Jinhao Motor Company: Exhibit 10.16 - Filed by newsfilecorp.com





Exhibit 10.16

 



LOAN AGREEMENT 

NO. Si Hui (Da Wang) Nong Xin (2009) Jie Zi No.
14077 

 

 

	BORROWER: 	Guangdong Jinhao Motorcycle Co., Ltd.
  
	 	 
	LENDER: 	Rural Credit Cooperative of Sihui, Dawang
      Credit Association 






LOAN AGREEMENT


Guangdong Jinhao Motorcycle Co., Ltd.(the
“Borrower”), 

ID card/enterprise legal person No. 441200400008320,


Legal representative (person in charge): Tsoi Man
Hoo           Title:
Chairman 

Domicile: Zhaoqing High-Tech
Zone,                                  
Post Code: __________________________________

Tel:__________________________________               
 Fax:__________________________________

 

And 

 

Rural Credit Cooperative of Sihui, Dawang Credit Association
(the “Lender”) 

Domicile:
Dawang                                                                                                
Post Code: __________________________________

Tel:______________________________________________    
 Fax:__________________________________

WHEREAS the Borrower applies for loan from the Lender, and the
Lender agrees upon approval to issue the loan as prescribed in the Agreement,


WHEREAS under the principle of equality and free will, honesty
and good faith, in accordance with pertinent laws, regulations and rules and
through consultation, both parties hereby enter into this Agreement for strict
implementation. 

	Article 1 	Types and Purposes of the Loan
    



	1.1 	
      The type of the Loan hereunder shall be incremental
      borrowing (incremental borrowing, repaying the old debts, borrowing a new
      loan to repay the old debts, repaying the old and borrowing new debts,
      change to the parties to the loan agreement)

	 	 
	1.2 	
      The Purpose of the Loan hereunder is for financing
      working capital requirements of the
Borrower.



Without the Lender’s written consent, the Borrower shall not
use the Loan for any other purpose and the Lender is entitled to supervise the
use of the Loan. 

	Article 2 	Currency and Amount of the Loan
  



	2.1 	
      The Currency of the Loan shall be RENMINBI.

	 	 
	2.2 	
      The amount of the Loan shall be RENMINBI EIGHTTEEN
      MILLION ONLY, 18,000,000.




	Article 3 	Term of the Loan 


The Term of the Loan shall be three (3) years
(month/year), calculated from 8 April, 2009 to 1 April, 2012.


The Receipt of the Loan is an integral part of this Agreement
and shall have the same legal effect as this Agreement. If there is any
difference in the term, value amount, interest rate or currency prescribed in
the Agreement and those prescribed in the Receipt of the Loan, the latter shall
prevail. 





	Article 4 	Method of Disbursement



The Borrower authorizes the Lender to directly remit the Loan
to the follow account: 

Name of account: Guangdong Jinhao Motorcycle Co., Ltd.


No. of account/card: 5988021401301000008957 

Deposit bank: Dawang Credit Association 

	Article 5 	Interest Rate 



	5.1 	
      The interest rate of the Loan shall be the basis lending
      rate of the same period and the same level issued by the People’s Bank of
      China plus 55% . Thus, the annual interest rate shall be
      6.975%, and shall be converted by the following formula: monthly
      interest rate = annual interest rate/12, daily interest rate = annual
      interest rate/360.

	 	 
	5.2 	
      If the basis interest rate is adjusted and such
      adjustment is applicable to the Loan before the issuance of the Loan, the
      adjusted basis interest rate shall be adopted and the lending rate shall
      be re-determined as stipulated in Paragraph 1 of this Article. If the
      basis rate is adjusted after the issuance of the Loan, the lending rate
      shall be adjusted in Method D below:




	 	A. 	
      The interest rate shall be determined per year and be
      calculated by section within the loan term. If the loan term is less than
      one (1) year, including one (1) year, the interest rate of this Agreement
      shall be implemented and shall not be calculated by section. If the loan
      term is more than one (1) year, new interest rate shall be determined and
      implemented in accordance with the adjusted basis rate and the rate
      floating ratio as agreed in Paragraph 1 of this Article commencing from
      January 1 of the year after the date of each adjustment of the basis
      interest rate. Such adjustment is not subject to the Borrower’s consent,
      nor is it necessary to give a separate notice to the Borrower. If the
      basis rate is adjusted for two times or more than two times within one
      calendar year, the basis rate of the last adjustment within that calendar
      year shall prevail.

