Document:

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                                                                    EXHIBIT 10.1

                                 FIRST AMENDMENT
                                       TO
                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

         THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
("this First Amendment") is made and entered into as of the 19th day of January,
2005, by and among:

         (i)      ARGO-TECH CORPORATION, a Delaware corporation (the
                  "Borrower");

         (ii)     AT HOLDINGS CORPORATION, a Delaware corporation ("Holdings");

         (iii)    THE FINANCIAL INSTITUTIONS as signatory lender parties hereto
                  and their successors and assigns (collectively, the "Lenders",
                  with each individually being a "Lender");

         (iv)     NATIONAL CITY BANK, as Administrative Agent and an Issuing
                  Bank; and

         (v)      JPMORGAN CHASE BANK, as an Issuing Bank in respect of the
                  Existing Letters of Credit (defined below).

                                    RECITALS:

         A The Borrower, Holdings, the Lenders, the Administrative Agent and the
Issuing Banks are parties to that certain Third Amended and Restated Credit
Agreement dated as of June 23, 2004 (the "Credit Agreement"), pursuant to which,
inter alia, the Lenders agreed, subject to the terms and conditions thereof to
make available to the Borrower Loans (as this and other capitalized terms used
herein and not otherwise defined herein are defined in the Credit Agreement) and
Letters of Credit.

         B. The Borrower has requested that the Lenders agree to certain
amendments to the Credit Agreement.

         C. Subject to the terms and conditions of this First Amendment, the
Lenders have agreed to such requests.

<PAGE>

                                   AGREEMENTS

         NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual agreements hereinafter set forth, the Borrower, the Lenders, the
Administrative Agent and the Issuing Banks hereby agree as follows:

         1. Amendments to Credit Agreement.

         A. The definition of "Issuing Bank" in Section 1.01 (Defined Terms) is
amended and restated in its entirety to provide, respectively, as follows:

                           "Issuing Bank" means, (i) with respect to any
         Existing Letter of Credit, JPMorgan Chase Bank, in its capacity as
         issuer thereof and (ii) with respect to any Letter of Credit issued on
         and after the Third Restatement Effective Date, National City Bank, in
         its capacity as the issuer of Letters of Credit hereunder, and its
         successors in such capacity as provided in Section 2.04(i). The Issuing
         Bank may, in its discretion, arrange for one or more Letters of Credit
         to be issued by an Affiliate of the Issuing Bank, by another Lender or
         by an Affiliate of another Lender, in which case the term "Issuing
         Bank" shall include any such Lender or Affiliate with respect to
         Letters of Credit issued by such Lender or Affiliate.

         B. Clause (i) of the third (and last) sentence of Section 2.04(b)
(Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions) is
amended and restated in its entirety to provide as follows:

         (i) the LC Exposure shall not exceed $12,000,000,

         2. Effective Date; Conditions Precedent. The modifications to the
Credit Agreement set forth in Paragraph 1, above, shall not be effective unless
and until the date on which the Borrower has satisfied all of the following
conditions precedent (such date of effectiveness being the "Effective Date"):

         A. On the Effective Date and after giving effect to the amendments
contained herein (i) there shall exist no Default, and an authorized officer of
the Borrower shall have delivered to the Administrative Agent written
confirmation thereof dated as of the Effective Date, and (ii) the
representations and warranties of the Borrower and Holdings under the Credit
Agreement shall

                                      -2-
<PAGE>

have been reaffirmed in writing as of the Effective Date, subject only to
variances therefrom acceptable to the Lenders, the Administrative Agent and the
Issuing Banks.

         B. The Borrower shall have delivered to the Administrative Agent a
Certificate of its Secretary dated as of the Effective Date certifying that
attached thereto is (i) a complete copy of resolutions adopted by the Board of
Directors of the Borrower authorizing the execution, delivery and performance of
this First Amendment and the agreements to be performed by the Borrower
hereunder and (ii) a complete copy of any amendments to the Articles of
Incorporation, Certificate of Incorporation, Code of Regulations or By-laws of
the Borrower that became effective after the effective date of the Credit
Agreement, each of which amendments, if any, shall be satisfactory to the
Administrative Agent; and Holdings shall have delivered to the Administrative
Agent a Certificate of its Secretary dated as of the Effective Date certifying
that the resolutions of the Board of Directors of Holdings adopted June 4, 2004
in respect of the Credit Agreement and attached to the Loan Parties' Certificate
dated June 23, 2004 are unmodified and in full force and effect, and that
attached thereto is a complete copy of any amendments to the Articles of
Incorporation, Certificate of Incorporation, Code of Regulations or By-laws of
Holdings that became effective after the effective date of the Credit Agreement,
each of which amendments, if any, shall be satisfactory to the Administrative
Agent.

         C. The Subsidiary Loan Parties shall have executed and delivered the
Joinder attached to this First Amendment.

         D. All legal matters incident to this First Amendment and the
consummation of the transactions contemplated hereby shall be reasonably
satisfactory to Squire, Sanders & Dempsey L.L.P., Cleveland, Ohio, special
counsel to the Administrative Agent (the "Special Counsel").

                                      -3-
<PAGE>

         E. The Agent, the Lenders and the Issuing Banks shall have received
such other certificates, opinions and documents, in form and substance
satisfactory to them, as they may reasonably request.

         3. Other Loan Documents. Any reference to the Credit Agreement in the
other Loan Documents shall, from and after the Effective Date, be deemed to
refer to the Credit Agreement, as modified by this First Amendment.

         4. Confirmation of Debt. The Borrower and Holdings hereby affirm all of
their respective liabilities and obligations to the Lenders, the Administrative
Agent and the Issuing Banks under the Credit Agreement and the other Loan
Documents and that such liabilities and obligations are owed to the Lenders, the
Administrative Agent and the Issuing Banks. The Borrower and Holdings further
acknowledge and agree that as of the date hereof they have no claims, defenses
or set-off rights against any of the Lenders, the Administrative Agent and the
Issuing Banks of any nature whatsoever, whether sounding in tort, contract or
otherwise; and there are no claims, defenses or set-offs to the enforcement by
the Lenders, the Administrative Agent and the Issuing Banks of the liabilities
and obligations of the Borrower to each of them under the Credit Agreement, the
Revolving Credit Notes or the other Loan Documents.

         5. Lenders' and Agent's Expense. The Borrower agrees to reimburse the
Lenders and the Administrative Agent promptly for their costs and expenses
incurred in connection with this First Amendment and the transactions
contemplated hereby, including, without limitation, the fees and expenses of the
Special Counsel.

         6. No Other Modifications; Same Indebtedness. Except as expressly
provided in this First Amendment, all of the terms and conditions of the Credit
Agreement and the other Loan Documents remain unchanged and in full force and
effect. The modifications effected by this

                                      -4-
<PAGE>

First Amendment and by the other instruments contemplated hereby shall not be
deemed to provide for or effect a repayment and re-advance of any of the Loans
now outstanding, it being the intention of the Borrower, Holdings, the Lenders,
the Administrative Agent and the Issuing Banks hereby that the indebtedness
owing under the Credit Agreement, as amended by this First Amendment, be and
hereby is the same Indebtedness as that owing under the Credit Agreement
immediately prior to the effectiveness hereof.

         7. Governing Law; Binding Effect. This First Amendment shall be
governed by and construed in accordance with the laws of the State of Ohio and
shall be binding upon and inure to the benefit of the Borrower, Holdings, the
Lenders, the Administrative Agent and the Issuing Banks and their respective
successors and assigns.

         8. Counterparts. This First Amendment may be executed in separate
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed a fully executed agreement.

            [No additional provisions are on this page; the page next
                       following is the signature page.]

                                      -5-
<PAGE>

         IN WITNESS WHEREOF, the Borrower, Holdings, the Lenders, the
Administrative Agent and the Issuing Bank have hereunto set their hands as of
the date first above written.

