Exhibit 10.47

CONFIDENTIAL
Our Ref: WBG/06/3707
Date  : 5 July 2006

BAK International Limited
BAK Industrial Park,
Kuichong Street, Longgang District,
Shenzhen, China.

Attention: Mr. Yongbin Han, Vice President

Dear Sirs,

Re:   Facility Letter

We, CITIC Ka Wah Bank Limited (the “Bank”), are pleased to offer you (the
“Borrower”) the general banking facilities (the “Facilities”) on the following
terms and conditions.

1.

Facilities

 

 

1.1

The facilities are available by way of the following:

 

Extent of Facilities

 

Documentary Credit (“L/C”) Facility plus Trust Receipt (“T/R”) Facility (120
days inclusive of usance period) plus Negotiation of Export Bills under L/C with
discrepancies supported by Letter of Indemnity Facility (“NEGT”) up to the
extent of USD6,000,000.00.

 

 

 

[within which:

 

Packing Credit Facility (“P/L”) up to the extent of USD3,000,000.00.]

 

 

 

Remarks:

 

i.

Utilization of the above trade facilities is subject to 20% cash margin placed
with the Bank.

 

ii.

The above trade facilities is used for purchase of raw materials.

 

iii.

Maximum tenor of P/L is 120 days and maximum amount is 70% of export L/C amount.

 

iv.

P/L is against lodgment of the export L/C.

1.2

The Facilities will be subject to periodic review, as the Bank deems fit at its
sole and absolute discretion. The Facilities shall expire and be repayable
forthwith as and when the Bank has given the Borrower notice of termination.
Nevertheless, the Bank reserves the right at its sole and absolute discretion to
increase, reduce, cancel and/or demand repayment of the Facilities or any part
or parts thereof at any time to be effective forthwith by notice to the
Borrower.

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CONFIDENTIAL
Our Ref: WBG/06/3707
Borrower: BAK International Limited

2.

Interest

 

 

2.1

Interest will be charged on the Facilities, subject to fluctuation, at the
following rate (the “Contract Rate”):

 

Contract Rate

 

1.5% over and above Hong Kong Inter Bank Offered Rate (“HIBOR”) per annum as
quoted by the Bank on the first day of each period, subject to market
availability.

2.2

Interest will accrue from day to day and be calculated on the basis of the
actual number of days elapsed and a 365-day year for Hong Kong Dollar of 360-day
year for United States Dollar or according to the market practice for
calculation of other currencies.

 

 

3.

Charges and Commissions

 

 

3.1

Charges and commissions will be levied and payable as set out in the following
table. Once paid, such charges and commissions shall not be refundable under any
circumstances.

 

Charges and Commissions

 

i.

Commission for Import and Export Bills charged at 1/4% on the first USD50,000.00
or equivalent and 1/16% thereafter shall be paid per each transaction.

 

ii.

Arrangement Fee of USD3,000.00 shall be payable by the Borrower to the Bank upon
acceptance of this Facility Letter.

3.2

Notwithstanding anything herein contained, the Bank reserves the right to vary
the amount of the charges and commissions set out in the aforesaid table from
time to time at the Bank’s absolute discretion by giving prior written notice.

 

 

3.3

If applicable, the Borrower is also required to pay those charges set out in the
Banking Charges Schedule published by the Bank from time to time.

 

 

4.

Repayment

 

 

4.1

Without prejudice to Clause 1.2, the Facilities together with accrued interest
shall be repaid according to the following Repayment Schedule:

 

Repayment Schedule

 

Each advance together with accrued interest shall be repaid on or before the
date specified in the relevant application.

5.

Default Interest

 

 

5.1

The Bank reserves the right to collect default interest on any sum (whether
principal or interest) overdue and not paid under any of the Facilities at the
following rate:

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CONFIDENTIAL
Our Ref: WBG/06/3707
Borrower: BAK International Limited

 

Default Interest Rate

 

4% per annum over and above the Contract Rate.

5.2

Default interest shall be calculated on basis of the actual number of days
elapsed and a 365-day year for Hong Kong Dollar or 360-day year for United
States Dollar or according to the market practice for calculation of other
currencies.

 

 

6.

Security

 

 

6.1

The Facilities are granted against the following securities (the “Securities”)

 

Security

 

i.