	 	 	 
	 	B. 	
      The interest rate shall be determined per quarter and be
      calculated by section within the loan term. If the loan term is less than
      one (1) quarter, including one (1) quarter, the interest rate of this
      Agreement shall be implemented and shall not be calculated by section. If
      the loan term is more than one (1) quarter, new interest rate shall be
      determined and implemented in accordance with the adjusted basis rate and
      the rate floating ratio as agreed in Paragraph 1 of this Article
      commencing from the first day of the quarter after the date of each
      adjustment of the basis interest rate. Such adjustment is not subject to
      the Borrower’s consent, nor is it necessary to give a separate notice to
      the Borrower. If the basis rate is adjusted for two times or more than two
      times within one calendar quarter, the basis rate of the last adjustment
      within that calendar quarter shall prevail.

	 	 	 
	 	C. 	
      The interest rate shall be determined per month and be
      calculated by section within the loan term. New interest rate shall be
      determined and implemented in accordance with the adjusted basis rate and
      the rate floating ratio as agreed in Paragraph 1 of this Article
      commencing from the first day of next month following each adjustment of
      the basis interest rate. Such adjustment is not subject to the Borrower’s
      consent, nor is it necessary to give a separate notice to the Borrower. If
      the basis rate is adjusted for two times or more than two times within one
      calendar month, the basis rate of the last adjustment within that calendar
      month shall prevail.








	 	D. 	
      The interest rate shall not be adjusted (That is, fixed
      interest rate shall be adopted).

	 	 	 
	 	E. 	
      Others:




	5.3 	
      The basis rate refers to the lending rate of loan in the
      same period and of the same level issued by the People’s Bank of China; If
      the People’s Bank of China no longer issues the lending rate of loan in
      the same period and of the same level, the basis rate shall be the lending
      rate of loan in the same period and of the same level generally accepted
      by the banking industry, unless otherwise agreed upon by both
    parties.




	Article 6 	Conditions Precedent



Unless wholly or partially waived by the Lender, all the
following conditions should be satisfied before the Lender is obligated to
disburse the Loan to the Borrower. (The Lender’s disbursement of loan in absence
of full satisfaction of the following conditions shall not constitute default in
the Lender’s performance of obligations hereunder.) 

	6.1 	
      The Borrower opens a basic account at the
      Lender.

	 	 
	6.2 	
      The Borrower has completed legal procedures including but
      not limited to procedures in respect of approval, registration, and
      delivery of the Loan hereunder in compliance with pertinent laws and
      regulations and specific requirements of the Lender.

	 	 
	6.3 	
      In case that there is guarantee on this Agreement, the
      guarantee that meets the Lender’s requirements has taken effect and
      remains effective.

	 	 
	6.4 	
      The Agreement has become effective and the Borrower has
      not done any of the defaulting conducts stipulated herein.

	 	 
	6.5 	
      The Borrower has provided the Lender with the documents
      and materials required by the Lender and such documents and materials have
      been examined and approved by the Lender.

	 	 
	6.6 	
      Other conditions precedent to the disbursement of the
      loan agreed upon by both parties:

	 	 
	 	 
	 	 
	 	 



	Article 7 	Repayment




	7.1 	
      Principles of repayment: Unless otherwise agreed upon by
      the Borrower and the Lender, the following principles shall be complied
      with: pay the interests first, then the principal; the interests shall be
      paid off together with the principal.

