Contract
      No.: 750506071011





**Non-Undertaking
      Short-Term Revolving Financing Agreement**





October
      11 th ,
      2007





This
      agreement is hereby entered into between:





(1)
            Citibank
                China Co., Ltd. Shenzhen Branch (hereinafter referred to as the Lending
                Bank), with its address at: Block A, F9, CITIC Tower, Middle Shennan
                Road,
                Futian District, Shenzhen, and





(2)
            Shenzhen
                Highpower Technology Co., Ltd. (hereinafter referred to as the Customer),
                with its address at: Block A2, Luoshan Industrial Park, Shanxia Village,
                Pinghu Town, Longgang District,
                Shenzhen.





The
      Parties hereby enter into the agreements as follows:





1.
            The
                General Terms and Conditions of the Financing Agreement and any other
                ancillary documentation attached hereto shall be a constituent part
                of
                this Agreement.





2.
            The
                maximum financing amount shall be equivalent to USD Two
                Millions.





The
      Lending Bank shall, for the purpose of calculating the maximum financing amount,
      have the right to calculate based on the exchange rate it determines. In case
      that the total outstanding amounts hereunder exceed the foregoing maximum amount
      due to any fluctuation of the exchange rate at any time, the Lending Bank shall
      be entitled to request the Customer to immediately pay the related excessive
      amount.





3.
            Currency
                of financing: USD/RMB





4.
            Financing
                Methods and Limit:





·
            Discount
                Business: RMB equivalent no more than USD 1.5
                Million


·
            Pre-Balance
                Risks: No more than USD 500,000.00





In
      any
      event, the total amount of all outstanding financing under the foregoing
      financing methods shall not exceed the maximum financing amount.





5.
            Maximum
                Term of Each Method:





·
            Discount
                Business: 3 months


·
            Pre-Balance
                Risks: 12 months


1


6.
            Loan
                Interest Rate/Commission Rate/Financing Interest
                Rate:





·  In
      terms
      of any Discount Business: the interest rate shall be subject to the relevant
      ancillary documents.





7.
            Purpose
                of Financing:





·  In
      terms
      of the Discount Business, the loan is obtained for the purchase of raw
      materials.





·  In
      terms of the Pre-Balance Risks, the Customer shall make all transactions for
      the
      purpose of hedge.





8.    
      Guaranty and Guarantors:


·
            The
                Customer shall provide cash guaranty under the Pledge Agreement with
                the
                Lending Bank via the Guarantors.


·
            Hong
                Kong Highpower Technology Company Limited shall provide guaranty
                by
                issuing a letter of guarantee.


·
            Pan
                Dangyu shall provide guaranty by issuing a letter of guarantee.


·
            Li
                Wenliang provide guaranty by issuing a letter of
                guarantee.


·
            Ma
                Wenwei provide guaranty by issuing a letter of
                guarantee.





9.    
      Penalty Rate:





Subject
      to the provisions set forth in Article 12 of the General Terms and Conditions
      of
      the Financing Agreement, the penalty rate shall be:





RMB:
      The
      penalty rate shall be the minimum penalty rate allowed according to the relevant
      regulations by the People ’ s
      Bank of
      China for overdue loans, including both principal and interest.





USD:
      The
      penalty rate shall be decided by the Lending Bank in its own discretion.





10.   
      Loan Limit Setup Fee:





The
      Customer shall pay to the Lending Bank loan limit setup fees according to the
      amount, time and other requirements set forth in the Document of Loan Limit
      Setup Fees issued by the Lending Bank from time to time.





11.   
      Special Conditions on Pre-Balance Risks:





Where
      the
      Lending Bank determines at any time that the losses calculated per market value
      climb to a certain amount or percentage (as determined in the sole discretion
      by
      the Lending Bank according to its internal calculation method), the Lending
      Bank
      shall be entitled but not obligated to request in its sole discretion the
      Customer to provide additional deposit pledge; the Customer hereby agrees and
      undertakes to enter into the relevant pledge agreement with the Lending Bank
      and
      deposit the corresponding amount as the additional pledge ed within two (2
      )
      working, and complete the formalities as stipulated by national laws and
      regulations as well as required by the Lending Bank.


2


IN
      WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
      formally authorized representatives respectively as of the date first written
      hereof. This agreement shall come into force upon execution by the formally
      authorized representatives of the Parties.





For
                and on behalf of the Lending Bank:
            For
                and on behalf of the Customer




By:
            [Illegible
                Signature]
            (signature)
            By:
            [Illegible
                Signature]
            (signature)(Customer
                Corporate Seal) (Seal of
              Shenzhen
                Highpower Technology Co., Ltd.)





Witnessed/Verified By:Print
                NameSignature


3




**Letter
      of Guarantee**




This
      letter of guarantee (hereinafter referred to as the “ **Letter** ”)
      is
      issued in Shanghai on October 11 th ,
      2007 by
      Pan Dangyu (hereinafter referred to as the “ **Guarantor** ”),
      a
      citizen of the People’s Republic of China, with its address at Room 604,
      Apartment 2, Block 34, No. 463 Residential Compound, Shou Gou Ling Road, Tianhe
      District, Guangzhou, Guangdong Province, China; and ID No.: 430104196803184316.
      The beneficiary to the Letter is Citibank China Co., Ltd. including all its
      branches and sub branches (hereinafter referred to as the “ **Guarantee** ”).




This
      Letter is aimed to guarantee, (i) the financing agreement (hereinafter referred
      to as the “ **Financing
      Agreement** ”)
      dated
      October 11 th ,
      2007 by
      and between Shenzhen Highpower Technology Co., Ltd. as the borrower (hereinafter
      referred to as the “ **Principal
      Debtor** ”)
      and
      the Guarantee as the loan bank, whereby the Guarantee shall provide the loan
      with total amount equivalent to USD 2 Million (hereinafter referred to as the
      “ **Financing** ”)
      to the
      Principal Debtor; and (ii) the main agreement on deriving deals (hereinafter
      referred to as the “ **Main
      Agreement** ”,
      which
      together with the Financing Agreement are referred to as “ **Such
      Agreements** ”)
      signed
      on October 11 th ,
      2007 by
      the Principal Debtor as Party B and the Guarantee as Party A.




The
      terms
      and expressions used but not otherwise defined in this Letter shall have the
      same meaning as in the Financing Agreement or the Main Agreement to the extent
      the same terms and expression are defined therein.




Whereas
      the Guarantee and Principal Debtor have entered into Such Agreements, the
      Guarantor agrees as follows:


1




1. Guaranty
          and Indemnity




The
      Guarantor unconditionally guarantees to pay any or all outstanding amounts
      (existing or subsequent amounts) due and payable or to be due and payable by
      the
      Principal Debtor under Such Agreements (including any modification or supplement
      made thereto from time to time as well as any deal confirmation or similar
      confirmation documents made on reliance of the Main Agreement), with or without
      other guaranty, that become due as a result of maturity or accelerated repayment
      or any other reasons. The debt shall include but not limited to principal,
      interest, charge, default interest, penalty, cost, expenditure, compensation,
      payment, expense, and any expense or other payment obligations arising from
      the
      enforcement by the Guarantee of the rights prescribed hereunder or strict
      performance of any terms or clauses hereof (all aforesaid obligations are herein
      referred to as the “ **Debt** ”).
      In
      the event the Principal Debtor fails to pay full amount of any Debt (at the
      prescribed due date or any other due date agreed as a result of accelerated
      repayment or any other reasons), the Guarantor shall, at the request of the
      Guarantee, pay said Debt to the Guarantee on behalf of the Principal Debtor
      without any delay, as if the Guarantor had become the Principal Debtor in place
      of the actual Principal Debtor. The Guarantor shall meanwhile pay any interest
      accrued on such overdue Debt from the due date of payment to the date when
      the
      Guarantor fully pays the required amounts under this Letter, at a rate equal
      to
      the annual interest rate applicable to such Debt payable by the Principal Debtor
      from time to time under the Financing Agreement. This Letter is a repayment
      guarantee instead of a guarantee for debt collection. The due and outstanding
      amounts of debt and expenses set forth on the vouchers produced by the Guarantee
      shall be final to the Guarantor. As an independent obligation, the Guarantor
      agrees that if any debt guaranteed by the Guarantor becomes unenforceable,
      invalid or illegal (whether such circumstance exists now or whether it has
      become known or may become known to any Party hereto in the future), the
      Guarantor shall, as a major obligation of the Guarantor and upon request by
      the
      Guarantee, immediately indemnify the Guarantee for any cost, loss or
      indebtedness incurred as a result of such circumstance. The amount of such
      cost,
      loss or indebtedness of the Guarantee shall be equal to the amounts otherwise
      repayable to the Guarantee.




2. Absolute
          Guarantee




This
      Letter is a continuous guarantee which shall become valid from the date of
      signature and remain in force till the date when the Guarantor informs the
      Guarantee of the cancellation of this Letter. The notice shall take force after
      the Guarantee receives the notice or on a later date specified in the notice.
      It
      is however provided that the said cancellation hereof shall not restrict or
      terminate any guaranty on related deals already agreed hereunder between the
      parties before cancellation.


