Guaranty Contract of Maximum Amount between Mr. Xiangqian Li, BAK International Entities, and Agricultural Bank of China (Shenzhen Eastern Branch)

Summary

This contract is a guaranty agreement entered into on November 27, 2008, between Mr. Xiangqian Li, BAK International (Tianjin) Limited, and BAK International Limited (the Guarantors), and the Shenzhen Eastern Branch of the Agricultural Bank of China (the Creditor). The Guarantors agree to be jointly and severally liable for up to RMB 580 million of Shenzhen BAK Battery Co., Ltd.'s debts under a credit facility agreement. The guaranty covers principal, interest, penalties, and related costs, and lasts until two years after the credit facility expires. Breach of contract results in additional penalties and full compensation for losses.

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Summary of Guaranty Contract of Maximum Amount ( the “Contract”) Entered into by and between Mr. Xiangqian Li, BAK International (Tianjin) Limited, BAK International Limited (the “Guarantors”)and Shenzhen Eastern Branch, Agricultural Bank of China( the “Creditor”) on Nov. 27th, 2008

Main contents

Ø Contract number: 819050200800000302.

Ø Each guarantor under this Guaranty Contract undertakes to assume joint and several liabilities for the indebtedness of Shenzhen BAK Battery Co., Ltd (the “Obligor”) towards the Creditor under the Comprehensive Credit Facility Agreement of Maximum Amount (no. No. 81001200813170001) from Nov. 27th, 2008 to Nov. 27th, 2009, and the maximum amount secured is RMB580 million.

Ø Scope of Guaranty: The guaranty shall cover all of the loan principal, interest, penalty interest, breach of contract compensation, damages, undertaking fee and all the expenses such as litigation cost, lawyer’s fee, notification cost and public notice cost etc. which is incurred to the Creditor in realizing its creditor’s right.

Ø Guaranty period: The guaranty period is from the effective date of this Contract to two years after the expiry of the term of the Credit Facility Agreement and the loan agreement entered into under the Credit Facility Agreement.

Ø Breach of Contract Penalties: additional 15% of the maximum amount secured in this Contract and full compensation for the Creditor’s loss due to the Guarantor’s breach of contract.

Headlines of the articles omitted:

Ø Termination and explanation

Ø Payment on demand

Ø The Guarantor’s undertaking

Ø Confirmation of the Creditor’s rights

Ø Fulfillment of the guaranty responsibility

Ø Dispute settlement

Ø Effectiveness

Ø Notification

Ø Supplement articles