**Guaranty
      Contract of Maximum Amount (Credit Facility)**




No.
      (2006) Zhen Zhong Yin Si Bao E Zi 0184




**Guarantor:** (hereinafter
      referred to as “Party A”) **** Li
      Xiangqian


**Identification
      No:** 620105196808081078


**Legal
      Representative:**


**Address:**


**Telephone
      No:**





**Creditor:** (hereinafter
      referred to as “Party B”) **** Shenzhen
      Branch, **** Bank
      of China


**People
      in Charge:** **** Duan
      Yongkuan


**Address:** International
      Finance Building, 2022 Jianshe Road, Luohu, Shenzhen


**Telephone
      No:** 0755-28922667





On
      the
      request of the credit facility applicant, Shenzhen BAK Battery Co., Ltd
      (hereinafter referred to as the “Applicant”) ,
      Party A undertakes
      to provide guaranty for the indebtedness under the Credit Facility Agreements
      of
      the Applicant  voluntarily in order
      that the Applicant could obtain the credit facility support from Party B. Party
      A also confirms that all terms of the Credit Facility Agreement which he
      guarantees, including the use of division sum within the total credit facility.
      In order to clarify both party’s rights and liabilities, Party A and Party B
      reach this agreement under the friendly negotiation.





**I.
      The Maximum Amount of Guaranteed Credit Facility**




This
      Agreement is signed for guaranty to the balance of every single credit facility
      or foreign currency of the equal value of the confirmed total of main credit’s
      rights of not exceeding RMB 450,000,000.00 yuan from November 1, 2007 to
      November 1, 2008 which are stipulated in Credit Facility Agreement of No. (2007)
      Zhen Zhong Yin E Xie Zi No. 000274.




**II.
      Scope of Guaranty**




|1. | All
              the balance of the creditor’s rights in every single credit facility under
              the aforesaid Credit Facility Agreement.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|2. | All
              the balance of the loan principal, interest (including the compound
              interest, penalty interest), and commission fee etc under the aforesaid
              Credit Facility Agreement.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|3. | All
              the balance of the remedy, the compensation, undertaking fee etc for
              breach of contract which shall be payable by the
              Applicant.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|4. | All
              the related expenses bored by the Creditor in realizing its creditor’s
              rights.
|-- | --------------------------------------------------------------------------------------------------------------



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**III.
      Method of Guaranty**




Party
      A
      shall bear joint and several liabilities for the indebtedness of every single
      loan of the aforesaid Credit Facility Agreement within the aforesaid scope
      of
      guaranty.





**IV.
      Guaranty Period**




The
      guaranty period under this Contract shall be from the effective date of this
      Contract to two years after the expiry date of all loans under the aforesaid
      Credit Facility Agreement. In case that the term of any of Credit Facility
      has
      been extended, the guaranty period would be extended to two years after the
      expiry date of the extension period.





**V.
      The Relationship between this Contract and the Guaranteed Credit Facility
      Agreement and its supplementary Credit Facility Agreement.**




If
      any of
      the Credit Facility Application provided by the Applicant to Party B under
      the
      aforesaid Credit Facility Agreement stipulates specially that the guaranty
      for
      any of the credit facility application letter shall be applied in this Contract,
      Party A shall bear the joint and several liability for this loan
      unconditionally.





**VI.
      Continuity of Guaranty**




The
      liabilities under this Contract is consecutive and shall not be affected by
      Party A or the Applicant’s division, merge, reconstruction, alterations, share
      structure transformation and the change of relationship of administrative
      subordination etc.





**VII.
      Undertaking of Guaranty**




In
      case
      of any breach of this Contract or the Credit Facility Agreement which guaranteed
      by this Contract occurs, Party B has the rights to require Party A to undertake
      his guaranty liability under this Contract and could deduct the fee directly
      from any accounts opened in Party B’s business place.


