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

    


    Main
      contents 

    
      	
              Ø

            	
              Contract
                number: Nong Yin Gu Ji Jie Zi
                12101200800001538;

            


    

    
      	
              Ø

            	
              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;

            


    

    
      	 	
              n

            	
              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;

            


    

    
      	 	
              n

            	
              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