	 	 
	7.2 	
      Payment of interests: The interests shall be calculated
      from the date of actual disbursement (date of value) in accordance with
      the actual amount of loan and the actual number of days of loan. The loan
      shall be settled A (A. every month; B. every quarter; C. every
      year; D. by paying the interests together with the principal). In case of
      settlement every month/quarter/year, the date of interest settlement shall
      be fixed as the twenty-first day of every A (A. month; B.
      last month of the quarter; C. last month of the year). The Borrower shall
      pay the interests on every date of interest settlement; if the last date
      of principal repayment is not the date of interest settlement, the unpaid
      interests shall be paid together with the principal. Failure to pay the
      interests within the stipulated time shall be deemed as
  default.








	7.3 	
      Payment of principal: The principal shall be repaid by
      the Borrower in the second method
below:




	 	7.3.1 	
      The Borrower shall pay off all the principals in a lump
      sum upon the expiry of the term of loan.

	 	 	 
	 	7.3.2 	
      Plan of repayment in installment: The Borrower shall
      repay the principal in accordance with the loan certificates and/or the
      plan of repayment in installment indicated in the Annex-Plan of Repayment
      in Installment.




	7.4 	
      Method of repayment: The Borrower shall raise the fund
      prior to the interest settlement date and the date of repayment stipulated
      herein and deposit the money into the repayment account opened at the
      Lender. The Borrower authorizes the Lender to, on the interest settlement
      date and the repayment date, directly deduct corresponding principals and
      interests and other payable amount from the account that is confirmed to
      be repayment account in the Lender’s system. For such authorization no
      power of attorney needs to be issued. If the repayment account is an
      account of a thirty party other than the Lender, such third party shall
      issue a power of attorney, authorizing the Lender to deduct the amount
      payable by the Borrower from such account. If the Borrower’s repayment
      account is reported lost, frozen, cancelled or the Borrower needs to
      change the repayment account, the Borrower shall promptly notify the
      Lender and apply for formalities of alteration registration. Before such
      registration becomes effective, if it is impossible to deduct payment from
      the original repayment account, the Borrower shall make payment at the
      business office designated by the Lender and liabilities regarding the
      failure to deduct money shall be assumed solely by the Borrower.

	 	 
		
      Should the Borrower fail to make payment on time, the
      Lender has the right to directly deduct the interest and principal of the
      loan, breach penalty and any other payable amount from any account of the
      Borrower in the Lender’s system of rural credit
  cooperatives.




	Article 8 	 Prepayment and Extension of
      Loan 



	8.1 	
      Upon giving five (5) days’ written notice in advance and
      approval by the Lender, the Borrower may prepay all or any portion of the
      Loan.

	 	 	 
	8.2 	
      The Borrower may prepay the principal provided that the
      Borrower has paid off the entire amount due and payable to the Lender. The
      Borrower shall settle the payable amount of that period before its
      prepayment of a portion of principal. With respect to the principal
      prepaid by the Borrower, the Lender shall charge interests on the basis of
      the lending rate implemented in the Agreement at the time of prepayment
      and the amount of prepaid principal, and the days shall be days of actual
      possession of the amount commencing from the last interest settlement date
      to the date of prepayment. The loan interests charged and collected before
      that time shall not be adjusted.

	 	 	 
	8.3 	
      In case of the Borrower’s prepayment, the Lender shall be
      entitled to collect liquidated damages on prepayment in accordance with
      the ____ method:

	 	 	 
		8.3.1 	
      In case of prepayment within ____ month(s) after the
      actual disbursement, liquidated damages = prepaid amount * _%; In case of
      prepayment ____ month(s) after the actual disbursement, liquidated damages
      = prepaid amount * _%.