                                      AT HOLDINGS CORPORATION

                                      By  /s/ Frances S. St. Clair
                                          ------------------------
                                              Name:  Frances S. St. Clair
                                              Title: Vice President

                                      ARGO-TECH CORPORATION

                                      By  /s/ Frances S. St. Clair
                                          ------------------------
                                              Name:  Frances S. St.Clair
                                              Title: Executive Vice President
                                                     and Chief Financial Officer

                                      NATIONAL CITY BANK, as Administrative
                                      Agent, as Issuing Bank and as a Lender,

                                      By  /s/ Carrie C. Tate
                                          ------------------------
                                              Name:  Carrie C. Tate
                                              Title: Senior Vice President

                                      -6-
<PAGE>

                                      JPMORGAN CHASE BANK, as Issuing Bank and
                                      as a Lender

                                      By  /s/ Matthew H. Massie
                                          ------------------------
                                              Name:  Matthew H. Massie
                                              Title: Managing Director

                                      -7-

<PAGE>

                                      GENERAL ELECTRIC CAPITAL CORPORATION,
                                      as a Lender

                                      By  /s/ Kelly Stotler
                                          ------------------------
                                              Name:  Kelly Stotler
                                              Title: Duly Authorized Signatory

                                      -8-
<PAGE>

                                      FIRSTMERIT BANK, N.A., as a Lender

                                      By  /s/ Trente L. Meteer
                                          ------------------------
                                              Name:  Trente L. Meteer
                                              Title: Senior Vice President

                                      -9-

<PAGE>

                                     Joinder

         The undersigned Subsidiary Loan Parties join in the foregoing First
Amendment as of the date first above written to confirm and agree that such
First Amendment shall not affect their Indebtedness (as this and other
capitalized terms used herein but not otherwise defined herein are defined in
the Credit Agreement, as that term is defined in said Second Amendment) and
other Obligations under and pursuant to their Subsidiary Guarantee Agreement of
even date with the Credit Agreement, all of which Indebtedness and Obligations
remain unmodified and in full force and effect. The undersigned Subsidiary Loan
Parties further acknowledge and agree that as of the date hereof, none has any
claims, defenses or set-off rights against any of the Lenders, the
Administrative Agent or the Issuing Banks of any nature whatsoever, whether
sounding in tort, contract or otherwise, and as of the date hereof has no claim,
defense or set-off of any nature whatsoever to the enforcement by the Lenders,
the Administrative Agent and the Issuing Banks of the full amount of all
Indebtedness and other Obligations of the undersigned under and pursuant to
their Subsidiary Guarantee Agreement.

                                ARGO-TECH CORPORATION (HBP)

                                By: /s/ Frances S. St. Clair
                                    ------------------------
                                Frances S. St. Clair, Vice President

                                ARGO-TECH CORPORATION (OEM)

                                By: /s/ Frances S. St. Clair
                                    ------------------------
                                Frances S. St. Clair, Vice President

                                ARGO-TECH CORPORATION (AFTERMARKET)

                                By: /s/ Frances S. St. Clair
                                    ------------------------
                                Frances S. St. Clair, Vice President

                                ARGO-TECH CORPORATION COSTA MESA

                                By: /s/ Frances S. St. Clair
                                    ------------------------
                                Frances S. St. Clair, Vice President

                                DURODYNE, INC.

                                By: /s/ Frances S. St. Clair
                                    ------------------------
                                Frances S. St. Clair, Vice President

                                      -10-EXHIBIT 10.1

                          SECURITIES EXCHANGE AGREEMENT

                     dated effective as of January 20, 2005

                                  by and among

                               MEDINA COFFEE, INC.

                             BAK INTERNATIONAL, LTD.

                                       and

                   THE SHAREHOLDERS OF BAK INTERNATIONAL, LTD.

<PAGE>

                                TABLE OF CONTENTS

ARTICLE I. ISSUANCE AND EXCHANGE OF SHARES.....................................1

   1.1     Issuance and Exchange...............................................1
   1.2     Exchange Ratio......................................................1

ARTICLE II. CLOSING 2

   2.1     Closing.............................................................2
   2.2     Deliveries by Public Company........................................2
   2.3     Deliveries by Shareholders and Holding Co...........................2

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS....................2

   3.1     Ownership of Stock..................................................2
   3.2     Authority to Execute and Perform Agreement; No Breach...............3
   3.3     Securities Matters..................................................3

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF HOLDING CO.......................4

   4.1     Organization, Standing and Corporate Power..........................4
   4.2     Authority; Noncontravention.........................................4
   4.3     Financial Statements................................................5
   4.4     Capital Structure...................................................5
   4.5     Subsidiaries........................................................5
   4.6     Intellectual Property...............................................5
   4.7     Absence of Certain Changes or Events; No Undisclosed Material
           Liabilities.........................................................5
   4.8     Books and Records...................................................6
   4.9     Employees...........................................................6
   4.10    Employee Benefit Plans..............................................6
   4.11    Compliance with Applicable Laws.....................................6
   4.12    Insurance...........................................................7
   4.13    Litigation, etc.....................................................7
   4.14    Contracts...........................................................7
   4.15    Real Property.......................................................7
   4.16    Environmental Matters...............................................7
   4.17    Solicitation........................................................7
   4.18    Disclosure..........................................................7

ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PUBLIC COMPANY....................8

   5.1     Organization, Standing and Power....................................8
   5.2     Capital Structure...................................................8
   5.3     Authority: Noncontravention.........................................8
   5.4     Subsidiaries........................................................9
   5.5     Intellectual Property...............................................9
   5.6     Absence of Certain Changes or Events; No Undisclosed Material
           Liabilities.........................................................9
   5.7     Books and Records..................................................10
   5.8     Employees..........................................................10
   5.9     Employee Benefit Plans.............................................10

                                       i

<PAGE>

   5.10    Compliance with Applicable Laws....................................10
   5.11    Insurance..........................................................11
   5.12    Litigation, etc....................................................11
   5.13    Contracts..........................................................11
   5.14    Real Property......................................................11
   5.15    Quotation..........................................................11
   5.16    Filings............................................................11
   5.17    Environmental Matters..............................................11
   5.18    Anti-takeover Plan: State Takeover Statutes........................12
   5.19    Solicitation.......................................................12
   5.20    Disclosure.........................................................12

ARTICLE VI. INDEMNIFICATION...................................................12

   6.1     Indemnification of Holding Co and Shareholders.....................12
   6.2     Indemnification of Public Company..................................13

ARTICLE VII. CONDITIONS PRECEDENT.............................................13

   7.1     Conditions to Each Party's Obligation to Effect the Exchange.......13
   7.2     Conditions to Obligations of Holding Co and the Shareholders.......14
   7.3     Conditions to Obligations of Public Company........................14
   7.4     Frustration of Closing Conditions..................................15

ARTICLE VIII. GENERAL PROVISIONS..............................................15

   8.1     Survival of Representations and Warranties.........................15
   8.2     Fees and Expenses..................................................15
   8.3     Definitions........................................................15
   8.4     Usage..............................................................16
   8.5     Notices............................................................16
   8.6     Counterparts.......................................................17
   8.7     Entire Agreement; Third-Party Beneficiaries........................17
   8.8     Governing Law......................................................17
   8.9     Assignment.........................................................17
   8.10    Enforcement........................................................17
   8.11    Severability.......................................................18

                                       ii
<PAGE>

                          SECURITIES EXCHANGE AGREEMENT

         THIS  SECURITIES  EXCHANGE  AGREEMENT  (the  "Agreement"),  dated as of
January  20,  2005 (the  "Effective  Date"),  is  entered  into by and among BAK
INTERNATIONAL,  LTD., a company incorporated in Hong Kong with limited liability
("Holding  Co"),  and MEDINA  COFFEE,  INC., a Nevada  corporation  (the "Public
Company"),  and the individuals whose names appear on the signature page hereof,
each being either a  shareholder  of Holding Co or an entity  holding  shares in
trust  (each a "Trust  Company")  for the  benefit  of certain  shareholders  of
Holding Co (collectively, the "Shareholders"). Certain capitalized terms used in
this Agreement are defined in Section 8.3 hereof.

                              W I T N E S S E T H:

         WHEREAS,  as of the Effective  Date,  there are 39,826,075  outstanding
shares of the common stock of Holding Co (the "Holding Co Stock"),  of which all
of the shares of Holding Co Stock are  beneficially  owned and/or  controlled by
the Shareholders.

         WHEREAS,  Public  Company  proposes to acquire  all of the  outstanding
shares of Holding Co in exchange for the issuance of an aggregate of  39,826,075
shares of common stock, par value $0.001, of Public Company (the "Exchange");

         WHEREAS,  the Exchange  shall  constitute a  reorganization  within the
meaning  of Section  368(a)  (1)(B) of the  Internal  Revenue  Code of 1986,  as
amended, and/or any other "tax free" exemptions thereunder that may be available
for the Exchange; and

         WHEREAS,  the Boards of Directors of Public Company and Holding Co have
determined that it is desirable to effect such a plan of reorganization.

         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and the
mutual covenants,  agreements,  representations and warranties contained herein,
the parties hereto agree as follows:

                                   ARTICLE I.
                         ISSUANCE AND EXCHANGE OF SHARES

1.1      Issuance and Exchange.

         At the  Closing  (as  defined  in  Section  2.1  below),  to be held in
accordance  with the provisions of Article II below and subject to the terms and
agreements set forth herein,  Public Company shall  authorize  Public  Company's
transfer agent to issue to the  Shareholders  the number of duly  authorized and
newly issued shares of common stock,  par value $0.001,  of Public  Company (the
"Public  Company  Stock")  set forth in  Section  1.2 below for the  outstanding
shares of Holding Co Stock.  In  consideration  for the shares of Public Company
Stock to be  exchanged,  the  Shareholders  shall have  delivered to counsel for
Public  Company,  prior to  Closing,  certificates  evidencing  their  shares of
Holding Co, together with duly executed stock powers to effectuate the transfer.
Counsel for Public  Company shall  release the Holding Co shares,  over which he
has custody,  to Public  Company in accordance  with the written  instruction of
Public Company,  assuming satisfaction by the Shareholders and Holding Co of all
applicable conditions set forth in this Agreement.