If
      in
      need of the business, Party B needs to authorize any institutions within his
      jurisdiction of Shenzhen Branch, Bank of China (including branch bank and
      sub-branch bank) to perform the aforesaid Credit Facility Agreement or some
      division sum guaranteed by this Contract, Party A approves this and it shall
      be
      deemed as Party B performs himself and Party A shall bear the same joint and
      several liability for Party B.





**VIII.
      Effectiveness**




This
      Contract shall be effective independently from the Credit Facility Agreement
      it
      guaranteed and any other legal documents. The invalidity of the Credit Facility
      Agreement and its supplementary legal documents shall not affect the validity
      of
      this Contract.




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Special
      statement of Party A: Unless
      to
      increase the principle of credit facility, the modification of the Credit
      Facility Agreement which guaranteed by this Contract between Party B and the
      Applicant does not need the approval from Party A. The aforesaid modification
      shall not affect Party A to perform his liabilities under this Contract; in
      case
      of Party B and the Applicant are carrying out the credit facility business
      of
      reducing (exempting) the guaranty bond, opening a letter of credit, inward
      negotiate, guaranty of taking delivery etc, Party B has the rights to require
      the Applicant to make the rights and benefits transfer or pledge commitment
      regarding to the credit facility business in order to regulate the Applicant
      and
      protect Party B’s deserved rights and benefits. However, despite of whether or
      not the aforesaid rights and benefits transfer or pledge commitment is stated,
      valid or enforceable or modification to the terms of letter of credit and there
      are discrepancies in the bills under the letter of credit and the Applicant
      accept the discrepancies, Party B would pay for it but it shall not affect
      Party
      A’s performance of liabilities under this Contract. Party A would not contradict
      on the guaranty responsibilities by this to Party B now or in the future and
      shall undertake the same guaranty responsibilities.





**IX.
      Rights and Obligations**




|1 | During
              the guaranty period, Party B has the rights to supervise and check
              the
              property status and the financial status of Party A’s and has the rights
              to require Party A to provide the documents to demonstrate his operation
              status and income status. Party A shall provide it promptly, accurately
              and completely;
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|2 | Party
              A has the responsibility to inform Party B in writing under the following
              circumstances:
|- | --------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|1) | Any
              breach of the Loan Contract, the Credit Facility Agreement and the
              Credit
              Facility Contract, Guaranty Contract which signed by Party A and Bank
              of
              China and its departments or branches, other banks, non-banking financial
              institutions and any breach of the Credit Facility Contract, Guaranty
              Contract or any other Credit Facility Contract which signed by other
              creditors;
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|2) | Any
              change of the membership structure of Party A, main business scope,
              alterations of directors of board and senior management staff,
              modification of Contract of Equity Joint Venture and articles of
              associations and adjustment of inner
              construction;
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|3) | Material
              violation of principles, law or compensation claiming which are relating
              to Party A or Party A’s principle leader;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|4) | Serious
              difficulties occur in Party A’s management and thedeterioration
              offinancial situation;
|-- | --------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|5) | Party
              A has already undertaken or would undertake any indebtedness, possible
              indebtedness or mortgage, pledge to the third
              party;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|6) | Any
              litigation or arbitration deriving from the disputes of Party A’s material
              creditor’s rights and indebtedness;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|7) | The
              change of Party A’s contact address;
|-- | ------------------------------------------------------

| | 
| | 

|8) | Other
              situations which might affect Party A’s financial status or indebtedness
              repay ability.
|-- | -------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|3 | Party
              A shall obtain Party B’s written approval on the following
              occurrences:
|- | ---------------------------------------------------------------------------------------------------------

| | 
| | 

|1) | Material
              system changes which including reducing the registered capital in any
              forms, division, merge, reconstruction, share structure transformation
              etc
              or cancellation, dismissal, suspending a
              business;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|2) | Material
              events which are concerning the investment and assets
              transferring;
|-- | --------------------------------------------------------------------------------------------------------

| | 
| | 

|3) | Conducting
              the title transaction, management transaction by the way of lease,
              contract, affiliation, trusteeship;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

|4) | The
              material share alteration of share adjustment or Party A’s share structure
              transformation;
|-- | --------------------------------------------------------------------------------------------------------------------------



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4.  Party
      A’s
      possible indebtedness shall not exceed its net capital and shall not dispose
      its
      fixed assets with the means which might affect its repay ability within the
      period of the guaranty.




