Common use of Representations and Warranties; Covenants; Survival Clause in Contracts

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the Closing Date: (a) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (b) Except as otherwise described in the Disclosure Documents, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (c) The audited financial statements of BAK as of September 30, 2003 and 2004 including the notes contained therein, fairly present the financial position of BAK at the respective dates thereof and the results of its operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30, 2004, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. (d) The Company, by appropriate and required corporate action, has, or will have prior to the closing, duly authorized the execution of this Agreement and the issuance and delivery of the Common Shares. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this Agreement, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (h) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (i) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (j) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable state. (k) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. (l) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless the Subscribers from and against all fees, commissions or other payments owing by the Company to any other person or firm acting on behalf of the Company hereunder.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of at the Closing DateDate on which Subscriber purchases Common Shares: (a) The Company has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms. The Company need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (b) The Company and each of its subsidiaries subsidiaries, if any, are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany's filings with the SEC, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiaries, if any, or which concerns the transactions contemplated by this Agreement. (c) The audited financial statements of BAK as of September 30, 2003 and 2004 including the notes contained therein, fairly present the financial position of BAK at the respective dates thereof and the results of its operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30, 2004, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. (d) The Company, by appropriate and required corporate action, has, or will have prior to the closingClosing, duly authorized the execution of this Agreement and the issuance and delivery of the Common Shares. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Articles of Incorporation of the Company, as amended and currently in effect, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. The issuance of the Common Shares hereunder will not trigger any outstanding antidilution rights. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Articles of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its charter or by-laws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (h) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hi) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (ij) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (jk) The Company has filed all material tax returns required to be filed, which returns are true and correct in all material respects, and the Company is not in default in the payment of any taxes, including penalties and interest, assessments, fees and other charges, shown thereon due or otherwise assessed, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without interest which were payable pursuant to said returns or any assessments with respect thereto. (l) The Company has not taken any action outside the ordinary course of business designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Shares to facilitate the sale or resale of the Common Shares in any manner in contravention of applicable securities laws. (m) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (kn) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. The issuance of the Shares to the Subscriber will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of the Securities Act. The Company will not make any offers or sales of any security (other than the Common Shares) that would cause the offering of the Common Shares to be integrated with any other offering of securities by the Company for purposes of any registration requirement under the Securities Act or any applicable rules of Nasdaq. (lo) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer The Company is in material compliance with all applicable securities (or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation "Blue Sky") laws of the Going Public Transaction, except states of the United States in connection with the issuance and sale of the Common Shares to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock MarketSubscriber. (mp) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless use all commercially reasonable efforts to keep the Subscribers from and against all fees, commissions or other payments owing by Common Shares quoted on the Company to any other person or firm acting on behalf of the Company hereunderOTC Bulletin Board.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of at the Closing DateDate on which Subscriber purchases Common Shares: (a) The Company has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms. The Company need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (b) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany's filings with the SEC, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (c) The audited financial statements of BAK as of September 30, 2003 and 2004 including the notes contained therein, fairly present the financial position of BAK at the respective dates thereof and the results of its operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30, 2004, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. (d) The Company, by appropriate and required corporate action, has, or will have prior to the closingClosing, duly authorized the execution of this Agreement and the issuance and delivery of the Common Shares. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Certificate of Incorporation of the Company, as amended and currently in effect, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. The issuance of the Common Shares hereunder will not trigger any outstanding antidilution rights. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Certificate of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its charter or by-laws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (h) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hi) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (ij) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (jk) The Company has filed all material tax returns required to be filed, which returns are true and correct in all material respects, and the Company is not in default in the payment of any taxes, including penalties and interest, assessments, fees and other charges, shown thereon due or otherwise assessed, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without interest which were payable pursuant to said returns or any assessments with respect thereto. (l) The Company has not taken any action outside the ordinary course of business designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Shares to facilitate the sale or resale of the Common Shares in any manner in contravention of applicable securities laws. (m) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (kn) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. The issuance of the Shares to the Subscriber will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of the Securities Act. The Company will not make any offers or sales of any security (other than the Common Shares) that would cause the offering of the Common Shares to be integrated with any other offering of securities by the Company for purposes of any registration requirement under the Securities Act or any applicable rules of Nasdaq. (lo) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer The Company is in material compliance with all applicable securities (or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation "Blue Sky") laws of the Going Public Transaction, except states of the United States in connection with the issuance and sale of the Common Shares to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock MarketSubscriber. (mp) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless use all commercially reasonable efforts to keep the Subscribers from and against all fees, commissions or other payments owing by Common Shares quoted on the Company to any other person or firm acting on behalf of the Company hereunderOTC Bulletin Board.

Representations and Warranties; Covenants; Survival. 4.1 4.1. The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the at each Closing Date: (a) The Company and each of its subsidiaries are corporations is a corporation duly organized, validly existing and in good standing under the laws of their jurisdiction its state of incorporation, with all requisite corporate power and authority to carry on the business in which they are it is engaged and to own the properties they ownit owns, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are is duly qualified and licensed to do business and are is in good standing in all jurisdictions where the nature of their its business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (b) Except as otherwise described in the Disclosure DocumentsPublic Reports, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Companyagainst, or that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common SharesStock, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (c) The Company's audited consolidated financial statements as of BAK December 31, 1999, contained in the Form 10-K, and its unaudited financial statements as of September 30, 2003 and 2004 2000, contained in the Form 10-Q (the "September 2000 10-Q"), including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30, 20042000, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements.statements or change in the capitalization of the Company as set forth in the September 2000 10-Q. (d) The Company, by appropriate and required corporate action, has, or will have prior to the closingInitial Closing, duly authorized the execution of this Agreement Agreement, including Appendix I, and the issuance and delivery of the Common SharesStock. The Common Shares are Stock is not subject to preemptive preemptive, antidilution or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Certificate of Incorporation of the Company, the Common Shares Stock will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Certificate of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure DocumentsPublic Reports, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, financial statement prepared or furnished, by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (h) This Agreement Agreement, including Appendix I, has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hi) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (ij) The Company has timely filed with the Securities and Exchange Commission (the "Commission") all documents required to be filed by the Company under the Exchange Act of 1934, as amended (the "Exchange Act"). (k) The Company intends to use the proceeds from the sale of the Shares for working capital and other general corporate purposes. The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares described in the proceeding sentence will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (jl) Subject to the accuracy of the Subscriber's Subscribers' representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (km) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. (l) Li Xiangqian, Purchasers. The issuance of the Shares to the Purchasers will not be integrated with any other issuance of the Company's and BAK's Chief Executive Officer has agreed that he securities (past, current or future) for purposes of the Securities Act or any applicable rules of Nasdaq. The Company will not sell, transfer make any offers or otherwise dispose sales of his holdings in either any security (other than the Shares) that would cause the offering of the Shares to be integrated with any other offering of securities by the Company or the Public Company, upon consummation for purposes of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand any registration rights to have the Make Good Shares registered requirement under the Securities ActAct or any applicable rules of Nasdaq. 4.2 The Company shall indemnify and hold harmless the Subscribers from and against all fees, commissions or other payments owing by the Company to any other person or firm acting on behalf of the Company hereunder.