1.2      Exchange Ratio.

         (a) At the  Closing,  Public  Company  shall  exchange an  aggregate of
39,826,075 shares of Public Company Stock for all issued and outstanding  shares
of  Holding Co Stock as full  consideration  for the  Holding Co Stock.  A chart
setting forth the  capitalization  of Public  Company  immediately  prior to and
immediately  following  the Closing (as defined in Section  2.1) is set forth on
Exhibit 1.2(a) hereto.

                                       1
<PAGE>

         (b) No fractional  shares of Public Company Stock will be issued to any
Shareholder entitled to receive said shares. Accordingly, Shareholders who would
otherwise be entitled to receive fractional shares of Public Company Stock will,
upon  surrender  of their  certificate  representing  the  fractional  shares of
Holding Co Stock,  receive a full share if the  fractional  share  exceeds fifty
percent (50%) and if the  fractional  share is less than fifty percent (50%) the
fractional share shall be cancelled.

                                   ARTICLE II.
                                     CLOSING

2.1      Closing.

         The consummation of the Exchange by Public Company,  Holding Co and the
Shareholders (the "Closing") shall occur on the Effective Date at the offices of
Holding Co,  subject to the  satisfaction  or waiver of all of the conditions to
Closing, or at such other place as the parties may agree upon.

2.2      Deliveries by Public Company.

         Public  Company  shall  deliver,  or  cause  to be  delivered,  to  the
Shareholders:

         (a) As soon as  practicable  after the  Closing,  certificates  for the
shares of Public Company Stock being exchanged for their respective accounts, in
form  and  substance  reasonably  satisfactory  to the  Shareholders  and  their
counsel,  it being understood that the  certificates  will be prepared by Public
Company's transfer agent and delivered to Jackson Walker, L.L.P. for the benefit
of the Shareholders;

         (b) At the Closing, the items specified in Article VII below; and

         (c) At the Closing, all of the books and records of Public Company.

2.3      Deliveries by Shareholders and Holding Co.

         At the Closing,  the Shareholders and Holding Co, as applicable,  shall
deliver to Public Company the items specified in Article VII below.

                                  ARTICLE III.
                 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS

         Each Shareholder,  including those Shareholders whose shares in Holding
Co are being held by a Trust Company,  hereby  represents and warrants to Public
Company as follows (it being  acknowledged  that Public Company is entering into
this Agreement in material  reliance upon each of the following  representations
and  warranties,  and that the truth and accuracy of each, as evidenced by their
signature set forth on the signature page,  constitutes a condition precedent to
the obligations of Public Company hereunder):

3.1      Ownership of Stock.

         Each  Shareholder  is the  lawful  owner of his  Holding Co Stock to be
transferred  to Public  Company  free and  clear of all  preemptive  or  similar
rights,  Liens,  and the  delivery  to Public  Company  of the  Holding Co Stock
pursuant to the  provisions of this  Agreement  will transfer to Public  Company
valid  title  thereto,  free and clear of all Liens.  To the  Knowledge  of each
Shareholder,  the  Holding  Co  Stock  to be  exchanged  herein  has  been  duly
authorized and validly issued and is fully paid and nonassessable.

                                       2
<PAGE>

3.2      Authority to Execute and Perform Agreement; No Breach.

         Each  Shareholder  has the full legal right and power and all authority
and approval required to enter into, execute and deliver this Agreement,  and to
sell, assign,  transfer and convey the Holding Co Stock and to perform fully his
respective  obligations  hereunder.  This  Agreement  has been duly executed and
delivered by each Shareholder  and,  assuming due execution and delivery by, and
enforceability  against  Public  Company,  constitutes  the  valid  and  binding
obligation of each Shareholder enforceable in accordance with its terms, subject
to the qualifications that enforcement of the rights and remedies created hereby
is subject to (a)  applicable  bankruptcy,  insolvency,  fraudulent  conveyance,
reorganization,  moratorium and other laws of general application  affecting the
rights  and  remedies  of  creditors,  and  (b)  general  principles  of  equity
(regardless of whether such  enforcement is considered in a proceeding in equity
or at law). No approval or consent of, or filing with, any Governmental  Entity,
and no approval or consent of, or filing,  with any other  Person is required to
be obtained by the Shareholders or in connection with the execution and delivery
by the  Shareholders of this Agreement and  consummation and performance by them
of the transactions contemplated hereby.

         The  execution,  delivery  and  performance  of this  Agreement by each
Shareholder and the  consummation  of the  transactions  contemplated  hereby in
accordance with the terms and conditions hereof by each Shareholder will not:

         (a) violate,  conflict with or result in the breach of any of the terms
of, or constitute  (or with notice or lapse of time or both would  constitute) a
default under, any contract,  lease, agreement or other instrument or obligation
to which a Shareholder  is a party or by or to which any of the  properties  and
assets of any of the Shareholders may be bound or subject;

         (b) violate  any order,  judgment,  injunction,  award or decree of any
court,  arbitrator,  governmental or regulatory  body, by which a Shareholder or
the securities, assets, properties or business of any of them is bound; or

         (c) violate any statute,  law or regulation to which any Shareholder is
subject.

3.3      Securities Matters.

         The Shareholders  hereby represent,  warrant and covenant to the Public
Company, as follows:

         (a) The  Shareholders  have been advised that the Public  Company Stock
has not been registered under the Securities Act, or any state securities act in
reliance on exemptions therefrom.

         (b) The  Public  Company  Stock  is  being  acquired  solely  for  each
Shareholder's own account, for investment and are not being acquired with a view
to or for the resale,  distribution,  subdivision or fractionalization  thereof.
The  Shareholders  have no  present  plans  to enter  into  any  such  contract,
undertaking,  agreement or arrangement and the Shareholders  further  understand
that the Public  Company  Stock may only be resold  pursuant  to a  registration
statement  under  the  Securities  Act,  or  pursuant  to some  other  available
exemption.

         (c)  The  Shareholders  agree  that  the  certificate  or  certificates
representing the Public Company Stock will be inscribed with  substantially  the
following legend:

         "The  securities   represented  by  this   certificate  have  not  been
         registered  under the Securities Act of 1933. The securities  have been
         acquired for investment and may not be sold, transferred or assigned in
         the absence of an effective registration statement for these securities
         under  the  Securities  Act of  1933  or an  opinion  of  counsel  that
         registration is not required under said Act."

                                       3
<PAGE>

         (d) The  Shareholders  acknowledge that an investment in Public Company
is subject  to a high  degree of risk and that,  even  though  Public  Company's
common stock is quoted on the NASD Over-the-Counter Bulletin Board, there exists
no established trading market for the Public Company Stock.

                                   ARTICLE IV.
                  REPRESENTATIONS AND WARRANTIES OF HOLDING CO

         Holding Co hereby  represents and warrants to Public Company as follows
(it being  acknowledged  that Public  Company is entering into this Agreement in
material reliance upon each of the following representations and warranties, and
that the truth and  accuracy of each,  as  evidenced  by the  execution  of this
Agreement by a duly  authorized  officer of Holding Co,  constitutes a condition
precedent to the obligations of the Public Company hereunder):

4.1      Organization, Standing and Corporate Power.

         Each of Holding Co and  Shenzhen BAK Battery  Co.,  Ltd.,  Holding Co's
wholly-owned  subsidiary  ("BAK"),  is a company  with  limited  liability  duly
organized, validly existing and in good standing under the laws of Hong Kong and
the People's Republic of China,  respectively,  and has all requisite  corporate
power and authority to own, lease and operate its properties and to carry on its
business substantially as now conducted, except where the failure to do so would
not have,  individually  or in the  aggregate,  a Holding  Co  Material  Adverse
Effect.  For purposes of this Agreement,  the term "Holding Co Material  Adverse
Effect"  means any Material  Adverse  Effect with respect to Holding Co and BAK,
taken as a whole,  or any  change of effect  that  adversely,  or is  reasonably
expected  to  adversely,  affect the  ability of  Holding Co to  consummate  the
transactions   contemplated  by  this  Agreement  in  any  material  respect  or
materially  impair or delay  Holding  Co's  ability to perform  its  obligations
hereunder.