	 	 	 
		8.3.2 	
      Other methods:
	 
	 	 	 
	 	 	 
	8.4 	
      If the Borrower can not pay the principals and interests
      of the Loan hereunder within the stipulated term and needs an extension of
      Loan, the Borrower shall submit a written application thirty
  (30) days prior to the expiry date of Loan. If the Lender agrees on
the extension upon examination, a loan extension agreement shall be entered into
by and between both parties. If the Lender refuses to make an extension, the
Borrower shall still be liable for repayment of the principals and interests in
accordance with the Agreement. 







	 	 
	Article 9 	Guarantee of the Loan




	9.1 	
      The Borrower must provide guarantee for the performance
      hereunder in accordance with the Lender’s requirements. Methods of
      guarantee hereunder may be any one or a portfolio of the following
      methods: guarantee, mortgage, pledge or other methods of
  guarantee.

	 	 
	9.2 	
      See guarantee methods and specific contents of guarantee
      hereunder in the guarantee provisions herein and provisions including but
      not limited to the following guarantee agreements and documents:

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 




	9.3 	
      The Borrower hereby confirms that the Lender may, at its
      discretion, choose to exercise all or any portion of the rights in the
      guarantee agreements and documents referred hereto for the purpose of
      realization of the Lender’s credits, and the Borrower waives any defense
      against the Lender’s option mentioned above.




	Article 10 	Rights and Obligations of the Borrower
    



	10.1 	
      The Borrower shall be entitled to obtain and use the Loan
      as agreed herein.

	 	 
	10.2 	
      Unless otherwise stipulated by laws, regulations, rules
      and/or this Agreement, the Borrower shall be entitled to require the
      Lender to keep confidential the individual or enterprise information in
      respect of family assets, financial materials, production and operation,
      etc. The Lender, if authorized by the Borrower, may disclose to the public
      material related to the Borrower within the scope of
  authorization.

	 	 
	10.3 	
      The Borrower shall timely return the principals and
      interests in full in accordance with the Agreement.

	 	 
	10.4 	
      The Borrower shall use the Loan for the purposes agreed
      in this Agreement and shall not use the Loan for any purpose other than
      those agreed herein. The Borrower shall guarantee that the purposes agreed
      herein comply with laws, regulations, rules, industrial codes and the
      Borrower’s articles of association and bylaws, and have obtained relevant
      licenses and authorization.

	 	 
	10.5 	
      The Borrower shall guarantee that all the documents,
      materials and information provided by it to the Lender or any person
      designated by the Lender are true, reliable and effective without any
      forge, fraud or concealment. The Borrower shall provide the Lender with
      materials and information including but not limited to reports,
      statements, certificates and documents in respect of the Borrower’s
      business status, financial status, and shall guarantee that these
      materials and information are accurate, true, complete and
    effective.

	 	 
	10.6 	
      The Borrower shall actively cooperate with the Lender and
      its authorized agent in their investigation into, understanding of and
      supervision on the Borrower and
guarantor/securities’ production and operation, financial activities and use of the Loan hereunder.












	
10.7 		
If the Borrower conducts any of the following activities prior to its full settlement of the principals and interests hereunder, the Borrower shall give prior notice to the Lender. Unless it has obtained the Lender’s prior
consent and guarantee is provided in compliance with the Lender’s requirements, and the liability for debt payment or prepayment is specified, the Borrower shall not implement the following activities:

	
	 	 	 
		
10.7.1 		
To reduce the registered capital in any manner, to undergo any important system change such as division, merger, restructure, and stockholding system reform, or to apply for or undergo procedures like winding up, dissolution,
liquidation and bankruptcy;

	
	 	 	 
		
10.7.2 		
To implement important events with respect to external investment and asset transfer;

	
	 	 	 
		
10.7.3 		
To carry out transactions of ownership and operation rights by means of lease, contract, joint-operation and trusteeship;

	
	 	 	 
		
10.7.4 		
To carry out important equity changes such as equity adjustment or equity transfer;

	
	 	 	 
		
10.7.5 		
To carry out any other activity that might cause change to the rights and obligations hereunder or might affect the realization of the Lender’s credits.