2




To
      the
      extent permitted by the applicable laws of the People’s Republic of China
      (hereinafter referred to as “China”; but for the purpose of this Letter, Hong
      Kong, Macao or Taiwan shall be excluded), the obligations of the Guarantor
      hereunder shall be unconditional, and the Guarantor shall waive its right of
      defense in respect of any of the following: (i) The unenforceability, invalidity
      or illegality of any Debt; (ii) Any modification, amendment or waiver of any
      clauses regarding the Debt or any consent regarding any deviation from the
      debt
      clauses, including changes to any extension or renewal of any period or terms,
      or in any payment method or place, made with or without notice to the Guarantor
      whatsoever; (iii) Any exchange, replacement, release of, or any unfulfilled
      security interest in, or any damage to any collaterals used to secure the Debt
      repayment hereunder; (iv) The Principal Debtor loses its capacity, power,
      authorization or its legal person status required for or incurs any change
      to
      its corporate existence, corporate structure or ownership, or it incurs any
      insolvency, bankruptcy, restructuring, or any other similar procedures that
      may
      affect the Principal Debtor or any of its assets or which may cause termination
      or elimination of any Debt; (v) Any right of claim, right of setoff or other
      rights that the Guarantor may have from time to time against the Principal
      Debtor, regardless of whether such rights are related to the transactions
      contemplated hereunder, to the extent that the provisions herein cannot prevent
      such claims from being made in any separate litigation or necessary
      counterclaim; (vi) Any laws, statutes or regulations in any jurisdiction
      affecting the Debt clauses or the rights of the Guarantee, including but not
      limited to: (A) The implementation of any such laws, statutes or regulations
      of
      the jurisdiction (including prior approval) will forbid the exchange of non-US
      currencies (as defined below) into US dollars or remittance of fund out of
      the
      jurisdiction, or make it impossible to obtain US dollars in the legal foreign
      exchange market in the jurisdiction according to common business practices;
      or
      (B) any orders are announced for closing down business operations of the banking
      sector in the jurisdiction or for suspension of payment, or the jurisdiction
      or
      the government imposes any orders for suspension of repayment on any due and
      outstanding amounts or requests for any rearrangement or restructuring, or
      requires prior approval for any repayment; or (C) the obligation of repayment
      set forth herein for any debt incurred in the said jurisdiction is directly
      or
      indirectly deprived by way of State or governmental confiscation,
      nationalization, or requisition; or (D) any war (declared or not), insurrection,
      revolution, enemy actions, civil turmoil or any event in the jurisdiction having
      similar impact as those described in the subsections (A), (B) or (C) above
      (all
      events described in (A) to (D) above shall be limited to those occurring or
      existing on or after the date of this Letter); and (vii) Any other circumstance
      (including but not limited to limitation of prosecution) or any representation
      (or the reliance on such representation) of the Guarantee which may constitute
      an objection or discharge of all or part of the obligations of the Principal
      Debtor or the Guarantor.




Without
      prejudice to the generality of the foregoing and if permitted by the PRC laws,
      in respect of any Debt, if the Debt is denoted in US dollars or in foreign
      currencies other than the currency of the jurisdiction where the Principal
      Debtor is primarily based, as it is stipulated in the relevant agreement giving
      rise to such Debt, the Guarantor warrants that it will strictly follow the
      terms
      of such agreement in making payments to the Guarantee, including provisions
      on
      amounts and types of currency of payment as stipulated thereunder, without
      regard to any applicable laws taking effect from time to time in the
      jurisdiction where the Principal Debtor is primarily based, or any orders,
      decrees or regulations issued by the said jurisdiction.


3




The
      tenet
      of this Article 2 is to expressly set forth that the obligations of the
      Guarantor under this Letter are absolute and unconditional in any
      circumstances.




3. Waive
          of
          Rights




The
      Guarantor hereby waives (i) any requirement on the Guarantee regarding any
      instant, diligent notices of acceptance or non-acceptance or any other notices
      in connection with any Debt and this Letter; and (ii) any requirement on the
      Guarantee to exercise any right or take any action against the Principal Debtor,
      or to request any collateral security or credit support therefrom.




4. Re-effectiveness




This
      Letter shall be consecutively valid. Under certain circumstances, if at any
      time
      all or part of the debts of the Principal Debtor (whether it is debt of the
      Principal Debtor or any security on such debt or any amounts hereunder or
      otherwise) are paid or cancelled, or rearranged by way of repayment, guarantee
      or other disposals, but such repayment, cancellation or rearrangement are
      revoked or the Guarantee must refund the received amounts due to any insolvency,
      bankruptcy, liquidation, administration or restructuring of the Principal Debtor
      as if such repayment, cancellation or rearrangement has never been made before,
      then the effectiveness of this Letter shall be restored.




5. Right
          of
          Subrogation




The
      Guarantor shall not claim, enforce or exercise any right of subrogation that
      it
      may obtain under this Letter. The Guarantor shall may obtain such right of
      subrogation by paying in the currency of denomination as set forth hereunder
      or
      in other currencies determined by the Guarantee till it has irrevocably repaid
      all debts in full and terminated all agreements whereby the Guarantee undertakes
      to provide loans. In the event the Guarantor claims for the right of subrogation
      in violation of this Article, the Guarantor shall immediately return any payment
      received to the Guarantee.


4




6. Non-Competition




The
      Guarantor shall have no right to act as debtee or claim any of such rights,
      or
      have any right of claim to the assets of Principal Debtor or compete with the
      Guarantee in case of bankruptcy or liquidation of the Principal Debtor. In
      the
      event the Guarantor claims for such rights in violation of this Article, the
      Guarantor shall keep any amounts received as a result thereof on behalf of
      the
      Guarantee and shall pay the amounts to the Guarantee immediately after it
      receives them.




7. Sub-Debtee




The
      Guarantor shall undertake to the Guarantee that he or she will not claim for
      or
      collect any repayment, early repayment or any other payment resulting from
      or in
      connection with the Principal Debtor’s performance of its obligations set forth
      hereunder until the completion of repayment of all debts, regardless whether
      the
      repayment is made in cash, or intangible assets or by setoff method. However,
      if
      the Guarantor is requested by the Guarantee or required by law to register
      or
      claim any rights against the Principal Debtor in respect of any sub-debt, it
      shall process such procedures in accordance with the instructions of the
      Guarantee, receive any payment on behalf of the Guarantee, and return such
      payment to the Guarantee immediately after it receives them. The Guarantor,
      as
      the Principal Debtor, hereby waives any right he or she may have to request
      the
      Guarantee to first claim any right of recourse against the Principal Debtor
      in
      respect of any debt according to the Financing Agreement and/or the Main
      Agreement.




8. Taxes




Any
      payment prescribed in this Letter shall not be deducted, including all current
      or future payments, but excluding the income tax and franchise taxes (all taxes,
      charges, deductions, fees or withholding tax and all related debts are referred
      to as the “ **Taxes** ”)
      imposed in accordance with the laws issued in the place of jurisdiction or
      local
      government where the corporation or loan bank of the Guarantee locates. In
      case
      the Guarantor deducts any of taxes from the payable amount according to any
      relevant laws, (i) the payable amount shall be increased accordingly so as
      to
      make sure the Guarantee can receive its receivables after the deduction
      aforesaid (including the deduction of extra payables applicable under this
      Article) as if no such deduction has been made; (ii) the Guarantor shall perform
      such deduction aforesaid, and (iii) pay for all deducted items to the taxation
      administration or any other government institutes according to relevant laws.
      In
      addition, the Guarantor shall also pay for any stamp tax, document tax,
      consumption tax, asset tax or other similar charges (referred to as “Other
      Taxes”) arising hereunder from signature, delivery or registration of this
      Letter or related to the debts aforesaid or upon the current or future payment
      prescribed under this Letter. The Guarantor shall immediately submit both
      original and certified copy of the receipt of payment to the Guarantee, and
      at
      the request indemnify the Guarantee for any taxes, charges or other debts
      (including penalty, interest and expenses) paid by the Guarantee within thirty
      days, regardless whether the Taxes or Other Taxes aforesaid are legal. Without
      prejudice to the effectiveness of the other agreements referred herein, the
      agreement and obligations of the Guarantor set forth in this Article shall
      remain effective after repayment of both principal and interest and the
      termination of this Letter.


5




9. Place
          and
          Currency of Payment




In
      case
      the debts are payable in US dollars, the Guarantor shall pay to the place and
      the account designated by the Guarantee. In case the debts are payable in any
      foreign currency other than US dollars (referred to as “ **Non-US
      Currency** ”)
      and no
      agreement has been reached regarding the time and place of such payment, the
      Guarantor shall, at the selection of the Guarantee, (i) pay the debts in Non-US
      Currency and in the prescribed payable place, or (ii) pay US dollars to any
      account designated by the Guarantee in the prescribed place. In case the payment
      is made according to subsection (ii) above, the Guarantor shall pay equivalent
      US dollars with the debt amount to the Guarantee. Ordinary bank procedures
      shall
      be applied in the calculation of exchange rate. The Guarantee shall make sure
      the Guarantor is able to purchase equivalent US dollars in the place of payment
      on the payment date; provided, however, that the foregoing provision in this
      paragraph shall not be applicable to any payment in Non-US Currency due to
      application of any non-US laws, orders, decrees or regulations, in which case,
      for the purpose of this Letter, the debts shall still be deemed to be payable
      in
      US dollars and be paid to the Guarantee according to the first sentence of
      this
      Article 9. The Guarantor shall indemnify any additional expenses to the
      Guarantee for purchase of foreign exchanges according to this Article. For
      the
      purpose of this Article 9, any evidence shall be sufficient if it can
      demonstrate that the Guarantee will suffer losses if it converts or purchases
      foreign exchange.


6




10. Right
        of
        Setoff




Should
      the laws of the People’s Republic of China allow, if the Guarantor fails to make
      payment when its obligations become due and payable, the Guarantee shall be
      authorized to set off any and all debts with any deposit (ordinary or special,
      fixed or current, temporary or formal whatsoever), stock, bond, commercial
      document or other assets held or controlled by the Guarantee from time to time,
      or with any amounts that the Guarantee owes to the Guarantor at any time or
      any
      indebtedness incurred by the Guarantee to the Guarantor’s credit or account at
      any time, regardless whether the Guarantee has made any other claim hereunder.
      The Guarantee shall inform the Guarantor of the setoff immediately after the
      same occurs, provided however that any failure to send such a notice shall
      not
      affect the effectiveness of such setoff or use if permitted by the laws of
      the
      People’s Republic of China. The right of the Guarantee stipulated herein is in
      addition to any other rights and remedy the Guarantee may have, including but
      not limited to other rights of setoff. To the extent permitted by the laws
      of
      the People’s Republic of China, the Guarantor agrees to waive any right of
      setoff he or she may have against the Guarantee, and not exercise any rights
      under its obligations set forth hereunder without restricting the effectiveness
      of the aforesaid waiver.