Representations and Warranties; Covenants; Survival. 4.1 3.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of at the Closing DateDate on which Subscriber purchases Common Shares: (a) The Company has the full power and each authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its subsidiaries are corporations terms. The Company need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement (other than filings required to be made under applicable federal and state securities laws or with Nasdaq). (b) The Company is a corporation duly organized, validly existing and in good standing under the laws of their jurisdiction the State of incorporationDelaware, with all requisite corporate power and authority to carry on the business in which they are it is engaged and to own the properties they ownit owns, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are is duly qualified and licensed to do business and are is in good standing in all jurisdictions where the nature of their its business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Material Adverse Effect. The Company and its has no subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany’s filings with the Commission, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to would have a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiariesMaterial Adverse Effect, or which concerns the transactions contemplated by this Agreement. (cd) The Company’s audited financial statements of BAK as of September 30December 31, 2003 and 2004 2003, contained in the Form 10-K, including the notes contained therein, fairly present present, in all material respects, the financial position of BAK the Company at the respective dates date thereof and the results of its operations for the periods period purported to be covered thereby. Such financial statements have been prepared in accordance with Regulation S-X under the Act in all material respects and in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. All liabilities, contingent and other, of the Company, are set forth in the financial statements as of December 31, 2003 contained in the Form 10-K, excepting only liabilities incurred in the ordinary course of business subsequent to December 31, 2003, and liabilities of the type not required under generally accepted accounting principles to be reflected in such financial statements. Since September 30December 31, 20042003, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. As of February 29, 2004, the Company had 51,464,298 Common Shares outstanding. The capitalization of the Company, including the authorized capital stock, the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company’s stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock as of the Closing Date is as described in the SEC Filings. (de) The Company’s Registration Statement on Form S-3 (No. 333-101963) was declared effective by the Commission on January 2, 2003. The Registration Statement is effective on the date hereof and the Company has not received notice that the Commission has issued or intends to issue a stop order with respect to the Registration Statement or that the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends, to the Company’s knowledge, or has threatened in writing to do so. The Registration Statement (including the information or documents incorporated by reference therein), as of the time it was declared effective, and any amendments or supplements thereto, each as of the time of filing, did not contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The issuance of the Shares to the Subscriber is registered by the Registration Statement. Copies of the Registration Statement and Prospectus, any such amendment or supplement and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement that are not publicly available on the Commission’s website have been delivered to the Placement Agent and the Subscriber. Any reference herein to the Registration Statement, the Prospectus, or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated (or deemed to be incorporated) by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. (f) Each part of the Registration Statement, and the Prospectus, conforms in all material respects with the requirements of the Act and the rules and regulations thereunder; each part of the Registration Statement, does or will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus, on the date of filing thereof with the Commission does or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing shall not apply to statements or omissions in any such document made in reliance on information furnished to the Company by the Placement Agent specifically stating that it is intended for use in the Registration Statement, the Prospectus, or any amendment or supplement thereto. (g) The documents incorporated by reference in the Registration Statement or the Prospectus, or any amendment or supplement thereto, when they became effective under the Act or were filed with the Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as the case may be, conformed in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; except that the foregoing will not apply to statements or omissions in any such document made in reliance on information furnished to the Company by the Placement Agent specifically stating that it is intended for use in any such document. (h) Except as set forth in all documents required to be filed by the Company under the Exchange Act (collectively, the “SEC Filings”), the Company has (i) good and marketable title to all of the properties and assets owned by it, free and clear of all liens, charges, claims, security interests or encumbrances (collectively, “Encumbrances”), that would have a Material Adverse Effect, and is in (ii) possession under all leases to which it is party as lessee. All leases to which the Company is a party are valid and binding and no material default has occurred and is continuing thereunder, and no event or circumstance that with the passage of time or giving of notice, or both, would constitute such a material default has occurred and is continuing, and, to the best knowledge of the Company, no defaults by the landlord exist under any such leases. (i) The Common Shares are currently listed on the Nasdaq National Market under the symbol “GNVC” and no notice has been given by Nasdaq that the Company is in non-compliance with any provision of the rules and regulations of the Nasdaq National Market. (j) The Company has not sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any material loss (other than operating losses incurred in the ordinary course of the Company’s business or specifically described in the SEC Filings) or interference with the business of the Company, including without limitation, from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Prospectus; subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, (i) the Company has not incurred any liabilities or obligations, direct or contingent, or entered into any transactions, not in the ordinary course of business, that are material to the Company, and (ii) except as specifically described in the SEC Filings, since the date of the latest audited financial statements included or incorporated by reference in the Prospectus there has not been (A) any material change, in the authorized capital stock of the Company, (B) any material increase in the short-term debt or long-term debt of the Company, or (C) any material adverse change, or any development, that has a Material Adverse Effect. (k) There are no legal or governmental proceedings, contracts or documents of the Company of a character that are required to be described in or filed as exhibits to the Registration Statement or any of the documents incorporated by reference therein by the Act or the Exchange Act or by the rules and regulations of the Commission thereunder that have not been so described or filed as required. (l) The Company is not in violation of any provisions of its Amended and Restated Certificate of Incorporation, Bylaws or any other governing document as amended and in effect on and as of the date hereof or in default (and no event has occurred which, with notice or lapse of time or both, would constitute a default) under any indenture, mortgage, deed of trust, loan or credit agreement or any provision of any instrument or contract to which it is a party or by which it is bound, which would have a Material Adverse Effect. (m) The Company has not violated and is in compliance with all laws, statutes, ordinances, regulations, rules and orders of any foreign, federal, state or local government and any other governmental department or agency, and any judgment, decision, decree or order of any court or governmental agency, department or authority, except for such violations or noncompliance which, individually or in the aggregate, would not have a Material Adverse Effect. (n) Except as disclosed in the SEC Filings, the Company possesses such licenses, permits, consents, orders, certificates or authorizations issued by the appropriate federal, state, foreign or local regulatory agencies or bodies necessary to conduct its business as described in the Prospectus except for licenses, permits, consents, orders, certificates, authorizations, approvals, franchises or rights, the absence of which, individually or in the aggregate, would not have a Material Adverse Effect; the Company has not received any notice of proceedings or investigations relating to the revocation or modification of any such licenses, permits, consents, orders, certificates, authorizations, approvals, franchises or rights which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect. (o) KPMG, which has audited the financial statements of the Company included in the Prospectus, is, to the best of the Company’s knowledge, an independent public accountant as required by the Act and the Rules and Regulations. (p) Except as disclosed in the SEC Filings, the Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, tradenames, copyrights, trade secrets, licenses, information and proprietary rights and processes necessary for its business as now conducted (collectively, the “Company Intellectual Property Rights”) without any conflict with, or infringement of, the rights of others. The Company has not received any written communications alleging that the Company has violated or, by conducting its business, would violate any of the patents, trademarks, service marks, tradenames, copyrights, trade secrets or other proprietary rights or processes of any other person or entity. Except as disclosed in the SEC Filings, and to the Company’s knowledge, all Company Intellectual Property Rights are enforceable and there is no existing infringement by any person of such Company Intellectual Property Rights. All patent applications that have been filed by the Company with the Patent and Trademark Office have been duly filed by the Company and the Company has, in all material respects, taken all actions reasonably necessary to maintain the prosecution of such patent applications. (q) The Company, by appropriate and required corporate action, has, or will have prior to the closingClosing, duly authorized the execution of this Agreement and the issuance and delivery of the Common Shares. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Amended and Restated Certificate of Incorporation of the Company, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. The issuance of the Shares will not trigger any anti-dilution rights. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (h) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (ir) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "“investment company" ” within the meaning of the Investment Company Act of 1940, as amended. (js) Subject The Company has not taken any action outside the ordinary course of business designed to the accuracy or that might reasonably be expected to cause or result in stabilization or manipulation of the Subscriber's representations and warranties in Section 7 price of this Agreement, the offer, sale, and issuance Common Shares to facilitate the sale or resale of the Common Shares in conformity with the terms any manner in contravention of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable statesecurities laws. (kt) Neither the Company, nor to the Company’s knowledge any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the SubscriberSubscriber except for securities covered by a currently effective registration statement under the Act. (lu) Li XiangqianFor two years following the Closing Date, the Company's and BAK's Chief Executive Officer has agreed that he will not sellCompany shall use its best efforts to keep the Common Shares quoted on the Nasdaq National Market or an Eligible Market. For the purposes of this section, transfer or otherwise dispose “Eligible Market” shall mean any of his holdings in either the Company New York Stock Exchange, the American Stock Exchange or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Nasdaq Small Cap Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless the Subscribers from and against all fees, commissions or other payments owing by the Company to any other person or firm acting on behalf of the Company hereunder.