	
	 	 	 
	
10.8 		
If any of the following circumstances occurs to the Borrower or in case of any event that might endanger the Borrower’s normal operation or its performance of repayment obligation hereunder, the Borrower shall notify the
Lender in writing and shall, in accordance with the Lender’s requirements, actively raise funds for the repayment of principals and interests hereunder and implement safeguarding measures necessary for the full payment of payables within
stipulated time:

	
	 	 	 
		
10.8.1 		
There is any defaulting event arising from the loan agreements, credit line agreements and the credit agreements and guarantee agreements thereunder concluded by the Borrower with banks and other financial institutions and any
other financing agreements concluded by the Borrower with other creditors.

	
	 	 	 
		
10.8.2 		
There is any change to the Borrower’s name, legal representative(person in charge), domicile, operation scope, affiliation, major business scope, list of directors and officers, amendment to the joint venture contract or the
company’s articles of association or adjustment to the internal organizational structure;

	
	 	 	 
		
10.8.3 		
The Borrower or its major leader is involved in any event violating discipline or law, or is claimed against;

	
	 	 	 
		
10.8.4 		
The Borrower has serious difficulties in business operation and its financial status deteriorates;

	
	 	 	 
		
10.8.5 		
Prior to the settlement of the debts hereunder, the Borrower has assumed or will assume debts, contingent debts or provide mortgage or pledge to a third party;

	
	 	 	 
		
10.8.6 		
There is any litigation or arbitration to the Borrower with respect to significant disputes over credits and debts;

	
	 	 	 
		
10.8.7 		
Any other event that might affect the Borrower’s financial status and its capacity of paying off its debts.

	
	 	 	 
	
10.9 		
If, prior to the full repayment of principals and interests hereunder, the Borrower provides guarantee to others’ debts or mortgage or pledge its major assets to a third party and might affect its capacity of repaying
principals and interests hereunder, the Borrower shall give a seven (7) days’ prior notice to the Lender in writing and shall not carry out such activities unless and until it has obtained the Lender’s written consent.

	









	10.10 	
      The Borrower and its investors shall not withdraw the
      capital, transfer the assets or transfer the equity without authorization
      so as to avoid payment of the debts owed to the Lender.

	 	 
	10.11 	
      If the Borrower’s operation results of the relevant
      accounting year are insufficient to pay off the principals and interests
      and other costs and expenses payable by the Borrower to the Lender upon
      the expiry of such accounting year in accordance with this Agreement, the
      Borrower shall not distribute any dividends or bonus to its shareholders
      or investors.

	 	 
	10.12 	
      The Borrower shall not dispose its assets in any manner
      that might endanger its capacity of paying off its debts and shall not
      provide others with any guarantee that is beyond its capacity.

	 	 
	10.13 	
      The Borrower shall assume costs and expenses with respect
      to legal services, insurance, transportation, evaluation, registration,
      custody, appraisal, notarization, etc. and costs and expenses arising from
      the Lender’s recovery of its credits hereunder attributable to the
      Borrower’s fault.

	 	 
	10.14 	
      The Borrower shall keep confident relevant business
      secrets of the Lender.

	 	 
	10.15 	
      Transfer of its debts hereunder to a third party by the
      Borrower shall be subject to the Lender’s written consent.

	 	 
	10.16 	
      The Borrower shall ensure that information provided by
      the Borrower, including but not limited to its address, contact
      information, business license, personal identification card are true,
      accurate and legal and shall guarantee to give written notice to the
      Lender within five (5) days as of the date of the change to such
      information. The Borrower shall guarantee that the Borrower can receive
      the certificates sent by the Lender making claims in accordance with the
      aforesaid information. If the Borrower fails to receive the certificates
      by which the Lender make claims due to errors in the aforesaid information
      or failure to timely update such information, the consequences shall be
      borne by the Borrower.




