Document:

EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT

         This  Registration  Rights  Agreement  (this  "Agreement")  is made and
entered into as of September 14, 2005,  by and among China BAK Battery,  Inc., a
Nevada corporation (the "Company"),  and the investors signatory hereto (each an
"Investor" and collectively, the "Investors").

         This Agreement is made pursuant to the Securities  Purchase  Agreement,
dated as of September 14, 2005, by and among the Company and the Investors  (the
"Purchase Agreement").

         The Company and the Investors hereby agree as follows:

         1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase  Agreement  will have the  meanings  given such
terms in the Purchase Agreement. As used in this Agreement,  the following terms
have the respective meanings set forth in this Section 1:

         "Advice" has the meaning set forth in Section 6(d).

         "Effective  Date" means,  as to a Registration  Statement,  the date on
which such Registration Statement is first declared effective by the Commission.

         "Effectiveness  Date"  means  (a)  with  respect  to  the  Registration
Statement  required to be filed under Section  2(a),  the earlier of: (a)(i) the
90th day following the Filing Date;  provided,  that, if the Commission  reviews
and has written comments to the filed Registration  Statement that would require
the filing of a pre-effective  amendment  thereto with the Commission,  then the
Effectiveness Date under this clause (a)(i) shall be the 105th day following the
Filing  Date,  and (ii) the fifth  Trading Day  following  the date on which the
Company is notified by the Commission  that the initial  Registration  Statement
will not be reviewed or is no longer subject to further review and comments; (b)
with  respect to any  additional  Registration  Statements  that may be required
pursuant to Section 2(b), the earlier of (i) the 120th day following (A) if such
Registration  Statement is required  because the Commission  shall have notified
the Company in writing that certain Registrable Securities were not eligible for
inclusion  on a previously  filed  Registration  Statement,  the date or time on
which the  Commission  shall  indicate as being the first date or time that such
Registrable Securities may then be included in a Registration  Statement, or (B)
if such Registration  Statement is required for a reason other than as described
in (A) above,  the date on which the Company first knows,  or reasonably  should
have  known,  that  such  additional  Registration   Statement(s)  is  required;
provided,  that,  if the  Commission  reviews  and  has  written  comments  to a
Registration Statement filed under Section 2(b) that would require the filing of
a pre-effective  amendment  thereto with the Commission,  then the Effectiveness
Date under this clause (b)(i) for such Registration Statement shall be the 150th
day following the date that the Company first knows,  or reasonably  should have
known,  that such  additional  Registration  Statement  is  required  under such
Section,  and (ii) the fifth Trading Day following the date on which the Company
is notified by the Commission that such additional  Registration  Statement will
not be reviewed or is no longer subject to further review and comments;  and (c)
with  respect to a  Registration  Statement  required to be filed under  Section

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2(c),  the  earlier  of:  (c)(i)  the 90th day  following  the date on which the
Company  becomes  eligible to utilize  Form S-3 to register the resale of Common
Stock;  provided,  that, if the Commission  reviews and has written  comments to
such  filed   Registration   Statement  that  would  require  the  filing  of  a
pre-effective amendment thereto with the Commission, then the Effectiveness Date
under this clause  (c)(i) shall be the 120th day following the date on which the
Company  becomes  eligible to utilize  Form S-3 to register the resale of Common
Stock, and (ii) the fifth Trading Day following the date on which the Company is
notified by the Commission that the initial  Registration  Statement will not be
reviewed or is no longer subject to further review and comments.

         "Effectiveness Period" has the meaning set forth in Section 2(a).

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Filing  Date"  means  (a) with  respect  to the  initial  Registration
Statement  required to be filed under Section  2(a),  the 10th day following the
date on which the Pending Registration  Statement is first declared effective by
the Commission;  (b) with respect to any additional Registration Statements that
may be required  pursuant to Section  2(b),  the 45th day  following (i) if such
Registration  Statement is required  because the Commission  shall have notified
the Company in writing that certain Registrable Securities were not eligible for
inclusion  on a previously  filed  Registration  Statement,  the date or time on
which the  Commission  shall  indicate as being the first date or time that such
Registrable Securities may then be included in a Registration Statement, or (ii)
if such Registration  Statement is required for a reason other than as described
in (i) above,  the date on which the Company first knows,  or reasonably  should
have known, that such additional Registration  Statement(s) is required; and (c)
with  respect to a  Registration  Statement  required to be filed under  Section
2(c), the 30th day following the date on which the Company  becomes  eligible to
utilize Form S-3 to register the resale of Common Stock.

         "Holder" or "Holders" means the holder or holders,  as the case may be,
from time to time of Registrable Securities.

         "Indemnified Party" has the meaning set forth in Section 5(c).

         "Indemnifying Party" has the meaning set forth in Section 5(c).

         "Losses" has the meaning set forth in Section 5(a).

         "New York  Courts"  means the state and federal  courts  sitting in the
City of New York, Borough of Manhattan.

         "Pending  Registration  Statement" means the Registration  Statement on
Form SB-2 filed by the Company with the  Commission  on January 1, 2005,  as the
same has been and shall be amended or supplemented.

         "Proceeding" means an action, claim, suit,  investigation or proceeding
(including,  without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

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         "Prospectus" means the prospectus included in a Registration  Statement
(including,  without  limitation,  a prospectus  that  includes any  information
previously omitted from a prospectus filed as part of an effective  registration
statement in reliance upon Rule 430A  promulgated  under the Securities Act), as
amended or supplemented by any prospectus supplement,  with respect to the terms
of the  offering  of any  portion  of the  Registrable  Securities  covered by a
Registration  Statement,  and  all  other  amendments  and  supplements  to  the
Prospectus,  including post-effective  amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

         "Registrable Securities" means: (a) the Shares, (b) the Warrant Shares,
(c) any shares of Common Stock issuable upon exercise of warrants  issued to any
placement  agent as  compensation  in connection  with the financing that is the
subject of the Purchase  Agreement,  and (d) any  securities  issued or issuable
upon any  stock  split,  dividend  or other  distribution,  recapitalization  or
similar event,  or any conversion  price  adjustment  with respect to any of the
securities referenced in (b) or (c) above.

         "Registration  Statement"  means  the  initial  registration  statement
required  to be  filed  in  accordance  with  Section  2(a)  and any  additional
registration  statement(s)  required to be filed under  Sections  2(b) and 2(c),
including (in each case) the  Prospectus,  amendments  and  supplements  to such
registration  statements  or  Prospectus,   including  pre-  and  post-effective
amendments,  all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference therein.

         "Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Selling  Holder  Questionnaire"  has the  meaning set forth in Section
2(e).

         "Shares"  means the shares of Common  Stock  issued or  issuable to the
Investors pursuant to the Purchase Agreement.

         "Warrants" means the Common Stock purchase  warrants issued or issuable
to the placement agent  identified in Schedule 3.1(u) to the Purchase  Agreement
in accordance with the terms of the engagement or similar agreements between the
Company and such agents.

         "Warrant  Shares"  means the shares of Common  Stock issued or issuable
upon exercise of the Warrants.

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         2. Registration.

         (a) On or prior to each Filing Date, the Company shall prepare and file
with  the  Commission  a  Registration  Statement  covering  the  resale  of all
Registrable  Securities  not  already  covered  by  an  existing  and  effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form SB-2 (or on such other form appropriate for such purpose)..
Such Registration Statement shall contain (except if otherwise required pursuant
to  written  comments  received  from  the  Commission  upon a  review  of  such
Registration  Statement) the "Plan of Distribution"  attached hereto as Annex A.
The Company shall use its reasonable best efforts to (i) cause such Registration
Statement to be declared  effective under the Securities Act as soon as possible
but,  in any event,  no later  than its  Effectiveness  Date,  and (ii) keep the
Registration Statement continuously effective under the Securities Act until the
date which is the earlier of (i) five years after its Effective  Date, (ii) such
time as all of the Registrable Securities covered by such Registration Statement
have  been  publicly  sold by the  Holders,  or  (iii)  such  time as all of the
Registrable Securities covered by such Registration Statement may be sold by the
Holders  pursuant  to Rule  144(k) as  determined  by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the  Company's  transfer  agent and the  affected  Holders  (the  "Effectiveness
Period").

