**Guaranty
      Contract of Maximum Amount Pledge**


No.
      Shenfa Longgang E’di Zi 20070420002





**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: Li Xiangqian (Pledger)**


Address:
      BAK Industrial Park, Kuichong Street, Longgang District, Shenzhen


Telephone:
      83841596            Fax:
      89770026





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 20050407001, hereinafter referred to
      as
      Master Agreement) entered into by Creditor and Obligor on 7 April 2005, the
      Pledger agrees to provide its assets to the Creditor as the pledge. 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.
      Pledged Collaterals**


The
      detail information of the pledged collaterals is described in the Statement
      of
      Pledged Collaterals attached to this Contract.


After
      the
      Pledger has pledged the abovementioned collaterals, the Pledger shall not
      transfer such pledged collaterals or allow any third party to use such pledged
      collaterals without the approval of the Creditor. In case that the Creditor
      and
      Pledger agree to transfer the pledged collaterals, the payment received by
      the
      Pledger from such transaction shall be used to settle the indebtedness owed
      to
      the Creditor in advance to expiry or be deposited in a third party designated
      by
      both parties.









**III.** The
      Creditor is entitled to dispose of the pledged collaterals by means of
      settlement of the indebtedness in kind, auction or sale and use the payment
      derived from such disposal to repay the indebtedness owed to it if any of the
      following occurs:


(1)
            The
                Obligor fails to pay its debts upon maturity of such debt (as originally
                agreed or put forward);


(2)
            The
                legal successor of the Pledger or the legatee of the Pledger refuse
                to
                perform their obligations;


(3)
            The
                Obligor is declared dissolved or
                bankrupt;


(4)
            The
                value of the pledged collaterals is likely to be obviously decreased
                so
                that the interest of the Creditor is endangered and the Pledger fails
                to
                provide additional collateral as requested by the
                Creditor;


(5)
            Other
                events which may have negative impact upon the realization of the
                Creditor’s rights under the Master
                Agreement.





**IV.
      Undertakings and Representations of the Pledger**


The
      Pledger 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
      Pledger undertakes that all application materials submitted by it to the
      Creditor are truthful, lawful, effective and with no serious errors or
      omissions. The Pledger has the lawful and undisputed right to pledge the pledged
      collaterals under this Contract. The execution and performance of this Contract
      by the Pledger do not violate any other contracts entered into or being
      performed by the Pledger.


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





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





**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 Pledger shall perform
      its obligation of guaranty for the Obligor’s obligation of repayment in
      accordance with this Contract.





**VII.**
      The expenses incurred during the course of execution and performance of this
      Contract by both parties such as notarial or testimonial fee, registration
      fee,
      auction or sell cost etc. shall all be born by the Pledger.





**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 Pledger immediately. The Pledger 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 Pledger 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.





**XI.** The
      Guaranty Contract of Maximum Amount Pledge (reference no. Shenfa Longgang E’di
      Zi no.20060329001) ceases to be effective after this Contract become effective.





**XII** .
      This
      Contract has four originals. The Creditor shall retain two originals and the
      Guarantor and Business Administration Bureau shall each retain one original.
      Each original shall have the same legal effect.







Party
        A:
        (Company Chop)
 Authorized
        Representative: /s/
        Bo
        Yu
 Date:
        June 20, 2007
 
 Party
        B: (Company
        Chop)
 Authorized
        Representative: /s/Xiangqian
        Li
 Date:
        June 20, 2007











**Exhibits:**





**Statement
      of Pledged Collaterals(1)**




Pledge
      contract no. Shenfa Longgang Ezhizi 20070420002


Name,
                  Quality and Quantity of the Pledged Collaterals
              
              RMB
                  150 million of battery cellsTitle
                  and Title Certificate
              
              Shenzhen
                  BAK Battery Co., LtdPlace
                  of the Pledged Collaterals
              
              BAK
                  Industrial Park, Kuichong Street, Longgang District,
                  ShenzhenOwnership
                  of the Pledged Collaterals
              
              100%
                  owned by PledgerOther
                  issues
              
              N/AMark
              
              N/A


The
      Pledger undertakes that the above statement is truthful. The Pledger shall
      bear
      the joint and several liability for the indebtedness of the Obligor under the
      Master Agreement if the pledge is invalid or the value of the pledged
      collaterals is not sufficient to cover the indebtedness due to false statement
      by the Pledger.










**Statement
      of Pledged Collaterals(2)**




Pledge
      Contract number: is Shenfa Longgang edi zi NO.20070420002.




Name,
                  Quality and Quantity of the Pledged Collaterals
              
              2554
                  sets of equipments and machinesTitle
                  and Title Certificate
              
              Shenzhen
                  BAK Battery Co.,LtdPlace
                  of the Pledged Collaterals
              
              BAK
                  Industrial Park, Kuichong Street, Longgang District,
                  ShenzhenValue
                  of the Pledged Collaterals
              
              RMB
                  138.04 million yuanOwnership
                  of the Pledged Collaterals
              
              100%
                  owned by PledgerOther
                  issue
              
              Pledge
                  Registration No.[05] Shen Gongshang Yadeng No. 77Remark
              
              N/A





The
      Pledger undertakes that the above statement is truthful. The Pledger shall
      bear
      the joint and several liability for the indebtedness of the Obligor under the
      Master Agreement if the pledge is invalid or the value of the pledged
      collaterals is not sufficient to cover the indebtedness due to false statement
      by the Pledger.