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CBAK > SEC Filings for CBAK > Form 8-K on 14-Mar-2014All Recent SEC Filings

Show all filings for CHINA BAK BATTERY INC

Form 8-K for CHINA BAK BATTERY INC


14-Mar-2014

Entry into a Material Definitive Agreement, Creation of a Direct Financial


ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

As previously disclosed, on December 17, 2013, Shenzhen BAK Battery Co., Ltd. ("Shenzhen BAK"), a wholly-owned subsidiary of China BAK Battery, Inc. (the "Company") entered into a loan agreement (the "Loan Agreement"), with Mr. Jinghui Wang, pursuant to which, Mr. Wang agreed to initially lend Shenzhen BAK a loan in the amount of RMB370 million (approximately $61.1 million). On January 14, 2014, the Company's wholly-owned Hong Kong subsidiary, BAK International Limited ("BAK International) entered into a corporate guarantee with Mr. Wang, under which BAK International irrevocably and unconditionally guaranteed to the lender timely performance by Shenzhen BAK of all its obligations under the Loan Agreement. On the same date, the Company and BAK International entered into a share mortgage with Mr. Wang, under which, the Company pledged 100% of its equity interest in BAK International to the lender as security for the performance of Shenzhen BAK's obligations under the Loan Agreement. If Shenzhen BAK defaults on its repayment obligation under or in connection with the Loan Agreement, the lender, as the pledgee, will be entitled to dispose of the pledged equity interests.

On January 8, 2014, Shenzhen BAK entered into a second loan agreement (the "Second Loan Agreement"), with Mr. Wang, pursuant to which, Mr. Wang agreed to lend Shenzhen BAK an additional RMB150 million (approximately $24.8 million) which bears an annual interest rate at 20%. As a result, Mr. Wang loaned a total of RMB520 million (approximately $85.9 million) to Shenzhen BAK. Pursuant to the Second Loan Agreement, Shenzhen BAK has the obligations to repay the principal amount of RMB520 million and any accrued interests to the lender by March 31, 2014.

On March 10, 2014, BAK International entered into a corporate guarantee with Mr. Wang ("BAK International Corporate Guarantee"), under which BAK International irrevocably and unconditionally guaranteed to the lender timely performance by Shenzhen BAK of all its obligations under the Second Loan Agreement. On the same date, the Company also entered into a similar corporate guarantee with Mr. Wang ("China BAK Corporate Guarantee"), to irrevocably and unconditionally guarantee timely performance by Shenzhen BAK of all its obligations under the Second Loan Agreement. In addition, on March 10, 2014, the Company, BAK International and Shenzhen BAK entered into a further share mortgage (the "Further Share Mortgage") with Mr. Wang, under which, the 100% equity interest in BAK International that the Company pledged to the lender on January 14, 2014 was deemed as security for the performance of Shenzhen BAK's obligations under the Second Loan Agreement. If Shenzhen BAK defaults on its repayment obligation under or in connection with the Second Loan Agreement, including but not limited to the repayment of the total amount of RMB520 million and any accrued interested by March 31, 2014, the lender, as the pledgee, will be entitled to dispose of all the pledged equity interests.

The foregoing description of the Second Loan Agreement, BAK International Corporate Guarantee, China BAK Corporate Guarantee and the Further Share Mortgage is qualified in its entirety by the Second Loan Agreement, BAK International Corporate Guarantee, China BAK Corporate Guarantee and the Further Share Mortgage, a copy of each document is attached as Exhibit 10.1, 10.2, 10.3 and 10.4 hereto, respectively, and are incorporated by reference herein.



ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

The description of the Second Loan Agreement, BAK International Corporate Guarantee, China BAK Corporate Guarantee and the Further Share Mortgage, set forth under Item 1.01 is hereby incorporated by reference into this Item 2.03 as if fully set forth herein.


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