Components
      Purchase Contract

    


    Contract
      No. XRGFP-2008-02-0002

    


    
      	
              Party
                A (Buyer): 

            	
              Jiansu
                Xinri Electric Bicycle Co., Ltd.

            
	
              Party
                B (Supplier): 

            	
              Changxing
                Chisen Electric Co., Ltd.

            
	
              Place
                of Signing: 

            	
              Wuxi,
                Jiangsu

            
	
              Time
                of Signing: 

            	
              20-Mar-08

            


    

    


    Party
      A
      (Buyer): Jiansu Xinri Electric Bicycle Co., Ltd.

    Party
      B
      (Supplier): Changxing Chisen Electric Co., Ltd.

    


    After
      friendly consultation, the both Parties agree to come into and strictly abide
      by
      this Contract on components purchase.

    1. Representations
      and Warranties

    
      	 	
              1.1

            	
              Party
                A hereby represents and warrants that it is a legal person established
                approved by the state, with complete legal status and good reputation,
                and
                has full authority to sign this Contract and to perform its obligations
                hereunder.

            


    

    
      	 	
              1.2

            	
              Party
                B hereby represents and warrants that it is a legal person established
                approved by the state, with complete legal status and good reputation,
                and
                has full authority to sign this Contract and to perform its obligations
                hereunder.

            


    

    1.3
      Each
      Party warrants that its signing and execution of this Contract will not violate
      any provision of laws, regulations, agreements and policies in China and its
      articles of association, and will not in collision with any contract or
      agreement (including but not limited to warranty contract or agreement). Each
      Party further represents and warrants to the other Party that it is in good
      financial status without negative assets and does not acknowledge that its
      creditor is entitled to appoint receiver or to file bankruptcy or exercising
      other rights.

    1.4
      Each
      Party agrees that: during the validity period of this Contract, each Party
      shall
      indemnify the other Party against any loss or damages due to its inaccuracy
      in
      representations and warranties hereinabove

    


    2.
      Definition
      of Terminology 

    2.1
      The
      term “Component” means to the commodity that provided by Party B and can meet
      the requirement for operation of Party A (including but not limited to
      components, accessories, fittings, and specification). Party B warrants that
      the
      components it provides are qualified products meeting the requirement of state
      law, regulation, standards and agreement and without violation of legal rights
      to any third party.

    2.2
      The
      term “unqualified product” means component provided by Party B that is found not
      meet the requirement of state law, regulation, standards or Party B’s warrants
      or Party A’s requirement during the operation of Party A(including but not
      limited to production, assembling, sale and after-sales
      service)


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    2.3
      The
      term “reputation loss” of Party A herein means having negative effect on Party
      A’s reputation, trademark, business name, business credit, including but not
      limited to the c herein under:

    (a)
      There
      has negative publicity of Party A on media (including but not limited to TV,
      radio, newspaper, magazine, network)due to Party B’s fault(including but not
      limited to quality problem, fake products, false propaganda, infringing
      intellectual property right, after-sales service or other problems) ,or being
      listed on public notice by related administrative department or
      organization(including but not limited to consumer association, administration
      for quality supervision, third party laboratory, notary public
      office)

    (b)
      Negative publicity does not exist, but many people consider or acknowledge
      that
      Party A’s component has quality problems or service problems.

    (c)other
      issues that has negative effect on Party A’s reputation, trademark, business
      name, business credit.

    


    3.
      General Rules

    3.1
      Party
      A and Party B conduct business in accordance with this Contract under the
      principle of equality and mutual
      benefit,
      honesty and faithfulness.

    3.2
      In
      accordance with the Contract, Party B, the seller, shall sell continually the
      components, materials and auxiliary materials to party A, the
      buyer.

    3.3
      The
      group that Party A represents owns large consumer group and considerable social
      influence. Party A is engaged in providing best goods and service to improve
      the
      consumer satisfaction and to establish the brand
      connotation
      in order to provide a high-effective platform to Party A. Party B ensure best
      price of components to Part A, ie. providing the price lower than the price
      on
      the same components it provide to any third party and adjust the price in
      accordance with the market to maintain the market competition capacity of the
      both parties.