A Corporate Guarantee from Shenzhen BAK Battery Company Limited (the “Corporate
Guarantor”) for repayment of principal amount up to the extent of
USD6,000,000.00 and accrued interest and default interest thereon and all other
costs and expenses.

 

ii.

A Personal Guarantee from Xiangqian Li (the “Personal Guarantor”) for repayment
of principal amount up to the extent of USD6,000,000.00 and accrued interest and
default interest thereon and all other costs and expenses.

6.2

The Bank reserves the right to request for any additional securities as the Bank
may deem fit at its sole and absolute discretion from time to time.

 

 

6.3

Nothing in this Facility Letter shall release, terminate or invalidate any
security given or security document signed before the date of this Facility
Letter. If there is any such security or security document, the same shall
continue to secure the Facilities granted or to be granted under this Facility
Letter.

 

 

7.

Conditions Precedent

 

 

7.1

The Facilities will be available for drawing when the Bank has received the
following documents in form and substance satisfactory to the Bank:

 

Documents

 

i.

The duplicate copy of this Facility Letter duly signed by the Borrower
indicating its acceptance of the Facilities on terms and conditions set out
herein and duly signed by the Corporate Guarantor and the Personal Guarantor.

 

ii.

Borrower’s Board Resolutions and Shareholders’ Resolutions certified by any
director(s) of the Borrower.

 

iii.

General Commercial Agreement duly signed by the Borrower.

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CONFIDENTIAL
Our Ref: WBG/06/3707
Borrower: BAK International Limited

 

iv.

Guarantee and Indemnity duly executed by the Corporate Guarantor together with
Board Resolutions and Shareholders’ Resolutions (if applicable).

 

v.

Guarantee and Indemnity duly signed by the Personal Guarantor.

 

vi.

Guarantor/ Security Provider (Individual) Acknowledgement duly signed by the
Personal Guarantor.

 

vii.

Certified true copies of identity documents of all authorized signers of the
Borrower and the Corporate Guarantor.

 

viii.

Supporting Documents given by the Corporate Guarantor:

 

 

 

 

 

 

a)

Certificate of Approval;

 

 

b)

Business License;

 

 

c)

Up-to-date Articles of Association; and

 

 

d)

List of all directors and shareholders.

 

 

 

 

 

If any one of the above-mentioned documents are submitted in copies, certified
as true and complete copies by legal representative plus a seal is required.

 

ix.

A legal opinion to be issued by the Bank’s appointed lawyer in China on the
validity and enforceability of the Guarantee and Indemnity given by the
Corporate Guarantor in form and substance satisfactory to the Bank. All cost
should be borne by the Borrower.

 

x.

The Corporate Guarantee from the Corporate Guarantor to be filed with State
Administration of Foreign Exchange (SAFE).

 

xi

Certified true copy of Memorandum and Articles of Association of the Borrower.

 

xii

Certified true copy of Business Registration Certificate of the Borrower.

 

xiii.

Certified true copy of Certificate of Incorporation of the Borrower.

 

xiv.

Any other documents as may reasonably be requested by the Bank from time to
time.

8.

Language

 

 

8.1

The Chinese version of the Facility Letter, if produced, is for reference only
and if there is any conflict between the English and Chinese version, the
English version shall prevail.

 

 

9.

Governing Law

 

 

9.1

The Facility Letter shall be governed by the laws of Hong Kong SAR. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the courts of
Hong Kong SAR as regards any claim or matter arising hereunder.

Kindly sign and return to us the duplicate copy of this Facility Letter to
indicate your acceptance of this credit facility arrangement by 26 July 2006 and
if not accepted by that date, unless extended by us at our sole and absolute
discretion, this offer will be deemed to have lapsed.

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CONFIDENTIAL
Our Ref: WBG/06/3707
Borrower: BAK International Limited

Should you have any queries on the completion of the required documents, please
do feel free to contact our Ms. Daphne Fong at 3603 2047. For queries on banking
arrangements, please contact our Ms. Betty Loo at 2909 6202 or Mr. Silas Ma at
2909 6617 at any time.

Yours faithfully,

For and on behalf of

 

For and on behalf of

CITIC Ka Wah Bank Limited

 

CITIC Ka Wah Bank Limited

 

 

 

 

 

 

/s/ Billy Wong

 

/s/ Benson Lee

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Billy Wong

 

Benson Lee

Manager

 

Senior Vice President and Group Head

Credit Administration

 

China Corporates, HK

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