4.2      Authority; Noncontravention.

         Holding Co has the  requisite  corporate  power and  authority to enter
into this  Agreement and to consummate  the  transactions  contemplated  by this
Agreement.  The  execution,  delivery  and  performance  by  Holding  Co of this
Agreement  and the  consummation  of the  transactions  contemplated  hereby  by
Holding Co have been duly  authorized by all necessary  corporate  action on the
part of Holding Co. This  Agreement  has been duly  executed  and  delivered  by
Holding  Co and,  assuming  this  Agreement  constitutes  the valid and  binding
agreement  of Public  Company,  constitutes  a valid and binding  obligation  of
Holding Co, enforceable against Holding Co in accordance with its terms, subject
to (a) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium  and other  laws of  general  application  affecting  the  rights and
remedies of  creditors,  and (b) general  principles  of equity  (regardless  of
whether such enforcement is considered in a proceeding in equity or at law). The
execution  and delivery of this  Agreement do not, and the  consummation  of the
transactions  contemplated  by this Agreement and compliance with the provisions
of this  Agreement,  will not (x) conflict with any provisions of the charter or
other  organizational  or governing  documents of Holding Co, (y) subject to the
governmental  filings and other matters  referred to in the following  sentence,
conflict with, result in a breach of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of first refusal,  termination,
cancellation  or  acceleration  of any  obligation  (including to pay any sum of
money) or loss of a material benefit under, or require the consent of any Person
under, any indenture, or other material agreement,  Permit,  concession,  ground
lease or similar  instrument or undertaking to which Holding Co is a party or by
which  Holding  Co or any of its  assets  are bound or  affected,  result in the
creation or imposition of a Lien against any material asset of Holding Co, which
singly or in the aggregate would have a Holding Co Material  Adverse Effect,  or
(z) subject to the  governmental  filings and other  matters  referred to in the
following sentence,  contravene any law, rule or regulation, or any order, writ,
judgment, injunction, decree, determination or award binding on or applicable to
Holding Co or BAK and currently in effect, which, in the case of clauses (y) and
(z) above, singly or in the aggregate,  would have a Holding Co Material Adverse
Effect. No consent, approval or authorization of, or declaration or filing with,

                                       4
<PAGE>

or notice  to, any  Governmental  Entity or any third  party  which has not been
received or made is required by or with respect to Holding Co in connection with
the execution and delivery of this  Agreement by Holding Co or the  consummation
by Holding Co of the  transactions  contemplated  hereby,  except for  consents,
approvals,  authorizations,  declarations,  filings  and  notices  that,  if not
obtained  or made,  will  not,  individually  or in the  aggregate,  result in a
Holding Co Material Adverse Effect.

4.3      Financial Statements.

         The financial statements of Holding Co and BAK have been audited by the
chartered  accounting firm of Schwartz  Levitsky Feldman LLP/SRL for the periods
indicated in  conformity  with U.S.  Generally  Accepted  Accounting  Principles
("GAAP").

4.4      Capital Structure.

         As of the Effective  Date,  39,826,075  shares of Holding Co Stock were
issued and outstanding and no shares of Holding Co Stock were held by Holding Co
in its treasury. All outstanding shares of capital stock of Holding Co will have
been  duly  authorized  and  validly   issued,   and  will  be  fully  paid  and
nonassessable  and not  subject  to  preemptive  or  similar  rights.  No bonds,
debentures,  notes or other  indebtedness of Holding Co having the right to vote
(or convertible into, or exchangeable for,  securities having the right to vote)
on any  matters on which the  Shareholders  may vote are issued or  outstanding.
Except for this  Agreement,  Holding Co does not have and,  at or after  Closing
will not have, any  outstanding  option,  warrant,  call,  subscription or other
right,  agreement or commitment which either (a) obligates  Holding Co to issue,
sell or transfer,  repurchase, redeem or otherwise acquire or vote any shares of
the capital  stock of Holding Co, or (b) restricts  the voting,  disposition  or
transfer  of shares of capital  stock of Holding  Co.  There are no  outstanding
stock appreciation rights or similar derivative  securities or rights of Holding
Co.

4.5      Subsidiaries.

         Other than as  provided  on Schedule  4.5,  neither  Holding Co nor BAK
owns, directly or indirectly,  any of the capital stock of any other corporation
or  any  equity,  profit  sharing,   participation  or  other  interest  in  any
corporation, partnership, joint venture or other entity.

4.6      Intellectual Property.

         Schedule 4.6 lists the trademarks, trade names, service marks, patents,
copyrights used by Holding Co and BAK and any applications with respect thereto.
Neither Holding Co nor BAK has any Knowledge of any claim that, or inquiry as to
whether, any product,  activity or operation of Holding Co or BAK infringes upon
or  involves,  or has resulted in the  infringement  of, any  trademarks,  trade
names,  service marks,  patents,  copyrights or other proprietary  rights of any
other  Person,  corporation  or  other  entity;  and no  proceedings  have  been
instituted, are pending or are threatened with respect thereto.

4.7      Absence  of  Certain  Changes  or  Events;   No  Undisclosed   Material
         Liabilities.

         (a) Each of Holding Co and BAK has  conducted  its business only in the
ordinary  course,  and,  except as set forth on Schedule 4.7, there has not been
(i) any  change,  destruction,  damage,  loss or  event  which  has had or could
reasonably  be expected to have,  individually  or in the aggregate a Holding Co
Material Adverse Effect;  (ii) any declaration,  setting aside or payment of any
dividend  or other  distribution  in  respect  of shares of  Holding Co or BAK's
capital stock, or any repurchase,  redemption or other acquisition by Holding Co
or BAK of any shares of their respective  capital stock or equity interests,  as
applicable;  (iii) any increase in the rate or terms of compensation  payable or
to  become  payable  by  Holding  Co or BAK to its  directors,  officers  or key
employees;  (iv) any entry into, or increase in the rate or terms of, any bonus,
insurance, severance, pension or other employee or retiree benefit plan, payment
or arrangement  made to, for or with any such directors,  officers or employees;
(v) any entry into any  agreement,  commitment or  transaction  by Holding Co or

                                       5
<PAGE>

BAK,  or  waiver,  termination,  amendment  or  modification  to any  agreement,
commitment  or  transaction,  which is  material to Holding Co or BAK taken as a
whole;  (vi) any material labor dispute involving the employees of Holding Co or
BAK; (vii) any change by Holding Co or BAK in accounting methods,  principles or
practices  except as required or  permitted  by GAAP;  (viii) any  write-off  or
write-down of, or any  determination  to write-off or  write-down,  any asset of
Holding  Co or BAK or any  portion  thereof;  (ix)  any  split,  combination  or
reclassification  of any of Holding Co or BAK's  capital  stock or  issuance  or
authorization relating to the issuance of any other securities in respect of, in
lieu of or in substitution  for shares of Holding Co or BAK's capital stock; (x)
any amendment of any material term of any outstanding  security of Holding Co or
BAK; (xi) any loans, advances or capital contributions to or investments in, any
other Person in existence on the Effective Date made by Holding Co or BAK; (xii)
any sale or  transfer by Holding Co or BAK of any of the assets of Holding Co or
BAK, as  applicable;  (xiii)  cancellation  of any  material  debts or claims or
waiver of any material  rights by Holding Co or BAK; or (xiv) any  agreements by
Holding Co or BAK to (a) do any of the things described in the preceding clauses
(i) through (xiii) other than as expressly  contemplated  or provided for herein
or (b) take,  whether in writing or otherwise,  any action which, if taken prior
to the Effective Date, would have made any representation or warranty of Holding
Co in this Agreement untrue or incorrect in any material respect.

         (b)  BAK has no  liabilities,  except  as set  forth  in its  financial
statements for the period ended September 30, 2004 or otherwise  incurred in the
ordinary course of business.

4.8      Books and Records.

         The books of account and other financial Records of Holding Co and BAK,
all of which  have been made  available  to Public  Company,  are  complete  and
correct and represent actual, bona fide transactions and have been maintained in
accordance with sound business practices.

4.9      Employees.

         Neither  Holding Co nor BAK has any labor  disputes with its respective
employees.  Except as otherwise set forth on Schedule 4.9, there are no loans or
other  obligations  payable or owing by  Holding  Co or BAK to any  stockholder,
officer, director or employee of Holding Co or BAK, as applicable, nor are there
any loans or debts  payable or owing by any of such persons to Holding Co or BAK
or any  guarantees  by Holding Co or BAK of any loan or obligation of any nature
to which any such Person is a party.

4.10     Employee Benefit Plans.

         All  employee  benefit  plans  provided  by BAK to  its  employees  are
operated under and in accordance with  applicable laws of the People's  Republic
of China.

4.11     Compliance with Applicable Laws.

         Each  of  Holding  Co and  BAK  has  and  after  giving  effect  to the
transactions  contemplated  hereby will have in effect all Permits necessary for
it to own,  lease or  operate  its  properties  and  assets  and to carry on its
business as now conducted, and to the Knowledge of Holding Co there has occurred
no  default  under  any such  Permit,  except  for the lack of  Permits  and for
defaults under Permits which  individually  or in the aggregate would not have a
Holding Co Material Adverse Effect.  To Holding Co's Knowledge,  each of Holding
Co and BAK is in compliance with, and has no liability or obligation  under, any
applicable  statute,   law,   ordinance,   rule,  order  or  regulation  of  any
Governmental  Entity,  including  any  liability or  obligation to undertake any
remedial action under Hazardous Substances Laws (as hereinafter defined), except
for instances of non-compliance,  liabilities or obligations, which individually
or in the aggregate would not have a Holding Co Material Adverse Effect.

                                       6
<PAGE>

4.12     Insurance.

         Except as disclosed on Schedule 4.12, each of Holding Co and BAK has no
insurance policies in effect.

