The Agreement Related to Share Acquisition of Weihai Hengda Electric Motor (Group) Co. Ltd. and Asset Purchase of Wendeng Second Electric Motor Factory

Party A:

(1) Wendeng Second Electric Motor Factory, with its residential address at South Zhangjiachan Village, Zhangjiachan Town, Wendeng County and its legal representative is Liu Wanfeng;

 

(2) The Committee of Labor Union of Wendeng Second Electric Motor Factory, with its residential address at South Zhangjiachan Village, Zhangjiachan Town, Wendeng County and its legal representative is Liu Wanfeng;

 

(3) The People’s Government of Zhangjiachan Town, Wendeng County, with its residential address at No.3 Yongan Street, Zhangjiachan Township, Wendeng County and the person in charge is Lou Taidong;

 

(The above parties shall be referred to herein collectively as the Party A)

and

Party B:

Harbin Tech Full Electric Co. Ltd., with its residential address at No.9 Ha Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin and its legal representative is Yang Tianfu.

1

Party A and Party B are both legal person duly incorporated and validly existing according to PRC laws;

2

Party A is a legitimate shareholder and governing authority of Weihai Hengda Electric Motor (Group) Co. Ltd. (“Hengda Electric Motor”), of which Wendeng Second Electric Motor Factory (“Wendeng Second Electric Motor”) holds 97.15% shares and the Committee of Labor Union of Wendeng Second Electric Motor Factory (“Labor Union”) holds 2.85% shares;

3

Hengda Electric Motor is located at No.28 Station Zhangjiachan Township Wendeng County, with its registered capital as well as the contributed capital at RMB 32,940,000. Its business scope covers: manufacturing electrical motors, mold, gear reduction asynchronous electric motor, speed control motor, hydraulic coupler, electronic devices, fiber reinforced plastic product, capacitor, cable and wire; exporting self-produced products and techniques; importing raw material, accessory, instrument, equipment, fittings, and techniques needed by Hengda Electric Motor for its production and research (except the merchandise and techniques which are restricted from operation or forbidden from importing and exporting by PRC); processing with imported materials; processing with materials or given samples, assembling supplied components;

4

Party A will transfer to Party B the 100% shares of Hengda Electric Motor held by it, and Party B will acquire such transfer; and

5

Wendeng Second Electric Motor will sell to Party B all of the assets it owns, and Party B will purchase such assets.

1.1

Wendeng Second Electric Motor and Labor Union respectively gives up the preemption right on shares of Hengda Electric Motor for each other.

1.2

As of the transfer of shares of Hengda Electric Motor, Hengda Electrical Motor shall duly own or hold the assets, rights and interests including but not limited to:

(1)

The right to use the assigned state-owned lands, as recorded in No. Wenguoyong [2005] 150009, No. Wenguoyong [2006] 150006, No. Wenguoyong [2005] 150020, No. Wenguoyong [2005] 150016 certificates for the use of state-owned land, and the above-ground buildings located thereon;

(2)

Registered trademark with registration numbers as No. 623984 and No. 3224410.

1.3

Consideration of Acquisition Assets

2.1

After the transfer of Acquisition Assets, Party A shall guarantee Party B the completion of the procedures of obtaining the use right of assigned lands within the territory of Hengda Electric Motor, of which such procedures are still ongoing.

2.2

Party A shall be responsible to Party B for the debts, contingent debts and any claims or liabilities relating to Hengda Electric Motor or Wendeng Second Electric Motor, if they are not disclosed in the formal acquisition agreement,

8.1

This agreement is written in the Chinese language, and is effective as of the date executed by both parties.

8.2

The official text is in four copies with equal weight, one copy for each party.