Document:

Summary of Loan Agreement
Entered into by and between Shenzhen BAK Battery Co., Ltd. (“the Company”) and
Shenzhen Eastern Branch, Agricultural Bank of China (“the Creditor”) dated
September 19, 2008

    

    Main
contents

    
      	
              Ø

            	
              Contract
      number: NO.81101200800001465;

            

    

    
      	
              Ø

            	
              Loan
      principal: RMB 131 million;

            

    

    
      	
              Ø

            	
              Loan
      term: from the date loan is provided to December 31,
  2008;

            

    

    
      	
              Ø

            	
              Floating
      interest rate: annually 6.21%, adjusted every 3
  months;

            

    

    
      	
               
      

            	
              n

            	
              Penalty
      interest rate for delayed repayment: 6.21% plus 50%
  *6.21%;

            

    

    
      	
               
      

            	
              n

            	
              Penalty
      interest rate for embezzlement of loan proceeds: 6.21%
  *1;

            

    

    
      	
              Ø

            	
              Purpose
      of the loan is to provide working capital for purchasing raw
      materials;

            

    

    
      	
              Ø

            	
              Advanced
      repayment of loan needs to be approved by the
  Creditor;

            

    

    
      	
              Ø

            	
              Breach
      of contract penalties: correct the breach of contract; suspension of loan
      un-provided, demand prepayment of loan principal and interest before
      maturity; imposition of punitive interest incurred due to delayed loan;
      imposition of punitive interest for embezzlement of loan; imposition of
      plural interest for unpaid interest; withdraw from any accounts of the
      Company the loan principal and interest; compensation for the Creditor’s
      expenses incurred due to the Company’s breach of contract such as lawyer’s
      fee.

            

    

    
      	
              Ø

            	
              Guarantee
      contract for this loan agreement: Guarantee Contract of Maximum Amount
      (No. 81905200800000212);

            

    

    
      	
              Ø

            	
              Supplemental:
      The Company undertakes to pledge the Land Use Right
      Certificate(“Certificate”) of BAK Industrial Park to the Creditor as soon
      as obtaining the Certificate;

            

    

    

    Headlines
of the articles omitted:

    Ø       Loan
arrangement

    Ø       Interest
clearing of the loan

    Ø       Payment
of the loan

    Ø       Interest
penalty of loan

    Ø       Rights
and obligation of the Company

    Ø       Rights
and obligations of the Creditor

    Ø       Breach
of contract responsibility

    Ø       Validity

    Ø       TextBank
of China Credit Loan certificate

    

    
      
        
          
            
              
                
                  
                    
                      
                        	      
                                Credit Ref.: Loan
      Agreement 08854472

                              	
                                 

                                Date: August 19,
      2008

                                                    /s/Bank’s
      Seal

                              
	
                                Credit
      Account:

                                Account Name: Shenzhen
      BAK Battery Co., Ltd.

                                Amount: RMB THIRTY
      MILLION ONLYBank
of China Shenzhen Branch Loan certificate

    

    
      
        
          
            
              
                
                  
                    
                      	
                              Printed Date: August 29,
      2008

                            
	
                              Customer No.:
      0575050

                            	
                              Branch Code:
      101

                            	 
      
	
                              Customer Name: Shenzhen
      BAK Battery Co., Ltd.

                            	 
      

                    

                  

                

              

            

          

        

      

    

    
      
        
          
            
              
                	
                        Loan
      Account

                      	
                        Loan
      Amount

                      	
                        OSF
      Balance

                      	
                        Ref.

                      
	 
      	
                        RMB
      SEVENTY MILLION ONLY

                      	
                        RMB
      SEVENTY MILLION ONLY

                      	
                        Contract
      No.:08854727

                      
	
                        Amount in
      total   (In
      Majuscule)         RMB
      SEVENTY MILLION ONLY

                                        (In
      Minuscule)         CNY
      70,000,000.00

                      
	
                        Value Date: August 29,
      2008   Annual Interest Rate:
      7.8435%

                        Contract No.:
      08854727               Expire Date: August 29,
      2009

                        Transaction No.:
      101LAAA08021802Guaranty Contract of Maximum
Amount Entered Between BAK International (Tianjin) Limited, BAK International
Limited, Xiangqian Li and Shenzhen Eastern Branch, Agricultural Bank of China
(“Agricultural Bank”) on September 17th, 2008

    Summary
of the main articles

    
      	
              Ø

            	
              Contract
      number: 81905200800000212;

            

    

    
      	
              Ø

            	
              As
      guarantors, BAK Tianjin, BAK International and Xiangqian Li undertakes to
      assume joint liabilities for Shenzhen BAK Battery Co., Ltd (“Shenzhen
      BAK”)’s indebtedness under the Loan Agreement (No. 81101200600001989) and
      the maximum amount secured is RMB355
million.