11. Representations
        and Warranties




The
      Guarantor represents and warrants that: (i) the Guarantor is legally qualified
      to sign, deliver and perform this Letter, and will not break any law or any
      contractual limitation with binding force over the Guarantor; (ii) the Guarantor
      signs, delivers and performs this Letter without any authorization, approval,
      notice or registration by any government institute, or supervision organization
      or any third party; (iii) the obligations prescribed here in this Letter, once
      signed and delivered by the Guarantor, shall become effective and have binding
      force on the Guarantor; (iv) the Guarantor has not taken any steps or legal
      procedures (if any) related with bankruptcy; and (v) the Guarantor has reached
      the minimum age requirement according to applicable laws, has good reason,
      and
      has entered into this Letter out of his/her own free will after he/she has
      sought independent professional advice (including legal advice) on all of
      his/her obligations hereunder this Letter and come to a thorough understanding
      of the nature of such obligations. The representations and warranties contained
      in this clause shall be deemed to be repeatedly made by the Guarantor each
      day
      in any period when the debts remain unpaid or not discharged, as the case may
      be.




12. Undertakings




The
      Guarantor hereby undertakes to the Guarantee that unless it is otherwise agreed
      by the Guarantee, so long as any debt remains unpaid, the Guarantor shall (i)
      comply with all applicable laws, statutes, and requirements and orders of any
      government authorities having jurisdiction; (ii) pay for all taxes, evaluation
      expenses, administrative charges or collection based on the incomes, revenues
      or
      assets of the Guarantor before any penalty is charged in order not to cause
      any
      lien, mortgage or any burden of rights to any of the assets aforesaid; (iii)
      sign any other document or bills, including any negotiable bill and take any
      action reasonably requested by the Guarantee for the purpose of implementation
      of this Letter; (iv) the Guarantor, without any prior consent of the Guarantee
      in written form, shall not (A) undertake, guarantee or endorse any other
      obligation, or be directly or indirectly responsible for any obligations of
      any
      individual, enterprise or company other than the obligations of the Guarantor
      prescribed herein; or (B) sell, lease or dispose or transfer any material part
      of his or her assets.


7




13. Consecutive
            Guaranty




This
      Letter constitutes a consecutive guaranty and is applicable to any current
      or
      future debts regardless of the time of such debts. This Letter is irrevocable
      and remains fully effective throughout the period of validity until all payable
      amounts prescribed herein are irrevocably paid and all agreements related to
      such debts are terminated. This Letter is an extra guaranty on and over any
      other guaranty the Guarantee may have now or in the future regarding any debt,
      and will not affect nor be affected by such other guaranty. To the extent
      permitted by the laws of the People’s Republic of China, and in order to
      maximize the amount of recovery of debts from the Principal Debtor in any actual
      or potential bankruptcy or dissolution (other than the fact that the Principal
      Debtor makes repayment to the Guarantee), the Guarantee may put such recovered
      amounts into a temporary account with accrual of interest. The amounts shall
      be
      kept in such account (interest-bearing temporary account) until the Guarantee
      is
      satisfied with the following: The Guarantee has no more obligation to make
      any
      payment in respect of the Debt and the Guarantee has irrevocably collected
      all
      amounts payable to the Guarantee under the Debt.




14. Amendment




No
      amendment or abandon of any clause of this Letter and no consent given by the
      Guarantor to any deviation from the terms of with this Letter shall be deemed
      valid unless they are made in writing and signed by the Guarantee. Subject
      to
      the Guarantees’ signature, such abandonment or consent shall be valid for
      special purposes under special circumstances.


8




15. Address




All
      notices and other communications prescribed herein shall be in writing
      (including telefax), and sent by mail, telefax or express mail. Any notice
      to
      the Guarantor shall be to the attention of Pan Dangyu at the address: Luoshan
      Industrial Park, Pinghu Town, Longgang District, Shenzhen City, 51811l, and
      any
      notice to the Guarantee shall be to the attention of Johnson Liu, Citibank
      China
      Co., Ltd., at the address: F35, Citigroup Tower, No.33, Huayuanshiqiao Road,
      Pudong District, Shanghai, China, 200120, and CC (carbon copy) to Johnson Liu,
      Block A, F9, CITIC Tower, No.1093, Middle Shennan Road, Futian District,
      Shenzhen City, 51803l; or sent to any other address specified in any written
      notice from one party to the other. All notices or other documents sent by
      mail
      shall become effective immediately after they are put into the mailbox, and
      notices sent by telefax shall become effective once sent out.




16. Credit
            Award Authorization




The
      Guarantor shall, without reliance on the Guarantee, independently analyze the
      credit status and make his or her own decision to sign this Letter based on
      any
      proper documents and information. The Guarantor shall have sufficient methods
      to
      successively obtain basic information regarding the business, operations and
      financial status of the Principal Debtor, and has not and will not depend on
      any
      such information provided by the Guarantee. The Guarantor acknowledges and
      understands that he or she can materially benefit, directly or indirectly from
      the credit award prescribed herein, and he or she fully agrees and understands
      the terms and conditions of this Letter and the legal meaning of such terms
      and
      conditions hereof.




17. Transfer
            of Rights




To
      the
      extent permitted by the PRC laws, this Letter shall have binding force over
      the
      Guarantor and any of its successors or assigns. The Guarantor shall not transfer
      his or her rights or obligations without prior consent of the Guarantee. The
      Guarantee may at any time transfer any of its rights or obligations (if any)
      prescribed herein to any other entity or individual after sending notice to
      the
      Guarantor. The Guarantor agrees such notice of right transfer can be made in
      any
      written form determined by the Guarantee at its sole discretion, and such
      transfer by the Guarantee requires no prior approval and consent of the
      Guarantor. The Guarantor further agrees that it is bound and will continue
      to be
      bound by this Letter regardless of such transfer of rights by the
      Guarantee.


9




18. Accumulative
            Rights




The
      rights and remedies the Guarantee is entitled to hereunder shall be in addition
      to and not exclusive of any other rights and remedies that the Guarantee may
      enjoy under any laws, other agreements or documents. Any delay on the part
      of
      the Guarantee to perform any of its rights shall not be deemed a waiver of
      such
      rights.




19. Joint
            and
            Several Liability




The
      Guarantor shall bear joint and several liability with any other guarantor (if
      any) for the debts aforesaid according to the laws of the People’s Republic of
      China. The Guarantor acknowledges and agrees that any of his or her obligations
      under this Letter shall not be relieved, or damaged or affected in any manner
      whatsoever in case the obligations of other guarantor are cancelled or
      terminated, and/or such obligations become invalid, illegal or not
      unenforceable.




20. Disclosure
            of Information




The
      Guarantor hereby irrevocably and unconditionally agrees that the Guarantee
      may
      disclose any information held by the Guarantee regarding debt, deposit, transfer
      or any other deal information or similar information of the Guarantor: (i)
      to
      any professional consultation institutes or their employees, or any other party
      providing services to the Guarantee, and/or (ii) to the headquarters, branches,
      or affiliates of the Guarantee, and/or (iii) to the regulatory bodies, judicial
      bodies or other government agencies of China or USA, including any state,
      provincial and municipal governments, or the government authorities at the
      place
      of other guarantors, headquarters of the Guarantee or its other branches or
      affiliates, and/or (iv) to any participants, or assignees or transferees of
      any
      rights (including any potential any participants, or assignees or transferees
      under any loans related to such debts); and/or (v) to any potential purchasers
      of the assets and liabilities of the Guarantee, and candidates for merging
      with
      the Guarantee, or any inheritors or any other person having similar legal
      status.




21. Personal
          Information




The
      Guarantor hereby agrees to the collection, processing and use by the Guarantee
      of any personal information regarding to and provided by the Guarantor; and
      the
      information aforesaid may also be obtained by the Guarantee (i) for the purpose
      of processing any deal between the Guarantee and the Guarantor, or (ii) for
      the
      purpose of soliciting business from the Guarantor or for any third party to
      solicit business from the Guarantor; and/or (iii) for other purpose allowed
      by
      other laws and regulations.


10




22. Severability




In
      the
      event any of the clauses prescribed in this Letter is or becomes illegal,
      invalid or unenforceable in any jurisdiction, it shall not affect (i) the
      effectiveness or enforceability of other clauses of this Letter in such
      jurisdiction; or (ii) the effectiveness or enforceability of the clause
      aforesaid or any other clauses of this Letter in other
      jurisdictions.




23. Judgment




If,
      for
      the purpose of obtaining any court judgment, any amount falling due hereunder
      must be converted from US Dollars into Non-US Currencies, the Guarantor agrees
      to apply ordinary bank procedures for purpose of determining the exchange rate
      and the Guarantee shall be able to purchase US Dollars with such Non-US Currency
      one working day before the final judgment is issued. Notwithstanding the final
      judgment in Non-US Currency, the obligations of the Guarantor falling due
      hereunder shall be relieved on the date of payment only to the extent of any
      amount in Non-US Currency declared due and payable by the Guarantor to the
      Guarantee as specified in the judgment. The Guarantee may purchase US Dollars
      with such Non-US Currency as per ordinary bank procedures. In the event the
      purchased US Dollars fall short of the US Dollar amount previously due and
      owing
      to the Guarantee, the Guarantor agrees, as a separate obligation, to indemnify
      any loss to the Guarantee arising in connection therewith, regardless of the
      result of the court judgment. In the event the purchased US Dollars exceed
      the
      US Dollar amount previously due and owing to the Guarantee, the Guarantee agrees
      to remit the excessive portion to the Guarantor.




24. Governing
          Laws




This
      Letter shall be subject to, governed by and interpreted in accordance with
      the
      laws of the People’s Republic of China. The Guarantor shall irrevocably submit
      to the non-exclusive jurisdiction
      of the local court in the place of the Guarantee.




11




Pan
                Dangyu/s/ Pan Dangyu
            (Signature)




ID
      No.:




Witnessed/Verified By:
            Johnson Liu, ManagerPrint Name/s/ [illegible signature]Signature


12




**Letter of Guarantee**




This letter of guarantee (hereinafter referred to as the “ **Letter** ”)
      is
      issued in Shanghai on October 11 th ,
      2007 by
      Ma Wenwei (hereinafter referred to as the “ **Guarantor** ”),
      a
      citizen of the People’s Republic of China, with its address at Room 602, No. 68,
      North Ji Li Xia Road, Haizhu District, Guangzhou, Guangdong Province, China;
      and
      ID No.: 44010619700240338. The beneficiary to the Letter is Citibank China
      Co.,
      Ltd. including all its branches and sub branches (hereinafter referred to as
      the
“ **Guarantee** ”).