	Article 11 	Rights and Obligations of the
      Lender



	11.1 	
      The Lender shall be entitled to investigate the
      Borrower’s conditions with respect to production and operation, financial
      activities, inventories and its use of the Loan, and to require the
      Borrower to regularly provide documents, materials and information such as
      financial statements.

	 	 
	11.2 	
      With respect to collection or pre-collection of the
      principals, interests, penalty interests, compound interest and other
      costs and expenses payable by the Borrower in accordance with the
      Agreement, the Lender may directly deduct such amount from any account
      opened by the Borrower in the rural credit association system to which the
      Lender is affiliated to and the deduction certificate is not subject to
      the Borrower’s signature and confirmation.

	 	 
	11.3 	
      If the amount repaid by the Borrower is insufficient to
      pay off its payables hereunder, the Lender shall operate under the
      principle of “pay the interests first, and then pay the
  principals”

	 	 
	11.4 	
      If the Borrower defaults, conducts any activities or gets
      involved in any circumstances that might have negative effect on the
      safety of the loan, the Lender may stop disbursement or require the
      Borrower to pay the principals, interests and relevant expenses and costs
      in advance.

	 	 
	11.5 	
      In any of the following circumstances, the Lender may
      recover the principals and interests in advance or require the Borrower to
      timely provide other guarantee acceptable to the Lender: the guarantor
      hereof stops production, suspends business, is cancelled of registration,
      is cancelled of business license, goes bankrupt, is cancelled or has
      business losses, wholly or partially loses the guaranty capacity that
      matches with the Loan; the value of the guarantees pledged property or the
      pledged rights hereunder is reduced, damaged or lost in incident; other
      guarantee is in risk.








	11.6 	
      If the Borrower fails to perform its obligation of
      repayment, the Lender may disclose the Borrower’s default to the public,
      or provide relevant information to the reminding institution for the
      purpose of reminding and the Lender shall not assume any liability for any
      effect on the Borrower arising therefore.

	 	 
	11.7 	
      The Borrower may, in accordance with pertinent laws,
      regulations and other regulatory documents, provide the information with
      this Agreement and other relevant information to the People’s Bank of
      China’s basic database for individual credit information and basic
      database for enterprise credit information and other credit databases
      established in accordance with laws for reference and use by qualified
      institutions and individuals. The Lender may, for the purpose of the
      conclusion and performance of the Agreement, check information regarding
      the Borrower and the guarantor through the People’s Bank of China’s basic
      database for individual credit information and basic database for
      enterprise credit information as well as other credit information database
      that are legally established..

	 	 
	11.8 	
      Save for delay at the Borrower’s fault, the Lender shall
      make full disbursement to the Borrower on schedule provided that the
      Borrower meets all the obligations hereunder and all the conditions for
      disbursement are satisfied.

	 	 
	11.9 	
      Other rights and obligations stipulated by laws,
      regulations and this Agreement.




	Article 12 	Defaulting Events




	12.1 	
      Any of the following circumstances shall constitute the
      Borrower’s default under this Agreement:

	 	 	 
		12.1.1 	
      The Borrower provides the Lender with false materials,
      information, or intentionally conceals material facts relating to the
      conclusion of this Agreement;

	 	 	 
		12.1.2 	
      The Borrower fails to use the Loan for the purpose agreed
      in the Agreement;

	 	 	 
		12.1.3 	
      The Borrower fails to repay or pay the principals,
      interests, costs and expenses and other payables in accordance with this
      Agreement;

	 	 	 
		12.1.4 	
      The Borrower breaches any other loan contract or
      guarantee contract, or the guarantor breaches the guarantee contract and
      might affect the Borrower’s performance of its obligations
    hereunder;

	 	 	 
		12.1.5 	
      The value of the mortgages or pledges hereunder reduces
      obviously and affects the Lender’s rights and the mortgagor the pledgeor
      fails to add corresponding guarantee;

	 	 	 
		12.1.6 	
      The business operation status or the financial status of
      the Borrower and/or its family deteriorates, or loses its business
      reputation;

