Loan Agreement
Exhibit
10.12
The
Borrower: Jinzhou Halla Electrical Equipment Co., Ltd.
The
Lender: Jinzhou Commercial Bank
1. The
Loan
1.1
The
amount
of the loan: RMB40,000,000
1.2
The
term of the loan: 3 years, commencing from September 30th,
2005 to
September 27th,
2008
(the “Maturity Date”).
1.3
Borrower can only use the loan for purpose of business operation. Any other
use
must be approved by the Lender.
2. Interest
Rate and
Calculation of the Interest Rate
2.1
The
interest rate of this loan in this contract is 0.624%, to be calculated on
a
monthly basis.
2.2
Interest shall accrue on the unpaid principal amount of each loan from the
date
such loan is made until the maturity thereof at a rate per month equal to the
interest rate.
2.3
If
Lender prepays the loan before the Maturity Date, the interests accrued shall
be
calculated on the basis of a 365-day year and the actual number of days lapsed.
3. Procedure
of Borrowing
3.1
The
obligation of Lender to make each loan is subject to determination by Lender
that the following conditions have been satisfied:
| i. |
Borrower
has furnished required documentation.
|
| ii. |
The
borrowing is consistent with applicable laws.
|
3.2
Borrower shall request the loan 3 days before the date of
borrowing.
4. Payment
4.1
Payment can be made by Lender or other third parties at the Maturity Date.
1
5. Guarantee
of the Loan
5.1
The
loan is guaranteed as follows:
x. Xxxx
Qingjie guarantees to Lender the prompt and complete
payment when due.
| ii. |
The
loan is secured by certain real properties provided by Halla.
|
6. The
rights and obligations of Borrower
6.1
Borrower shall request the loan pursuant to this agreement.
| i. |
Borrower
can extend the term of the loan pursuant to this
agreement.
|
6.2
The
obligations of Borrower:
| i. |
Provide
the materials required by Lender in a timely
manner
|
ii.
Disclose
information regarding financial conditions and use
of
the loan upon request of Lender.
| iii. |
Inform
Lender of any material change of the company.
|
| iv. |
Lender
can terminate the agreement in event of disposition of properties by
Borrower at an unreasonable price.
|
| v. |
Borrower
must obtain Lender’s written consent before it acts as guarantor for other
third parties’ debt or obligations.
|
| vi. |
Borrower
shall not partially or fully delegate its obligations under this agreement
without Lender’s consent.
|
| vii. |
Borrower
shall pay off its debts according to their legal priorities. Borrower
shall not entered into any contract that renders this loan subordinated.
|
7. Lender’s
rights and obligations
7.1
Lender’s right
2
| i. |
Lender
can require disclosure of Borrower’s financial
status.
|
| ii. |
In
the event of breaches of this agreement by Borrower, Lender can declare
the entire outstanding principal balance of the loan, together with
all
accrued but unpaid interest immediate due and payable, or stop
disbursement of the loan.
|
iii. Lender
can withdraw funding from any account that Borrower open with Lender, to satisfy
Borrower’s obligations when due pursuant to this agreement.
7.2
Lender’s obligations
| i. |
Lender
shall disburse the loan in a timely
manner
|
| ii. |
Lender
shall keep any information regarding Borrower’s financial conditions that
is derived from the loan transaction
confidential.
|
8. Effectiveness,
Modification and Termination of the Agreement
8.1
This
agreement shall become effective upon the signing of the agreement.
8.2
Any
extension of the term of the loan shall be made no less than 30 days before
the
Maturity Date. The extension shall not become effective without Lender’s written
consent.
9. Remedies
for Breaches of the Agreement
9.1
Breaches of the Agreement on the part of Borrower occurs upon the occurrence
of
any of the following:
| i. |
Misrepresentation
of material information regarding Borrower’s financial
status.
|
| ii. |
Use
of the loan for purpose not set forth in this
agreement
|
| iii. |
Default
in payment when due
|
| iv. |
Unreasonable
disposition of Borrower’s properties by Borrower
|
| v. |
Material
adverse changes during the term of the
loan
|
| vi. |
Use
of the loan in engaging securities
transactions
|
| vii. |
The
loan is obtained by fraud
|
3
9.2
Any
occurrence of the following situations, without new guarantee agreement approved
by Lender constitutes breaches of this agreement:
| i. |
Guarantor
has adverse material change in its financial
status
|
| ii. |
Guarantor
provides guaranty to any other third parties which substantially adversely
affects its capability of performance under this agreement.
|
| iii. |
Guarantor
becomes insolvent or incapable to perform its obligation under the
guarantee agreement.
|
9.3
Any
of the following on the part of Mortgagor without new guarantee agreement
approved by Lender constitutes breaches of this agreement
| i. |
Mortgagor
does not purchase property insurance for the mortgaged property or
Mortgagor use the proceeds obtained in violation of the mortgage
agreement.
|
| ii. |
The
mortgaged property is
damaged due to the behavior of the third person, and the mortgagor
dispose
the payment of damages in violation of the mortgage
agreement.
|
| iii. |
Mortgagor
disposes the mortgaged property without Lender’s written
consent
|
9.4
Breaches on the part of Borrower regarding certain liens.
9.5
Remedies for Lender
| i. |
In
the event of breaches of this agreement by Borrower, Lender can declare
the entire outstanding principal balance of the loan, together with
all
accrued but unpaid interest immediate due and payable, or stop
disbursement of the loan.
|
| ii. |
Lender
can foreclose the mortgaged properties.
|
9.6
Remedies for Borrower
| i. |
Lender
shall be responsible for any difference in amount between the interest
of
this loan that should have accrued and the actual accrued interest
of an
substitute loan obtained by Borrower after Lender breaches the
agreement.
|
10. Dispute
Resolution: in case of litigation, the venue should be the residence of the
Lender.
Jinzhou
Halla Electrical Equipment Xx.Xxx.
/s/
Xxxxxxx Xxxx
Jinzhou
Commercial Bank
Seal