4.13     Litigation, etc.

         Except as set forth on Schedule 4.13 and as of the Effective  Date, (a)
there is no suit, claim,  action or proceeding (at law or in equity) pending or,
to the Knowledge of Holding Co, threatened against Holding Co or BAK (including,
without   limitation,   any  product  liability  claims)  before  any  court  or
governmental or regulatory authority or body, and (b) neither Holding Co nor BAK
is subject to any outstanding order, writ, judgment,  injunction,  order, decree
or  arbitration  order that, in any such case  described in clauses (a) and (b),
(i) could  reasonably be expected to have,  individually or in the aggregate,  a
Holding Co Material  Adverse  Effect or (ii)  involves an allegation of criminal
misconduct or a violation of the Racketeer and Influenced Corrupt Practices Act.
As of the Closing,  there are no suits,  actions,  claims or proceedings pending
or, to Holding Co's Knowledge, threatened, seeking to prevent, hinder, modify or
challenge the transactions contemplated by this Agreement.

4.14     Contracts.

         Schedule 4.14 lists all material  contracts,  leases,  arrangements  or
commitments  (whether oral or written) of either  Holding Co or BAK relating to:
(a) the  employment  of any  Person;  (b)  collective  bargaining  with,  or any
representation  of any  employees  by, any labor union or  association;  (c) the
acquisition of services, supplies, equipment or other personal property; (d) the
purchase or sale of real property; (e) distribution, agency or construction; (f)
lease  of real or  personal  property  as  lessor  or  lessee  or  sublessor  or
sublessee;  (g) lending or advancing of funds; (h) borrowing of funds or receipt
of  credit;  (i)  incurring  any  obligation  or  liability;  or (j) the sale of
personal property.

4.15     Real Property.

         Except as provided on Schedule 4.15, neither Holding Co nor BAK owns or
leases any real property.

4.16     Environmental Matters.

         The operations of each of Holding Co and BAK comply with all applicable
local and national environmental laws.

4.17     Solicitation.

         None of Holding Co,  BAK, or the  officers,  directors,  Affiliates  or
agents of Holding Co or BAK, or any other Person  acting on behalf of Holding Co
or BAK has solicited,  directly or indirectly, any Person to enter into a merger
or similar business  combination  transaction with Holding Co or BAK by any form
of general  solicitation,  including,  without  limitation,  any  advertisement,
article, notice or other communication  published in any newspaper,  magazine or
similar  media or broadcast  over  television or radio or any seminar or meeting
whose  attendees  have been  invited  by any  general  solicitation  or  general
advertising.

4.18     Disclosure.

         The  representations  and  warranties  and  statements  of fact made by
Holding Co in this Agreement are, as applicable,  accurate, correct and complete
and do not contain any untrue  statement of a material fact or omit to state any
material  fact  necessary  in  order  to make  the  statements  and  information
contained herein not false or misleading.

                                       7
<PAGE>

                                   ARTICLE V.
                REPRESENTATIONS AND WARRANTIES OF PUBLIC COMPANY

         Public  Company  hereby  represents  and warrants to Holding Co and the
Shareholders  as  follows  (it  being  acknowledged  that  Holding  Co  and  the
Shareholders are entering into this Agreement in material  reliance upon each of
the following representations and warranties, and that the truth and accuracy of
each,  as evidenced  by the  execution  of this  Agreement by a duly  authorized
officer of Public Company,  constitutes a condition precedent to the obligations
of Holding Co and the Shareholders hereunder):

5.1      Organization, Standing and Power.

         Public Company is duly organized, validly existing and in good standing
under the laws of Nevada and has the requisite  corporate power and authority to
carry on its business as now being  conducted.  Public Company is duly qualified
or licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its  properties  makes
such  qualification  or licensing  necessary,  other than in such  jurisdictions
where  the  failure  to be so  qualified  or  licensed  (individually  or in the
aggregate) would not have a Public Company Material Adverse Effect. For purposes
of this Agreement,  the term "Public Company  Material Adverse Effect" means any
Material Adverse Effect with respect to Public Company, taken as a whole, or any
change or effect that adversely, or is reasonably expected to adversely,  affect
the ability of Public Company to consummate  the  transactions  contemplated  by
this  Agreement in any material  respect or materially  impairs or delays Public
Company's ability to perform its obligations hereunder.  Public Company has made
available to Holding Co complete and correct copies of its charter documents and
bylaws.

5.2      Capital Structure.

         As of the  Effective  Date,  the  authorized  capital  stock of  Public
Company  consists of 100,000,000  shares of Public  Company  Stock.  Immediately
following the Closing, there will be 40,978,533 shares of common stock of Public
Company issued and outstanding. No shares of common stock of Public Company will
be held by Public  Company in its treasury.  All  outstanding  shares of capital
stock of Public Company will have been duly authorized and validly  issued,  and
will be fully paid and  nonassessable  and not subject to  preemptive or similar
rights.  No bonds,  debentures,  notes or other  indebtedness  of Public Company
having the right to vote (or convertible into, or exchangeable  for,  securities
having  the right to vote) on any  matters on which the  stockholders  of Public
Company may vote are issued or outstanding.  Except for this  Agreement,  Public
Company does not have,  and at or after Closing will not have,  any  outstanding
option,  warrant,  call,  subscription  or other right,  agreement or commitment
which  either  (a)  obligates  Public  Company  to  issue,   sell  or  transfer,
repurchase,  redeem or otherwise acquire or vote any shares of the capital stock
of Public  Company,  or (b)  restricts  the voting,  disposition  or transfer of
shares of  capital  stock of Public  Company.  There  are no  outstanding  stock
appreciation  rights  or  similar  derivative  securities  or  rights  of Public
Company.

5.3      Authority: Noncontravention.

         Public Company has the requisite corporate power and authority to enter
into this  Agreement and to consummate  the  transactions  contemplated  by this
Agreement.  The execution,  delivery and performance of this Agreement by Public
Company and the consummation by Public Company of the transactions  contemplated
hereby have been duly authorized by all necessary  corporate  action on the part
of Public Company. This Agreement has been duly executed and delivered by Public
Company and, assuming this Agreement constitutes the valid and binding agreement
of Holding Co and the Shareholders,  constitutes a valid and binding  obligation
of Public  Company,  enforceable  against Public Company in accordance  with its
terms, subject to (a) applicable bankruptcy,  insolvency, fraudulent conveyance,
reorganization,  moratorium and other laws of general application  affecting the
rights  and  remedies  of  creditors,  and  (b)  general  principles  of  equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).  The  execution  and  delivery  of  this  Agreement  do  not,  and  the

                                       8
<PAGE>

consummation of the  transactions  contemplated by this Agreement and compliance
with the provisions hereof, will not, (x) conflict with any of the provisions of
the  charter  documents  or  bylaws  of  Public  Company,  (y)  subject  to  the
governmental  filings and other matters  referred to in the following  sentence,
conflict with, result in a breach of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of first refusal,  termination,
cancellation  or  acceleration  of any  obligation  (including to pay any sum of
money) or loss of a benefit  under,  or require the consent of any Person under,
any indenture or other agreement,  Permit,  concession,  ground lease or similar
instrument or  undertaking to which Public Company is a party or by which Public
Company or any of its assets are bound or  affected,  result in the  creation or
imposition of a Lien against any material asset of Public Company, which, singly
or in the aggregate, would have a Public Company Material Adverse Effect, or (z)
subject  to the  governmental  filings  and  other  matters  referred  to in the
following sentence,  contravene any law, rule or regulation, or any order, writ,
judgment,  injunction,  decree, determination or award binding on Public Company
currently in effect,  which in the case of clauses (y) and (z) above,  singly or
in the aggregate, would have a Public Company Material Adverse Effect. Except as
required  by  applicable  federal  securities  law,  no  consent,   approval  or
authorization  of, or declaration or filing with, or notice to, any Governmental
Entity or any third party which has not been  received or made is required by or
with respect to Public Company in connection  with the execution and delivery of
this  Agreement by Public Company or the  consummation  by Public Company of the
transactions    contemplated   hereby,    except   for   consents,    approvals,
authorizations, declarations, filings and notices that, if not obtained or made,
will not, individually or in the aggregate,  result in a Public Company Material
Adverse Effect.

5.4      Subsidiaries.

         Public Company does not own, directly or indirectly, any of the capital
stock of any other corporation or any equity,  profit sharing,  participation or
other interest in any corporation, partnership, joint venture or other entity.

5.5      Intellectual Property.

         Public Company does not own or use any trademarks, trade names, service
marks,  patents,  copyrights or any applications  with respect  thereto.  Public
Company  has no  Knowledge  of any claim  that,  or inquiry as to  whether,  any
product,  activity or operation of Public Company infringes upon or involves, or
has resulted in the infringement of, any trademarks, trade names, service marks,
patents, copyrights or other proprietary rights of any other Person, corporation
or other entity;  and no proceedings  have been  instituted,  are pending or are
threatened with respect thereto.