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as at the Closing of the Closing Date:purchase of the Shares and Warrant by Subscriber (the “Subscriber Closing”): (a) The Company has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms. The Company need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (b) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany’s filings with the SEC, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Preferred Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (cd) The Company’s audited consolidated financial statements of BAK as of September 30December 31, 2003 2007 and 2004 2008, contained in the Form 10-K, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30December 31, 20042008, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. The capitalization of the Company, including the authorized capital stock, the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company’s stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock as of November 16, 2009, is as described in Schedule 4.1(d) attached to this Agreement. (de) The Company owns the patents and patents pending and trademarks and trademarks pending listed in Schedule 4.1(e) attached hereto (collectively, the “Intellectual Property”). To the Company’s knowledge, the Company has the sole and exclusive right to use the Intellectual Property without infringing or violating the rights of any third parties. No claim has been asserted by any person to the ownership of or right to use any of the Intellectual Property or challenging or questioning the validity or effectiveness of any of the Intellectual Property. None of the Intellectual Property has been cancelled, abandoned or otherwise terminated and has been duly issued or filed, as applicable. The Company has no knowledge of any claim that, or inquiry as to whether, any product, activity or operation of the Company infringes upon or involves, or has resulted in the infringement of, any proprietary right of any other person, corporation or other entity; and no proceedings have been instituted, are pending or are threatened that challenge the rights of the Company with respect thereto. (f) The Company, by appropriate and required corporate action, has, or will have prior to the closingSubscriber Closing, duly authorized the execution of this Agreement and the issuance and delivery of the Common SharesShares and Warrants to Subscriber. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Articles of Incorporation, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. Neither the issuance of the Shares or Warrants issued hereunder, nor the shares of Common Stock, underlying the Shares and the Warrants (the “Underlying Shares”), will trigger any outstanding antidilution rights. (eg) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Articles of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its Articles of Incorporation or Bylaws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (fh) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (gi) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (j) This Agreement Agreement, including the Exhibits attached hereto, has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hk) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares and Warrants under this Agreement. (il) The Company has timely filed with the SEC all documents required to be filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (collectively, the “SEC Filings”). On their respective dates of filing, the SEC Filings complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC. (m) The Company is not now, and after the sale of the Common Shares and Warrants under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Preferred Shares will not be, an "“investment company" ” within the meaning of the Investment Company Act of 1940, as amended. (jn) The Company has filed all material tax returns required to be filed, which returns are true and correct in all material respects, and the Company is not in default in the payment of any taxes, including penalties and interest, assessments, fees and other charges, shown thereon due or otherwise assessed, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without interest which were payable pursuant to said returns or any assessments with respect thereto. (o) The Company has not taken any action outside the ordinary course of business designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Underlying Stock in any manner in contravention of applicable securities laws. (p) Subject to the accuracy of the Subscriber's ’s representations and warranties in Section 7 of this Agreement9 below, the offer, sale, and issuance of the Common Shares and Warrants in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "“Securities Act"”) and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (kq) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares and Warrants to the Subscriber. (l) Li Xiangqian, . The issuance of the Series F Preferred Stock and Warrants under the offering will not be integrated with any other issuance of the Company's and BAK's Chief Executive Officer has agreed that he ’s securities (past, current or future) for purposes of the Securities Act or any applicable rules of the American Stock Exchange. The Company will not sell, transfer make any offers or otherwise dispose sales of his holdings in either any security (other than the Company or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Series F Preferred Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants Warrants in the Offering. In ) that would cause the event offering of the Make Good Shares are delivered and Warrants to participants in be integrated with any other offering of securities by the Offering, the holders thereof shall be afforded demand Company for purposes of any registration rights to have the Make Good Shares registered requirement under the Securities Act. 4.2 (r) The Company shall indemnify and hold harmless the Subscribers from and against is in material compliance with all fees, commissions applicable securities (or other payments owing by the Company to any other person or firm acting on behalf “Blue Sky”) laws of the Company hereunderstates of the United States in connection with the issuance and sale of the Shares and Warrants to Subscriber and the issuance of the other shares of Series F Preferred Stock and Warrants to other subscribers in the Offering.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the at each Closing DateDate on which Subscriber purchases Common Shares: (a) The Company has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms. The Company need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (b) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany's filings with the SEC, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (cd) The Company's audited consolidated financial statements of BAK as of September December 31, 2002, contained in the Form 10-K/A and the unaudited financial statements for the three months and six months ended June 30, 2003 and 2004 2003, contained in the Form 10-Q/A, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September All liabilities, contingent and other, of the Company and its subsidiaries, are set forth in the financial statements as of June 30, 20042003 contained in the Form 10-Q/A, excepting only liabilities incurred in the ordinary course of business subsequent to June 30, 2003, and liabilities of the type not required under generally accepted accounting principles to be reflected in such financial statements. Since June 30, 2003, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. As of September 2, 2003, the Company had 29,719,837 Common Shares outstanding (29,917,753 as of September 24, 2003). The capitalization of the Company, including the authorized capital stock, the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company's stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock as of the Closing Date is as described in Schedule 4.1(d) attached to this Agreement. (de) The Company, by appropriate and required corporate action, has, or will have prior to the closingInitial Closing, duly authorized the execution of this Agreement and the issuance and delivery of the Common Shares. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Amended and Restated Certificate of Incorporation of the Company, as amended and currently in effect, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. The issuance of the Common Shares hereunder will not trigger any outstanding antidilution rights. (ef) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Certificate of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its charter or by-laws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (fg) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (gh) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (i) This Agreement Agreement, including Appendix I, has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hj) No Other than the listing of the Registrable Securities on the American Stock Exchange, no registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (ik) The Company has timely filed with the SEC all documents required to be filed by the Company under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (collectively, the "SEC Filings"). On their respective dates of filing, the SEC Filings complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC. (l) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (jm) The Company has filed all material tax returns required to be filed, which returns are true and correct in all material respects, and the Company is not in default in the payment of any taxes, including penalties and interest, assessments, fees and other charges, shown thereon due or otherwise assessed, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without interest which were payable pursuant to said returns or any assessments with respect thereto. (n) The Company has not taken any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Shares to facilitate the sale or resale of the Common Shares in any manner in contravention of applicable securities laws. (o) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (kp) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. The issuance of the Shares to the Subscriber will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of the Securities Act or any applicable rules of the American Stock Exchange. The Company will not make any offers or sales of any security (other than the Common Shares) that would cause the offering of the Common Shares to be integrated with any other offering of securities by the Company for purposes of any registration requirement under the Securities Act or any applicable rules of the American Stock Exchange. (lq) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the The Company or the Public Company, upon consummation of the Going Public Transaction, except is eligible to persons or entities who agree to be bound by the same restrictions, register securities for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed resale with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered SEC under Form S-3 promulgated under the Securities Act. (r) The Company is in material compliance with all applicable securities (or "Blue Sky") laws of the states of the United States in connection with the issuance and sale of the Common Shares to Subscriber and the issuance of the other Common Shares. (s) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (a) transactions are executed in accordance with management's general or specific authorization; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (c) access to assets is permitted only in accordance with management's general or specific authorization; and (d) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 4.2 The Company will take all action required to continue to be eligible to register securities for resale with the SEC under Form S-3 promulgated under the Securities Act. 4.3 The Company shall issue a press release and file a Current Report on Form 8-K with the SEC regarding the closing of the Offering within three (3) business days after the Final Closing. 4.4 The Company shall indemnify and hold harmless the Subscribers Subscriber from and against all fees, commissions or other payments owing by the Company to the Placement Agent or any other person or firm acting on behalf of the Company hereunder.