5.  Party
      A
      shall not require the Applicant to conduct a counter-guaranty with a property
      mortgage or pledge regarding to Party A’s liabilities under this Guaranty
      Contract; if Party A and the Applicant sign a Counter-guaranty Agreement or
      any
      similar agreement regarding to the guaranty liabilities under the Guaranty
      Contract, the guarantee could have his rights under the Counter-guaranty
      Agreement or any similar agreement only after he fully performs his guaranty
      liabilities under this Guaranty Contract.





**X.
      Transfer of Rights and Liabilities**




Party
      A
      shall not transfer his rights and liabilities under this Guaranty Contract
      to
      the third party without Party B’s written permission.





**XI.
      Breach of Contract**




If
      either
      Party A does not perform his stipulated liabilities of Article IX of this
      Contract or the Applicant does not perform his stipulated liabilities under
      the
      Credit Facility Agreement, Party B has the rights to take the following actions
      solely or simultaneously:




(1).  Requires
      Party A to correct the breach evens in a required time;




(2).  Requires
      Party A to provide supplementary guaranty;




(3).  Requires
      Party A to undertake the guaranty responsibilities of loan already occurred
      or
      the particular/some loans or deduct the fee directly from Party A’s
      account.




**XII.
      Notarization**




If
      this
      Contract needs to be notarized, the notarization fee shall be bore by Party
      A;
      once this Contract has been notarized, despite of what reasons cause Party
      A
      and/or the Applicant does not perform his liabilities, Party B has the rights
      to
      apply directly for the obligatory execution.





**XIII.
      Expenses**




All
      expenses which are relating to this Contract (including but not limited to
      the
      expenses of the evaluation, appraisal, registration, notarization etc) shall
      be
      paid or bore by Party A.





**XIV.
      Modification, Supplementation and Explanation**




(1).  Any
      modifications or supplementation of this Contract shall be make in writing
      and
      shall contribute as a whole of this Contract.




(2).  If
      any
      revisions of national laws or regulations which lead to any clause of this
      Contract become illegal or invalid, the legality and validity of the rest
      clauses of this Contract shall not be affected; the parties of this Contract
      shall cooperatively modify the relevant illegal or invalid clauses
      promptly.





**XV.
      The Application Laws and Dispute Settlements**




The
      applicable law for this Agreement shall be laws of People’s Republic of
      China.




Any
      arguments or disputes arising from the performance of this Agreement shall
      be
      settled by negotiation by the parties. In case that no settlement has been
      reached, the dispute shall be settled in the following (1)
      solution:


(1).
      to
      be submitted to the People’s Court located in the region of Party
      B;




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(2).
      to
      be submitted to (/) Arbitration Committee. The arbitration shall be proceeded
      by
      its own arbitration rules.





**XVI.
      Effectiveness**




This
      Agreement would come into effect if this Agreement has been signed and stamped
      by the authorized persons of both parties.





**XVII.
      Copies**




There
      are
      three original copies of this Contract. Party A retains one copy and Party
      B
      retains one copy. All of these copies have the same legal
      force.


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**Party
      A (stamp):** Shenzhen
      BAK Battery Co., Ltd





**Authorized
      Representative (signature/stamp):** Xiangqian
      Li








**Party
      B (stamp):**  Shenzhen
      Branch, Bank of China





**Authorized
      Representative (signature/stamp):** Tan
      Zhen








**Date:** November
      1, 2007


**Venue:** Shenzhen





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