5.6      Absence  of  Certain  Changes  or  Events;   No  Undisclosed   Material
         Liabilities.

         (a) The  Shareholders  have been  provided  with the audited  financial
statements of Public Company as of December 31, 2003 and unaudited balance sheet
of Public  Company  dated  September  30,  2004  (collectively,  the  "Financial
Statements"). Except as otherwise disclosed in its filings or public record with
the  Securities  and  Exchange  Commission,  Public  Company has  conducted  its
business  only in the  ordinary  course,  and there has not been (i) any change,
destruction, damage, loss or event which has had or could reasonably be expected
to have,  individually  or in the aggregate a Public  Company  Material  Adverse
Effect; (ii) any declaration,  setting aside or payment of any dividend or other
distribution  in respect of shares of Public  Company's  capital  stock,  or any
repurchase,  redemption or other  acquisition by Public Company of any shares of
their respective  capital stock or equity  interests,  as applicable;  (iii) any
increase in the rate or terms of  compensation  payable or to become  payable by
Public Company to its directors, officers or key employees; (iv) any entry into,
or increase in the rate or terms of, any bonus, insurance, severance, pension or
other employee or retiree benefit plan,  payment or arrangement  made to, for or
with  any  such  directors,  officers  or  employees;  (v) any  entry  into  any
agreement,  commitment or transaction by Public Company, or waiver, termination,
amendment or modification to any agreement,  commitment or transaction, which is
material to Public  Company  taken as a whole;  (vi) any material  labor dispute

                                       9
<PAGE>

involving the employees of Public Company; (vii) any change by Public Company in
accounting  methods,  principles or practices except as required or permitted by
GAAP;  (viii) any write-off or write-down of, or any  determination to write-off
or  write-down,  any asset of Public  Company or any portion  thereof;  (ix) any
split,  combination or reclassification of any of Public Company's capital stock
or issuance or authorization relating to the issuance of any other securities in
respect of, in lieu of or in substitution for shares of Public Company's capital
stock;  (x) any  amendment of any material term of any  outstanding  security of
Public  Company;  (xi)  any  loans,  advances  or  capital  contributions  to or
investments  in, any other  Person in existence  on the  Effective  Date made by
Public  Company;  (xii) any sale or  transfer  by Public  Company  of any of the
assets of Public Company; (xiii) cancellation of any material debts or claims or
waiver of any material  rights by Public  Company;  or (xiv) any  agreements  by
Public  Company to (a) do any of the things  described in the preceding  clauses
(i) through (xiii) other than as expressly  contemplated  or provided for herein
or (b) take,  whether in writing or otherwise,  any action which, if taken prior
to the Effective Date, would have made any  representation or warranty of Public
Company in this Agreement untrue or incorrect in any material respect.

         (b)  Public  Company  has no  Liabilities,  except  as set forth in the
Financial Statements or otherwise incurred in the ordinary course of business.

5.7      Books and Records.

         The books of account and other financial Records of Public Company, all
of which have been made  available  to Holding Co, are  complete and correct and
represent actual,  bona fide transactions and have been maintained in accordance
with sound business  practices and the  requirements of Section  13(b)(2) of the
Exchange Act.

5.8      Employees.

         Except with regard to Timothy P. Halter,  Public Company's sole officer
and  director,  Public  Company  (a)  has no  employees,  (b)  does  not owe any
compensation  of any kind,  deferred  or  otherwise,  to any current or previous
employees,  (c) has no written or oral employment agreements with any officer or
director of Public  Company or (d) is not a party to or bound by any  collective
bargaining  agreement.  There are no loans or other obligations payable or owing
by Public Company to any  stockholder,  officer,  director or employee of Public
Company,  nor are  there  any  loans  or debts  payable  or owing by any of such
persons to Public  Company or any  guarantees  by Public  Company of any loan or
obligation of any nature to which any such Person is a party.

5.9      Employee Benefit Plans.

         Public  Company  has  no  (a)   non-qualified   deferred  or  incentive
compensation or retirement plans or arrangements, (b) qualified retirement plans
or arrangements,  (c) other employee compensation,  severance or termination pay
or welfare  benefit plans,  programs or  arrangements or (d) any related trusts,
insurance  contracts or other funding  arrangements  maintained,  established or
contributed to by Public Company.

5.10     Compliance with Applicable Laws.

         Public  Company  has  and  after  giving  effect  to  the  transactions
contemplated  hereby  will have in effect all Permits  necessary  for it to own,
lease or operate its  properties  and assets and to carry on its business as now
conducted,  and to the Knowledge of Public Company there has occurred no default
under any such  Permit,  except for the lack of Permits and for  defaults  under
Permits which  individually  or in the aggregate would not have a Public Company
Material  Adverse Effect.  To Public Company's  Knowledge,  Public Company is in
compliance  with,  and has no  liability or  obligation  under,  any  applicable
statute,  law, ordinance,  rule, order or regulation of any Governmental Entity,
including any  liability or  obligation  to undertake any remedial  action under
Hazardous  Substances  Laws (as  hereinafter  defined),  except for instances of
non-compliance,  liabilities  or  obligations,  which  individually  or  in  the
aggregate would not have a Public Company Material Adverse Effect.

                                       10
<PAGE>

5.11     Insurance.

         Public Company has no insurance policies in effect.

5.12     Litigation, etc.

         As of the  Effective  Date,  (a)  there is no suit,  claim,  action  or
proceeding (at law or in equity) pending or, to the Knowledge of Public Company,
threatened against Public Company (including,  without  limitation,  any product
liability  claims) before any court or governmental  or regulatory  authority or
body,  and (b) Public  Company is not subject to any  outstanding  order,  writ,
judgment,  injunction, order, decree or arbitration order that, in any such case
described  in clauses  (a) and (b),  (i) could  reasonably  be expected to have,
individually or in the aggregate,  a Public Company  Material  Adverse Effect or
(ii)  involves an  allegation  of  criminal  misconduct  or a  violation  of the
Racketeer and Influenced Corrupt Practices Act. As of the Closing,  there are no
suits, actions, claims or proceedings pending or, to Public Company's Knowledge,
threatened,  seeking to prevent,  hinder,  modify or challenge the  transactions
contemplated by this Agreement.

5.13     Contracts.

         Except for its contract with Securities Transfer  Corporation,  a Texas
corporation  ("STC"),  pursuant to which STC acts as the Public  Company's stock
transfer agent, Public Company has no material contracts,  leases,  arrangements
or  commitments  (whether  oral or written) and is not a party to or bound by or
affected by any contract,  lease,  arrangement  or  commitment  (whether oral or
written)  relating  to:  (a)  the  employment  of  any  Person;  (b)  collective
bargaining with, or any  representation  of any employees by, any labor union or
association;  (c) the  acquisition  of  services,  supplies,  equipment or other
personal property;  (d) the purchase or sale of real property; (e) distribution,
agency or  construction;  (f) lease of real or  personal  property  as lessor or
lessee or  sublessor  or  sublessee;  (g)  lending or  advancing  of funds;  (h)
borrowing  of funds or  receipt of  credit;  (i)  incurring  any  obligation  or
liability; or (j) the sale of personal property.

5.14     Real Property.

         Public Company does not own or lease any real property.

5.15     Quotation.

         As of the Effective Date, the Public Company Stock will remain eligible
for quotation on the NASD Over-the-Counter Bulletin-Board.

5.16     Filings.

         Prior to the  Effective  Date,  Public  Company  has filed all  reports
required to be filed by it under the Securities Exchange Act.

5.17     Environmental Matters.

         Public   Company  has  not  received   any  written   notice  from  any
Governmental Entity that there exists any violation of any Hazardous  Substances
Law  (as  hereinafter  defined).  Public  Company  has no  Knowledge  (a) of any
Hazardous  Substances (as  hereinafter  defined)  present on, under or about any
Public Company asset, and to Public Company's Knowledge no discharge,  spillage,
uncontrolled  loss,  seepage or filtration of Hazardous  Substances has occurred
on, under or about any Public Company asset,  (b) that any Public Company assets
violates,  or has at any time violated,  any Hazardous  Substance  Laws, and (c)
that  there  is a  condition  on any  asset  for  which  Public  Company  has an
obligation  to undertake  any remedial  action  pursuant to Hazardous  Substance

                                       11
<PAGE>

Laws. For purposes hereof,  "Hazardous Substances" means, without limitation (i)
those  substances  included  within  definitions of any one or more of the terms
"Hazardous  Substance," and "Hazardous  Waste," "Toxic Substance" and "Hazardous
Material" in the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C. ss. 90,601, et seq., the Resource  Conservation and Recovery Act,
42 U.S.C.  ss. 6901, et seq., the Toxic  Substances  Control Act, 15 U.S.C.  ss.
2601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et
seq.,  the  Occupational  Safety and Health  Act,  29 U.S.C.  ss.  651, et seq.,
(insofar as it relates to employee  health and safety in relation to exposure to
Hazardous  Substances)  and any other local,  state,  federal or foreign laws or
regulations  related  to the  protection  of public  health  or the  environment
(collectively,   "Hazardous  Substances  Laws");  (ii)  such  other  substances,
materials or wastes as are or become  regulated  under,  or as are classified as
hazardous or toxic under  Hazardous  Substance  Laws;  and (iii) any  materials,
wastes or substances  that can be defined as (v)  petroleum  products or wastes;
(w) asbestos; (x) polychlorinated  biphenyl; (y) flammable or explosive;  or (z)
radioactive.