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the Closing DateAgreement: (a) The Company is a corporation duly organized and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction the State of incorporationOklahoma, with all requisite corporate power entitled to own its property of a material nature and authority to carry on the its business of a material nature as and in which they are engaged places where such property is now owned or operated and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do such business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, is conducted except where the failure to be qualified or licensed would so qualify will not have a material adverse effect on the business of the Company and its subsidiaries, subsidiaries taken as a whole. (b) Except as otherwise described in Each of the Disclosure Documents, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge subsidiaries of the Company is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction of their respective incorporation, entitled to own their respective properties of a material nature and to carry on their respective businesses of a material nature in places where such properties are now owned or operated and such businesses are conducted, and there is no action or proceeding pending or, to the Company’s best knowledge threatened, against brought by or before any federal or state agency having jurisdiction over the Company, that could reasonably be expected to have operations of a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business nature of the Company and which threatens in any material respect the continued operation of any material phase of the Company’s business now conducted by it or its subsidiaries, or which concerns the transactions contemplated by this Agreement. (c) The Company’s audited financial statements of BAK as of September June 30, 2003 and 2004 including the notes contained therein2010, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30, 2004, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. (d) The Company, by appropriate and required corporate action, has, or will have prior to the closing, Initial Closing duly authorized the execution of this Agreement Agreement, and the issuance and delivery of the Common SharesSecurities. The Common Shares Securities are not subject to preemptive or other rights of any stockholders shareholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Articles of Incorporation of the Company, the Common Shares Securities will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrancesnonassessable. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Articles of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of a material nature of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (h) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (i) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (j) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable state. (k) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. (l) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless the Subscribers from and against all fees, commissions or other payments owing by the Company to any other person or firm acting on behalf of the Company hereunder.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as at the Closing of the Closing Date:purchase of the Shares and Warrant by Subscriber (the “Subscriber Closing”): (a) The Company has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms. The Company need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (b) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany’s filings with the SEC, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Preferred Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (cd) The Company’s audited consolidated financial statements of BAK as of September 30December 31, 2003 2007 and 2004 2008, contained in the Form 10-K, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30December 31, 20042008, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. As of April 21, 2009, the Company had no shares of Preferred Stock, no par value per share (the “Preferred Stock”), issued and outstanding. The capitalization of the Company, including the authorized capital stock, the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company’s stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock as of the Closing Date is as described in Schedule 4.1(d) attached to this Agreement. (de) The Company owns the patents and patents pending and trademarks and trademarks pending listed in Schedule 4.1(e) attached hereto (collectively, the “Intellectual Property”). To the Company’s knowledge, the Company has the sole and exclusive right to use the Intellectual Property without infringing or violating the rights of any third parties. No claim has been asserted by any person to the ownership of or right to use any of the Intellectual Property or challenging or questioning the validity or effectiveness of any of the Intellectual Property. None of the Intellectual Property has been cancelled, abandoned or otherwise terminated and has been duly issued or filed, as applicable. The Company has no knowledge of any claim that, or inquiry as to whether, any product, activity or operation of the Company infringes upon or involves, or has resulted in the infringement of, any proprietary right of any other person, corporation or other entity; and no proceedings have been instituted, are pending or are threatened that challenge the rights of the Company with respect thereto. (f) The Company, by appropriate and required corporate action, has, or will have prior to the closingSubscriber Closing, duly authorized the execution of this Agreement and the issuance and delivery of the Common SharesShares and Warrants to Subscriber. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Articles of Incorporation, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. Neither the issuance of the Shares or Warrants issued hereunder, nor the shares of Common Stock, underlying the Shares and the Warrants (the “Underlying Shares”), will trigger any outstanding antidilution rights. (eg) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Articles of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its Articles of Incorporation or Bylaws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (fh) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (gi) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (j) This Agreement Agreement, including the Exhibits attached hereto, has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hk) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares and Warrants under this Agreement. (il) The Company has timely filed with the SEC all documents required to be filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (collectively, the “SEC Filings”). On their respective dates of filing, the SEC Filings complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC. (m) The Company is not now, and after the sale of the Common Shares and Warrants under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Preferred Shares will not be, an "“investment company" ” within the meaning of the Investment Company Act of 1940, as amended. (jn) The Company has filed all material tax returns required to be filed, which returns are true and correct in all material respects, and the Company is not in default in the payment of any taxes, including penalties and interest, assessments, fees and other charges, shown thereon due or otherwise assessed, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without interest which were payable pursuant to said returns or any assessments with respect thereto. (o) The Company has not taken any action outside the ordinary course of business designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Underlying Stock in any manner in contravention of applicable securities laws. (p) Subject to the accuracy of the Subscriber's ’s representations and warranties in Section 7 of this Agreement9 below, the offer, sale, and issuance of the Common Shares and Warrants in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "“Securities Act"”) and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (kq) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares and Warrants to the Subscriber. (l) Li Xiangqian, . The issuance of the Series F Preferred Stock and Warrants under the offering will not be integrated with any other issuance of the Company's and BAK's Chief Executive Officer has agreed that he ’s securities (past, current or future) for purposes of the Securities Act or any applicable rules of the American Stock Exchange. The Company will not sell, transfer make any offers or otherwise dispose sales of his holdings in either any security (other than the Company or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Series F Preferred Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants Warrants in the Offering. In ) that would cause the event offering of the Make Good Shares are delivered and Warrants to participants in be integrated with any other offering of securities by the Offering, the holders thereof shall be afforded demand Company for purposes of any registration rights to have the Make Good Shares registered requirement under the Securities Act. 4.2 (r) The Company shall indemnify and hold harmless the Subscribers from and against is in material compliance with all fees, commissions applicable securities (or other payments owing by the Company to any other person or firm acting on behalf “Blue Sky”) laws of the Company hereunderstates of the United States in connection with the issuance and sale of the Shares and Warrants to Subscriber and the issuance of the other shares of Series F Preferred Stock and Warrants to other subscribers in the Offering.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at on the date of this Agreement and as of on the Closing Date: (a) The Company has the full power and authority to execute and deliver this Agreement and (b) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany’s filings with the SEC, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement.or (cd) The Company’s audited consolidated financial statements of BAK as of September December 31, 2002, contained in the Form 10-KSB and the unaudited financial statements for the six months ended June 30, 2003 and 2004 2003, contained in the Form 10-QSB, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September All liabilities, contingent and other, of the Company and its subsidiaries, are set forth in the financial statements as of June 30, 20042003 contained in the Form 10-QSB, excepting only liabilities incurred in the ordinary course of business subsequent to June 30, 2003, and liabilities of the type not required under generally accepted accounting principles to be reflected in such financial statements. Since June 30, 2003, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. The capitalization of the Company, including the authorized capital stock, the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company’s stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock as of the Closing Date is as described in Schedule 4.1(d) attached to this Agreement. (de) The Company, by appropriate and required corporate action, has, or will have prior to the closingClosing, duly authorized the execution of this Agreement and the issuance and delivery of the Common Shares. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Articles of Incorporation of the Company, as amended and currently in effect, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. The issuance of the Shares hereunder will not trigger any outstanding antidilution rights. (ef) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Articles of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its charter or by-laws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (fg) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (gh) This The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith, contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (i) Each of this Agreement and the Registration Rights Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hj) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection or (k) The Company has timely filed with the execution and delivery SEC all documents required to be filed by the Company under the Securities Exchange Act of this Agreement or 1934, as amended (the offering“Exchange Act”) (collectively, issuance or sale the “SEC Filings”). On their respective dates of filing, the SEC Filings complied in all material respects with the requirements of the Common Shares under this AgreementExchange Act and the rules and regulations of the SEC. (il) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "“investment company" ” within the meaning of the Investment Company Act of 1940, as amended. (jm) The Company has filed all material tax returns required to be filed, which returns are true and correct in all material respects, and the Company is not in default in the payment of any taxes, including penalties and interest, assessments, fees and other charges, shown thereon due or otherwise assessed, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without interest which were payable pursuant to said returns or any assessments with respect thereto. (n) The Company has not taken any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares in any manner in contravention of applicable securities laws. (o) Subject to the accuracy of the Subscriber's ’s representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "“Securities Act"”) and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (kp) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. (l) Li Xiangqian, . The issuance of the Shares to the Subscriber will not be integrated with any other issuance of the Company's and BAK's Chief Executive Officer has agreed that he ’s securities (past, current or future) for purposes of the Securities Act. The Company will not sell, transfer make any offers or otherwise dispose sales of his holdings in either any security (other than the Shares) that would cause the offering of the Shares to be integrated with any other offering of securities by the Company or the Public Company, upon consummation for purposes of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand any registration rights to have the Make Good Shares registered requirement under the Securities Act. (q) The Company is eligible to register securities for resale with the SEC under Form SB-2 promulgated under the Securities Act. (r) The Company is in material compliance with all applicable securities (or “Blue Sky”) laws of the states of the United States in connection with the issuance and sale of the Shares to Subscriber. (s) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (a) transactions are executed in accordance with management’s general or specific authorization; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 4.2 [Intentionally left blank.] 