         (b) If for  any  reason  the  Commission  does  not  permit  all of the
Registrable Securities to be included in a Registration Statement filed pursuant
to Section 2(a), or for any other reason any outstanding  Registrable Securities
are not then covered by an effective  Registration  Statement,  then the Company
shall prepare and file by the Filing Date for such  Registration  Statement,  an
additional  Registration  Statement  covering  the  resale  of  all  Registrable
Securities  not  already  covered  by an  existing  and  effective  Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415,
on Form SB-2 (or on such other form  appropriate  for such  purpose).  Each such
Registration  Statement shall contain (except if otherwise  required pursuant to
written comments received from the Commission upon a review of such Registration
Statement) the "Plan of  Distribution"  attached  hereto as Annex A. The Company
shall cause each such Registration  Statement to be declared effective under the
Securities Act as soon as possible but, in any event, by its Effectiveness Date,
and shall use its reasonable  best efforts to keep such  Registration  Statement
continuously  effective under the Securities Act during the entire Effectiveness
Period.

         (c) Promptly  following any date on which the Company becomes  eligible
to use a  registration  statement  on  Form  S-3  to  register  the  Registrable
Securities for resale,  the Company shall file a registration  statement on Form
S-3 covering the Registrable  Securities (or a post-effective  amendment on Form
S-3 to the then effective  Registration  Statement) and shall use its reasonable
best efforts to cause such  Registration  Statement to be declared  effective as
soon as possible  thereafter,  but in any event prior to the Effectiveness  Date
therefor.  Such  Registration  Statement  shall  contain  (except  if  otherwise
required pursuant to written comments received from the Commission upon a review
of such  Registration  Statement) the "Plan of Distribution"  attached hereto as
Annex A. The Company  shall  cause such  Registration  Statement  to be declared
effective under the Securities Act as soon as possible but, in any event, by its
Effectiveness  Date,  and shall use its  reasonable  best  efforts  to keep such
Registration  Statement  continuously  effective under the Securities Act during
the entire Effectiveness Period.

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         (d) If: (i) a  Registration  Statement is not filed on the earlier of a
date (A) on or prior to ninety (90) days following the date of this Agreement or
(B) on or  prior  to its  Filing  Date  (if the  Company  files  a  Registration
Statement without affording the Holders the opportunity to review and comment on
the same as required by Section 3(a) hereof,  the Company shall not be deemed to
have  satisfied  this  clause  (i)),  or (ii) a  Registration  Statement  is not
declared  effective by the Commission on or prior to its required  Effectiveness
Date,  or  (iii)  after  its  Effective  Date,  without  regard  for the  reason
thereunder or efforts  therefore,  such  Registration  Statement  ceases for any
reason to be  effective  and  available  to the  Holders  as to all  Registrable
Securities to which it is required to cover at any time prior to the  expiration
of its Effectiveness Period for more than an aggregate of 30 Trading Days (which
need not be  consecutive)  (any such failure or breach  being  referred to as an
"Event,"  and for  purposes  of clauses (i) or (ii) the date on which such Event
occurs,  or for  purposes  of  clause  (iii)  the  date  which  such 30  Trading
Day-period is exceeded,  being referred to as "Event Date"), then in addition to
any other rights the Holders may have hereunder or under  applicable law: (x) on
each such Event Date the Company  shall pay to each Holder an amount in cash, as
partial liquidated damages and not as a penalty,  equal to 1.0% of the aggregate
Investment  Amount  paid by such  Holder for  Shares  pursuant  to the  Purchase
Agreement;  and (y) on each monthly  anniversary of each such Event Date (if the
applicable  Event shall not have been cured by such date)  until the  applicable
Event is  cured,  the  Company  shall pay to each  Holder an amount in cash,  as
partial liquidated damages and not as a penalty,  equal to 1.5% of the aggregate
Investment  Amount  paid by such  Holder for  Shares  pursuant  to the  Purchase
Agreement.  The parties agree that the Company will not be liable for liquidated
damages under this Section in respect of the  Warrants.  If the Company fails to
pay any partial liquidated damages pursuant to this Section in full within seven
days after the date payable,  the Company will pay interest thereon at a rate of
10% per annum (or such lesser  maximum  amount that is  permitted  to be paid by
applicable  law) to the  Holder,  accruing  daily  from  the date  such  partial
liquidated  damages are due until such amounts,  plus all such interest thereon,
are paid in full. The partial  liquidated  damages  pursuant to the terms hereof
shall  apply on a daily  pro-rata  basis for any portion of a month prior to the
cure of an Event, except in the case of the first Event Date.

         (e)  Each  Holder   agrees  to  furnish  to  the  Company  a  completed
Questionnaire  in the form  attached  to this  Agreement  as Annex B (a "Selling
Holder  Questionnaire").  The  Company  shall not be  required  to  include  the
Registrable  Securities of a Holder in a Registration Statement and shall not be
required to pay any liquidated or other damages under Section 2(d) to any Holder
who  fails  to  furnish  to  the  Company  a  fully  completed   Selling  Holder
Questionnaire at least two Trading Days prior to the Filing Date (subject to the
requirements set forth in Section 3(a)).

         3. Registration Procedures.

         In connection with the Company's  registration  obligations  hereunder,
the Company shall:

         (a)  Not  less  than  four  Trading  Days  prior  to  the  filing  of a
Registration  Statement or any related Prospectus or any amendment or supplement
thereto,  the  Company  shall  furnish  to each  Holder  copies of the  "Selling
Stockholders" section of such document,  the "Plan of Distribution" and any risk
factor contained in such document that addresses  specifically  this transaction

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or the Selling  Stockholders,  as proposed to be filed which  documents  will be
subject to the review of such Holder.  The Company shall not file a Registration
Statement,  any Prospectus or any amendments or supplements thereto in which the
"Selling  Stockholder" section thereof differs from the disclosure received from
a Holder in its Selling Holder Questionnaire (as amended or supplemented).

         (b) (i) Prepare and file with the Commission such amendments, including
post-effective  amendments,  to each  Registration  Statement and the Prospectus
used in  connection  therewith  as may be  necessary  to keep such  Registration
Statement continuously effective as to the applicable Registrable Securities for
its  Effectiveness  Period  and  prepare  and  file  with  the  Commission  such
additional  Registration  Statements  in order to register  for resale under the
Securities  Act  all of the  Registrable  Securities;  (ii)  cause  the  related
Prospectus to be amended or supplemented by any required Prospectus  supplement,
and as so  supplemented  or  amended  to be filed  pursuant  to Rule 424;  (iii)
respond as promptly as  reasonably  possible to any comments  received  from the
Commission with respect to each Registration  Statement or any amendment thereto
and, as promptly as  reasonably  possible  provide the Holders true and complete
copies  of all  correspondence  from  and to the  Commission  relating  to  such
Registration Statement that would not result in the disclosure to the Holders of
material and non-public  information  concerning the Company; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange
Act with  respect to the  Registration  Statements  and the  disposition  of all
Registrable Securities covered by each Registration Statement.

         (c) Notify the Holders as promptly as reasonably  possible (and, in the
case of (i)(A) below, not less than three Trading Days prior to such filing) and
(if  requested by any such Person)  confirm such notice in writing no later than
one Trading Day  following  the day (i)(A) when a Prospectus  or any  Prospectus
supplement or post-effective  amendment to a Registration  Statement is proposed
to be filed; (B) when the Commission  notifies the Company whether there will be
a "review" of such Registration  Statement and whenever the Commission  comments
in writing on such  Registration  Statement  (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the Holders
that  pertain  to  the  Holders  as a  Selling  Stockholder  or to the  Plan  of
Distribution,  but not information  which the Company  believes would constitute
material and non-public information);  and (C) with respect to each Registration
Statement or any post-effective  amendment,  when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental
authority  for  amendments  or  supplements  to  a  Registration   Statement  or
Prospectus  or  for  additional  information;  (iii)  of  the  issuance  by  the
Commission of any stop order  suspending  the  effectiveness  of a  Registration
Statement covering any or all of the Registrable Securities or the initiation of
any  Proceedings  for that  purpose;  (iv) of the  receipt by the Company of any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction,  or the  initiation  or  threatening  of any  Proceeding  for such
purpose;  and (v) of the  occurrence  of any event or passage of time that makes
the financial  statements  included in a Registration  Statement  ineligible for
inclusion  therein  or any  statement  made in such  Registration  Statement  or

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Prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any material respect or that requires any revisions to such
Registration  Statement,  Prospectus or other  documents so that, in the case of
such Registration  Statement or the Prospectus,  as the case may be, it will not
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading.