            

    

    
      	
              Ø

            	
              Secured
      items include the loan principal, interest, penalty interest, breach of
      contract compensation and all the expenses incurred for Agricultural Bank
      to realize its creditor’s right under the Loan Agreement
  ;

            

    

    
      	
              Ø

            	
              The
      type of the guaranty is joint liability guaranty; the guarantors undertake
      joint liabilities to the creditor.

            

    

    
      	
              Ø

            	
              Guaranty
      period:

            

    

    
      	
               
      

            	
              n

            	
              Two
      years from the expiry date that Shenzhen BAK should fulfill its
      obligations in accordance with Loan
Agreement;

            

    

    
      	
               
      

            	
              n

            	
              For
      the acceptance of commercial drafts, issuance of Letter of Credit and
      issuance of Letter of Guarantee, the term is two years from the creditor’s
      disbursement;

            

    

    
      	
               
      

            	
              n

            	
              For
      discounted commercial drafts, the term is two years from the expiry date
      of the discounted commercial
drafts;

            

    

    
      	
               
      

            	
              n

            	
              If
      the term of the Loan Agreement is extended, guaranty period shall be two
      years from the expiry date for the Company to fulfill its obligations
      according to the extended
agreement;

            

    

    
      	
              Ø

            	
              Breach
      of contract penalties: compensation for the Guarantor’ loss incurred due
      to the Creditor’s breach of contract; imposition penalties at the maximum
      of 15% of the guaranteed indebtedness, and full compensation for the
      Creditor’s loss incurred due to the Guarantor’s breach of
      contract.

            

    

    

    Summary
of the articles omitted:

    
      	
              Ø

            	
              Commitment
      of the guarantors

            

    

    
      	
              Ø

            	
              Confirmation
      of the creditor’s guaranteed rights

            

    

    
      	
              Ø

            	
              Undertaking
      of the guaranteed liabilities

            

    

    
      	
              Ø

            	
              Breach
      of contract obligation

            

    

    
      	
              Ø

            	
              Dispute
      settlement

            

    

    
      	
              Ø

            	
              Miscellaneous

            

    

    
      	
              Ø

            	
              Validity

            

    

    
      	
              Ø

            	
              Text
      copies

            

    

    
      	
              Ø

            	
              NotesSummary of Shenzhen Land Use
Right Grant Agreement Entered into by and between Shenzhen Municipal Bureau of
Land Resources and Housing Management (“Party A”)and Shenzhen BAK Battery Co.,
Ltd (“Party B”) on June 29th, 2007

      

      Main
Terms:

      
        	
                Ø

              	
                On
      the signing date of this agreement, Party A assigns the land use right of
      the land no. G15322-0057) with an area of 199,998.43 square meters to Part
      B, and Party B has no objection to the current status of the land. It
      deems that the Party A has delivered the land to Party B since the signing
      date of the agreement.

              

      

      
        	
                Ø

              	
                The
      term for the land use right is 50 years, from June 29th,
      2007 to June 28th,
      2057;

              

      

      
        	
                Ø

              	
                The
      ownership of the land is People’s Republic of China. Both natural resource
      and treasure trove under the ground are out of the range of the remised
      right to the use of land.

              

      

      
        	
                Ø

              	
                The
      regulation for land usage:

              

      

      
        
          
            	
                  	
                    2

                  	
                    Coverage
      ratio (Construction density): ≤45%;

                  
	 	 	 

          

        

      

      
        
          
            
              	
                    	
                      2

                    	
                      Plot
      ratio (construction area density): ≤1.20;

                    
	 	 	 

            

          

        

      

      
        
          
            	
                  	
                    2

                  	
                    Total
      construction area should be less than 240,000 square
      meters;

                  

          

        

      

      
        	
                Ø

              	
                The
      land use right fee includes:

              

      

      
        
          	
                	
                  2

                	
                  Land
      grant fee is RMB 13,383,239;

                

        

      

      
        
          	
                	
                  2

                	
                  Land
      development fee is RMB 19,999,843;
      and

                

        

      

      
        
          	
                	
                  2

                	
                  Related
      municipal utility facilities fee is RMB
      55,838,513.

                

        

      

      
        
          	
                	
                  2

                	
                  A
      total of RMB 89,221,595,

                

        

      

      The
retainer fee for signing of this agreement is 20% of the land grant
fee.

      
        	
                Ø

              	
                Party
      B agrees to pay off the land use right fee on the date of signing this
      agreement.

              

      

      

      Summary
of the articles omitted:

      
        	
                Ø

              	
                Overdue
      payment

              

      

      
        	
                Ø

              	
                Government
      law

              

      

      
        	
                Ø

              	
                Maturity
      and renew regulations

              

      

      
        	
                Ø

              	
                Validity

              

      

      
        	
                Ø

              	
                Dispute
      settlement

              

      

      
        	
                Ø

              	
                Miscellaneous

              

      

      
        	
                Ø

              	
                Text
      copies

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