	 	 	 
		12.1.7 	
      The Borrower transfers the properties, withdraws the
      capital or conducts any other activity to avoid payment of its
    debts;

	 	 	 
		12.1.8 	
      The Borrower and/or its family has any dispute,
      litigation, arbitration with a third party or is imposed with
      administrative punishment or there is any event that the Lender believes
      will pose threat to or exert adverse effect on the Lender’s rights and
      interests and might affect the Borrower’s performance of its obligations
      hereunder;

	 	 	 
		12.1.9 	
      The Borrower has lost or will lose its capacity of
      repayment;

	 	 	 
		12.1.10 	
      Prior to the expiry of the loan term, the Borrower
      expressly states or indicates with its conduct that it will not perform
      its major obligation under this Agreement;








		12.1.11 	
      All or any portion of the guarantee provisions or the
      guarantee documents fail to take effect, become invalid or are cancelled
      and the Borrower fails to add new guarantee as required by the
    Lender;

	 	 	 
		12.1.12 	
      There is any other event that might affect the Borrower’s
      capacity of repayment;

	 	 	 
		12.1.13 	
      The Borrower breaches any other obligation stipulated in
      this Agreement.

	 	 	 
	12.2 	
      Any of the following circumstances shall constitute the
      Lender’s default:

	 	 	 
		12.2.1 	
      The Lender fails to provide funds as agreed
  herein;

	 	 	 
		12.2.2 	
      The Lender adds or adds in disguised form the interests
      or other costs and expenses beyond the scope of lending rate floating
      stipulated by the People’s Bank of China and in violation of this
      Agreement.




	13. 	
      Liability for Breach of Agreement

	 	 
	13.1 	
      If any of the defaulting events occurs to the Borrower,
      the Lender may (rather than must) take any of the following measures
      separately or aggregately:




	 	13.1.1 	
      To demand the Borrower to correct its default within
      stipulated time and indemnify corresponding losses;

	 	 	 
	 	13.1.2 	
      To cease to disburse the Loan;

	 	 	 
	 	13.1.3 	
      To declare the prompt expiry of the loan term and require
      the Borrower to promptly return all the principals, interests, and
      relevant costs and expenses;

	 	 	 
	 	13.1.4 	
      To transfer amount in any currency from the Borrower’s
      account opened at the rural credit association system that the Lender is
      affiliated to for the purpose of payment of principals, interests and
      other amount payable by the Borrower;

	 	 	 
	 	13.1.5 	
      To demand the Borrower to provide new guarantee for all
      the debts hereunder in accordance with the Lender’s
requirements;

	 	 	 
	 	13.1.6 	
      To exercise its guarantee rights;

	 	 	 
	 	13.1.7 	
      If the Borrower fails to pay the principals in full, the
      Lender shall be entitled to collect interests on the principals overdue by
      9‰ per day commencing from the day overdue.

	 	 	 
	 	13.1.8 	
      If the Borrower fails to pay the interest on schedule,
      the Lender may collect compound interests on the unpaid interests by ___
      per day;

	 	 	 
	 	13.1.9 	
      If the Borrower fails to use the Loan in compliance with
      the purposes stipulated in this Agreement, the Lender shall be entitled to
      collect penalty interests by 9‰ per day on the amount that the
      Borrower has used for any other purpose, commencing from the date that the
      Loan is used for any other purpose to the date when the Borrower corrects
      such wrong behavior.