    3.4
      Desiring to protect the interest of the both parties, under any condition during
      the validity period of this Contract, Party B shall ensure the priority of
      supply of components to Party A to meet the requirements of operation and
      market. Stable and continual supply is the base to the cooperation and mutual
      benefits of the both parties but not the precondition of any dispute
      settlement.

    3.5.
      The
      annexes to this Contract, including Quality Guarantee Agreement, After Sales
      Service Agreement, have equal legal force with this Contract.

    3.6.
      Supplementary Contract will be made on uncovered matters of this Contract if
      necessary, and shall have equal legal force with this Contract. 

    


    4
       Business

    4.1
      Price

    4.1.1
      Party B shall fill the appointed quotation with component name, specification,
      expected price and detailed quotation, and provide the quotation to Party A
      after signing and stamping. The price of components will be set after
      negotiation of both parties with written consent. 

    4.1.2
      Unless
      the terms or context of the contract otherwise provided, the unit price, packing
      charge, transport expense from Party B to Party A, storing, insurance are
      include in the price of the component.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    4.1.3
      Party B shall be responsible for the test
      charge
      of any third party, including the charge for periodic test of the component
      and
      the authorized test.

    4.1.4
      Packing Standard: Party B shall apply circulation box, paper box or wood box
      for
      packing and to meet the requirement for sturdy package, no chip
      and
      no scratch, reasonable
      setup, separating the components with expanded plastic or paper board. The
      mark
      in the outside packing box shall meet the requirement of Party A, ie, having
      clear signs for supplier, component name, specification, quantity of each box,
      etc. Party B will not responsible for the recycling of package except the
      circulation boxes. If Party B requires the recycling for package, the recycling
      mode shall be set by additional contract. Any special requirement for the
      package shall be specified by additional contract.

    4.2
      Delivery

    4.2.1
      Party A will inform Party B of the delivery plan (including component name,
      specification, quantity, technical standard, special requirement, delivery
      time
      hereinafter referred to as the “Plan”)in accordance with the requirement in
      writing through fax, email, etc.

    4.2.2Party
      A shall inform Party B of any adjustment to the Plan in the way specified in
      provision of 3.2.1

    4.2.3
      Party B shall appoint special person for receiving and handling the Plan of
      Party A. If Party B holds different opinions towards the Plan of Party A, it
      shall notify Party A in writing within 24 hours. Otherwise, it shall be deemed
      as acceptance of the Plan. 

    4.2.4
      Party B shall deliver in time the qualified components with the delivery list
      recording the name, code, specification, quantity of the components. Party
      A
      shall sign in acknowledgement of receipt for actual quantity
      received.

    4.2.5
      Where Party B could not deliver the goods complying with the requirements
      hereinabove, it shall notify Party A in writing within the time the Parties
      agree separately and inform Party B of the reason, delivery time on
      schedule
      and
solutions
      complying with the requirement of Party A.

    4.2.6
      Party B shall indemnify Party A for losses and damages caused by Party’s
      nonfulfillment of obligations under Privisions 4.2.3, Privisions 4.2.4 or
      Privisions 4.2.5.

    4.2.7
      In
      case the quantity of goods delivered by Party B exceeds that prescribed on
      the
      Plan, Party A is entitled to reject
      the goods.

    4.2.9
      Party B shall guarantee the inventory of raw materials, semi-finished products
      and finished product for the normal continuous supply of
      components.

    4.2.10
      Party B shall warrant steady and continuous production conditions. If Party
      B
      plans to stop supply, it shall notify Party A in writing one month in advance
      when it stops supply temporarily and there months in advance for a long period.
      Otherwise, Party A reserves the right to stop the payment temporarily, and
      Party
      B shall be responsible for the losses and damages of Party A.