4.3 On or before 8:30 a.m., New York City time, on the business day immediately following the Closing 4.4 The Company shall indemnify and hold harmless the Subscribers Subscriber from and against all fees, commissions or other payments owing by the Company to the Placement Agent or any other person or firm acting on behalf of the Company hereunder.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the at each Closing DateDate on which Subscriber purchases Common Shares: (a) The Company has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms. The Company need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (b) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany's filings with the SEC, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (cd) The Company's audited consolidated financial statements of BAK as of December 31, 2001, contained in the Form 10-K and the unaudited financial statements for the three months and nine months ended September 30, 2003 and 2004 2002, contained in the Form 10-Q, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. All liabilities, contingent and other, of the Company and its subsidiaries, are set forth in the financial statements as of September 30, 2002 contained in the Form 10-Q, excepting only liabilities incurred in the ordinary course of business subsequent to September 30, 2002, and liabilities of the type not required under generally accepted accounting principles to be reflected in such financial statements. Since September 30, 20042002, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. As of December 31, 2002, the Company had 23,442,164 Common Shares outstanding. The capitalization of the Company, including the authorized capital stock, the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company's stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock as of the Closing Date is as described in Schedule 4.1(d) attached to this Agreement. (de) The Company, by appropriate and required corporate action, has, or will have prior to the closingInitial Closing, duly authorized the execution of this Agreement and the issuance and delivery of the Common Shares. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Amended and Restated Certificate of Incorporation of the Company, as amended and currently in effect, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. The issuance of the Common Shares hereunder will not trigger any outstanding antidilution rights. (ef) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Certificate of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its charter or by-laws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (fg) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (gh) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (i) This Agreement Agreement, including Appendix I, has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hj) No Other than the listing of the Registrable Securities on the American Stock Exchange, no registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (ik) The Company has timely filed with the SEC all documents required to be filed by the Company under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (collectively, the "SEC Filings"). On their respective dates of filing, the SEC Filings complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC. (l) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (jm) The Company has filed all material tax returns required to be filed, which returns are true and correct in all material respects, and the Company is not in default in the payment of any taxes, including penalties and interest, assessments, fees and other charges, shown thereon due or otherwise assessed, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without interest which were payable pursuant to said returns or any assessments with respect thereto. (n) The Company has not taken any action outside the ordinary course of business designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Shares to facilitate the sale or resale of the Common Shares in any manner in contravention of applicable securities laws. (o) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (kp) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. The issuance of the Shares to the Subscriber will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of the Securities Act or any applicable rules of the American Stock Exchange. The Company will not make any offers or sales of any security (other than the Common Shares) that would cause the offering of the Common Shares to be integrated with any other offering of securities by the Company for purposes of any registration requirement under the Securities Act or any applicable rules of Nasdaq. (lq) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the The Company or the Public Company, upon consummation of the Going Public Transaction, except is eligible to persons or entities who agree to be bound by the same restrictions, register securities for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed resale with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered SEC under Form S-3 promulgated under the Securities Act. (r) The Company is in material compliance with all applicable securities (or "Blue Sky") laws of the states of the United States in connection with the issuance and sale of the Common Shares to Subscriber and the issuance of the other Common Shares. (s) The Company shall use all commercially reasonable efforts to obtain, prior to the effective date of the Registration Statement, approval for listing of the Registrable Securities on the American Stock Exchange. 4.2 The Company will take all action required to continue to be eligible to register securities for resale with the SEC under Form S-3 promulgated under the Securities Act. 4.3 The Company shall issue a press release and file a Current Report on Form 8-K with the SEC regarding the closing of the Offering within three (3) business days after the Final Closing. 4.4 The Company shall indemnify and hold harmless the Subscribers Subscriber from and against all fees, commissions or other payments owing by the Company to the Placement Agent or any other person or firm acting on behalf of the Company hereunder.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the at each Closing DateDate on which Subscriber purchases Securities: (a) The Company and each of its material subsidiaries are corporations duly organizedincorporated, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its material subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its material subsidiaries, taken as a whole. (b) Except as otherwise described in the Disclosure Documents, there There are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiariessubsidiaries taken as a whole, or which concerns the transactions contemplated by this Agreement. (c) The Company's audited consolidated financial statements of BAK as of September 30December 31, 2003 and 2004 2000, contained in the Form 10-K, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. All liabilities, contingent and other, of the Company and its subsidiaries, are set forth in the financial statements as of September 30, 2001 contained in the Form 10-Q, excepting only liabilities incurred in the ordinary course of business subsequent to December 31, 2000, and liabilities of the type not required under generally accepted accounting principles to be reflected in such financial statements. Since September 30, 2004, 2001 there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. Prior to the issuance of shares contemplated by this Agreement, the Company has 45,998,609 shares of Common Stock outstanding. The capitalization of the Company , including the authorized capital stock, the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company's stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock as of the Closing Date is as described in Schedule 4.1(c) attached to this Agreement. (d) The Company, by appropriate and required corporate action, has, or will have prior to the closingInitial Closing, (i) duly authorized the execution of this Agreement and the issuance and delivery of the Securities and (ii) reserved for issuance sufficient shares of Common SharesStock as may be necessary from time to time to be issued upon exercise of the Warrants (the "Underlying Common Stock"). The Neither the Securities nor the Underlying Common Shares Stock are not subject to preemptive preemptive, anti-dilution or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Certificate of Incorporation of the Company, the Securities and the shares of Underlying Common Shares Stock will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Certificate of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its charter or by-laws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) No representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith, taken together, contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (h) This Agreement Agreement, including Appendix I, has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hi) No Other than the filing of a Form D with the SEC and any state Blue Sky filings, which shall in each case be made prior to the Closing Date, if so required, or if not so required, as soon after the Closing Date as is reasonably practicable, no registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares Securities under this Agreement. (ij) The Company has timely filed with the Securities and Exchange Commission (the "Commission") all documents required to be filed by the Company under the Exchange Act of 1934, as amended (the "Exchange Act"). On their respective dates of filing, the SEC Filings complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC. (k) The Company is not now, and after the sale of the Common Shares Securities under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares Securities will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (jl) Subject to the accuracy of the Subscriber's 's' representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares Securities in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (km) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares Securities to the Subscriber. The issuance of the Securities to the Subscribers will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of the Securities Act or any applicable rules of Nasdaq. The Company will not make any offers or sales of any security (other than the Securities) that would cause the offering of the Securities to be integrated with any other offering of securities by the Company for purposes of any registration requirement under the Securities Act or any applicable rules of Nasdaq. (ln) Li XiangqianThe Company is eligible, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation of the Going Public Transaction, except take all action required to persons or entities who agree continue to be bound by eligible, to register the same restrictions, Shares for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed resale with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered SEC under Form S-3 promulgated under the Securities Act. 4.2 (o) The Company shall indemnify issue a press release and hold harmless file a Current Report on Form 8-K with the Subscribers from SEC regarding the closing of the Offering within three (3) business days after the Final Closing. (p) The Company has the sole and against all feesexclusive right to use the Intangibles (as defined below) without infringing or violating the rights of any third parties. There is no outstanding claim asserted by any person to the ownership of or right to use any Intangibles or challenging or questioning the validity or effectiveness of any license or agreement constituting a part of the Intangibles. The Company has no knowledge of any claim that, commissions or other payments owing by the Company inquiry as to whether, any other person product, activity or firm acting on behalf operation of the Company hereunderinfringes upon or involves, or has resulted in the infringement of, any proprietary right of any other person, corporation or other entity; and no proceedings have been instituted, are pending or are threatened that challenge the rights of the Company with respect thereto. "Intangibles" means all patents, trademarks, trade names, trade applications, service marks, registrations, copyrights, rights under licenses and similar intangible rights and applications therefore of the Company. The Company has taken and in the future will take all reasonable steps necessary to protect the Intangibles from infringement by third parties.

