**Guaranty
      Contract of Maximum Amount**


Shenfa
      Longgang E’bao Zi 20070420002o 2





**Party
      A: Longgang Branch, Shenzhen Development Bank (Creditor)**


Address:
      A1, Xinyazhou Park, Central Town, Longgang District, Shenzhen


Telephone:
      28952003            Fax:
      28952004


Person
      in
      charge: Yu Bo       Position: President of
      Longgang Branch





**Party
      B: BAK International Limted (Guarantor)**


Address:
      Flat/RM 1201, 12/F Wing On CTR, 111 Connaught RD, Central, HK


Telephone:
      852-25448080     Fax: 852-28541767





In
      order
      to secure the indebtedness of Shenzhen BAK Battery Co., Ltd. (hereinafter
      referred to as Obligor) under the Comprehensive Credit Facilities Agreement
      (reference no. Shenfa Longgang Zongzi 20070420002, hereinafter referred to
      as
      Master Agreement) entered into by Creditor and Obligor, the Guarantor agrees
      to
      provide guaranty to the Creditor as the guarantor of the Obligor. Through
      friendly negotiation, both parties agree to enter into this
      Contract:





**I.
      Scope of Guaranty**


The
      scope
      of guaranty covers all loan principal, interest, penalty interest and all the
      expenses incurred to the Creditor in realizing its creditor’s right. The maximum
      loan principal shall not exceed RMB 150 Million yuan.





**II.
      Guaranty Period**


The
      guaranty period under this Contract is from the date of effectiveness of this
      Contract to 2 years after the expiry of each credit facilities under the Master
      Agreement. In case that the Creditor lawfully transfer its creditor’s right to a
      third party during the guaranty period, the Guarantor shall continue to perform
      its obligation of guaranty as originally agreed.









**III.
      Obligation of Guaranty**


The
      Guarantor shall bear the joint and several liability to repay all indebtedness
      of the Obligor within the scope of the guaranty. In case of default by the
      Obligor, the Creditor is entitled to demand the Obligor to repay or demand
      the
      Guaranty. The Guarantor irrevocably authorizes the Creditor to transfer directly
      the relevant amount of money from the account of Guarantor to the account of
      Creditor in case of default of the Obligor upon mature of its
      indebtedness.





**IV.** The
      guaranty of pledge provided by the Guarantor is independent from and shall
      not
      be replaced by any other guaranty provided by other guarantors.





**V.** The
      guaranty under this Contract is irrevocable and shall not be affected by any
      documentations or agreements entered into by the Guarantor and other parties,
      nor be affected by the insolvency, bankruptcy, cancellation of corporate status,
      or amendment of articles of association of the Obligor.





**VI.** In
      case
      that part or whole of the Master Agreement or agreement entered into under
      the
      Master Agreement become invalid due to any reason, the Obligor shall
      nevertheless perform its obligation of repayment and the Guarantor shall perform
      its obligation of guaranty for the Obligor’s obligation of repayment in
      accordance with this Contract.





**VII.
      Undertakings and Representations of the Guarantor**


The
      Guarantor is legally qualified to execute and perform this Contract, and has
      obtained all necessary authorization by the board of directors or other
      competent authorities (as the case may be).


The
      Guarantor undertakes that all application materials submitted by it to the
      Creditor are truthful, lawful, effective and with no serious errors or
      omissions.









The
      Guarantor also undertakes that all application materials submitted by the
      Obligor to the Creditor are truthful, lawful, effective and with no serious
      errors or omissions.


The
      Guarantor shall notify the Creditor in writing within 10 days after it has
      changed its address, contact details, liaison telephone, business scope or
      legal
      representative etc.


The
      Guarantor has fully understood all provisions of this Contract and both parties
      execute this Contract of their free will.





**VIII.
      Amendment and Termination of Contract**


1.
            In
                case that any party intends to amend or terminate this Contract,
                it shall
                notify the other party in writing and a written agreement shall be
                reached
                by both parties. This Contract shall remain valid until the written
                agreement to amend or terminate this Contract has been
                reached.





2.
            Any
                waiver or tolerance of the Creditor shall not be deemed as amendment
                or
                termination of this Contract except that a written agreement has
                been
                reached in accordance with the above
                provision.





3.
            In
                case that the Master Agreement has been amended, the Creditor shall
                seek
                the approval of the Guarantor immediately. The Guarantor shall continue
                to
                bear the responsibility of guaranty for the indebtedness of the Obligor
                under the Master Agreement (before and after the amendment) only
                after it
                has approved such amendment. However, the Creditor does not need
                to seek
                the approval of the Guarantor for amendment of the Master Agreement
                which
                decreases the indebtedness of the
                Obligor.





**IX.
      Applicable Law and Dispute Settlement**


1.
            The
                execution and performance of this Contract shall be governed by the
                laws
                of People’s Republic of China;









2.
            The
                method of dispute settlement for this Contract shall be the same
                with that
                of the Master Agreement.





**X.** This
      Contract shall be signed and stamped by both parties (only signature is needed
      for party of natural person). This Contract shall become effective upon the
      delivery of the pledged collaterals to the Creditor. If the pledge shall be
      registered or recorded in accordance with article 78 or 79 of the Guarantee
      Law
      of People’s Republic of China, this Contract shall become effective upon the
      registration or record.





Party
      A: (Company
      Chop)


Authorized
      Representative: /s/Bo
      Yu


Date:
      June 21, 2007





Party
      B: (Company
      Chop)


Authorized
      Representative: /s/Xiangqian
      Li


Date:
      June 21, 2007