    4.3
      Acceptance Standard and Method

    4.3.1
      The
      quality and technical standard shall completely comply with the requirement
      of
      drawing, specification and sample confirmed by Party A. Party A shall confirm
      the standard by signing and sealing on the materials hereinabove. Except with
      the written approval by Party A, Party B could not change the production
      technology, equipment, materials, specification, and factory of the components.
      Party B shall make delivery of the components to the appointed place of Party
      A
      and Party A shall make sample inspection on the goods within 48 hours. In case
      of any quantity or quality discrepancy, Party A shall notify Party B in writing.
      If Party B has an objection, it shall apply for re—inspection or send special
      person to Party A’s side for confirmation. If Party B does not file an objection
      within 120 hours after the arrival of goods, it shall be deemed that the
      components pass the acceptance inspection. 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    4.3.2
      The
      ownership of components is transferred from Party B to Party A since Party
      A
      uses them.

    4.4
      Payment Method and Term

    4.4.1
      The
      payment shall be clear off every N/A_days,
      each
      month,
      (each
      batch or each month). ( in accordance with the price agreement)

    4.4.2
      Payment shall be made in 1
      subject to the contract.

    1.
      cheque
      or telegraphic transfer 

    2.
      ___months Bank’s Acceptance Bill without interest clause

    3.
      ___months Trader’s Acceptance Bill without interest clause

    4.4.3
      From the 1st to the 10th day of each month, Party A will check the account;
      from
      the 11th to the19th day of each month, the Parties shall confirm the account
      reconciliation; from 20th

    day
      to
      24th day of each month, Party B will replace the defective products and
      after-sales components at sight for Party A; from 10th to 15th day of each
      month, Party B shall issue VAT invoice to Party A, whereafter Party A shall
      clear off the payment two months before. Where the components have quality
      problem in batch, Party A is entitled to suspend the payment.

    4.5
      The
      components stop the production; Party B shall ensure the supply of after-sales
      components.

    


    5
      Breach
      Liabilities

    5.1
      For
      the purpose of stable quality of components, Party A shall deduct in part the
      payment of Party B for performance bond
      (performance bond is set in accordance with delivery quantity and value, and
      shall be deducted from the goods payment of each batch, the Parties shall make
      adjustment to the performance bond if the return & repair rate is larger
      than the proportion agreed by both parties or the supply is increasing.), and
      refund it to Party B within two months after the
      expiration date
      of
      warranty period for the components. 

    5.2
      Where
      Party B could not make delivery at time and quantity prescribed in the Plan,
      in
      case of short delivery of the goods those Party needs, Party B shall make
delivery
      of the balance
      and
      indemnify Party A against all losses and damages thereby; in case of delivery
      over
      required quantity, Party A is entitled to return the goods; in case of late
      delivery, Party B shall indemnify
      Party A against all losses caused thereby. Once delivery one hour later, Party
      B
      shall indemnify Party A 5‰
of
      the
      aggregate amount of payment, late deliver less than one hour shall be calculated
      as one hour. Other indemnification shall be made in accordance with the damage
      to Party A.

    5.3
      Where
      the components Party B provides cannot meet the provision 4.3.1, provided that
      Party A accepts the components after analyzing and judging, Party A shall notify
      Party B the price in accordance with the quality in writing (or through E-mail),
      and Party B shall reply within 8 hours, otherwise, it shall be deemed as consent
      from Party B. Where the goods are judged as defective ones, Party B shall bear
      the transportation charge for returning the goods and indemnify
      Party B against all losses caused thereby.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    5.4
      In
      case the components which Party A requires to return exceeds returning period,
      Party A shall keep them with Party B bearing the storage
      charge,
      the storage
      charge
      is subject to Party
      A’s
      charging standard.

    5.5
      In
      case of wrong delivery of the components. Party B shall make delivery to the
      appointed place or person in accordance with the Contract and be responsible
      for
      the transportation expense and indemnification against the damage to Party
      A
      caused by late delivery.