Representations and Warranties; Covenants; Survival. 4.1 4.1. The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the at each Closing DateDate on which Subscriber purchases Shares: (a) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (b) Except as otherwise described in the Disclosure Documents, there There are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common SharesStock, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (c) The Company's audited consolidated financial statements of BAK as of September December 30, 2003 and 2004 2000, contained in the Form 10-K, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September All liabilities, contingent and other, of the Company and its subsidiaries, are set forth in the financial statements as of December 30, 20042000 contained in the Form 10-K, excepting only liabilities incurred in the ordinary course of business subsequent to December 30, 2000, and liabilities of the type not required under generally accepted accounting principles to be reflected in such financial statements. Since December 30, 2000, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. Prior to the issuance of shares contemplated by this Agreement, the Company has 29,843,044 shares of Common Stock outstanding. (d) The Company, by appropriate and required corporate action, has, or will have prior to the closingInitial Closing, duly authorized the execution of this Agreement and the issuance and delivery of the Common SharesStock. The Common Shares are Stock is not subject to preemptive preemptive, antidilution or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Articles of Incorporation of the Company, the Common Shares Stock will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Articles of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (h) This Agreement Agreement, including Appendix I, has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hi) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (ij) The Company has timely filed with the Securities and Exchange Commission (the "Commission") all documents required to be filed by the Company under the Exchange Act of 1934, as amended (the "Exchange Act"). (k) The Company intends to use the proceeds from the sale of the Shares for the purposes described in the Memorandum. The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares described in the proceeding sentence will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (jl) Subject to the accuracy of the Subscriber's Subscribers' representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (km) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the SubscriberPurchasers. The issuance of the Shares to the Purchasers will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of the Securities Act or any applicable rules of Nasdaq. The Company will not make any offers or sales of any security (other than the Shares) that would cause the offering of the Shares to be integrated with any other offering of securities by the Company for purposes of any registration requirement under the Securities Act or any applicable rules of Nasdaq. (ln) Li XiangqianThe Company is eligible, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation of the Going Public Transaction, except take all action required to persons or entities who agree continue to be bound by the same restrictionseligible, to register securities for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed resale with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered SEC under Form S-3 promulgated under the Securities Act. 4.2 (o) The Company shall indemnify issue a press release and hold harmless file a Current Report on Form 8-K with the Subscribers from and against all fees, commissions or other payments owing by SEC regarding the Company to any other person or firm acting on behalf closing of the Company hereunderOffering within three (3) business days after the Final Closing.

Representations and Warranties; Covenants; Survival. 4.1 The Company Issuer represents and warrants to Subscriber that, at the date of this Agreement and as of the Closing DateAgreement: (a) The Company Issuer is a corporation duly organized and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction the State of incorporationDelaware, with all requisite corporate power entitled to own its property of a material nature and authority to carry on the its business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the nature as and in places where such property is now owned or operated and such business of the Company and its subsidiaries, taken as a whole.is conducted; (b) Except Each of the subsidiaries of Issuer is a corporation duly organized and validly existing and in good standing under the laws of the State of their respective incorporation, entitled to own their respective properties of a material nature and to carry on their respective businesses of a material nature in places where such properties are now owned or operated and such businesses are conducted, and, except as otherwise described disclosed in the Disclosure DocumentsPublic Reports, there are is no legal actions action or administrative proceedings or investigations instituted, proceeding pending or to the Issuer's best knowledge of the Company threatened, against brought by or before any federal or state agency having jurisdiction over the Company, that could reasonably be expected to have operations of a material adverse effect on nature of Issuer which threatens in any material respect the Company continued operation of any material phase of Issuer's business now conducted by it or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement.; EXHIBIT A (c) The audited Issuer has furnished the Subscriber with its certified consolidated financial statements of BAK as of September December 31, 1995, contained in the Form 10-KSB, and its unaudited financial statements as of June 30, 2003 1996, contained in the Form 10-QSB, and 2004 all such financial statements, including the notes contained therein, fairly present the consolidated financial position of BAK Issuer at the respective dates date thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September June 30, 20041996, there has been no material adverse change in the financial condition of the Company or BAK Issuer from the financial condition stated in such financial statements.statements subject to changes occurring in the ordinary course of its business or to changes reflected in the Form 10-QSB; (d) The CompanyIssuer, by appropriate and required corporate action, has, or will have prior to the closing, has duly authorized the execution of this Agreement and Agreement, the issuance and delivery of the Common SharesStock. The Such shares of Common Shares Stock are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this Agreement, the shares of Common Shares Stock will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances.nonassessable; (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Certificate of the CompanyIncorporation or By-Laws of Issuer, or of any of its subsidiaries, and, and will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Companya material nature of Issuer, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or of instrument binding upon the CompanyIssuer, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (h) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (i) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (j) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable state. (k) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. (l) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless the Subscribers from and against all fees, commissions or other payments owing by the Company to any other person or firm acting on behalf of the Company hereunder.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the Closing Date: (a) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. The ownership of Helpson by the Company complies with all applicable laws of the People's Republic of China. (b) Except as otherwise described in the Disclosure Documents, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the CompanyCompany or its subsidiaries, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Preferred Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (c) The audited financial statements of BAK Helpson as of September 30December 31, 2003 and 2004 2004, and as of June 30, 2005 including the notes contained therein, fairly present the financial position of BAK Helpson at the respective dates thereof and the results of its operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September June 30, 20042005, there has been no material adverse change in the financial condition of the Company or BAK Helpson from the financial condition stated in such financial statements. (d) The Company, by appropriate and required corporate action, has, or will have prior to the closing, duly authorized the execution of this Agreement and duly effected the issuance and delivery of the Common convertible Preferred Shares. The Common convertible Preferred Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this Agreement, the Common Preferred Shares will be validly issued, fully paid and nonassessable nn-assessable and free and clear of all pledges, liens and encumbrances. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (h) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Preferred Shares under this Agreement. (i) The Company is not now, and after the sale of the Common Preferred Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Preferred Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (j) Subject to the accuracy of the Subscriber's ' representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Preferred Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable state. (k) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. (l) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless the Subscribers from and against all fees, commissions or other payments owing by the Company to any other person or firm acting on behalf of the Company hereunder.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the Closing DateAgreement: (a) The Company is a corporation duly organized and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction the State of incorporationDelaware, with all requisite corporate power entitled to own its property of a material nature and authority to carry on the its business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the nature as and in places where such property is now owned or operated and such business of the Company and its subsidiaries, taken as a whole.is conducted; (b) Except as otherwise described in Each of the Disclosure Documents, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge subsidiaries of the Company is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction of their respective incorporation, entitled to own their respective properties of a material nature and to carry on their respective businesses of a material nature in places where such properties are now owned or operated and such businesses are conducted, and, except as disclosed in the Public Reports, there is no action or proceeding pending or, to the Company's best knowledge threatened, against brought by or before any federal or state agency having jurisdiction over the Company, that could reasonably be expected to have operations of a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business nature of the Company and which threatens in any material respect the continued operation of any material phase of the Company's business now conducted by it or its subsidiaries, or which concerns the transactions contemplated by this Agreement.; (c) The audited Company's certified consolidated financial statements as of BAK December 31, 1998, contained in the Form 10-K, and its unaudited financial statements as of September 30, 2003 and 2004 1999, contained in the Form 10-Q, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30, 20041999, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements.statements subject to changes occurring in the ordinary course of its business; (d) The Company, by appropriate and required corporate action, has, or will have prior to the closingInitial Closing, duly authorized the execution of this Agreement Agreement, and the issuance and delivery of the Common Shares. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this Agreement, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (h) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (i) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (j) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable state. (k) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. (l) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless the Subscribers from and against all fees, commissions or other payments owing by the Company to any other person or firm acting on behalf of the Company hereunder.the