         (d) Use its  reasonable  best  efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration  Statement,  or  (ii)  any  suspension  of  the  qualification  (or
exemption from  qualification) of any of the Registrable  Securities for sale in
any jurisdiction, at the earliest practicable moment.

         (e) Furnish to each Holder, without charge, at least one conformed copy
of each  Registration  Statement and each amendment  thereto and all exhibits to
the extent  requested  by such Person  (including  those  previously  furnished)
promptly after the filing of such documents with the Commission.

         (f) Promptly deliver to each Holder,  without charge, as many copies of
each  Prospectus or  Prospectuses  (including  each form of prospectus) and each
amendment or  supplement  thereto as such Persons may  reasonably  request.  The
Company  hereby  consents to the use of such  Prospectus  and each  amendment or
supplement  thereto  by each of the  selling  Holders  in  connection  with  the
offering and sale of the Registrable  Securities  covered by such Prospectus and
any amendment or supplement thereto.

         (g) Prior to any public offering of Registrable Securities, to register
or  qualify  or  cooperate  with the  selling  Holders  in  connection  with the
registration  or   qualification   (or  exemption  from  such   registration  or
qualification)  of such  Registrable  Securities  for offer  and sale  under the
securities or Blue Sky laws of all  jurisdictions  within the United States,  to
keep each such registration or qualification (or exemption  therefrom) effective
during  the  Effectiveness  Period  and to do any and all  other  acts or things
necessary or advisable to enable the  disposition in such  jurisdictions  of the
Registrable  Securities  covered  by  the  Registration  Statements;   provided,
however,  that the Company  shall not be required  to (i) qualify  generally  to
transact business as a foreign  corporation in any jurisdiction  where it is not
so qualified,  (ii) consent to service of process in any such jurisdiction where
it is not so qualified or (iii) subject  itself to taxation in any  jurisdiction
that it is not otherwise subject to tax liabilities.

         (h) Cooperate with the Holders to facilitate the timely preparation and
delivery of certificates  representing Registrable Securities to be delivered to
a transferee pursuant to the Registration  Statements,  which certificates shall
be free, to the extent permitted by the Purchase  Agreement,  of all restrictive
legends,  and to enable such Registrable  Securities to be in such denominations
and registered in such names as any such Holders may request.

         (i) Upon the occurrence of any event  contemplated by Section  3(c)(v),
as promptly as reasonably possible, prepare a supplement or amendment, including
a  post-effective  amendment,  to  the  affected  Registration  Statements  or a
supplement to the related  Prospectus or any document  incorporated or deemed to
be incorporated  therein by reference,  and file any other required  document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue  statement of a material fact or omit to state a material fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the circumstances under which they were made, not misleading.

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         4.  Registration  Expenses.  All  fees  and  expenses  incident  to the
performance  of or compliance  with this Agreement by the Company shall be borne
by the Company whether or not any Registrable  Securities are sold pursuant to a
Registration  Statement.  The fees and  expenses  referred  to in the  foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including,  without  limitation,  fees and expenses (A) with respect to filings
required  to be made with any Trading  Market on which the Common  Stock is then
listed for trading,  and (B) in compliance with applicable  state  securities or
Blue Sky laws), (ii) printing expenses (including, without limitation,  expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the  printing of  prospectuses  is  reasonably  requested by the holders of a
majority of the Registrable Securities included in the Registration  Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance,  if the Company
so desires  such  insurance,  and (vi) fees and  expenses  of all other  Persons
retained by the Company in connection with the  consummation of the transactions
contemplated  by this Agreement.  In addition,  the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including,  without limitation,
all salaries and expenses of its  officers  and  employees  performing  legal or
accounting  duties),  the expense of any annual  audit and the fees and expenses
incurred in  connection  with the listing of the  Registrable  Securities on any
securities exchange as required hereunder.

         5. Indemnification.

         (a) Indemnification by the Company. The Company shall,  notwithstanding
any termination of this Agreement,  indemnify and hold harmless each Holder, the
officers,   directors,   agents,  investment  advisors,  partners,  members  and
employees of each of them,  each Person who controls any such Holder (within the
meaning of Section 15 of the  Securities  Act or Section 20 of the Exchange Act)
and the  officers,  directors,  agents and  employees  of each such  controlling
Person,  to the fullest extent permitted by applicable law, from and against any
and  all  losses,  claims,  damages,  liabilities,   costs  (including,  without
limitation,  reasonable costs of preparation and reasonable attorneys' fees) and
expenses (collectively,  "Losses"),  as incurred,  arising out of or relating to
any untrue or alleged  untrue  statement  of a material  fact  contained  in any
Registration  Statement,  any  Prospectus  or any form of  prospectus  or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged  omission of a material  fact required
to be stated therein or necessary to make the statements therein (in the case of
any  Prospectus or form of prospectus  or  supplement  thereto,  in light of the
circumstances under which they were made) not misleading,  except to the extent,
but only to the extent,  that (i) such untrue  statements or omissions are based
solely  upon  information  regarding  such  Holder  furnished  in writing to the
Company by such Holder  expressly  for use  therein,  or to the extent that such
information  relates  to  such  Holder  or  such  Holder's  proposed  method  of
distribution of Registrable  Securities and was reviewed and expressly  approved
in writing by such Holder expressly for use in the Registration Statement,  such
Prospectus or such form of Prospectus or in any amendment or supplement  thereto
(it being  understood  that the  Holder  has  approved  Annex A hereto  for this
purpose) or (ii) in the case of an occurrence of an event of the type  specified

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in Sections  3(c)(ii)-(v),  the use by such  Holder of an outdated or  defective
Prospectus  after the  Company  has  notified  such  Holder in writing  that the
Prospectus  is outdated or defective  and prior to the receipt by such Holder of
an Advice  or an  amended  or  supplemented  Prospectus,  but only if and to the
extent that  following the receipt of the Advice or the amended or  supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected.  The Company  shall notify the Holders  promptly of the  institution,
threat  or  assertion  of any  Proceeding  of  which  the  Company  is  aware in
connection with the transactions contemplated by this Agreement.

         (b)  Indemnification by Holders.  Each Holder shall,  severally and not
jointly,  indemnify  and hold  harmless the Company,  its  directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents or employees of such controlling  Persons,  to the
fullest  extent  permitted by applicable  law,  from and against all Losses,  as
incurred,  arising solely out of or based solely upon: (i) such Holder's failure
to comply with the  prospectus  delivery  requirements  of the Securities Act or
(ii) any untrue  statement  of a material  fact  contained  in any  Registration
Statement,  any  Prospectus,  or any form of prospectus,  or in any amendment or
supplement  thereto,  or arising solely out of or based solely upon any omission
of a  material  fact  required  to be stated  therein or  necessary  to make the
statements  therein not  misleading to the extent,  but only to the extent that,
(A) such untrue  statements  or  omissions  are based  solely  upon  information
regarding  such  Holder  furnished  in  writing to the  Company  by such  Holder
expressly  for use therein,  or to the extent that such  information  relates to
such Holder or such Holder's  proposed  method of  distribution  of  Registrable
Securities  and was  reviewed and  expressly  approved in writing by such Holder
expressly for use in the  Registration  Statement (it being  understood that the
Holder has approved  Annex A hereto for this purpose),  such  Prospectus or such
form of Prospectus or in any amendment or supplement  thereto or (B) in the case
of an occurrence of an event of the type specified in Sections 3(c)(ii)-(v), the
use by such Holder of an outdated or defective  Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such  Holder of an Advice or an amended or  supplemented
Prospectus,  but only if and to the extent  that  following  the  receipt of the
Advice or the amended or  supplemented  Prospectus the  misstatement or omission
giving  rise to such Loss  would  have  been  corrected.  In no event  shall the
liability of any selling  Holder  hereunder be greater in amount than the dollar
amount  of the  net  proceeds  received  by such  Holder  upon  the  sale of the
Registrable Securities giving rise to such indemnification obligation.

         (c) Conduct of Indemnification  Proceedings. If any Proceeding shall be
brought or asserted  against  any Person  entitled to  indemnity  hereunder  (an
"Indemnified  Party"),  such Indemnified  Party shall promptly notify the Person
from whom  indemnity is sought (the  "Indemnifying  Party") in writing,  and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably  satisfactory to the Indemnified Party and the payment of all
fees and expenses  incurred in connection with defense thereof;  provided,  that
the failure of any  Indemnified  Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally  determined  by a court
of  competent  jurisdiction  (which  determination  is not  subject to appeal or
further  review)  that  such  failure  shall  have  proximately  and  materially
adversely prejudiced the Indemnifying Party.

         An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof,  but the fees and
expenses of such counsel  shall be at the expense of such  Indemnified  Party or
Parties  unless:  (i) the  Indemnifying  Party has agreed in writing to pay such
fees and  expenses;  (i) the  Indemnifying  Party shall have failed  promptly to

                                       9
<PAGE>

assume  the  defense  of  such  Proceeding  and  to  employ  counsel  reasonably
satisfactory  to such  Indemnified  Party in any such  Proceeding;  or (iii) the
named parties to any such Proceeding  (including any impleaded  parties) include
both such  Indemnified  Party and the  Indemnifying  Party, and such Indemnified
Party shall have been  advised by counsel  that a conflict of interest is likely
to exist if the same counsel were to represent  such  Indemnified  Party and the
Indemnifying  Party (in which  case,  if such  Indemnified  Party  notifies  the
Indemnifying  Party in writing that it elects to employ separate  counsel at the
expense of the Indemnifying  Party,  the  Indemnifying  Party shall not have the
right to assume the defense  thereof and such counsel shall be at the expense of
the  Indemnifying  Party).  The  Indemnifying  Party shall not be liable for any
settlement of any such Proceeding  effected without its written  consent,  which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,  unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

         All fees and expenses of the Indemnified  Party  (including  reasonable
fees and expenses to the extent  incurred in connection  with  investigating  or
preparing  to defend  such  Proceeding  in a manner not  inconsistent  with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Trading
Days of written notice thereof to the Indemnifying  Party (regardless of whether
it is  ultimately  determined  that an  Indemnified  Party  is not  entitled  to
indemnification  hereunder;  provided,  that the Indemnifying  Party may require
such  Indemnified  Party to undertake to reimburse all such fees and expenses to
the extent it is finally  judicially  determined that such Indemnified  Party is
not entitled to indemnification hereunder).

         (d) Contribution.  If a claim for indemnification under Section 5(a) or
5(b) is  unavailable  to an  Indemnified  Party (by  reason of public  policy or
otherwise),   then  each  Indemnifying  Party,  in  lieu  of  indemnifying  such
Indemnified  Party,  shall  contribute  to the  amount  paid or  payable by such
Indemnified  Party  as a  result  of  such  Losses,  in  such  proportion  as is
appropriate  to  reflect  the  relative  fault  of the  Indemnifying  Party  and
Indemnified  Party in connection with the actions,  statements or omissions that
resulted in such Losses as well as any other relevant equitable  considerations.
The relative fault of such  Indemnifying  Party and  Indemnified  Party shall be
determined by reference to, among other things,  whether any action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information  supplied by, such Indemnifying  Party or Indemnified Party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  action,  statement  or  omission.  The amount  paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable  fees or  expenses  incurred  by such  party in  connection  with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the  indemnification  provided for in this Section was  available to
such party in accordance with its terms.

         The parties  hereto  agree that it would not be just and  equitable  if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.

                                       10
<PAGE>

Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds  actually  received  by such  Holder  from the sale of the  Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has  otherwise  been  required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.

         The indemnity and contribution agreements contained in this Section are
in  addition  to any  liability  that the  Indemnifying  Parties may have to the
Indemnified Parties.

         6. Miscellaneous.

         (a)  Remedies.  In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific  performance of its rights under this  Agreement.  The Company and each
Holder agree that monetary damages would not provide  adequate  compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement  and  hereby  further  agrees  that,  in the event of any  action  for
specific  performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

         (b) No  Piggyback  on  Registrations.  Except  as  and  to  the  extent
specified in Schedule 3.1(v) to the Purchase Agreement,  neither the Company nor
any of its security  holders  (other than the Holders in such capacity  pursuant
hereto) may include securities of the Company in a Registration  Statement other
than  the  Registrable  Securities,   and  the  Company  shall  not  during  the
Registration  Period enter into any agreement providing any such right to any of
its security holders.

         (c)  Compliance.  Each Holder  covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it  in  connection  with  sales  of  Registrable   Securities  pursuant  to  the
Registration Statement.

         (d) Discontinued Disposition.  Each Holder agrees by its acquisition of
such  Registrable  Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind  described in Section 3(c),  such Holder
will forthwith discontinue  disposition of such Registrable Securities under the
Registration  Statement  until  such  Holder's  receipt  of  the  copies  of the
supplemented  Prospectus  and/or amended  Registration  Statement or until it is
advised in writing (the  "Advice") by the Company that the use of the applicable
Prospectus  may be resumed,  and, in either  case,  has  received  copies of any
additional  or  supplemental  filings  that are  incorporated  or  deemed  to be
incorporated  by reference in such  Prospectus or  Registration  Statement.  The
Company may provide  appropriate  stop orders to enforce the  provisions of this
paragraph.

         (e) Piggy-Back  Registrations.  If at any time during the Effectiveness
Period  there is not an  effective  Registration  Statement  covering all of the
Registrable  Securities and the Company shall determine to prepare and file with
the  Commission  a  registration  statement  relating to an offering for its own
account or the account of others under the  Securities  Act of any of its equity

                                       11
<PAGE>

securities,  other than on Form S-4 or Form S-8 (each as  promulgated  under the
Securities Act) or their then  equivalents  relating to equity  securities to be
issued solely in connection  with any  acquisition  of any entity or business or
equity  securities  issuable in connection  with stock option or other  employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen days after receipt of such notice, any such
Holder  shall  so  request  in  writing,  the  Company  shall  include  in  such
registration  statement  all or any  part of such  Registrable  Securities  such
holder  requests to be  registered,  subject to customary  underwriter  cutbacks
applicable to all holders of registration rights.

         (f) Amendments and Waivers. The provisions of this Agreement, including
the  provisions  of  this  Section  6(f),  may  not  be  amended,   modified  or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given,  unless the same shall be in writing and signed by the Company
and the Holders of no less than a majority  in interest of the then  outstanding
Registrable  Securities.  Notwithstanding the foregoing,  a waiver or consent to
depart  from  the  provisions  hereof  with  respect  to a matter  that  relates
exclusively  to the  rights of certain  Holders  and that does not  directly  or
indirectly  affect  the  rights of other  Holders  may be given by Holders of at
least a majority of the  Registrable  Securities to which such waiver or consent
relates.

         (g) Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of  transmission,  if
such notice or  communication  is delivered via  facsimile  (provided the sender
receives a  machine-generated  confirmation of successful  transmission)  at the
facsimile  number  specified in this Section  prior to 6:30 p.m.  (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or  communication  is delivered  via  facsimile at the  facsimile
number  specified  in this  Section on a day that is not a Trading  Day or later
than 6:30 p.m.  (New York City time) on any  Trading  Day,  (c) the  Trading Day
following the date of mailing, if sent by U.S. nationally  recognized  overnight
courier service,  or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and  communications  shall be
as follows:

         If to the Company:       China BAK Battery, Inc.
                                  BAK Industrial Park, No. 1 BAK Street
                                  Kuichong Town, Longgang District
                                  Shenzhen, People's Republic Of China
                                  Attn:  Li Xiangqian, Chief Executive Officer
                                  Facsimile:  011 86 755 89 77 00 04
         and also to

                                  Nevada Agency and Trust Company
                                  50 West Liberty Street, Suite 880
                                  Reno, Nevada  89501

                                       12
<PAGE>

         With a copy to:          Andrews Kurth, L.L.P.
                                  1717 Main Street
                                  Dallas, Texas 75201
                                  Attn:  Robin Bradford, Esq.
                                  Facsimile:  (214) 659-4401

         If to a Investor:        To the address set forth under such Investor's
                                  name on the signature pages hereto.

         If to any other Person who is then the registered Holder:

                                  To the address of such Holder as it appears
                                  in the stock transfer books of the Company

or such other  address as may be designated  in writing  hereafter,  in the same
manner, by such Person.

         (h) Successors and Assigns.  This Agreement  shall inure to the benefit
of and be  binding  upon the  successors  and  permitted  assigns of each of the
parties  and shall  inure to the  benefit of each  Holder.  The  Company may not
assign its rights or obligations  hereunder without the prior written consent of
each Holder.  Each Holder may assign their  respective  rights  hereunder in the
manner  and to the  Persons  as  permitted  under the  Purchase  Agreement.  Any
transferee to whom the rights of a Holder are transferred, including any pledges
or secured parties, shall agree, by accepting any rights, privileges or benefits
of this Agreement,  to be bound by the obligations imposed on such Holders under
this  Agreement  in  connection  with such  rights,  privileges  or  benefits so
transferred.

         (i) Execution and  Counterparts.  This Agreement may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original  and, all of which taken  together  shall  constitute  one and the same
Agreement.   In  the  event  that  any   signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.

         (j) Governing Law. All questions concerning the construction, validity,
enforcement  and  interpretation  of this  Agreement  shall be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York,  without regard to the principles of conflicts of law thereof.  Each party
agrees that all  Proceedings  concerning the  interpretations,  enforcement  and
defense of the  transactions  contemplated  by this Agreement  (whether  brought
against a party hereto or its respective  Affiliates,  employees or agents) will
be  commenced  in the New York  Courts.  Each party  hereto  hereby  irrevocably
submits  to  the  exclusive   jurisdiction  of  the  New  York  Courts  for  the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed  herein,  and hereby  irrevocably
waives,  and  agrees not to assert in any  Proceeding,  any claim that it is not
personally  subject  to the  jurisdiction  of any New York  Court,  or that such
Proceeding has been commenced in an improper or inconvenient  forum.  Each party
hereto hereby  irrevocably  waives  personal  service of process and consents to
process  being  served in any such  Proceeding  by  mailing a copy  thereof  via
registered or certified  mail or overnight  delivery (with evidence of delivery)

                                       13
<PAGE>

to such party at the  address in effect for  notices to it under this  Agreement
and agrees that such service shall  constitute  good and  sufficient  service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve  process in any manner  permitted by law.  Each party
hereto hereby irrevocably  waives, to the fullest extent permitted by applicable
law,  any and all  right to trial by jury in any  Proceeding  arising  out of or
relating to this Agreement or the transactions  contemplated  hereby.  If either
party shall commence a Proceeding to enforce any  provisions of this  Agreement,
then the prevailing  party in such  Proceeding  shall be reimbursed by the other
party for its  attorney's  fees and other costs and expenses  incurred  with the
investigation, preparation and prosecution of such Proceeding.

         (k) Cumulative  Remedies.  The remedies  provided herein are cumulative
and not exclusive of any remedies provided by law.

         (l) Severability.  If any term,  provision,  covenant or restriction of
this  Agreement  is held by a court of  competent  jurisdiction  to be  invalid,
illegal,  void  or  unenforceable,  the  remainder  of  the  terms,  provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  reasonable  efforts to find and  employ an  alternative
means to achieve the same or substantially  the same result as that contemplated
by such term,  provision,  covenant or restriction.  It is hereby stipulated and
declared to be the  intention of the parties  that they would have  executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

         (m) Headings.  The headings in this  Agreement are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

         (n)  Independent  Nature of  Investors'  Obligations  and  Rights.  The
obligations of each Investor under this Agreement are several and not joint with
the obligations of each other Investor,  and no Investor shall be responsible in
any way for the  performance of the obligations of any other Investor under this
Agreement.  Nothing  contained  herein or in any  Transaction  Document,  and no
action taken by any Investor pursuant thereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity,  or create a  presumption  that the  Investors  are in any way acting in
concert  or as a group  with  respect to such  obligations  or the  transactions
contemplated by this Agreement or any other Transaction Document.  Each Investor
acknowledges  that no other Investor will be acting as agent of such Investor in
enforcing its rights under this  Agreement.  Each Investor  shall be entitled to
independently  protect and enforce its rights,  including without limitation the
rights  arising out of this  Agreement,  and it shall not be  necessary  for any
other  Investor to be joined as an additional  party in any  Proceeding for such
purpose.  The Company  acknowledges that each of the Investors has been provided
with the same  Registration  Rights  Agreement  for the  purpose  of  closing  a
transaction with multiple Investors and not because it was required or requested
to do so by any Investor.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                           SIGNATURE PAGES TO FOLLOW]

                                       14
<PAGE>

         IN WITNESS WHEREOF,  the parties have executed this Registration Rights
Agreement as of the date first written above.

                                            CHINA BAK BATTERY, INC.

                                            By:_________________________________
                                                 Name:
                                                 Title:

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES OF INVESTORS TO FOLLOW]

                                       15
<PAGE>

         IN WITNESS WHEREOF,  the parties have executed this Registration Rights
Agreement as of the date first written above.

                                       NAME OF INVESTING ENTITY

                                       By:______________________________________
                                          Name:
                                          Title:

                                       ADDRESS FOR NOTICE

                                       c/o:_____________________________________

                                       Street:__________________________________

                                       City/State/Zip:__________________________

                                       Attention:_______________________________

                                       Tel:_____________________________________

                                       Fax:_____________________________________

                                       Email:___________________________________

                                       16
<PAGE>

                                                                         Annex A

                              Plan of Distribution

         The  Selling   Stockholders   and  any  of  their   pledgees,   donees,
transferees,  assignees and successors-in-interest  may, from time to time, sell
any or all of their  shares of Common  Stock on any  stock  exchange,  market or
trading  facility  on which the shares  are  traded or in private  transactions.
These sales may be at fixed or negotiated prices.  The Selling  Stockholders may
use any one or more of the following methods when selling shares:

o        ordinary   brokerage   transactions   and  transactions  in  which  the
         broker-dealer solicits Investors;

o        block trades in which the broker-dealer will attempt to sell the shares
         as  agent  but may  position  and  resell  a  portion  of the  block as
         principal to facilitate the transaction;

o        purchases  by  a   broker-dealer   as  principal   and  resale  by  the
         broker-dealer for its account;

o        an exchange distribution in accordance with the rules of the applicable
         exchange;

o        privately negotiated transactions;

o        to cover  short  sales  made  after  the date  that  this  Registration
         Statement is declared effective by the Commission;

o        broker-dealers  may  agree  with  the  Selling  Stockholders  to sell a
         specified number of such shares at a stipulated price per share;

o        a combination of any such methods of sale; and

o        any other method permitted pursuant to applicable law.

         The Selling  Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

         Broker-dealers  engaged by the  Selling  Stockholders  may  arrange for
other  brokers-dealers  to  participate  in sales.  Broker-dealers  may  receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares,  from the purchaser) in amounts to be
negotiated.  The  Selling  Stockholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved.

                                       17
<PAGE>

         The  Selling  Stockholders  may  from  time to time  pledge  or grant a
security  interest  in some or all of the  Shares  owned  by them  and,  if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell  shares of Common  Stock from time to time under this
prospectus,  or under an amendment to this  prospectus  under Rule  424(b)(3) or
other  applicable  provision of the  Securities Act of 1933 amending the list of
selling  stockholders to include the pledgee,  transferee or other successors in
interest as selling stockholders under this prospectus.

         Upon the Company  being  notified  in writing by a Selling  Stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale  of  Common  Stock  through  a  block  trade,  special  offering,  exchange
distribution or secondary  distribution  or a purchase by a broker or dealer,  a
supplement  to this  prospectus  will be filed,  if  required,  pursuant to Rule
424(b) under the  Securities  Act,  disclosing (i) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (ii) the number of shares
involved,  (iii) the price at which such the  shares of Common  Stock were sold,
(iv)the   commissions   paid  or  discounts  or  concessions   allowed  to  such
broker-dealer(s),  where  applicable,  (v) that  such  broker-dealer(s)  did not
conduct any  investigation  to verify the information set out or incorporated by
reference in this prospectus,  and (vi) other facts material to the transaction.
In addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee  intends to sell more than 500 shares of Common Stock, a
supplement to this  prospectus will be filed if then required in accordance with
applicable securities law.

         The Selling  Stockholders  also may transfer the shares of Common Stock
in  other  circumstances,  in  which  case the  transferees,  pledgees  or other
successors  in interest  will be the selling  beneficial  owners for purposes of
this prospectus.

         The  Selling  Stockholders  and any  broker-dealers  or agents that are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker-dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions  or discounts  under the  Securities  Act.  Discounts,  concessions,
commissions and similar selling expenses,  if any, that can be attributed to the
sale  of  Securities  will  be  paid  by  the  Selling  Stockholder  and/or  the
purchasers.  Each  Selling  Stockholder  has  represented  and  warranted to the
Company that it acquired the securities  subject to this registration  statement
in the ordinary course of such Selling  Stockholder's  business and, at the time
of its purchase of such securities such Selling Stockholder had no agreements or
understandings,  directly or indirectly,  with any person to distribute any such
securities.

         The Company has advised  each Selling  Stockholder  that it may not use
shares registered on this Registration  Statement to cover short sales of Common
Stock  made prior to the date on which this  Registration  Statement  shall have
been declared  effective by the Commission.  If a Selling  Stockholder uses this
prospectus  for any  sale  of the  Common  Stock,  it  will  be  subject  to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible  to comply with the applicable  provisions of the Securities
Act and Exchange  Act,  and the rules and  regulations  thereunder  promulgated,
including,  without  limitation,  Regulation  M, as  applicable  to such Selling
Stockholders  in connection with resales of their  respective  shares under this
Registration Statement.

         The Company is required  to pay all fees and  expenses  incident to the
registration  of the shares,  but the Company will not receive any proceeds from
the sale of the Common  Stock.  The Company has agreed to indemnify  the Selling
Stockholders against certain losses, claims, damages and liabilities,  including
liabilities under the Securities Act.

                                       18
<PAGE>

                                                                         Annex B

                             CHINA BAK BATTERY, INC.

                 Selling Securityholder Notice and Questionnaire

The undersigned  beneficial owner of common stock (the "Common Stock"), of China
BAK Battery,  Inc.  (the  "Company")  understands  that the Company has filed or
intends to file with the Securities and Exchange Commission (the "Commission") a
Registration  Statement  for the  registration  and  resale  of the  Registrable
Securities,  in accordance with the terms of the Registration  Rights Agreement,
dated as of ___, 2005 (the "Registration  Rights Agreement"),  among the Company
and the Investors named therein. A copy of the Registration  Rights Agreement is
available  from the Company  upon  request at the address set forth  below.  All
capitalized  terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Registration Rights Agreement.

The  undersigned  hereby  provides the following  information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.       Name.

         (a)      Full Legal Name of Selling Securityholder

                  ______________________________________________________________

         (b)      Full Legal Name of  Registered  Holder (if not the same as (a)
                  above) through which  Registrable  Securities Listed in Item 3
                  below are held:

                  ______________________________________________________________

         (c)      Full Legal  Name of  Natural  Control  Person  (which  means a
                  natural person who directly or indirectly alone or with others
                  has power to vote or dispose of the securities  covered by the
                  questionnaire):

                  ______________________________________________________________

2.  Address for Notices to Selling Securityholder:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Telephone:______________________________________________________________________

                                       19
<PAGE>

Fax:____________________________________________________________________________
Contact Person:_________________________________________________________________

3.       Beneficial Ownership of Registrable Securities:

         Type and Principal Amount of Registrable Securities beneficially owned:

         _______________________________________________________________________
         _______________________________________________________________________
         _______________________________________________________________________

4.       Broker-Dealer Status:

         (a)      Are you a broker-dealer?

                                 Yes [_] No [_]

         Note:    If yes, the  Commission's  staff has indicated that you should
                  be identified as an underwriter in the Registration Statement.

         (b)      Are you an affiliate of a broker-dealer?

                                 Yes [_] No [_]

         (c)      If you are an  affiliate  of a  broker-dealer,  do you certify
                  that you bought the  Registrable  Securities  in the  ordinary
                  course of  business,  and at the time of the  purchase  of the
                  Registrable  Securities to be resold, you had no agreements or
                  understandings,  directly  or  indirectly,  with any person to
                  distribute the Registrable Securities?

                                            Yes [_] No [_]

         Note:    If no, the Commission's staff has indicated that you should be
                  identified as an underwriter in the Registration Statement.

5.       Beneficial  Ownership of Other  Securities  of the Company Owned by the
         Selling Securityholder.

         Except as set forth  below in this Item 5, the  undersigned  is not the
         beneficial or registered  owner of any  securities of the Company other
         than the Registrable Securities listed above in Item 3.

         Type and Amount of Other Securities  beneficially  owned by the Selling
         Securityholder:

         _______________________________________________________________________
         _______________________________________________________________________
         _______________________________________________________________________

                                       20
<PAGE>

6.       Relationships with the Company:

         Except as set  forth  below,  neither  the  undersigned  nor any of its
         affiliates,  officers, directors or principal equity holders (owners of
         5% of more of the equity  securities of the  undersigned)  has held any
         position or office or has had any other material  relationship with the
         Company  (or its  predecessors  or  affiliates)  during  the past three
         years.

         State any exceptions here:

         _______________________________________________________________________
         _______________________________________________________________________
         _______________________________________________________________________

The  undersigned  agrees to promptly  notify the Company of any  inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.

By signing below, the undersigned  consents to the disclosure of the information
contained  herein in its answers to Items 1 through 6 and the  inclusion of such
information  in the  Registration  Statement  and the  related  prospectus.  The
undersigned understands that such information will be relied upon by the Company
in connection  with the preparation or amendment of the  Registration  Statement
and the related prospectus.

IN WITNESS  WHEREOF the  undersigned,  by authority duly given,  has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:_____________________              Beneficial Owner:

                                         By:____________________________________
                                            Name:
                                            Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED  NOTICE AND  QUESTIONNAIRE,  AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                     China BAK Battery, Inc.
                     BAK Industrial Park, No. 1 BAK Street
                     Kuichong Town, Longgang District
                     Shenzhen, People's Republic Of China
                     Attn:  Li Xiangqian, Chief Executive Officer
                     Facsimile:  011 86 755 89 77 00 04

                                       21EX-10.1

WAIVER AND RELEASE OF CLAIMS

This WAIVER AND RELEASE OF CLAIMS (this “Release”) is made and entered into on March 6, 2006,
by and between Health Net, Inc. and its affiliates and subsidiaries (hereinafter referred to as the
“Company”) and Jeffrey M. Folick (hereinafter referred to as the “Employee”).

WHEREAS, the Company and Employee are parties to an Employment Letter Agreement dated as of
May 22, 2002, as amended by the letter agreement dated July 2, 2004, as further amended by the
letter agreement dated January 28, 2005 and as further amended by the letter agreement dated
October 10, 2005 (collectively, the “Employment Letter Agreement”) and are entering into this
Release as a condition to Employee’s receipt of a severance payment thereunder (capitalized terms
used but not defined herein shall have the meanings set forth in the Employment Letter Agreement).

NOW, THEREFORE, the Company and Employee agree as follows:

	1.	 	Employee’s employment with the Company will terminate on March 6, 2006 (the “Termination
Date”). Upon termination of employment, Employee will not represent to anyone that he is an
employee of the Company and will not say or do anything purporting to bind the Company. Upon
Employee’s termination of employment, Employee shall be deemed to have resigned from all other
positions with the Company, if any, held by Employee.

	2.	 	Employee has elected to terminate his employment with the Company in accordance with Section
9(h) of the Employment Letter Agreement, and Employee is therefore eligible to receive, in
lieu of any other payments or benefits under Section 9 of the Employment Letter Agreement, (i)
a lump sum cash payment equal to (x) two times (2x) Employee’s Base Salary, which, for
avoidance of doubt, the Company and Employee agree is an amount equal to $1,080,000, and (y),
in lieu of participating in the Company’s 2005 and 2006 Management Incentive Plans (“MIP”),
(1) as compensation for achieving the goals set forth in Section 9(h)(2)(A) of the Employment
Letter Agreement a bonus award equal to fifty percent (50%) of Employee’s target incentive
amount under the Company’s MIP for 2005, which, for the avoidance of doubt, the Company and
Employee agree is an amount equal to $216,000, and (2) in addition, Employee may be eligible
to receive, as compensation for achieving the goals set forth in Section 9(h)(2)(B) of the
Employment Letter Agreement (the “9(h)(2)(B) Amount”), an additional bonus award equal to
fifty percent (50%) of Employee’s target incentive amount under the Company’s MIP for 2005
which, for the avoidance of doubt, the Company and Employee agree, if payable, shall be an
amount equal to $216,000, (ii) the continuation of medical, dental, and vision benefits for
Employee and his dependents for six (6) months following the Termination Date, and (iii) after
the expiration of such six (6) month benefit continuation period, the premium payments for the
continuation of his medical, dental, and vision benefits under COBRA (as maintained for
Employee’s benefit immediately prior to the Termination Date) for Employee and his dependents
for an additional period of eighteen (18) months, provided, that Employee properly
elects to continue those benefits under COBRA and provided, further, that
Employee’s eligibility for benefits continuation and/or COBRA premium payments will expire
immediately upon Employee’s acceptance of employment with another employer offering comparable
benefits . The Compensation Committee of the Board of Directors (the “Committee”) is
currently analyzing whether Employee has met the performance criteria for payment of the
9(h)(2)(B) Amount. The Committee will complete its analysis of the criteria by no later than
March 31, 2006 (the “Determination Date”). If Employee has met the performance criteria for
an award of the 9(h)(2)(B) Amount, the Company will pay such amount to Employee within fifteen
(15) days of the Determination Date, it being understood that if the Determination Date occurs
earlier than March 31, 2006, the date upon which the Committee renders its decision as to
Employee’s eligibility to receive the 9(h)(2)(B) Amount shall be deemed the Determination
Date. Payment of all other amounts owed under Section 2(i) above, which, for the avoidance of
doubt is an amount equal to $1,296,000, above will be paid in a lump sum within thirty (30)
days following the Termination Date and the Company will withhold the applicable tax
withholdings from such lump sum payment. Employee and the Company agree that, notwithstanding
the terms of the Employment Agreement, Employee shall not be required to sign a Restrictive
Covenant Agreement as a condition to Employee’s receipt of the benefits set forth in this
Release and that Section 11 hereof shall be deemed to supersede the form of Restrictive
Covenant Agreement attached as Exhibit B to the Employment Agreement (the “Restrictive
Covenant Agreement”).

	3.	 	Employee and Company acknowledge and agree that all of the terms and conditions of each of
the Nonqualified Stock Option Agreements (the “Option Agreements”) dated as of May 24, 2002
and February 20, 2003 between the Company and Employee (as well as the vesting schedule for
stock options set forth in Paragraph 7 of the Employment Letter Agreement and Exhibit C
thereto) remain in effect, and that the Employee’s timely election to terminate his employment
with the Company pursuant to Section 9(h) of the Employment Letter Agreement shall be treated
as a termination by the Company without Cause for purposes of the Option Agreements, which
shall mean, among other things, that Employee shall have a period of three (3) months from the
Termination Date to exercise any outstanding stock options which have vested in accordance
with the terms of the Option Agreements as of the Termination Date. Notwithstanding the
foregoing, the Company agrees that Employee’s employment with Elder Health, Inc. shall not be
deemed to be a breach of Section 11(b) hereof or of the restrictive covenant provisions
contained in the Employment Letter Agreement, the Restrictive Covenant Agreement, or the
Option Agreements.

	4.	 	All unused accrued vacation and unused personal absence time will be paid in Employee’s final
regular paycheck in keeping with the Company’s policy and practice or such shorter time as may
be required by applicable law. Employee acknowledges that no further vacation/paid-time-off
benefits will accrue after the Termination Date.

	5.	 	Employee’s participation in all Company employee benefit plans as an active employee shall
cease on the Termination Date, and Employee shall not be eligible to make contributions to or
to receive allocations under the Health Net, Inc. 401(k) Associate Savings Plan (the “401(k)
Plan”) or to make any deferrals pursuant to any deferred compensation plan of the Company
after the Termination Date. For the avoidance of doubt, the parties hereto acknowledge and
agree that nothing contained in this Section 5 shall restrict Employee from receiving any
distribution under the 401(k) Plan or any deferred compensation plan of the Company to which
Employee is entitled to receive in accordance with and pursuant to the terms of any such plan
or from receiving any of the medical, dental or vision benefits under COBRA as provided in
Sections 2(ii) and 2(iii) above.

	6.	 	In partial consideration of the Company providing Employee the payments and benefits set
forth above and as a condition to receive such payments and benefits, Employee freely and
voluntarily enters into this Release and by signing this Release Employee, on his own behalf
and on behalf of his heirs, beneficiaries, successors, representatives, trustees,
administrators and assigns, hereby waives and releases the Company, and each of its past,
present and future officers, directors, shareholders, employees, consultants, accountants,
attorneys, agents, managers, insurers, sureties, parent and sister corporations, divisions,
subsidiary corporations and entities, partners, joint venturers, affiliates, beneficiaries,
successors, representatives and assigns (collectively, the “Released Parties”), from any and
all claims, demands, damages, debts, liabilities, controversies, obligations, actions or
causes of action of any nature whatsoever, whether based on tort, statute, contract
(specifically including, but not limited to, claims arising out of or related to the
Employment Letter Agreement), indemnity, rescission or any other theory of recovery, including
but not limited to claims arising under federal, state or local laws prohibiting
discrimination in employment, including Title VII of the Civil Rights Act of 1964, as amended,
the Civil Rights Act of 1866, as amended, claims of disability discrimination under the
Americans with Disabilities Act, as amended, the Age Discrimination in Employment Act, as
amended (“ADEA”), the Worker Adjustment and Retraining Notification Act (“WARN”), as amended,
the Fair Labor Standards Act, as amended, the Employee Retirement Income Security Act of 1974,
as amended, the Family and Medical Leave Act, as amended, the California Fair Employment and
Housing Act, as amended, the California Family Rights Act, California Labor Code Section 1400
et seq. or claims growing out of any legal restrictions on the Company’s right to terminate
its employees and whether for compensatory, punitive, equitable or other relief, whether
known, unknown, suspected or unsuspected, against the Released Parties, including without
limitation claims which may have arisen or may in the future arise in connection with any
event which occurred on or before the date of Employee’s execution of this Release. The
provisions in this paragraph do not extend to any rights Employee may have to enforce the
terms of this Release and are not intended to prohibit Employee from filing a claim for
unemployment insurance. The Company acknowledges and agrees that the provisions of this
Section 6 do not release or affect any of Employee’s or the Company’s rights or obligations
under the Option Agreements (or the vesting schedule for stock options set forth in Paragraph
7 of the Employment Letter Agreement and Exhibit C thereto). The release provisions of this
Section 6 shall not release any Company shareholders, insurers or sureties from any claim that
Employee may have against them that is wholly unrelated, directly or indirectly, to Employee’s
affiliation with the Company, whether as an officer, employee, shareholder or otherwise.

	7.	 	Employee expressly waives any right or claim of right to assert hereafter that any claim,
demand, obligation and/or cause of action has, through ignorance, oversight or error, been
omitted from the terms of this Release. Employee makes this waiver with full knowledge of his
rights and with specific intent to release both his known and unknown claims, and therefore
specifically waives the provisions of Section 1542 of the Civil Code of California or other
similar provisions of any other applicable law, which reads as follows:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with the
debtor.”

Employee understands and acknowledges the significance and consequence of this Release and
of such specific waiver of Section 1542, and expressly agrees that this Release shall be
given full force and effect according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected claims, demands, obligations and causes
of action herein above specified.

	8.	 	Employee shall not initiate or cause to be initiated against the Company any compliance
review, suit, action, investigation or proceeding of any kind, or voluntarily participate in
same, individually or as a representative, witness or member of a class, under contract, law
or regulation, federal, state or local, pertaining to any matter related to his employment
with the Company, unless Employee first cooperates in making his allegations known to the
Company for the Company to take corrective action at a time and place designated by the
Company. In addition, Employee shall cooperate with and assist the Company in the
investigation of, preparation for or defense of any actual or threatened third party claim,
investigation or proceeding involving the Company or its predecessors or affiliates and
arising from or relating to, in whole or in part, Employee’s employment with the Company or
its predecessors or affiliates for which the Company requests Employee’s assistance, which
cooperation and assistance shall include, but not be limited to, providing truthful testimony
and assisting in information and document gathering efforts. The Company shall reimburse
Employee for any reasonable travel expenses incurred in connection with the foregoing, in each
case in accordance with the Company’s standard reimbursement policy. In this connection, it
is agreed that the Company will use its reasonable best efforts to assure that any request for
such cooperation will not unduly interfere with Employee’s other material business and
personal obligations and commitments.

	9.	 	Employee agrees that he will return to the Company immediately upon termination any building
keys, security passes or other access or identification cards and any Company property that
was in his possession, including but not limited to any documents, credit cards, computer
equipment, mobile phones or data files. Employee agrees to clear all expense accounts and pay
all amounts owed on any corporate credit cards which the Company previously issued to
Employee, subject to the Company’s obligation to reimburse Employee for any properly
reimbursable business expenses in accordance with the Company’s expense policies and
procedures then in effect.

	10.	 	Employee shall not, without the Company’s written consent by an authorized representative, at
any time prior or subsequent to the execution of this Release, disclose, use, remove or copy
any confidential, trade secret or proprietary information he acquired during the course of his
employment by the Company, including without limitation, any technical, actuarial, economic,
financial, procurement, provider, customer, underwriting, contractual, managerial, marketing
or other information of any type that has economic value in the business in which the Company
is engaged, but not including any previously published information or other information
generally in the public domain.

	11.	 	In addition to any other part or term of this Release or the Employment Letter Agreement,
Employee agrees that he will not, (a) for a period of one (1) year from the date of this
Release, irrespective of the reason for the termination, either directly or indirectly, on his
own behalf or on behalf of any other person: (1) make known to any person, firm, corporation
or other entity of any type, the names and addresses of any of the Company’s customers,
enrollees or providers or any other information pertaining to them; or (2) disrupt, solicit or
influence or attempt to solicit, disrupt or influence any of the Company’s customers,
providers, vendors, agents or independent contractors with whom the Employee became acquainted
during the course of employment or service for the purpose of terminating such a person’s or
entity’s relationship with the Company or causing such a person or entity to associate with a
competitor of the Company, and (b) for a period of one (1) year from the date of this Release
undertake any employment or activity (including, but not limited to, consulting services) with
a Competitor (as defined below), where the loyal and complete fulfillment of the duties of the
competitive employment or activity would call upon Employee to reveal, to make judgments on or
otherwise use or disclose any confidential business information or trade secrets of the
business of the Company or any of its affiliates to which Employee had access during his
employment with the Company. Employee acknowledges and agrees that if he takes a position as
vice president (or a higher position) or as a director of a Competitor, it will be presumed
for purposes of this Release that the loyal and complete fulfillment of Employee’s duties
would require him to use such information and Employee therefore would be deemed to be in
breach of this Section 11(b); provided, however, that Employee and the Company
agree that Employee’s employment with Elder Health, Inc. shall not be deemed to be a breach of
this Section 11(b) or the restrictive covenant provisions contained in the Employment Letter
Agreement, the Restrictive Covenant Agreement or the Option Agreements. For purposes of this
Section 11(b), “Competitor” shall mean (x) any publicly-traded health maintenance organization
with $1 billion or more in market capitalization or (y) any company licensed to offer managed
care and insurance products by Blue Cross or Blue Shield in Arizona, California, Connecticut,
Oregon, New Jersey or New York. The prohibitions of this paragraph are not intended to deny
employment opportunities within the Employee’s field of employment but are limited only to
those prohibitions necessary to protect the Company from unfair competition.

In the event that Employee breaches this Section 11, in addition to any and all other
remedies available to the Company hereunder or under applicable law, Employee agrees to
repay to the Company the cash payment received by him under Section 2 hereof (including,
without limitation, the 9(h)(2)(B) Amount, if payable) in equal monthly installments over
the twelve (12) months following written demand for payment by the Company.

	12.	 	Employee acknowledges that the Company is not entering into this Release because it believes
that Employee has any cognizable legal claim against the Release Parties. If Employee elects
not to sign this Release, the fact that the Release was offered will not be understood as an
indication that the Released Parties believed Employee was treated unlawfully in any respect.

	13.	 	If any part or term of this Release, other than Section 2, is held invalid or unenforceable,
such invalidity or unenforceability shall not affect in any way the validity or enforceability
of any other part or term of this Release. Employee and the Company expressly agree that the
character, duration and geographic scope of the restrictive covenant set forth in Section 11
hereof are reasonable in light of the circumstances as they exist on the date hereof,
including, but not limited to, Employee’s position of confidence and trust as an executive
officer of the Company. If any court of competent jurisdiction construes the covenants
contained in Section 11 hereof, or any part thereof, to be unenforceable in any respect, the
court may reduce the duration or scope to the extent necessary so that the provision is
enforceable, and the provision, as reduced, shall then be enforceable.

	14.	 	Employee agrees and acknowledges that this Release recites all payments and benefits Employee
is entitled to receive hereunder and under the Employment Letter Agreement, and that no other
payments or benefits will be asserted or requested by Employee, other than as provided for in
the Option Agreements (or the vesting schedule for stock options set forth in Paragraph 7 of
the Employment Letter Agreement and Exhibit C thereto).

	15.	 	Employee acknowledges that he enters into this Release freely, without coercion, and based on
the Employee’s own judgment and not in reliance upon any representation or promise made by the
other party, other than those contained herein. There may be no modification of the terms of
this Release except in writing signed by the parties hereto including an appropriately
authorized Officer of the Company.

	16.	 	This Release and the Option Agreements (including the vesting schedule for stock options set
forth in Paragraph 7 of the Employment Letter Agreement and Exhibit C thereto) constitute the
full, complete and exclusive agreement between Employee and the Company with respect to the
subject matters herein and supersede any prior agreements, representations or promises of any
kind, whether written, oral, express or implied, with respect to the subject matters herein.

	17.	 	Reference is hereby made to the Indemnification Agreement dated as of December 17, 2004
between the Company and Employee (the “Indemnification Agreement”). The parties hereto
acknowledge and agree that any rights Employee has to indemnification from the Company
pursuant to the Indemnification Agreement following the Termination Date shall remain in full
force and effect in accordance with the terms of the Indemnification Agreement. The Company
further acknowledges and agrees that the rights of Employee pursuant to the Indemnification
Agreement are in addition to any other rights to indemnification that Employee may have
pursuant to the Company’s Sixth Amended and Restated Certificate of Incorporation, Ninth
Amended and Restated Bylaws, as amended, the Delaware General Corporation Law or otherwise.

	18.	 	This Release shall be construed and governed by the laws of the State of Delaware.

EMPLOYEE ACKNOWLEDGES BY SIGNING BELOW that (i) Employee has not relied upon any
representations, written or oral, not set forth in this Release or in the Option Agreements
(including the vesting schedule for stock options set forth in Paragraph 7 of the Employment Letter
Agreement and Exhibit C thereto); (ii) at the time Employee was given this Release Employee was
informed in writing by the Company that (a) Employee had at least 21 days in which to consider
whether Employee would sign the Release and (b) Employee should consult with an attorney before
signing the Release; and (iii) Employee had an opportunity to consult with an attorney and either
had such consultations or has freely decided to sign this Release without consulting an attorney.

Employee further acknowledges that he may revoke acceptance of this Release by delivering a
letter of revocation within seven (7) days after the later of the dates set forth below addressed
to: Health Net, Inc., Corporate Legal Department, 21650 Oxnard Street, Woodland Hills, California
91367, Attention: General Counsel.

Finally, Employee acknowledges that he understands that this Release will not become effective
until the eighth (8th) day following his signing this Release and that if Employee does not revoke
his acceptance of the terms of this Release within the seven (7) day period following the date on
which Employee signs this Release as set forth above, this Release will be binding and enforceable.

[Signature Page Follows]

1

IN WITNESS WHEREOF, the parties hereto have executed this Release as of the date set forth
above.

	 	 	 	 	 	 	 
	Employee

By:

	 	     /s/ Jeffrey Folick                     
	 	Health Net, Inc.

By:
	 	

    /s/ Karin Mayhew                   
	
 
	 	 
	 	 	 	 
	
 
	 	Name: Jeffrey M. Folick

Title: Executive Vice President,

Regional Health Plans

and Specialty Companies
	 	Name: Karin D. Mayhew

Title:

	 	

Senior Vice President of

Organizational Effectiveness

	 
	 	 	 	 	 	 

2

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