This
      Letter is aimed to guarantee, (i) the financing agreement (hereinafter referred
      to as the “ **Financing
      Agreement** ”)
      dated
      October 11 th ,
      2007 by
      and between Shenzhen Highpower Technology Co., Ltd. as the borrower (hereinafter
      referred to as the “ **Principal
      Debtor** ”)
      and
      the Guarantee as the loan bank, whereby the Guarantee shall provide the loan
      with total amount equivalent to USD 2 Million (hereinafter referred to as the
      “ **Financing** ”)
      to the
      Principal Debtor; and (ii) the main agreement on deriving deals (hereinafter
      referred to as the “ **Main
      Agreement** ”,
      which
      together with the Financing Agreement are referred to as “ **Such
      Agreements** ”)
      signed
      on October 11 th ,
      2007 by
      the Principal Debtor as Party B and the Guarantee as Party A.




The
      terms
      and expressions used but not otherwise defined in this Letter shall have the
      same meaning as in the Financing Agreement or the Main Agreement to the extent
      the same terms and expression are defined therein.




Whereas
      the Guarantee and Principal Debtor have entered into Such Agreements, the
      Guarantor agrees as follows:


1




7. Guaranty
          and Indemnity




The
      Guarantor unconditionally guarantees to pay any or all outstanding amounts
      (existing or subsequent amounts) due and payable or to be due and payable by
      the
      Principal Debtor under Such Agreements (including any modification or supplement
      made thereto from time to time as well as any deal confirmation or similar
      confirmation documents made on reliance of the Main Agreement), with or without
      other guaranty, that become due as a result of maturity or accelerated repayment
      or any other reasons. The debt shall include but not limited to principal,
      interest, charge, default interest, penalty, cost, expenditure, compensation,
      payment, expense, and any expense or other payment obligations arising from
      the
      enforcement by the Guarantee of the rights prescribed hereunder or strict
      performance of any terms or clauses hereof (all aforesaid obligations are herein
      referred to as the “ **Debt** ”).
      In
      the event the Principal Debtor fails to pay full amount of any Debt (at the
      prescribed due date or any other due date agreed as a result of accelerated
      repayment or any other reasons), the Guarantor shall, at the request of the
      Guarantee, pay said Debt to the Guarantee on behalf of the Principal Debtor
      without any delay, as if the Guarantor had become the Principal Debtor in place
      of the actual Principal Debtor. The Guarantor shall meanwhile pay any interest
      accrued on such overdue Debt from the due date of payment to the date when
      the
      Guarantor fully pays the required amounts under this Letter, at a rate equal
      to
      the annual interest rate applicable to such Debt payable by the Principal Debtor
      from time to time under the Financing Agreement. This Letter is a repayment
      guarantee instead of a guarantee for debt collection. The due and outstanding
      amounts of debt and expenses set forth on the vouchers produced by the Guarantee
      shall be final to the Guarantor. As an independent obligation, the Guarantor
      agrees that if any debt guaranteed by the Guarantor becomes unenforceable,
      invalid or illegal (whether such circumstance exists now or whether it has
      become known or may become known to any Party hereto in the future), the
      Guarantor shall, as a major obligation of the Guarantor and upon request by
      the
      Guarantee, immediately indemnify the Guarantee for any cost, loss or
      indebtedness incurred as a result of such circumstance. The amount of such
      cost,
      loss or indebtedness of the Guarantee shall be equal to the amounts otherwise
      repayable to the Guarantee.




8. Absolute
          Guarantee




This
      Letter is a continuous guarantee which shall become valid from the date of
      signature and remain in force till the date when the Guarantor informs the
      Guarantee of the cancellation of this Letter. The notice shall take force after
      the Guarantee receives the notice or on a later date specified in the notice.
      It
      is however provided that the said cancellation hereof shall not restrict or
      terminate any guaranty on related deals already agreed hereunder between the
      parties before cancellation.


2




To
      the
      extent permitted by the applicable laws of the People’s Republic of China
      (hereinafter referred to as “China”; but for the purpose of this Letter, Hong
      Kong, Macao or Taiwan shall be excluded), the obligations of the Guarantor
      hereunder shall be unconditional, and the Guarantor shall waive its right of
      defense in respect of any of the following: (i) The unenforceability, invalidity
      or illegality of any Debt; (ii) Any modification, amendment or waiver of any
      clauses regarding the Debt or any consent regarding any deviation from the
      debt
      clauses, including changes to any extension or renewal of any period or terms,
      or in any payment method or place, made with or without notice to the Guarantor
      whatsoever; (iii) Any exchange, replacement, release of, or any unfulfilled
      security interest in, or any damage to any collaterals used to secure the Debt
      repayment hereunder; (iv) The Principal Debtor loses its capacity, power,
      authorization or its legal person status required for or incurs any change
      to
      its corporate existence, corporate structure or ownership, or it incurs any
      insolvency, bankruptcy, restructuring, or any other similar procedures that
      may
      affect the Principal Debtor or any of its assets or which may cause termination
      or elimination of any Debt; (v) Any right of claim, right of setoff or other
      rights that the Guarantor may have from time to time against the Principal
      Debtor, regardless of whether such rights are related to the transactions
      contemplated hereunder, to the extent that the provisions herein cannot prevent
      such claims from being made in any separate litigation or necessary
      counterclaim; (vi) Any laws, statutes or regulations in any jurisdiction
      affecting the Debt clauses or the rights of the Guarantee, including but not
      limited to: (A) The implementation of any such laws, statutes or regulations
      of
      the jurisdiction (including prior approval) will forbid the exchange of non-US
      currencies (as defined below) into US dollars or remittance of fund out of
      the
      jurisdiction, or make it impossible to obtain US dollars in the legal foreign
      exchange market in the jurisdiction according to common business practices;
      or
      (B) any orders are announced for closing down business operations of the banking
      sector in the jurisdiction or for suspension of payment, or the jurisdiction
      or
      the government imposes any orders for suspension of repayment on any due and
      outstanding amounts or requests for any rearrangement or restructuring, or
      requires prior approval for any repayment; or (C) the obligation of repayment
      set forth herein for any debt incurred in the said jurisdiction is directly
      or
      indirectly deprived by way of State or governmental confiscation,
      nationalization, or requisition; or (D) any war (declared or not), insurrection,
      revolution, enemy actions, civil turmoil or any event in the jurisdiction having
      similar impact as those described in the subsections (A), (B) or (C) above
      (all
      events described in (A) to (D) above shall be limited to those occurring or
      existing on or after the date of this Letter); and (vii) Any other circumstance
      (including but not limited to limitation of prosecution) or any representation
      (or the reliance on such representation) of the Guarantee which may constitute
      an objection or discharge of all or part of the obligations of the Principal
      Debtor or the Guarantor.




Without
      prejudice to the generality of the foregoing and if permitted by the PRC laws,
      in respect of any Debt, if the Debt is denoted in US dollars or in foreign
      currencies other than the currency of the jurisdiction where the Principal
      Debtor is primarily based, as it is stipulated in the relevant agreement giving
      rise to such Debt, the Guarantor warrants that it will strictly follow the
      terms
      of such agreement in making payments to the Guarantee, including provisions
      on
      amounts and types of currency of payment as stipulated thereunder, without
      regard to any applicable laws taking effect from time to time in the
      jurisdiction where the Principal Debtor is primarily based, or any orders,
      decrees or regulations issued by the said jurisdiction.


3




The
      tenet
      of this Article 2 is to expressly set forth that the obligations of the
      Guarantor under this Letter are absolute and unconditional in any
      circumstances.




9. Waive
          of
          Rights




The
      Guarantor hereby waives (i) any requirement on the Guarantee regarding any
      instant, diligent notices of acceptance or non-acceptance or any other notices
      in connection with any Debt and this Letter; and (ii) any requirement on the
      Guarantee to exercise any right or take any action against the Principal Debtor,
      or to request any collateral security or credit support therefrom.




10. Re-effectiveness




This
      Letter shall be consecutively valid. Under certain circumstances, if at any
      time
      all or part of the debts of the Principal Debtor (whether it is debt of the
      Principal Debtor or any security on such debt or any amounts hereunder or
      otherwise) are paid or cancelled, or rearranged by way of repayment, guarantee
      or other disposals, but such repayment, cancellation or rearrangement are
      revoked or the Guarantee must refund the received amounts due to any insolvency,
      bankruptcy, liquidation, administration or restructuring of the Principal Debtor
      as if such repayment, cancellation or rearrangement has never been made before,
      then the effectiveness of this Letter shall be restored.




11. Right
          of
          Subrogation




The
      Guarantor shall not claim, enforce or exercise any right of subrogation that
      it
      may obtain under this Letter. The Guarantor shall may obtain such right of
      subrogation by paying in the currency of denomination as set forth hereunder
      or
      in other currencies determined by the Guarantee till it has irrevocably repaid
      all debts in full and terminated all agreements whereby the Guarantee undertakes
      to provide loans. In the event the Guarantor claims for the right of subrogation
      in violation of this Article, the Guarantor shall immediately return any payment
      received to the Guarantee.