5.18     Anti-takeover Plan: State Takeover Statutes.

         Public  Company  does not have in effect  any plan,  scheme,  device or
arrangement,   commonly   or   colloquially   known  as  a   "poison   pill"  or
"anti-takeover"  plan or any similar plan,  scheme,  device or arrangement.  The
Board of Directors of Public Company has approved this Agreement. No other state
takeover  statute or similar statute or regulation  applies or purports to apply
to the Exchange, this Agreement or any of the transactions  contemplated by this
Agreement.

5.19     Solicitation.

         None of Public Company, its officers, directors,  Affiliates or agents,
or any other Person acting on its behalf has solicited,  directly or indirectly,
any Person to enter into a merger or similar  business  combination  transaction
with  Public  Company by any form of general  solicitation,  including,  without
limitation, any advertisement,  article, notice or other communication published
in any  newspaper,  magazine or similar  media or broadcast  over  television or
radio or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.

5.20     Disclosure.

         The  representations  and  warranties  and  statements  of fact made by
Public  Company in this  Agreement  are, as  applicable,  accurate,  correct and
complete and do not contain any untrue  statement of a material  fact or omit to
state  any  material  fact  necessary  in  order  to  make  the  statements  and
information contained herein not false or misleading.

                                   ARTICLE VI.
                                 INDEMNIFICATION

6.1      Indemnification of Holding Co and Shareholders.

         (a) Public Company shall, from and after the Closing, indemnify, defend
and hold  harmless  the  Shareholders,  Holding Co, and Holding  Co's  officers,
directors,  Affiliates or agents, and any other Person acting on its behalf (the
"Holding Co Indemnified Parties") against all losses,  claims,  damages,  costs,
expenses  (including  reasonable  attorneys' fees and expenses),  liabilities or
judgments  or  amounts  that are paid in  settlement  with the  approval  of the
indemnifying  party (the  "Holding  Co  Indemnified  Liabilities")  based on, or
arising out of, or pertaining to this Agreement or the transactions contemplated
hereby,  in each case,  to the fullest  extent  permitted  under the laws of the
State of Nevada.

         (b) The Holding Co Indemnified  Parties shall have the right to conduct
the  defense  of any  action  giving  rise to a claim for  indemnity  under this
Agreement with counsel of their own choosing.  Holding Co, the  Shareholders and

                                       12
<PAGE>

Public Company agree that all rights to  indemnification,  including  provisions
relating  to  advances  of  expenses  incurred in defense of any action or suit,
existing in favor of the Holding Co Indemnified  Parties with respect to matters
occurring through the Closing,  shall survive the Exchange and shall continue in
full force and effect for a period of not less than two years from the  Closing;
provided,  however, that all rights to indemnification in respect of any Holding
Co  Indemnified  Liabilities  asserted or made within such period shall continue
until the disposition of such Holding Co Indemnified Liabilities.

         (c) The  provisions  of this  Section  6.1 are  intended  to be for the
benefit of, and shall be enforceable by, each Holding Co Indemnified  Party, his
or her heirs and his or her personal  representatives  and shall be binding upon
all successors and assigns of Public Company and Holding Co.

6.2      Indemnification of Public Company.

         (a) Holding Co shall, from and after the Closing, indemnify, defend and
hold  harmless  Public  Company  and  Public  Company's   officers,   directors,
Affiliates  or agents,  and any other  Person  acting on its behalf (the "Public
Company  Indemnified  Parties")  against all  losses,  claims,  damages,  costs,
expenses  (including  reasonable  attorneys' fees and expenses),  liabilities or
judgments  or  amounts  that are paid in  settlement  with the  approval  of the
indemnifying party (the "Public Company  Indemnified  Liabilities") based on, or
arising out of, or pertaining to this Agreement or the transactions contemplated
hereby,  in each case,  to the fullest  extent  permitted  under the laws of the
State of Nevada and Hong Kong.

         (b) The  Public  Company  Indemnified  Parties  shall have the right to
conduct the defense of any action  giving  rise to a claim for  indemnity  under
this Agreement with counsel of their own choosing.  Holding Co, the Shareholders
and  Public  Company  agree  that  all  rights  to  indemnification,   including
provisions relating to advances of expenses incurred in defense of any action or
suit,  existing in favor of the Public Company  Indemnified Parties with respect
to matters occurring  through the Closing,  shall survive the Exchange and shall
continue  in full  force and effect for a period of not less than two years from
the Closing; provided, however, that all rights to indemnification in respect of
any Public Company Indemnified  Liabilities  asserted or made within such period
shall  continue  until  the  disposition  of  such  Public  Company  Indemnified
Liabilities.

         (c) The  provisions  of this  Section  6.2 are  intended  to be for the
benefit of, and shall be enforceable by, each Public Company  Indemnified Party,
his or her heirs and his or her  personal  representatives  and shall be binding
upon all successors and assigns of Public Company and Holding Co.

                                  ARTICLE VII.
                              CONDITIONS PRECEDENT

7.1      Conditions to Each Party's Obligation to Effect the Exchange.

         The  respective  obligation  of each  party to effect the  Exchange  is
subject to the satisfaction or written waiver of the following conditions:

         (a)  No  Injunctions  or  Restraints.  No  statute,  rule,  regulation,
temporary restraining order,  preliminary or permanent injunction or other order
issued  by any court of  competent  jurisdiction  or other  legal  restraint  or
prohibition  preventing  the  consummation  of the Exchange  shall be in effect;
provided,  however,  that the party invoking this  condition  shall use its best
efforts  to have  any  such  temporary  restraining  order,  injunction,  order,
restraint or prohibition vacated.

         (b) Governmental and Regulatory Consents. All material filings required
to be made prior to the Closing  with,  and all  material  consents,  approvals,
permits and  authorizations  required to be obtained  prior to the Closing from,

                                       13
<PAGE>

Governmental  Entities,  in  connection  with the execution and delivery of this
Agreement  and the  consummation  of the  transactions  contemplated  hereby  by
Holding Co and Public  Company  will have been made or obtained (as the case may
be).

7.2      Conditions to Obligations of Holding Co and the Shareholders.

         The  obligations  of  Holding  Co and the  Shareholders  to effect  the
Exchange are further  subject to the  satisfaction or written waiver on or prior
to the Closing of the following conditions:

         (a) Representations and Warranties.  The representations and warranties
of Public Company set forth in Article V that are qualified as to materiality or
Material  Adverse Effect shall be true and correct and the  representations  and
warranties  of Public  Company set forth in Article V that are not so  qualified
shall be true and  correct  in all  material  respects,  in each  case as of the
Closing, except to the extent such representations and warranties speak as of an
earlier date. In addition, all such representations and warranties shall be true
and  correct as of the  Closing,  except to the extent  such  representation  or
warranty  speaks of an earlier date (without  regard to any  qualifications  for
materiality  or  Material  Adverse  Effect)  except to the extent  that any such
failure to be true and correct  (other than any such failure the effect of which
is  immaterial)  individually  and in the aggregate with all such other failures
would not have a Material  Adverse Effect,  and Holding Co and the  Shareholders
shall have  received  a  certificate  signed on behalf of Public  Company by the
chief  executive  officer  of Public  Company  to the  effect  set forth in this
paragraph.

         (b) Performance of Obligations of Public Company.  Public Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing.

         (c) Board  Representation.  At the  Closing  and  pursuant to a written
consent  to action of the Board of  Directors  of Public  Company,  the Board of
Directors (a) shall appoint  Xiangqian Li as a member of the Board of Directors,
and (b) all existing officers shall resign as officers of Public Company.

         (d) Current Report and Registration Statement.  Simultaneously with the
Closing,  Public Company shall file with the Securities and Exchange  Commission
(i) a  Current  Report  on  Form  8-K to  report  the  transaction  contemplated
hereunder and (ii) a  registration  statement to register those shares issued to
those  stockholders  of Holding Co who  participated  in  Holding  Co's  private
offering of securities deemed consummated on the Effective Date.

7.3      Conditions to Obligations of Public Company.

         The  obligation  of Public  Company to effect the  Exchange  is further
subject  to the  satisfaction  or  written  waiver on or prior to Closing of the
following conditions:

         (a) Representations and Warranties.  The representations and warranties
of Holding Co set forth in Article IV and the  Shareholders set forth in Article
III that are qualified as to  materiality  or Material  Adverse  Effect shall be
true and correct and the  representations and warranties of Holding Co set forth
in Article  IV and the  Shareholders  set forth in  Article  III that are not so
qualified shall be true and correct in all material respects, in each case as of
the Closing. In addition,  all such representations and warranties shall be true
and  correct as of the  Closing,  except to the extent  such  representation  or
warranty  speaks of an earlier date (without  regard to any  qualifications  for
materiality  or  Material  Adverse  Effect)  except to the extent  that any such
failure to be true and correct  (other than any such failure the effect of which
is  immaterial)  individually  and in the aggregate with all such other failures
would not have a Material Adverse Effect, and Public Company shall have received
a  certificate  signed on behalf of Holding Co by the president of Holding Co to
the effect set forth in this paragraph.

