any governmental department or the preliminary works necessary for
      the
      commencement of construction and development.

     

    Article
      34 Where
      the
      granted land delivered by the Grantor fails to meet the land use conditions
      set
      forth herein, it shall be deemed a breach of this Contract on the part of the
      Grantor. The Grantee shall have the right to require the Grantor to perform
      its
      obligations in accordance with the conditions stipulated herein and to
      compensate for the direct losses suffered by the Grantee due to the Grantor’s
      delayed performance.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Chapter
      VIII Notices and Instructions

     

    Article
      35 Any
      notice and communication required or permitted hereunder shall become effective
      on the date of actual receipt regardless of their form of delivery.

     

    Article
      36 Where
      a
      Party changes its address for notice and communication, or the bank of deposit
      or its account number, it shall, within 15 days after making such changes,
      notify the other Party of its new address, the bank of deposit or its account
      number. A Party shall be held liable for any losses caused by its delay in
      giving notices.

     

    Article
      37 At
      the
      conclusion of this Contract, the Grantor shall have the obligation to answer
      the
      questions raised by the Grantee in respect of this Contract. 

     

    Chapter
      IX Applicable Law and Dispute Settlement

     

    Article
      38 The
      formation, validity, interpretation, performance and dispute settlement of
      this
      Contract shall be governed by the laws of the People’s Republic of
      China.

     

    Article
      39 In
      case
      of any dispute arising from the performance of this Contract, such dispute
      shall
      be settled by both Parties through negotiations, failing which such dispute
      shall be settled in accordance with the method stipulated in Article 39.1
      below:

     

    39.1
      Submit to (in
      blank) Arbitration
      Commission for arbitration;

     

    39.2
      File
      a lawsuit to the people’s court according to law.

     

    Chapter
      X Supplemental Provisions

     

    Article
      40 This
      Contract shall come into force and effect in accordance with the provisions
      of
      Article 40.1 of the following:

     

    40.1
      The
      grant plan in respect of the Land Plot hereunder has been approved by the
      Huizhou City People’s Government. This Contract shall come into force and effect
      from the date of its execution. 

     

    40.2
      The
      grant plan in respect of the Land Plot hereunder shall be subject to the
      approval by the People’s Government of (in
      blank) and
      this
      Contract shall come into force and effect from the date of approval by the
      People’s Government of (in
      blank) .

     

    Article
      41 This
      Contract is executed in three
      (3)
      original
      copies, which shall be equally authentic. The Grantor and the Grantee shall
      each
      keep one
      (1)
      copy.


     

    Article
      42 This
      Contract and its Appendices have a total of thirteen
      (13)
      pages
      and the Chinese version shall prevail. 

     

    Article
      43 The
      amounts, area etc in connection herewith shall be expressed both in word and
      in
      figure; in case of any discrepancy between the words and figures, the numbers
      expressed in words shall prevail. 

     

    Article
      44 This
      Contract is executed on May
      23, 2007
      in
Huizhou
      City,
Guangdong
      Province, the People’s Republic of China. 

     

    Article
      45 The
      Parties may make supplementary agreement with respect to any matters not
      addressed herein and attach the same as an appendix hereto. Such supplementary
      agreement shall have equal force and effect as this Contract. 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      
        	The Grantor
                (official seal):	
                The
                  Grantee (official seal): Shenzhen

                Highpower
                  Technology Company Limited

              
	 	 
	Address: 	
                Address:
                  Luoshan Industrial Area, Shan  

                Xia
                  Village, Pinghu Town, Longgang 

                District,
                  Shenzhen City

              
	 	 
	Legal
                Representative (authorized agent)	Legal
                Representative (authorized agent)
	/s/
                Illegible Signature	/s/ Qiu
                Yu
	
                (Signature)

              	
                (Signature) 
                  (Signature) [Qiu Yu]

              
	 	 
	
                Telephone:

              	
                Telephone:
                  013923469546

              
	 	 
	
                Fax:

              	
                Fax:

              
	 	 
	
                Telegram:

              	
                Telegram:

              
	 	 
	
                Bank
                  with the Account Opened:

              	
                Bank
                  with the Account Opened:

              
	 	 
	
                Account
                  Number:

              	
                Account
                  Number:

              
	 	 
	
                Postal
                  Code:

              	
                Postal
                  Code:

              
	 	 
	
                 

              	
                Dated: