Exhibit 10.42
 
Summary of Loan Agreement by and between Shenzhen BAK Battery Co., Ltd. and East
Branch, Agricultural Bank of China dated August 27 , 2007.
 
Summary of the main articles
 
·
Contract number: NO.81101200700001547

   

·
Loan Principal: RMB 40 million;

   

·
Loan term: twelve months starting from the date loan is actually provided to the
Company.

   

·
Floating interest rate: annually 7.722%, 110% of the benchmark rate announced by
the People’s Bank of China;

   

 
·
Penalty interest rate for delayed repayment: 5.022% plus 50% *5.022%;

     

 
·
Penalty interest rate for embezzlement of loan proceeds: 5.022% * 2;

     

·
Purpose of the loan is to provide working capital for the Company;

   

·
Advanced repayment of loan needs to be approved by the Lender;

   

·
Breach of contract penalties: suspension of loan un-provided, demand prepayment
of loan principal and interest before maturity; imposition of punitive interest;
compensation for the Lender’s expenses incurred due to the Company’s breach of
contract such as lawyer’s fee, travel cost in case of litigation, etc.

Summary of the articles omitted
 
·
Types of the loan

   

·
Clearing of the loan interest

   

·
Condition precedent to the drawing of the loan

   

·
Rights and obligations of the borrower

   

·
Rights and obligations of the lender

   

·
Guarantee of the loan

   

·
Dispute settlement

   

·
Miscellaneous

   

·
Validity

   

·
Notes

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