4


12. Non-Competition
  The
        Guarantor shall have no right to act as debtee or claim any of such rights,
        or
        have any right of claim to the assets of Principal Debtor or compete with
        the
        Guarantee in case of bankruptcy or liquidation of the Principal Debtor. In
        the
        event the Guarantor claims for such rights in violation of this Article,
        the
        Guarantor shall keep any amounts received as a result thereof on behalf of
        the
        Guarantee and shall pay the amounts to the Guarantee immediately after it
        receives them.
  10. Sub-Debtee
  The
        Guarantor shall undertake to the Guarantee that he or she will not claim
        for or
        collect any repayment, early repayment or any other payment resulting from
        or in
        connection with the Principal Debtor’s performance of its obligations set forth
        hereunder until the completion of repayment of all debts, regardless whether
        the
        repayment is made in cash, or intangible assets or by setoff method. However,
        if
        the Guarantor is requested by the Guarantee or required by law to register
        or
        claim any rights against the Principal Debtor in respect of any sub-debt,
        it
        shall process such procedures in accordance with the instructions of the
        Guarantee, receive any payment on behalf of the Guarantee, and return such
        payment to the Guarantee immediately after it receives them. The Guarantor,
        as
        the Principal Debtor, hereby waives any right he or she may have to request
        the
        Guarantee to first claim any right of recourse against the Principal Debtor
        in
        respect of any debt according to the Financing Agreement and/or the Main
        Agreement.
  11. Taxes
  Any
        payment prescribed in this Letter shall not be deducted, including all current
        or future payments, but excluding the income tax and franchise taxes (all
        taxes,
        charges, deductions, fees or withholding tax and all related debts are referred
        to as the “ **Taxes** ”)
        imposed in accordance with the laws issued in the place of jurisdiction or
        local
        government where the corporation or loan bank of the Guarantee locates. In
        case
        the Guarantor deducts any of taxes from the payable amount according to any
        relevant laws, (i) the payable amount shall be increased accordingly so as
        to
        make sure the Guarantee can receive its receivables after the deduction
        aforesaid (including the deduction of extra payables applicable under this
        Article) as if no such deduction has been made; (ii) the Guarantor shall
        perform
        such deduction aforesaid, and (iii) pay for all deducted items to the taxation
        administration or any other government institutes according to relevant laws.
        In
        addition, the Guarantor shall also pay for any stamp tax, document tax,
        consumption tax, asset tax or other similar charges (referred to as “Other
        Taxes”) arising hereunder from signature, delivery or registration of this
        Letter or related to the debts aforesaid or upon the current or future payment
        prescribed under this Letter. The Guarantor shall immediately submit both
        original and certified copy of the receipt of payment to the Guarantee, and
        at
        the request indemnify the Guarantee for any taxes, charges or other debts
        (including penalty, interest and expenses) paid by the Guarantee within thirty
        days, regardless whether the Taxes or Other Taxes aforesaid are legal. Without
        prejudice to the effectiveness of the other agreements referred herein, the
        agreement and obligations of the Guarantor set forth in this Article shall
        remain effective after repayment of both principal and interest and the
        termination of this Letter.




5




12. Place
          and
          Currency of Payment




In
      case
      the debts are payable in US dollars, the Guarantor shall pay to the place and
      the account designated by the Guarantee. In case the debts are payable in any
      foreign currency other than US dollars (referred to as “ **Non-US
      Currency** ”)
      and no
      agreement has been reached regarding the time and place of such payment, the
      Guarantor shall, at the selection of the Guarantee, (i) pay the debts in Non-US
      Currency and in the prescribed payable place, or (ii) pay US dollars to any
      account designated by the Guarantee in the prescribed place. In case the payment
      is made according to subsection (ii) above, the Guarantor shall pay equivalent
      US dollars with the debt amount to the Guarantee. Ordinary bank procedures
      shall
      be applied in the calculation of exchange rate. The Guarantee shall make sure
      the Guarantor is able to purchase equivalent US dollars in the place of payment
      on the payment date; provided, however, that the foregoing provision in this
      paragraph shall not be applicable to any payment in Non-US Currency due to
      application of any non-US laws, orders, decrees or regulations, in which case,
      for the purpose of this Letter, the debts shall still be deemed to be payable
      in
      US dollars and be paid to the Guarantee according to the first sentence of
      this
      Article 9. The Guarantor shall indemnify any additional expenses to the
      Guarantee for purchase of foreign exchanges according to this Article. For
      the
      purpose of this Article 9, any evidence shall be sufficient if it can
      demonstrate that the Guarantee will suffer losses if it converts or purchases
      foreign exchange.




10.
      Right
      of Setoff




Should
      the laws of the People’s Republic of China allow, if the Guarantor fails to make
      payment when its obligations become due and payable, the Guarantee shall be
      authorized to set off any and all debts with any deposit (ordinary or special,
      fixed or current, temporary or formal whatsoever), stock, bond, commercial
      document or other assets held or controlled by the Guarantee from time to time,
      or with any amounts that the Guarantee owes to the Guarantor at any time or
      any
      indebtedness incurred by the Guarantee to the Guarantor’s credit or account at
      any time, regardless whether the Guarantee has made any other claim hereunder.
      The Guarantee shall inform the Guarantor of the setoff immediately after the
      same occurs, provided however that any failure to send such a notice shall
      not
      affect the effectiveness of such setoff or use if permitted by the laws of
      the
      People’s Republic of China. The right of the Guarantee stipulated herein is in
      addition to any other rights and remedy the Guarantee may have, including but
      not limited to other rights of setoff. To the extent permitted by the laws
      of
      the People’s Republic of China, the Guarantor agrees to waive any right of
      setoff he or she may have against the Guarantee, and not exercise any rights
      under its obligations set forth hereunder without restricting the effectiveness
      of the aforesaid waiver.


6




11.
      Representations and Warranties




The
      Guarantor represents and warrants that: (i) the Guarantor is legally qualified
      to sign, deliver and perform this Letter, and will not break any law or any
      contractual limitation with binding force over the Guarantor; (ii) the Guarantor
      signs, delivers and performs this Letter without any authorization, approval,
      notice or registration by any government institute, or supervision organization
      or any third party; (iii) the obligations prescribed here in this Letter, once
      signed and delivered by the Guarantor, shall become effective and have binding
      force on the Guarantor; (iv) the Guarantor has not taken any steps or legal
      procedures (if any) related with bankruptcy; and (v) the Guarantor has reached
      the minimum age requirement according to applicable laws, has good reason,
      and
      has entered into this Letter out of his/her own free will after he/she has
      sought independent professional advice (including legal advice) on all of
      his/her obligations hereunder this Letter and come to a thorough understanding
      of the nature of such obligations. The representations and warranties contained
      in this clause shall be deemed to be repeatedly made by the Guarantor each
      day
      in any period when the debts remain unpaid or not discharged, as the case may
      be.




25. Undertakings




The
      Guarantor hereby undertakes to the Guarantee that unless it is otherwise agreed
      by the Guarantee, so long as any debt remains unpaid, the Guarantor shall (i)
      comply with all applicable laws, statutes, and requirements and orders of any
      government authorities having jurisdiction; (ii) pay for all taxes, evaluation
      expenses, administrative charges or collection based on the incomes, revenues
      or
      assets of the Guarantor before any penalty is charged in order not to cause
      any
      lien, mortgage or any burden of rights to any of the assets aforesaid; (iii)
      sign any other document or bills, including any negotiable bill and take any
      action reasonably requested by the Guarantee for the purpose of implementation
      of this Letter; (iv) the Guarantor, without any prior consent of the Guarantee
      in written form, shall not (A) undertake, guarantee or endorse any other
      obligation, or be directly or indirectly responsible for any obligations of
      any
      individual, enterprise or company other than the obligations of the Guarantor
      prescribed herein; or (B) sell, lease or dispose or transfer any material part
      of his or her assets.


7




26. Consecutive
          Guaranty




This
      Letter constitutes a consecutive guaranty and is applicable to any current
      or
      future debts regardless of the time of such debts. This Letter is irrevocable
      and remains fully effective throughout the period of validity until all payable
      amounts prescribed herein are irrevocably paid and all agreements related to
      such debts are terminated. This Letter is an extra guaranty on and over any
      other guaranty the Guarantee may have now or in the future regarding any debt,
      and will not affect nor be affected by such other guaranty. To the extent
      permitted by the laws of the People’s Republic of China, and in order to
      maximize the amount of recovery of debts from the Principal Debtor in any actual
      or potential bankruptcy or dissolution (other than the fact that the Principal
      Debtor makes repayment to the Guarantee), the Guarantee may put such recovered
      amounts into a temporary account with accrual of interest. The amounts shall
      be
      kept in such account (interest-bearing temporary account) until the Guarantee
      is
      satisfied with the following: The Guarantee has no more obligation to make
      any
      payment in respect of the Debt and the Guarantee has irrevocably collected
      all
      amounts payable to the Guarantee under the Debt.




27. Amendment




No
      amendment or abandon of any clause of this Letter and no consent given by the
      Guarantor to any deviation from the terms of with this Letter shall be deemed
      valid unless they are made in writing and signed by the Guarantee. Subject
      to
      the Guarantees’ signature, such abandonment or consent shall be valid for
      special purposes under special circumstances.


8




28. Address




All
      notices and other communications prescribed herein shall be in writing
      (including telefax), and sent by mail, telefax or express mail. Any notice
      to
      the Guarantor shall be to the attention of Ma Wenwei at the address: Luoshan
      Industrial Park, Pinghu Town, Longgang District, Shenzhen City, 51811l, and
      any
      notice to the Guarantee shall be to the attention of Johnson Liu, Citibank
      China
      Co., Ltd., at the address: F35, Citigroup Tower, No.33, Huayuanshiqiao Road,
      Pudong District, Shanghai, China, 200120, and CC (carbon copy) to Johnson Liu,
      Block A, F9, CITIC Tower, No.1093, Middle Shennan Road, Futian District,
      Shenzhen City, 51803l; or sent to any other address specified in any written
      notice from one party to the other. All notices or other documents sent by
      mail
      shall become effective immediately after they are put into the mailbox, and
      notices sent by telefax shall become effective once sent out.




29. Credit
          Award Authorization




The
      Guarantor shall, without reliance on the Guarantee, independently analyze the
      credit status and make his or her own decision to sign this Letter based on
      any
      proper documents and information. The Guarantor shall have sufficient methods
      to
      successively obtain basic information regarding the business, operations and
      financial status of the Principal Debtor, and has not and will not depend on
      any
      such information provided by the Guarantee. The Guarantor acknowledges and
      understands that he or she can materially benefit, directly or indirectly from
      the credit award prescribed herein, and he or she fully agrees and understands
      the terms and conditions of this Letter and the legal meaning of such terms
      and
      conditions hereof.