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as of at the Closing DateDate on which Subscriber purchases Common Shares: (a) The Company has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms. The Company need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (b) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany's filings with the SEC, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiaries, if any, or which concerns the transactions contemplated by this Agreement. (c) The audited financial statements of BAK as of September 30, 2003 and 2004 including the notes contained therein, fairly present the financial position of BAK at the respective dates thereof and the results of its operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30, 2004, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. (d) The Company, by appropriate and required corporate action, has, or will have prior to the closingClosing, duly authorized the execution of this Agreement and the issuance and delivery of the Common Shares. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Articles of Incorporation of the Company, as amended and currently in effect, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. The issuance of the Common Shares hereunder will not trigger any outstanding antidilution rights. (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Articles of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its charter or by-laws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (h) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hi) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (ij) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (jk) The Company has filed all material tax returns required to be filed, which returns are true and correct in all material respects, and the Company is not in default in the payment of any taxes, including penalties and interest, assessments, fees and other charges, shown thereon due or otherwise assessed, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without interest which were payable pursuant to said returns or any assessments with respect thereto. (l) The Company has not taken any action outside the ordinary course of business designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Shares to facilitate the sale or resale of the Common Shares in any manner in contravention of applicable securities laws. (m) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (kn) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. The issuance of the Shares to the Subscriber will not be integrated with any other issuance of the Company's securities (past, current or future) for purposes of the Securities Act. The Company will not make any offers or sales of any security (other than the Common Shares) that would cause the offering of the Common Shares to be integrated with any other offering of securities by the Company for purposes of any registration requirement under the Securities Act or any applicable rules of Nasdaq. (lo) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer The Company is in material compliance with all applicable securities (or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation "Blue Sky") laws of the Going Public Transaction, except states of the United States in connection with the issuance and sale of the Common Shares to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock MarketSubscriber. (mp) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless use all commercially reasonable efforts to keep the Subscribers from and against all fees, commissions or other payments owing by Common Shares quoted on the Company to any other person or firm acting on behalf of the Company hereunderOTC Bulletin Board.

Representations and Warranties; Covenants; Survival. 4.1 The Company represents and warrants to Subscriber that, at the date of this Agreement and as at the Closing of the Closing Date:purchase of the Shares and Warrant by Subscriber (the “Subscriber Closing”): (a) The Company has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms. The Company need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (b) The Company and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction states of incorporation, with all requisite corporate power and authority to carry on the business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole. (bc) Except as otherwise described set forth in the Disclosure DocumentsCompany’s filings with the SEC, there are no legal actions or administrative proceedings or investigations instituted, or to the best knowledge of the Company threatened, against the Company, that could reasonably be expected to have a material adverse effect on the Company or any subsidiary, any of the Common Preferred Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement. (cd) The Company’s audited consolidated financial statements of BAK as of September 30December 31, 2003 2007 and 2004 2008, contained in the Form 10-K, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates thereof and the results of its consolidated operations for the periods purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30December 31, 20042008, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements. As of April 21, 2009, the Company had no shares of Preferred Stock, no par value per share (the “Preferred Stock”), issued and outstanding. The capitalization of the Company, including the authorized capital stock, the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company’s stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock as of August 26, 2009, is as described in Schedule 4.1(d) attached to this Agreement. (de) The Company owns the patents and patents pending and trademarks and trademarks pending listed in Schedule 4.1(e) attached hereto (collectively, the “Intellectual Property”). To the Company’s knowledge, the Company has the sole and exclusive right to use the Intellectual Property without infringing or violating the rights of any third parties. No claim has been asserted by any person to the ownership of or right to use any of the Intellectual Property or challenging or questioning the validity or effectiveness of any of the Intellectual Property. None of the Intellectual Property has been cancelled, abandoned or otherwise terminated and has been duly issued or filed, as applicable. The Company has no knowledge of any claim that, or inquiry as to whether, any product, activity or operation of the Company infringes upon or involves, or has resulted in the infringement of, any proprietary right of any other person, corporation or other entity; and no proceedings have been instituted, are pending or are threatened that challenge the rights of the Company with respect thereto. (f) The Company, by appropriate and required corporate action, has, or will have prior to the closingSubscriber Closing, duly authorized the execution of this Agreement and the issuance and delivery of the Common SharesShares and Warrants to Subscriber. The Common Shares are not subject to preemptive or other rights of any stockholders of the Company and when issued in accordance with the terms of this AgreementAgreement and the Articles of Incorporation, the Common Shares will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances. Neither the issuance of the Shares or Warrants issued hereunder, nor the shares of Common Stock, underlying the Shares and the Warrants (the “Underlying Shares”), will trigger any outstanding antidilution rights. (eg) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Articles of Incorporation or Bylaws of the Company, or of any of its subsidiaries, and, will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its Articles of Incorporation or Bylaws or other organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (fh) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (gi) The Company has provided Subscriber with all material public information in connection with the business of the Company and the transactions contemplated by this Agreement, and no representation or warranty made, nor any document, statement, or financial statement prepared or furnished by the Company in connection herewith contains any untrue statement of material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading. (j) This Agreement Agreement, including the Exhibits attached hereto, has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (hk) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares and Warrants under this Agreement. (il) The Company has timely filed with the SEC all documents required to be filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (collectively, the “SEC Filings”). On their respective dates of filing, the SEC Filings complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC. (m) The Company is not now, and after the sale of the Common Shares and Warrants under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Preferred Shares will not be, an "“investment company" ” within the meaning of the Investment Company Act of 1940, as amended. (jn) The Company has filed all material tax returns required to be filed, which returns are true and correct in all material respects, and the Company is not in default in the payment of any taxes, including penalties and interest, assessments, fees and other charges, shown thereon due or otherwise assessed, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without interest which were payable pursuant to said returns or any assessments with respect thereto. (o) The Company has not taken any action outside the ordinary course of business designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Underlying Stock in any manner in contravention of applicable securities laws. (p) Subject to the accuracy of the Subscriber's ’s representations and warranties in Section 7 of this Agreement9 below, the offer, sale, and issuance of the Common Shares and Warrants in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "“Securities Act"”) and from the registration or qualification requirements of the laws of any applicable statestate or United States jurisdiction. (kq) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares and Warrants to the Subscriber. (l) Li Xiangqian, . The issuance of the Series F Preferred Stock and Warrants under the offering will not be integrated with any other issuance of the Company's and BAK's Chief Executive Officer has agreed that he ’s securities (past, current or future) for purposes of the Securities Act or any applicable rules of the American Stock Exchange. The Company will not sell, transfer make any offers or otherwise dispose sales of his holdings in either any security (other than the Company or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Series F Preferred Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants Warrants in the Offering. In ) that would cause the event offering of the Make Good Shares are delivered and Warrants to participants in be integrated with any other offering of securities by the Offering, the holders thereof shall be afforded demand Company for purposes of any registration rights to have the Make Good Shares registered requirement under the Securities Act. 4.2 (r) The Company shall indemnify and hold harmless the Subscribers from and against is in material compliance with all fees, commissions applicable securities (or other payments owing by the Company to any other person or firm acting on behalf “Blue Sky”) laws of the Company hereunderstates of the United States in connection with the issuance and sale of the Shares and Warrants to Subscriber and the issuance of the other shares of Series F Preferred Stock and Warrants to other subscribers in the Offering.