                                       14
<PAGE>

         (b)  Performance  of  Obligations  of Holding Co and the  Shareholders.
Holding Co and the  Shareholders  shall have performed in all material  respects
all  obligations  required to be  performed  by them under this  Agreement at or
prior to the Closing.

7.4      Frustration of Closing Conditions.

         None of Public Company,  the Shareholders or Holding Co may rely on the
failure of any  condition set forth in Sections 7.1, 7.2 or 7.3, as the case may
be, to be satisfied  if such  failure was caused by such party's  failure to use
reasonable   efforts  to  commence  or  complete  the  Exchange  and  the  other
transactions contemplated by this Agreement.

                                  ARTICLE VIII.
                               GENERAL PROVISIONS

8.1      Survival of Representations and Warranties.

         Except  as  otherwise  contemplated  herein,  the  representations  and
warranties in this  Agreement and in any instrument  delivered  pursuant to this
Agreement shall survive the Closing for a period of two years.

8.2      Fees and Expenses.

         Each party hereto shall pay its own expenses incident to preparing for,
entering  into and  carrying  out this  Agreement  and the  consummation  of the
transactions contemplated hereby.

8.3      Definitions.

         For purposes of this Agreement, and except as otherwise defined in this
Agreement:

         (a)  "Affiliate"  of any person means  another  person that directly or
indirectly,  through one or more intermediaries,  controls, is controlled by, or
is under common control with, such first person;

         (b)  "Governmental  Entity" means any domestic or foreign  governmental
agency or regulatory authority;

         (c) "Knowledge" means actual  knowledge.  In order for an individual to
have  Knowledge of a fact or matter,  the  individual  must be actually aware of
that fact or matter.  A Person (other than an individual) will be deemed to have
Knowledge of a particular  fact or matter if any individual  who is serving,  or
who has at any time served, as a director, officer, partner, executor or trustee
of that Person (or in any similar  capacity) has, or at any time had,  Knowledge
of that fact or matter.

         (d) "Liens" means,  collectively,  all material pledges, claims, liens,
charges,   mortgages,   conditional   sale  or   title   retention   agreements,
hypothecations,  collateral assignments, security interests, easements and other
encumbrances of any kind or nature whatsoever;

         (e) "Material Adverse Effect" with respect to any Person means an event
that has had or would  reasonably be expected to have a material  adverse effect
on the business, financial condition or results of operations of such Person and
its subsidiaries taken as a whole;

         (f) "Permits"  means  federal,  state,  local and foreign  governmental
approvals, authorizations, certificates, filings, franchises, licenses, notices,
permits an rights; and

         (g)  "Person"  means an  individual,  corporation,  partnership,  joint
venture, association, trust, unincorporated organization or other entity.

                                       15
<PAGE>

         (h) "Record" means  information  that is inscribed on a tangible medium
or that is  stored  in an  electronic  or other  medium  and is  retrievable  in
perceivable form.

         (i) "Securities Act" means the Securities Act of 1933, as amended.

         (j)  "Securities  Exchange  Act" means the  Securities  Exchange Act of
1934, as amended.

8.4      Usage.

         In this Agreement, unless a clear contrary intention appears:

         (a) the singular number includes the plural number and vice versa;

         (b)  reference to any Person  includes  such  Person's  successors  and
assigns  but,  if  applicable,  only  if such  successors  and  assigns  are not
prohibited by this Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually;

         (c) reference to any gender  includes each other gender or, in the case
of an entity, the neuter;

         (d)  reference  to any  agreement,  document or  instrument  means such
agreement, document or instrument as amended or modified and in effect from time
to time in accordance  with the terms  thereof,  and shall be deemed to refer as
well to all addenda, exhibits and schedules;

         (e) reference to a Section or Schedule,  such  reference  shall be to a
Section of, or a Schedule to, this Agreement unless otherwise indicated

         (f) reference to any law means such law as amended, modified, codified,
replaced  or  reenacted,  in whole or in part,  and in effect from time to time,
including  rules and  regulations  promulgated  thereunder  and reference to any
section or other provision of any law means that provision of such law from time
to time in effect and  constituting  the  substantive  amendment,  modification,
codification, replacement or reenactment of such section or other provision;

         (g) the table of contents and headings  contained in this Agreement are
for  reference  purposes  only and shall not  affect in any way the  meaning  or
interpretation of this Agreement.

         (h) "hereunder",  "hereof",  "hereto" and words of similar import shall
be deemed  references  to this  Agreement  as a whole and not to any  particular
Article, Section or other provision thereof;

         (i)  "including"  (and  with  correlative   meaning   "include")  means
including  without  limiting the  generality of any  description  preceding such
term;

         (j) "or" is used in the inclusive sense of "and/or;" and

         (k) with  respect to the  determination  of any period of time,  "from"
means "from and including" and "to" means "to but excluding."

8.5      Notices.

         All notices,  requests,  claims, demands and other communications under
this  Agreement  shall be in  writing  and  shall be deemed  given if  delivered
personally  or sent by overnight  courier  (providing  proof of delivery) to the
parties at the  following  addresses  (or at such other  address  for a party as
shall be specified by like notice):

                                       16
<PAGE>

         (a) if to Public Company prior to the Closing to:

                                Timothy P. Halter
                                12890 Hilltop Road
                                Argyle, Texas 76226
                                Telephone: (972) 233-0300

         (b) if to Holding Co and to Public Company after the Closing to

                                BAK Industrial Park
                                No. 1 BAK Street, Kuichang Town
                                Longgang District, Shenzhen, China
                                Telephone:

8.6      Counterparts.

         This Agreement may be executed in two or more counterparts.

8.7      Entire Agreement; Third-Party Beneficiaries.

         This Agreement  constitutes  the entire  agreement,  and supersedes all
prior  agreements and  understandings,  both written and oral, among the parties
with  respect to the subject  matter of this  Agreement.  This  Agreement is not
intended to confer upon any Person  other than the parties  hereto and the third
party  beneficiaries  referred  to in the  following  sentence,  any  rights  or
remedies. The parties hereto expressly intend the provisions of Sections 6.1 and
6.2 to confer a benefit upon and be enforceable by, as third party beneficiaries
of this Agreement, the third Persons referred to in, or intended to be benefited
by, such provisions.

8.8      Governing Law.

         THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,
THE LAWS OF THE STATE OF NEVADA  REGARDLESS  OF THE LAWS  THAT  MIGHT  OTHERWISE
GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

8.9      Assignment.

         Neither this Agreement nor any of the rights,  interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or  otherwise  by any of the parties  without the prior  written  consent of the
other parties,  and any such  assignment  that is not consented to shall be null
and void.  Subject to the preceding  sentence,  this  Agreement  will be binding
upon,  inure to the  benefit  of, and be  enforceable  by, the parties and their
respective successors and assigns.

8.10     Enforcement.

         The parties agree that irreparable damage would occur in the event that
any of the provisions of this  Agreement  were not performed in accordance  with
their specific terms or were otherwise  breached.  It is accordingly agreed that
the  parties  shall be  entitled  to an  injunction  or  injunctions  to prevent
breaches of this Agreement and to enforce  specifically the terms and provisions
of this  Agreement  in any court of the  United  States  located in the State of
Nevada, this being in addition to any other remedy to which they are entitled at
law or in equity.

                                       17
<PAGE>

8.11     Severability.

         Whenever  possible,  each provision or portion of any provision of this
Agreement  will be interpreted in such manner as to be effective and valid under
applicable  law  but if any  provision  or  portion  of any  provision  of  this
Agreement is held to be invalid,  illegal or  unenforceable in any respect under
any applicable law or rule in any jurisdiction, so long as the economic or legal
substance of the transactions  contemplated hereby is not affected in any manner
materially adverse to any party, such invalidity, illegality or unenforceability
will not  affect  any  other  provision  or  portion  of any  provision  in such
jurisdiction,  and this  Agreement  will be reformed,  construed and enforced in
such  jurisdiction  as if such invalid,  illegal or  unenforceable  provision or
portion of any provision had never been contained herein.

         IN WITNESS  WHEREOF,  Public Company,  Holding Co and the  Shareholders
have executed this Agreement to be effective as of the Effective Date.

                                   MEDINA COFFEE, INC.

                                   By: /s/ Timothy P. Halter
                                      ------------------------------------------
                                      Timothy P. Halter, Chief Executive Officer

                                   BAK INTERNATIONAL, LTD.

                                   By: /s/ Xiangqian Li
                                      ------------------------------------------
                                      Xiangqian Li, President

                                       18
<PAGE>

                                      SKY TARGET INTERNATIONAL, LIMITED

                                      By: /s/
                                         -----------------------------

                                      Its:
                                          ----------------------------

                                      KENWELL INTERNATIONAL LIMITED

                                      By: /s/
                                         -----------------------------

                                      Its:
                                          ----------------------------

                                       19
<PAGE>

                                      SHAREHOLDERS

                                      By: /s/
                                         ---------------------------

                                       20

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