    5.6
      Party
      B shall keep secret Party’s special requirements for supply and the components
      with independent
      intellectual property rights. In case of any disclosure
      due to
      Party B’s fault, Party B shall be liable for the losses caused thereby. The
      indemnification will be 4 to 20 times of the sales value of the products
      provided to other factories or companies (not less than RMB 100,000
      yuan)

    5.7
      Any
      economical loss or damage to brand caused to Party A or Customer during the
      production, sale or in use due to the quality problem of Party B’s components,
      Party B shall confirm within 24 hours after receipt of Party A’s written notice
      and indemnify Party A and Customer against any damage, or it shall be deemed
      that Party B accepts Party A’s notice and processing results with the
      compensation deducted directly from the payment or
      performance bond.

    5.8
      Where
      quantity of the defective products is found larger the agreed proportion of
      the
      components after Party A ’s inspection, Party A is entitled to reject the batch
      of components or use them with discount equaling to 1%-10% of the aggregate
      payment for the batch; where the quantity of the defective products exceeds
      the
      agreed proportion of the components for three times in sequence, Party A is
      entitled to Cancel the contract with Party B bearing the economic losses
      hereof.

    5.9
      During the validity period of the Contract, in case of reputation damage to
      Party A caused by Party B (including Party B’s employees and related personnel
      authorized by Party B) Party B bear responsibility for breach of the contract
      from 100,000 yuan to 500,000 yuan. The compensation will be determined by Party
      A independently. Party B shall make the indemnification within 10 days after
      receipt of the claim on reputation damage from Party A (the damage claim shall
      include the reality in detail and related materials).In case of late payment,
      Party A will deduct directly from the unpaid payment.

    


    6
      Intellectual Property Protection

    6.1
      Where
      Party B’s components are in connection with infringement of intellectual
      property right of any third party or fake components or false publicity, Party
      B
      shall be responsible for the damage to Party A caused thereby. Party B shall
      suspend the payment and notify Party B in writing once finding the breach to
      the
      Contract hereinabove. Since the date of delivering the notice:

    6.1.1
      Party B shall make compensation of 100,000 yuan within 3 days, and indemnify
      Party A against all losses ( direct or indirect losses).


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    6.1.2
      Where Party B’s components are in connection with infringement of intellectual
      property right of any third party or fake components or false publicity, in
      addition to Provision 6.1.1, Party B shall indemnify Party A against reputation
      damage in an amount of 200,000 yuan within 5 days.

    6.1.3
      Where Party B does not indemnify Party B against losses or reputation damage
      at
      time prescribed herein, Party A is entitled to deduct directly from the payment
      payable.

    6.1.4
      Party B shall responsible for unconditional
      retune and related expense for the unsold tort components, fake components
      or
      the components in connection with false publicity.

    6.1.5
      Party A shall charge Party B damage reserve in an amount of 300%
      of
      the aggregate sales value (subject to Party A’s financial data) as security
      deposit for the tort components provided by Party B. (after
      the
      expiry of prescription and the warranty period, Party A shall refund for any
      overpayment or a supplemental payment for any deficiency.) 

    6.2
      Party
      B shall bear the transportation expense for change or return of the goods under
      the condition
      provided by this section. 

    6.3
      Party
      B cannot provide to any third party the components (including but not limited
      to
      test, sale, donation) in connection with Party A’s intellectual property
      (including but not limited to trademark, patent, copyright, etc.) unless with
      Party A’s written approval.

    


    7.
      Commercial Bribery Prohibition

    7.1
      The
      Parties agree the prohibition of extorted or accepted bribes and other illegal
      commercial behavior:. In case that Party B offer commercial bribery to Party
      A’s
      employee, employee’s relatives in any form(including but not limited to
      backhander, entertainment, house property, employment, domestic or abroad
      travelling, gift, discount shopping, loan to the Party A’s purchaser
      ),
      Party A
      is entitled to cancel the contract, and Party B agrees to make compensation
      in
      an amount of not less than 100 times of the bribe(no less than RMB
      N/A
yuan
      ).
      Serious cases can be submitted before the judiciary.