	 	 	 
	 	13.1.10 	
      If the Borrower breaches any of its obligations
      hereunder, in addition to the collection of interests, compound interests
      and penalty interests stipulated in Subparagraphs (7), (8) and (9) of this
      Paragraph, the Lender shall be entitled to collect liquidated damages by
      __ per day on the basis of the involved principals;

	 	 	 
	 	13.1.11 	
      To discharge the loan relationship with the
    Borrower;

	 	 	 
	 	13.1.12 	
      To take any other measures stipulated in this Agreement
      or allowed by laws.




	13.2 	
      If the Lender conducts any activity stipulated in
      Paragraph 2 of Article 12 hereof, the Borrower may take the following
      measures separately or aggregately:

	 	 	 
		13.2.1 	
      To demand the Lender to correct its default within
      stipulated time;

	 	 	 
		13.2.2 	
      To make prepayment.








	13.3 	
      If the Lender takes measures such as litigation and
      arbitration to realize its credits due to the Borrower’s breach of
      contract, the Borrower shall assume legal costs, attorney’s fees,
      traveling expenses and other costs and expenses arising from realization
      of the Lender’s credits suffered by the
Lender.




	Article 14 	Governing Law and Dispute
      Settlement 



	14.1 	
      Conclusion, change, amendment, supplementation, validity,
      interpretation, performance and enforcement of this Agreement shall be
      governed by the laws of the People’s Republic of China.

	 	 	 
	14.2 	
      Any dispute arising from or related to this Agreement may
      be solved through negotiation between both parties. If the negotiation
      fails or either party is unwilling to negotiate, the dispute shall be
      solved in the second method:

	 	 	 
		14.2.1 	
      Submitting the case to ________________Arbitration
      Commission for arbitration in_________.

	 	 	 
		14.2.2 	
      Bringing the case to the people’s court in the area where
      the Lender is located.

	 	 	 
	14.3 	
      Prior to the resolution of the dispute, the
      implementation of any provision hereof other than the disputed matters
      shall not be affected.




	Article 15 	Miscellaneous




	15.1 	
      Any matter uncovered herein shall be decided through
      negotiation between both parties; any matter on which both parties fail to
      reach any agreement shall be governed by laws, regulations and other
      pertinent provisions of the People’s Republic of China.

	 	 	 
	15.2 	
      The following documents shall be an integral part of this
      Agreement and shall have the same legal effect as this
Agreement:

	 	 	 
		15.2.1 	
      Receipt of loan

	 	 	 
		15.2.2 	
      Guarantee agreement and documents;

	 	 	 
		15.2.3 	
      Plan of repayment in installment;

	 	 	 
		15.2.4 	
      Other materials that are deemed necessary by both
      parties.

	 	 	 
		15.3 	
      The Borrower declares and warrants:

	 	 	 
		15.3.1 	
      The Borrower clearly understands the Lender’s business
      scope and authorized powers;

	 	 	 
		15.3.2 	
      The Borrower has read all the provisions of this
      Agreement. Upon the Borrower’s request, the Lender has made corresponding
      explanation on this Agreement. And the Borrower has fully known and
      understood the meanings and legal results of the provisions
  hereof.

	 	 	 
		15.3.3 	
      The Borrower has all the necessary rights and
      authorization and full capacity for rights and behavior with respect to
      engaging in its business operation and the conclusion and performance of
      this Agreement.








	Article 16 	Others 
	 
	 
	 
	 
	 
	 
	 




	Article 17 	Validity 


This Agreement shall become effective when it is signed and
sealed by both parties’ legal representatives (persons in charge) or authorized
representatives and affixed with their official seals (if the Borrower is a
natural person, use the Borrower’s signature). 

	Article 18 	 ounterparts
  


This Agreement has five (5) copies, with the Borrower
holding one (1) copy and the Lender holding two (2) copies, and the remaining
two (2) copies shall be kept by the Lender for the purpose of submission to
competent authorities or persons for registration, recording or filing; each
copy shall have the same legal effect. 

(The rest of the page is intentionally left blank for signature
and seal) 


	Borrower: 	Lender: 
	 	 
	Signature: (company seal of Guangdong Jinhao Motorcycle
      Co., Ltd. 	Signature: (company seal of Rural Credit
      Cooperative of Sihui, Dawang Credit Association)




Date of Execution: 8 April, 2009 

Place of Execution: Dawang Credit Association