30. Transfer
          of Rights




To
      the
      extent permitted by the PRC laws, this Letter shall have binding force over
      the
      Guarantor and any of its successors or assigns. The Guarantor shall not transfer
      his or her rights or obligations without prior consent of the Guarantee. The
      Guarantee may at any time transfer any of its rights or obligations (if any)
      prescribed herein to any other entity or individual after sending notice to
      the
      Guarantor. The Guarantor agrees such notice of right transfer can be made in
      any
      written form determined by the Guarantee at its sole discretion, and such
      transfer by the Guarantee requires no prior approval and consent of the
      Guarantor. The Guarantor further agrees that it is bound and will continue
      to be
      bound by this Letter regardless of such transfer of rights by the
      Guarantee.


9




31. Accumulative
          Rights




The
      rights and remedies the Guarantee is entitled to hereunder shall be in addition
      to and not exclusive of any other rights and remedies that the Guarantee may
      enjoy under any laws, other agreements or documents. Any delay on the part
      of
      the Guarantee to perform any of its rights shall not be deemed a waiver of
      such
      rights.




32. Joint
          and
          Several Liability




The
      Guarantor shall bear joint and several liability with any other guarantor (if
      any) for the debts aforesaid according to the laws of the People’s Republic of
      China. The Guarantor acknowledges and agrees that any of his or her obligations
      under this Letter shall not be relieved, or damaged or affected in any manner
      whatsoever in case the obligations of other guarantor are cancelled or
      terminated, and/or such obligations become invalid, illegal or not
      unenforceable.




33. Disclosure
          of Information




The
      Guarantor hereby irrevocably and unconditionally agrees that the Guarantee
      may
      disclose any information held by the Guarantee regarding debt, deposit, transfer
      or any other deal information or similar information of the Guarantor: (i)
      to
      any professional consultation institutes or their employees, or any other party
      providing services to the Guarantee, and/or (ii) to the headquarters, branches,
      or affiliates of the Guarantee, and/or (iii) to the regulatory bodies, judicial
      bodies or other government agencies of China or USA, including any state,
      provincial and municipal governments, or the government authorities at the
      place
      of other guarantors, headquarters of the Guarantee or its other branches or
      affiliates, and/or (iv) to any participants, or assignees or transferees of
      any
      rights (including any potential any participants, or assignees or transferees
      under any loans related to such debts); and/or (v) to any potential purchasers
      of the assets and liabilities of the Guarantee, and candidates for merging
      with
      the Guarantee, or any inheritors or any other person having similar legal
      status.




34. Personal
          Information




The
      Guarantor hereby agrees to the collection, processing and use by the Guarantee
      of any personal information regarding to and provided by the Guarantor; and
      the
      information aforesaid may also be obtained by the Guarantee (i) for the purpose
      of processing any deal between the Guarantee and the Guarantor, or (ii) for
      the
      purpose of soliciting business from the Guarantor or for any third party to
      solicit business from the Guarantor; and/or (iii) for other purpose allowed
      by
      other laws and regulations.


10




35. Severability




In
      the
      event any of the clauses prescribed in this Letter is or becomes illegal,
      invalid or unenforceable in any jurisdiction, it shall not affect (i) the
      effectiveness or enforceability of other clauses of this Letter in such
      jurisdiction; or (ii) the effectiveness or enforceability of the clause
      aforesaid or any other clauses of this Letter in other
      jurisdictions.




36. Judgment




If,
      for
      the purpose of obtaining any court judgment, any amount falling due hereunder
      must be converted from US Dollars into Non-US Currencies, the Guarantor agrees
      to apply ordinary bank procedures for purpose of determining the exchange rate
      and the Guarantee shall be able to purchase US Dollars with such Non-US Currency
      one working day before the final judgment is issued. Notwithstanding the final
      judgment in Non-US Currency, the obligations of the Guarantor falling due
      hereunder shall be relieved on the date of payment only to the extent of any
      amount in Non-US Currency declared due and payable by the Guarantor to the
      Guarantee as specified in the judgment. The Guarantee may purchase US Dollars
      with such Non-US Currency as per ordinary bank procedures. In the event the
      purchased US Dollars fall short of the US Dollar amount previously due and
      owing
      to the Guarantee, the Guarantor agrees, as a separate obligation, to indemnify
      any loss to the Guarantee arising in connection therewith, regardless of the
      result of the court judgment. In the event the purchased US Dollars exceed
      the
      US Dollar amount previously due and owing to the Guarantee, the Guarantee agrees
      to remit the excessive portion to the Guarantor.




37. Governing
          Laws




This
      Letter shall be subject to, governed by and interpreted in accordance with
      the
      laws of the People’s Republic of China. The Guarantor shall irrevocably submit
      to the non-exclusive jurisdiction
      of the local court in the place of the Guarantee.


11




Ma
                Wenwei/s/
                Ma Wenwei
            
            (Signature)ID
                No.:




Witnessed/Verified
                By:
            Johnson
                Liu, ManagerPrint Name/s/
                [illegible signature]Signature





12




**Letter
      of Guarantee**




This
      letter of guarantee (hereinafter referred to as the “ **Letter** ”)
      is
      issued in Shanghai on October 11 th ,
      2007 by
      Li Wenliang (hereinafter referred to as the “ **Guarantor** ”),
      a
      citizen of the People’s Republic of China, with its address at Room 502, Block
      7, No.2108, South Mingzhu Road, Qianshan Town, Xiangzhou District, Zhuhai City,
      Guangdong Province, China; and ID No.: 230103196507173213. The beneficiary
      to
      the Letter is Citibank China Co., Ltd. including all its branches and sub
      branches (hereinafter referred to as the “ **Guarantee** ”).




This
      Letter is aimed to guarantee, (i) the financing agreement (hereinafter referred
      to as the “ **Financing
      Agreement** ”)
      dated
      October 11 th ,
      2007 by
      and between Shenzhen Highpower Technology Co., Ltd. as the borrower (hereinafter
      referred to as the “ **Principal
      Debtor** ”)
      and
      the Guarantee as the loan bank, whereby the Guarantee shall provide the loan
      with total amount equivalent to USD 2 Million (hereinafter referred to as the
      “ **Financing** ”)
      to the
      Principal Debtor; and (ii) the main agreement on deriving deals (hereinafter
      referred to as the “ **Main
      Agreement** ”,
      which
      together with the Financing Agreement are referred to as “ **Such
      Agreements** ”)
      signed
      on October 11 th ,
      2007 by
      the Principal Debtor as Party B and the Guarantee as Party A.




The
      terms
      and expressions used but not otherwise defined in this Letter shall have the
      same meaning as in the Financing Agreement or the Main Agreement to the extent
      the same terms and expression are defined therein.




Whereas
      the Guarantee and Principal Debtor have entered into Such Agreements, the
      Guarantor agrees as follows:




1




13. Guaranty
          and Indemnity




The
      Guarantor unconditionally guarantees to pay any or all outstanding amounts
      (existing or subsequent amounts) due and payable or to be due and payable by
      the
      Principal Debtor under Such Agreements (including any modification or supplement
      made thereto from time to time as well as any deal confirmation or similar
      confirmation documents made on reliance of the Main Agreement), with or without
      other guaranty, that become due as a result of maturity or accelerated repayment
      or any other reasons. The debt shall include but not limited to principal,
      interest, charge, default interest, penalty, cost, expenditure, compensation,
      payment, expense, and any expense or other payment obligations arising from
      the
      enforcement by the Guarantee of the rights prescribed hereunder or strict
      performance of any terms or clauses hereof (all aforesaid obligations are herein
      referred to as the “ **Debt** ”).
      In
      the event the Principal Debtor fails to pay full amount of any Debt (at the
      prescribed due date or any other due date agreed as a result of accelerated
      repayment or any other reasons), the Guarantor shall, at the request of the
      Guarantee, pay said Debt to the Guarantee on behalf of the Principal Debtor
      without any delay, as if the Guarantor had become the Principal Debtor in place
      of the actual Principal Debtor. The Guarantor shall meanwhile pay any interest
      accrued on such overdue Debt from the due date of payment to the date when
      the
      Guarantor fully pays the required amounts under this Letter, at a rate equal
      to
      the annual interest rate applicable to such Debt payable by the Principal Debtor
      from time to time under the Financing Agreement. This Letter is a repayment
      guarantee instead of a guarantee for debt collection. The due and outstanding
      amounts of debt and expenses set forth on the vouchers produced by the Guarantee
      shall be final to the Guarantor. As an independent obligation, the Guarantor
      agrees that if any debt guaranteed by the Guarantor becomes unenforceable,
      invalid or illegal (whether such circumstance exists now or whether it has
      become known or may become known to any Party hereto in the future), the
      Guarantor shall, as a major obligation of the Guarantor and upon request by
      the
      Guarantee, immediately indemnify the Guarantee for any cost, loss or
      indebtedness incurred as a result of such circumstance. The amount of such
      cost,
      loss or indebtedness of the Guarantee shall be equal to the amounts otherwise
      repayable to the Guarantee.




14. Absolute
          Guarantee




This
      Letter is a continuous guarantee which shall become valid from the date of
      signature and remain in force till the date when the Guarantor informs the
      Guarantee of the cancellation of this Letter. The notice shall take force after
      the Guarantee receives the notice or on a later date specified in the notice.
      It
      is however provided that the said cancellation hereof shall not restrict or
      terminate any guaranty on related deals already agreed hereunder between the
      parties before cancellation.