    


    8.
      Alteration , Cancellation, Termination and Expiry

    8.1
      Unless otherwise provided herein, Party A is entitled to cancel this Contract
      under the condition as follows:

    8.1.1
      Party B stops supply to Party A without justified reason or Party fails to
      supply to Party A exceeding 5 days of the agreed date after receipt of the
      order.

    8.1.2
      Party B fails to make the payment unpaid subject to this Contract exceeding
      one
      month.

    8.1.3
      The
      following conditions may occur to Party B, including but not limited
      to:

    Operation
      risk arising out of negative news, significant changes in equity, significant
      litigation, any other circumstance which will or may cause it to lose its
      ability to perform obligation. 

    Party
      A
      can judge the above-mentioned conditions independently.

    8.1.4
      Party B breaches the Contract and does not rectify within 7 days after receipt
      of the Party’s written notice.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    9.
      Force
      Majeure

    Where
      one
      party fails to perform the Contract due to force majeure, the liability for
      the
      losses due to force majeure shall be partially eliminated accordingly. The
      Nonperforming party shall immediately notify the other party of the occurrence
      of a Force Majeure within 48 hours, and furnish a written certification
      describing the particulars of the occurrence and impact, otherwise the liability
      of the nonperforming party shall not be eliminated; in case of delayed
      performance of the Contract, the liability of the nonperforming Party shall
      not
      be eliminated notwithstanding occurrence of Force Majeure.

    9.2
      In
      case of a Force Majeure event, the nonperforming party shall exercise effects
      to
      reduce the losses of the other party, otherwise it shall be responsible for
      the
      additional damage arising out of that the nonperforming party takes no
      countermeasure or unsuitable countermeasures,.

    9.3
      Where
      the Force Majeure event ends and will have impact on the performance under
      this
      Contract, the Parties shall exercise reasonable efforts to resume
      performance.

    


    10
      Others.

    10.1
      Quality bond: N/A

    10.2
      Any
      delete, alternation to the printing character without consent with signature,
      seal of the parties herein shall be invalid. 

    10.3
      The
      Contract is made in triplicate, with Party A holding two originals and Party
      B
      holding one original, and shall come into effect after being signed and sealed
      by the Parties.

    10.4
      The
      Contract shall have same legal effect on successors or assignees to the
      Parties.

    


    11
      Dispute Settlement.

    Any
      dispute shall be solved through negotiation. If no settlement can be reached,
      the case in dispute shall be subjected to local People’s Court at the signing
      place of this Contract.

    


    12.
      The
      Contract shall take effect once being entered into and be strictly abided by
      both parties. 

    


    13.
      The
      validity period of this Contract is from January 1st
      of 2008
      to December 31st,
      2008.
      If the parties have no objection, the Contract and its annexes shall be
      automatically renewed for one year term within 10days prior to the expiry of
      this Contract 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              Supplier:
                Jiangsu Xinri Electric Bicycle Co., Ltd.

            	 	
              Buyer:
                Changxing Chisen Electric Co., Ltd.

            
	
              (seal)

            	 	
              (seal)

            
	
              Address:No.
                8, Xiri Road, New 

              Century
                Industrial Park, Wuxi, Jiangsu

            	 	
              Address:
                Jingyi Road, Changxing

              Economic
                Development Zone

            
	
              Legal
                Representative: /s/ Authorized Representative

            	 	
              Legal
                Representative: /s/ Authorized Representative

            
	
              Entrusted
                Agent: (signature)

            	 	
              Entrusted
                Agent:

            
	
              Opening
                Bank: 

            	 	
              Opening
                Bank

            
	
              Account
                No.:

            	 	
              Account
                No.:

            
	
              Postal
                Code:214104

            	 	
              Postal
                Code: