TERMINATION AND RELEASE AGREEMENT

Exhibit 10.1

TERMINATION AND RELEASE AGREEMENT

          TERMINATION AND RELEASE AGREEMENT, dated as of September ___, 2006 (this “Agreement”), between the person executing this Agreement as the Optionee on the signature page hereto (the “Optionee”) and CHINA BAK BATTERY, INC., a Nevada corporation (the “Company”).  Capitalized terms used, but not otherwise defined, herein have the meanings ascribed to those terms in the China BAK Battery, Inc. Stock Option Plan (the “Plan”).

BACKGROUND

          The parties desire to terminate the Options identified on the signature page to this Agreement and to grant to the Optionee a number of shares of Restricted Stock as will be determined by the Board of Directors of the Company at a meeting to be held during the first quarter of the Company’s 2007 fiscal year.  The shares of Restricted Stock will be granted to the Optionee under the Plan using the form of Restricted Stock Grant Agreement attached hereto as Exhibit A.

          NOW, THEREFORE, in consideration of the mutual agreements set forth herein and for such other good and valuable consideration the receipt and adequacy of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

          1.          Termination and Release.  The Options identified on the signature page to this Agreement and any and all agreements pursuant to which such Options were granted (collectively, the “Option Agreement”) are hereby terminated and of no further force and effect.  Each Optionee shall return the original copy of the Option Agreement for cancellation, however, the failure to so return an Option Agreement shall in no way affect the termination thereof.  In consideration of the issuance of the Restricted Shares and such other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, each Optionee hereby releases and forever discharges the Company, its officers, directors, employees, agents and representatives from any and all claims, liabilities, suits and damages arising or in any way related to the the Options identified on the signature page hereto and the Option Agreement and agrees not to commence any such suit or make any such claim against the Company, its officers, directors, employees, agents or representatives.  Each Optionee represents and warrants to the Company that he has not made any such claim or suit prior to the date hereof.

          2.          Issuance of Shares of Restricted Stock.  In