2




To
      the
      extent permitted by the applicable laws of the People’s Republic of China
      (hereinafter referred to as “China”; but for the purpose of this Letter, Hong
      Kong, Macao or Taiwan shall be excluded), the obligations of the Guarantor
      hereunder shall be unconditional, and the Guarantor shall waive its right of
      defense in respect of any of the following: (i) The unenforceability, invalidity
      or illegality of any Debt; (ii) Any modification, amendment or waiver of any
      clauses regarding the Debt or any consent regarding any deviation from the
      debt
      clauses, including changes to any extension or renewal of any period or terms,
      or in any payment method or place, made with or without notice to the Guarantor
      whatsoever; (iii) Any exchange, replacement, release of, or any unfulfilled
      security interest in, or any damage to any collaterals used to secure the Debt
      repayment hereunder; (iv) The Principal Debtor loses its capacity, power,
      authorization or its legal person status required for or incurs any change
      to
      its corporate existence, corporate structure or ownership, or it incurs any
      insolvency, bankruptcy, restructuring, or any other similar procedures that
      may
      affect the Principal Debtor or any of its assets or which may cause termination
      or elimination of any Debt; (v) Any right of claim, right of setoff or other
      rights that the Guarantor may have from time to time against the Principal
      Debtor, regardless of whether such rights are related to the transactions
      contemplated hereunder, to the extent that the provisions herein cannot prevent
      such claims from being made in any separate litigation or necessary
      counterclaim; (vi) Any laws, statutes or regulations in any jurisdiction
      affecting the Debt clauses or the rights of the Guarantee, including but not
      limited to: (A) The implementation of any such laws, statutes or regulations
      of
      the jurisdiction (including prior approval) will forbid the exchange of non-US
      currencies (as defined below) into US dollars or remittance of fund out of
      the
      jurisdiction, or make it impossible to obtain US dollars in the legal foreign
      exchange market in the jurisdiction according to common business practices;
      or
      (B) any orders are announced for closing down business operations of the banking
      sector in the jurisdiction or for suspension of payment, or the jurisdiction or
      the government imposes any orders for suspension of repayment on any due and
      outstanding amounts or requests for any rearrangement or restructuring, or
      requires prior approval for any repayment; or (C) the obligation of repayment
      set forth herein for any debt incurred in the said jurisdiction is directly
      or
      indirectly deprived by way of State or governmental confiscation,
      nationalization, or requisition; or (D) any war (declared or not), insurrection,
      revolution, enemy actions, civil turmoil or any event in the jurisdiction having
      similar impact as those described in the subsections (A), (B) or (C) above
      (all
      events described in (A) to (D) above shall be limited to those occurring or
      existing on or after the date of this Letter); and (vii) Any other circumstance
      (including but not limited to limitation of prosecution) or any representation
      (or the reliance on such representation) of the Guarantee which may constitute
      an objection or discharge of all or part of the obligations of the Principal
      Debtor or the Guarantor.




3




Without
      prejudice to the generality of the foregoing and if permitted by the PRC laws,
      in respect of any Debt, if the Debt is denoted in US dollars or in foreign
      currencies other than the currency of the jurisdiction where the Principal
      Debtor is primarily based, as it is stipulated in the relevant agreement giving
      rise to such Debt, the Guarantor warrants that it will strictly follow the
      terms
      of such agreement in making payments to the Guarantee, including provisions
      on
      amounts and types of currency of payment as stipulated thereunder, without
      regard to any applicable laws taking effect from time to time in the
      jurisdiction where the Principal Debtor is primarily based, or any orders,
      decrees or regulations issued by the said jurisdiction.




The
      tenet
      of this Article 2 is to expressly set forth that the obligations of the
      Guarantor under this Letter are absolute and unconditional in any
      circumstances.




15. Waive
          of
          Rights




The
      Guarantor hereby waives (i) any requirement on the Guarantee regarding any
      instant, diligent notices of acceptance or non-acceptance or any other notices
      in connection with any Debt and this Letter; and (ii) any requirement on the
      Guarantee to exercise any right or take any action against the Principal Debtor,
      or to request any collateral security or credit support therefrom.




16. Re-effectiveness




This
      Letter shall be consecutively valid. Under certain circumstances, if at any
      time
      all or part of the debts of the Principal Debtor (whether it is debt of the
      Principal Debtor or any security on such debt or any amounts hereunder or
      otherwise) are paid or cancelled, or rearranged by way of repayment, guarantee
      or other disposals, but such repayment, cancellation or rearrangement are
      revoked or the Guarantee must refund the received amounts due to any insolvency,
      bankruptcy, liquidation, administration or restructuring of the Principal Debtor
      as if such repayment, cancellation or rearrangement has never been made before,
      then the effectiveness of this Letter shall be restored.




17. Right
          of
          Subrogation




The
      Guarantor shall not claim, enforce or exercise any right of subrogation that
      it
      may obtain under this Letter. The Guarantor shall may obtain such right of
      subrogation by paying in the currency of denomination as set forth hereunder
      or
      in other currencies determined by the Guarantee till it has irrevocably repaid
      all debts in full and terminated all agreements whereby the Guarantee undertakes
      to provide loans. In the event the Guarantor claims for the right of subrogation
      in violation of this Article, the Guarantor shall immediately return any payment
      received to the Guarantee.


4




18. Non-Competition




The
      Guarantor shall have no right to act as debtee or claim any of such rights,
      or
      have any right of claim to the assets of Principal Debtor or compete with the
      Guarantee in case of bankruptcy or liquidation of the Principal Debtor. In
      the
      event the Guarantor claims for such rights in violation of this Article, the
      Guarantor shall keep any amounts received as a result thereof on behalf of
      the
      Guarantee and shall pay the amounts to the Guarantee immediately after it
      receives them.




13. Sub-Debtee




The
      Guarantor shall undertake to the Guarantee that he or she will not claim for
      or
      collect any repayment, early repayment or any other payment resulting from
      or in
      connection with the Principal Debtor’s performance of its obligations set forth
      hereunder until the completion of repayment of all debts, regardless whether
      the
      repayment is made in cash, or intangible assets or by setoff method. However,
      if
      the Guarantor is requested by the Guarantee or required by law to register
      or
      claim any rights against the Principal Debtor in respect of any sub-debt, it
      shall process such procedures in accordance with the instructions of the
      Guarantee, receive any payment on behalf of the Guarantee, and return such
      payment to the Guarantee immediately after it receives them. The Guarantor,
      as
      the Principal Debtor, hereby waives any right he or she may have to request
      the
      Guarantee to first claim any right of recourse against the Principal Debtor
      in
      respect of any debt according to the Financing Agreement and/or the Main
      Agreement.


5




14. Taxes




Any
      payment prescribed in this Letter shall not be deducted, including all current
      or future payments, but excluding the income tax and franchise taxes (all taxes,
      charges, deductions, fees or withholding tax and all related debts are referred
      to as the “ **Taxes** ”)
      imposed in accordance with the laws issued in the place of jurisdiction or
      local
      government where the corporation or loan bank of the Guarantee locates. In
      case
      the Guarantor deducts any of taxes from the payable amount according to any
      relevant laws, (i) the payable amount shall be increased accordingly so as
      to
      make sure the Guarantee can receive its receivables after the deduction
      aforesaid (including the deduction of extra payables applicable under this
      Article) as if no such deduction has been made; (ii) the Guarantor shall perform
      such deduction aforesaid, and (iii) pay for all deducted items to the taxation
      administration or any other government institutes according to relevant laws.
      In
      addition, the Guarantor shall also pay for any stamp tax, document tax,
      consumption tax, asset tax or other similar charges (referred to as “Other
      Taxes”) arising hereunder from signature, delivery or registration of this
      Letter or related to the debts aforesaid or upon the current or future payment
      prescribed under this Letter. The Guarantor shall immediately submit both
      original and certified copy of the receipt of payment to the Guarantee, and
      at
      the request indemnify the Guarantee for any taxes, charges or other debts
      (including penalty, interest and expenses) paid by the Guarantee within thirty
      days, regardless whether the Taxes or Other Taxes aforesaid are legal. Without
      prejudice to the effectiveness of the other agreements referred herein, the
      agreement and obligations of the Guarantor set forth in this Article shall
      remain effective after repayment of both principal and interest and the
      termination of this Letter.




15. Place
          and
          Currency of Payment




In
      case
      the debts are payable in US dollars, the Guarantor shall pay to the place and
      the account designated by the Guarantee. In case the debts are payable in any
      foreign currency other than US dollars (referred to as “ **Non-US
      Currency** ”)
      and no
      agreement has been reached regarding the time and place of such payment, the
      Guarantor shall, at the selection of the Guarantee, (i) pay the debts in Non-US
      Currency and in the prescribed payable place, or (ii) pay US dollars to any
      account designated by the Guarantee in the prescribed place. In case the payment
      is made according to subsection (ii) above, the Guarantor shall pay equivalent
      US dollars with the debt amount to the Guarantee. Ordinary bank procedures
      shall
      be applied in the calculation of exchange rate. The Guarantee shall make sure
      the Guarantor is able to purchase equivalent US dollars in the place of payment
      on the payment date; provided, however, that the foregoing provision in this
      paragraph shall not be applicable to any payment in Non-US Currency due to
      application of any non-US laws, orders, decrees or regulations, in which case,
      for the purpose of this Letter, the debts shall still be deemed to be payable
      in
      US dollars and be paid to the Guarantee according to the first sentence of
      this
      Article 9. The Guarantor shall indemnify any additional expenses to the
      Guarantee for purchase of foreign exchanges according to this Article. For
      the
      purpose of this Article 9, any evidence shall be sufficient if it can
      demonstrate that the Guarantee will suffer losses if it converts or purchases
      foreign exchange.


6




10.
      Right
      of Setoff




Should
      the laws of the People’s Republic of China allow, if the Guarantor fails to make
      payment when its obligations become due and payable, the Guarantee shall be
      authorized to set off any and all debts with any deposit (ordinary or special,
      fixed or current, temporary or formal whatsoever), stock, bond, commercial
      document or other assets held or controlled by the Guarantee from time to time,
      or with any amounts that the Guarantee owes to the Guarantor at any time or
      any
      indebtedness incurred by the Guarantee to the Guarantor’s credit or account at
      any time, regardless whether the Guarantee has made any other claim hereunder.
      The Guarantee shall inform the Guarantor of the setoff immediately after the
      same occurs, provided however that any failure to send such a notice shall
      not
      affect the effectiveness of such setoff or use if permitted by the laws of
      the
      People’s Republic of China. The right of the Guarantee stipulated herein is in
      addition to any other rights and remedy the Guarantee may have, including but
      not limited to other rights of setoff. To the extent permitted by the laws
      of
      the People’s Republic of China, the Guarantor agrees to waive any right of
      setoff he or she may have against the Guarantee, and not exercise any rights
      under its obligations set forth hereunder without restricting the effectiveness
      of the aforesaid waiver.




