Summary of Loan Agreement by and between BAK International (Tianjin) Limited and
Tianjin Branch, Agricultural Bank of China dated May 26, 2008

Main contents
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Contract number: Nong Yin Gu Ji Jie Zi 12101200800001538;

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Loan principal: RMB160 million;

Ø
Loan term: May 26, 2008~May 26, 2012;

Ø
Interest rate: Float rate according to the basic rate announced by the People’s
Bank of China, adjusted every three months, the interest should be paid by
quarter;

 
n
Penalty interest rate for delayed repayment: 1.5*the above rate;

 
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Penalty interest rate for embezzlement of loan proceeds: 2* the above rate;

Ø
Purpose of the loan is to provide fund for the Company to construct its first
phase of Li-ion Power Tool Cell Automated Line Project;

Ø
Advanced repayment and advanced withdrawal of loan needs to be approved by
Agriculture Bank of China;

Ø
Loan withdrawal and repayment: The Company shall repay the principals as
follows:

 
n
Repay RMB 30 million between May 26, 2009 and December 26, 2009;

 
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Repay RMB 30 million between May 26, 2010 and December 26, 2010;

 
n
Repay RMB 50 million between May 26, 2011 and December 26, 2011;

 
n
Repay RMB 30 million on May 26, 2012

Headlines of the articles omitted:
Ø  Definition and explanation
Ø  The borrower’s statement and guaranty
Ø  Condition required to withdraw the loan
Ø  Supervision of the account
Ø  Check on the use of the loan and supervision of the project
Ø  Guaranty
Ø  Rights and obligation of the borrower
Ø  Rights and obligations of the lender
Ø  Insurance
Ø  Confidentiality
Ø  Breach of contract penalty
Ø  Miscellaneous
Ø  Dispute settlement
Ø  Validity of the contract
Ø  Note

 
 
 

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