Representations and Warranties; Covenants; Survival. 4.1 4.1. The Company represents and warrants to Subscriber that, at the date of this Agreement and as of the Closing DateAgreement: (a) The Company is a corporation duly organized and each of its subsidiaries are corporations duly organized, validly existing and in good standing under the laws of their jurisdiction the State of incorporationDelaware, with all requisite corporate power entitled to own its property of a material nature and authority to carry on the its business in which they are engaged and to own the properties they own, and the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Company and each of its subsidiaries are duly qualified and licensed to do business and are in good standing in all jurisdictions where the nature of their business makes such qualification necessary, except where the failure to be qualified or licensed would not have a material adverse effect on the nature as and in places where such property is now owned or operated and such business of the Company and its subsidiaries, taken as a whole.is conducted; (b) Except Each of the subsidiaries of the Company is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction of their respective place of organization, entitled to own their respective properties of a material nature and to carry on their respective businesses of a material nature in places where such properties are now owned or operated and such businesses are conducted, and, except as otherwise described disclosed in the Disclosure DocumentsPublic Reports, there are is no legal actions action or administrative proceedings or investigations instituted, proceeding pending or to the Company's best knowledge threatened, brought by or before any federal or state agency having jurisdiction over the operations of a material nature of the Company threatened, against which threatens in any material respect the continued operation of any material phase of the Company, that could reasonably be expected to have a material adverse effect on the Company 's business now conducted by it or any subsidiary, any of the Common Shares, or the business of the Company and its subsidiaries, or which concerns the transactions contemplated by this Agreement.; (c) The audited Company has furnished the Subscriber with its certified consolidated financial statements of BAK as of September 30October 26, 2003 1997, contained in the Form 10-K, and 2004 such financial statements, including the notes contained therein, fairly present the consolidated financial position of BAK the Company at the respective dates date thereof and the results of its consolidated operations for the periods period purported to be covered thereby. Such financial statements have been prepared in conformity with generally accepted accounting principles consistently applied with prior periods subject to any comments and notes contained therein. Since September 30, 2004, there has been no material adverse change in the financial condition of the Company or BAK from the financial condition stated in such financial statements.; (d) The Company, Company by appropriate and required corporate action, has, or will have prior to the closing, has duly authorized the execution of this Agreement and the issuance and delivery of the Common SharesStock. The Such shares of Common Shares Stock are not subject to preemptive or other rights of any stockholders of the Company and and, when issued in accordance with the terms of this Agreement, the shares of Common Shares Stock will be validly issued, fully paid and nonassessable and free and clear of all pledges, liens and encumbrances.nonassessable; (e) Performance of this Agreement and compliance with the provisions hereof will not violate any provision of any applicable law or of the charter documents Certificate of Incorporation or By-Laws of the Company, or of any of its subsidiaries, and, and will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon, any of the properties or assets of a material nature of the Company, or of any of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or other agreement or of instrument binding upon the Company, or any of its subsidiaries, other than such breaches, defaults or liens which would not have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company is not in default under any provision of its organizational documents or under any provision of any agreement or other instrument to which it is a party or by which it is bound or of any law, governmental order, rule or regulation so as to affect adversely in any material manner its business or assets or its condition, financial or otherwise. (f) The Disclosure Documents, taken together, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein to make the statements contained therein not misleading. (g) This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (h) No registration, authorization, approval, qualification or consent of any court or governmental authority or agency is necessary in connection with the execution and delivery of this Agreement or the offering, issuance or sale of the Common Shares under this Agreement. (i) The Company is not now, and after the sale of the Common Shares under this Agreement and under all other agreements and the application of the net proceeds from the sale of the Common Shares will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (j) Subject to the accuracy of the Subscriber's representations and warranties in Section 7 of this Agreement, the offer, sale, and issuance of the Common Shares in conformity with the terms of this Agreement constitute transactions made exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act") and from the registration or qualification requirements of the laws of any applicable state. (k) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Shares to the Subscriber. (l) Li Xiangqian, the Company's and BAK's Chief Executive Officer has agreed that he will not sell, transfer or otherwise dispose of his holdings in either the Company or the Public Company, upon consummation of the Going Public Transaction, except to persons or entities who agree to be bound by the same restrictions, for a period of twelve months following the date the Public Company's securities become eligible for quotation on the NASDAQ Stock Market. (m) Executive management of the Company will escrow 10% of their holdings (the "Make Good Shares") in the Public Company following consummation of the Going Public Transaction, so that in the event the consolidated financial statements of the Public Company do not reflect $12 million of Net Income ("NI") for the fiscal year ending September 30, 2005 and $27 million NI for the fiscal year ending September 30, 2006, respectively (the "Guaranteed NI") the Make Good Shares shall be distributed on a pro rata to the subscribers to the Offering as follows: (i) in the event that the Guaranteed NI for fiscal 2005 is not achieved, 50% of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC; and (b) in the event that the Guaranteed NI for fiscal 2006 is not achieved, the balance of the Make Good Shares will be delivered to participants in the Offering within ten (10) business days of the date the audit report for the period is filed with the SEC. If the Guaranteed NI is achieved for a given fiscal year, holders of the Make Good Shares can immediately take possession of the number of said shares reserved for distribution during said period to participants in the Offering. In the event the Make Good Shares are delivered to participants in the Offering, the holders thereof shall be afforded demand registration rights to have the Make Good Shares registered under the Securities Act. 4.2 The Company shall indemnify and hold harmless the Subscribers from and against all fees, commissions or other payments owing by the Company to any other person or firm acting on behalf of the Company hereunder.