11.
      Representations and Warranties




The
      Guarantor represents and warrants that: (i) the Guarantor is legally qualified
      to sign, deliver and perform this Letter, and will not break any law or any
      contractual limitation with binding force over the Guarantor; (ii) the Guarantor
      signs, delivers and performs this Letter without any authorization, approval,
      notice or registration by any government institute, or supervision organization
      or any third party; (iii) the obligations prescribed here in this Letter, once
      signed and delivered by the Guarantor, shall become effective and have binding
      force on the Guarantor; (iv) the Guarantor has not taken any steps or legal
      procedures (if any) related with bankruptcy; and (v) the Guarantor has reached
      the minimum age requirement according to applicable laws, has good reason,
      and
      has entered into this Letter out of his/her own free will after he/she has
      sought independent professional advice (including legal advice) on all of
      his/her obligations hereunder this Letter and come to a thorough understanding
      of the nature of such obligations. The representations and warranties contained
      in this clause shall be deemed to be repeatedly made by the Guarantor each
      day
      in any period when the debts remain unpaid or not discharged, as the case may
      be.


7




38. Undertakings




The
      Guarantor hereby undertakes to the Guarantee that unless it is otherwise agreed
      by the Guarantee, so long as any debt remains unpaid, the Guarantor shall (i)
      comply with all applicable laws, statutes, and requirements and orders of any
      government authorities having jurisdiction; (ii) pay for all taxes, evaluation
      expenses, administrative charges or collection based on the incomes, revenues
      or
      assets of the Guarantor before any penalty is charged in order not to cause
      any
      lien, mortgage or any burden of rights to any of the assets aforesaid; (iii)
      sign any other document or bills, including any negotiable bill and take any
      action reasonably requested by the Guarantee for the purpose of implementation
      of this Letter; (iv) the Guarantor, without any prior consent of the Guarantee
      in written form, shall not (A) undertake, guarantee or endorse any other
      obligation, or be directly or indirectly responsible for any obligations of
      any
      individual, enterprise or company other than the obligations of the Guarantor
      prescribed herein; or (B) sell, lease or dispose or transfer any material part
      of his or her assets.




39. Consecutive
          Guaranty




This
      Letter constitutes a consecutive guaranty and is applicable to any current
      or
      future debts regardless of the time of such debts. This Letter is irrevocable
      and remains fully effective throughout the period of validity until all payable
      amounts prescribed herein are irrevocably paid and all agreements related to
      such debts are terminated. This Letter is an extra guaranty on and over any
      other guaranty the Guarantee may have now or in the future regarding any debt,
      and will not affect nor be affected by such other guaranty. To the extent
      permitted by the laws of the People’s Republic of China, and in order to
      maximize the amount of recovery of debts from the Principal Debtor in any actual
      or potential bankruptcy or dissolution (other than the fact that the Principal
      Debtor makes repayment to the Guarantee), the Guarantee may put such recovered
      amounts into a temporary account with accrual of interest. The amounts shall
      be
      kept in such account (interest-bearing temporary account) until the Guarantee
      is
      satisfied with the following: The Guarantee has no more obligation to make
      any
      payment in respect of the Debt and the Guarantee has irrevocably collected
      all
      amounts payable to the Guarantee under the Debt.




40. Amendment




No
      amendment or abandon of any clause of this Letter and no consent given by the
      Guarantor to any deviation from the terms of with this Letter shall be deemed
      valid unless they are made in writing and signed by the Guarantee. Subject
      to
      the Guarantees’ signature, such abandonment or consent shall be valid for
      special purposes under special circumstances.


8




41. Address




All
      notices and other communications prescribed herein shall be in writing
      (including telefax), and sent by mail, telefax or express mail. Any notice
      to
      the Guarantor shall be to the attention of Li Wenliang at the address: Luoshan
      Industrial Park, Pinghu Town, Longgang District, Shenzhen City, 51811l, and
      any
      notice to the Guarantee shall be to the attention of Johnson Liu, Citibank
      China
      Co., Ltd., at the address: F35, Citigroup Tower, No.33, Huayuanshiqiao Road,
      Pudong District, Shanghai, China, 200120, and CC (carbon copy) to Johnson Liu,
      Block A, F9, CITIC Tower, No.1093, Middle Shennan Road, Futian District,
      Shenzhen City, 51803l; or sent to any other address specified in any written
      notice from one party to the other. All notices or other documents sent by
      mail
      shall become effective immediately after they are put into the mailbox, and
      notices sent by telefax shall become effective once sent out.




42. Credit
          Award Authorization




The
      Guarantor shall, without reliance on the Guarantee, independently analyze the
      credit status and make his or her own decision to sign this Letter based on
      any
      proper documents and information. The Guarantor shall have sufficient methods
      to
      successively obtain basic information regarding the business, operations and
      financial status of the Principal Debtor, and has not and will not depend on
      any
      such information provided by the Guarantee. The Guarantor acknowledges and
      understands that he or she can materially benefit, directly or indirectly from
      the credit award prescribed herein, and he or she fully agrees and understands
      the terms and conditions of this Letter and the legal meaning of such terms
      and
      conditions hereof.




43. Transfer
          of Rights




To
      the
      extent permitted by the PRC laws, this Letter shall have binding force over
      the
      Guarantor and any of its successors or assigns. The Guarantor shall not transfer
      his or her rights or obligations without prior consent of the Guarantee. The
      Guarantee may at any time transfer any of its rights or obligations (if any)
      prescribed herein to any other entity or individual after sending notice to
      the
      Guarantor. The Guarantor agrees such notice of right transfer can be made in
      any
      written form determined by the Guarantee at its sole discretion, and such
      transfer by the Guarantee requires no prior approval and consent of the
      Guarantor. The Guarantor further agrees that it is bound and will continue
      to be
      bound by this Letter regardless of such transfer of rights by the
      Guarantee.




9




44. Accumulative
          Rights




The
      rights and remedies the Guarantee is entitled to hereunder shall be in addition
      to and not exclusive of any other rights and remedies that the Guarantee may
      enjoy under any laws, other agreements or documents. Any delay on the part
      of
      the Guarantee to perform any of its rights shall not be deemed a waiver of
      such
      rights.




45. Joint
          and
          Several Liability




The
      Guarantor shall bear joint and several liability with any other guarantor (if
      any) for the debts aforesaid according to the laws of the People’s Republic of
      China. The Guarantor acknowledges and agrees that any of his or her obligations
      under this Letter shall not be relieved, or damaged or affected in any manner
      whatsoever in case the obligations of other guarantor are cancelled or
      terminated, and/or such obligations become invalid, illegal or not
      unenforceable.




46. Disclosure
          of Information




The
      Guarantor hereby irrevocably and unconditionally agrees that the Guarantee
      may
      disclose any information held by the Guarantee regarding debt, deposit, transfer
      or any other deal information or similar information of the Guarantor: (i)
      to
      any professional consultation institutes or their employees, or any other party
      providing services to the Guarantee, and/or (ii) to the headquarters, branches,
      or affiliates of the Guarantee, and/or (iii) to the regulatory bodies, judicial
      bodies or other government agencies of China or USA, including any state,
      provincial and municipal governments, or the government authorities at the
      place
      of other guarantors, headquarters of the Guarantee or its other branches or
      affiliates, and/or (iv) to any participants, or assignees or transferees of
      any
      rights (including any potential any participants, or assignees or transferees
      under any loans related to such debts); and/or (v) to any potential purchasers
      of the assets and liabilities of the Guarantee, and candidates for merging
      with
      the Guarantee, or any inheritors or any other person having similar legal
      status.




47. Personal
          Information




The
      Guarantor hereby agrees to the collection, processing and use by the Guarantee
      of any personal information regarding to and provided by the Guarantor; and
      the
      information aforesaid may also be obtained by the Guarantee (i) for the purpose
      of processing any deal between the Guarantee and the Guarantor, or (ii) for
      the
      purpose of soliciting business from the Guarantor or for any third party to
      solicit business from the Guarantor; and/or (iii) for other purpose allowed
      by
      other laws and regulations.


10




48. Severability




In
      the
      event any of the clauses prescribed in this Letter is or becomes illegal,
      invalid or unenforceable in any jurisdiction, it shall not affect (i) the
      effectiveness or enforceability of other clauses of this Letter in such
      jurisdiction; or (ii) the effectiveness or enforceability of the clause
      aforesaid or any other clauses of this Letter in other
      jurisdictions.




49. Judgment




If,
      for
      the purpose of obtaining any court judgment, any amount falling due hereunder
      must be converted from US Dollars into Non-US Currencies, the Guarantor agrees
      to apply ordinary bank procedures for purpose of determining the exchange rate
      and the Guarantee shall be able to purchase US Dollars with such Non-US Currency
      one working day before the final judgment is issued. Notwithstanding the final
      judgment in Non-US Currency, the obligations of the Guarantor falling due
      hereunder shall be relieved on the date of payment only to the extent of any
      amount in Non-US Currency declared due and payable by the Guarantor to the
      Guarantee as specified in the judgment. The Guarantee may purchase US Dollars
      with such Non-US Currency as per ordinary bank procedures. In the event the
      purchased US Dollars fall short of the US Dollar amount previously due and
      owing
      to the Guarantee, the Guarantor agrees, as a separate obligation, to indemnify
      any loss to the Guarantee arising in connection therewith, regardless of the
      result of the court judgment. In the event the purchased US Dollars exceed
      the
      US Dollar amount previously due and owing to the Guarantee, the Guarantee agrees
      to remit the excessive portion to the Guarantor.




50. Governing
          Laws




This
      Letter shall be subject to, governed by and interpreted in accordance with
      the
      laws of the People’s Republic of China. The Guarantor shall irrevocably submit
      to the non-exclusive jurisdiction
      of the local court in the place of the Guarantee.




11




Li
                Wenliang/s/
                Li Wenliang
            
            (Signature)ID
                No.:




Witnessed/Verified
                By:
            Johnson
                Liu, ManagerPrint Name/s/
                [illegible signature]Signature




12