Loan Agreement
Exhibit
10.11
The
Borrower: Jinzhou Halla Electrical Equipment Co., Ltd.
The
Lender: China Construction Bank (Jinzhou Linghe Branch)
October
18, 2005
1. The
Loan
1.1
The
amount
of the loan: RMB20,000,000
2. Borrower
can only use the loan for purpose of business operation. Any other
use
must be approved by the Lender.
3. The
term of
the loan: 1 year, commencing from October 18th
, 2005
to October 17th
, 2006
(the “Maturity Date”).
4. Interest
Rate and Calculation of the Interest Rate
4.1
Interest rate
i. The
interest rate of this loan in this contract is 7.254%. The
accruals of interest shall be calculated on the basis of
a
365-day year and the
actual number of days elapsed..
4.2
Increase of Interest Rate
i. If
Borrower uses the loan for other purposes not set forth
in
this agreement, the interest rate shall be increased
to 14.508% per annum.
ii. If
Borrow
defaults in payment when due, the interest rate
shall be increased to 10.881% per annum.
4.3
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 defined in this agreement.
4.4
Daily
interest rate = monthly interest rate/30 = annual interest rate/360
4.5
Interest Payment
i. Interest
accrued shall be paid by Borrower monthly on the 20th
day of
each month.
1
5. Borrowing
Procedure
5.1
Borrower must meet
the
following prerequisite conditions before withdrawing
funding from the loan
| i. |
Borrower has furnished required
documentation
|
| ii. |
The borrowing is consistent with applicable laws.
|
5.2
Borrower can request the loan by giving notice to Lender 3 days before the
date
of borrowing.
6. Manner
of
Payment
6.1
Manner of Payment
i.
If
Borrower defaults in the payment for either principal balance
or interest when due, or Borrower ceases its business
operation before the
payment becomes due, or certain
circumstances
occur as defined by applicable law,
anypayment
made by Borrower shall first be applied
to
the amount of the outstanding principal balance
and second to unpaid
interest.
ii.
Except
for the circumstances defined in the proceeding paragraph,
any payment made by Borrower shall first be
applied to the amount of
unpaid interest and second to
the
outstanding
principal balance.
6.2
Borrower shall make the payment in a timely manner.
6.3
The
whole amount of RMB20,000,000 shall become due on October 17, 2006.
6.4
Each
payment require to be made by the Borrower hereunder shall be made by wire
transfer or immediately available funds. If Borrower defaults in any payment
when due, Lender can withdraw funding from any of Borrower’s China Construction
Bank accounts to satisfy Borrower’s payment when due pursuant to this agreement.
2
6.5
Prepayment
i. Prepayment
for the unpaid interest shall be make after giving
written notice to Lender.
ii. Prepayment
for the outstanding principal balance shall be
made
known to Lender by written application 30 business
days before the date of
the prepayment, subject
to Lender’s approval. All interest accrued shall be
calculated on the basis of actual number of days elapsed.
Borrower agrees to pay Lender a fee upon Borrower’s
prepayment, in any amount defined by the following
formula: amount of fee =
amount of prepayment
* 0.1% * number of days before the payment
due
7. The
loan
is guaranteed.
8. The
rights and obligations of Borrower
8.1
Borrower can request the disbursement of the loan pursuant to this
agreement.
| i. |
Borrower
can extend the term of the loan pursuant to this
agreement.
|
ii. Borrower
can request Lender to keep confidentialany
information regarding its financial conditions and business
operation.
8.2
The
obligations of Borrower:
iii. Provide
to
the Lender, as soon as possible within 10
days
after the end of each fiscal quarter of Borrower, certain
balance sheet and statement of income.
iv. Disclose
information regarding financial conditions and use
of
the loan upon request of Lender.
| v. |
Inform Lender of any material change of the company.
|
vi. Lender
can terminate the agreement in event of disposition
of Borrower’s properties by Borrower at anunreasonably
inadequate price.
vii. Borrower
must obtain Lender’s written consent before it
acts
as guarantor for other third parties’ debt or obligations.
viii.
Borrower
cannot partially or fully delegate its obligations
under this agreement without Lender’s consent.
ix. Borrower
shall pay off its debts according to their legal priorities.
Borrower cannot entered into any contract that
renders this loan
subordinated.
3
9. Lender’s
rights and obligations
9.1
Lender’s right
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.
|
9.2
Lender’s obligations
| i. |
Lender
shall disburse the loan in a timely
manner
|
ii. Lender
shall keep any information regarding Borrower that
is
derived from the loan transaction confidential.
10. Remedies
for Breaches of the Agreement
10.1
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 it is due
|
| iv. |
Unreasonable
disposition of Borrower’s properties by Borrower
|
| v. |
Material
adverse changes occurred during the term of the
loan
|
| vi. |
Use
of the loan in engaging securities
transactions
|
vii. Change
of
Borrower’s structure that substantially adversely
affects its capacity to make timely payments when
due.
4
10.2
Any
occurrence of the following situations, without new guarantee agreement approved
by Lender constitutes breaches of this agreement:
| i. |
Guarantor
has material adverse change in its financial
status
|
ii. Guarantor
provides guaranty to any other third parties which
substantially adversely affects its capability of performance
under the guarantee agreement.
| iii. |
Guarantor
becomes insolvent or incapable to perform its obligation under the
guarantee agreement.
|
10.
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
|
10.4
Breaches on the part of Borrower based on certain conducts on the part of
Borrower regarding certain lien.
10.5
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 subject to the
mortgage.
|
| iii. |
Lender
can increase interest rate at the event of Borrower’s default as set forth
in this agreement.
|
11. Reserved
12. Choice
of
forum
5
12.1
Dispute arising from this agreement shall be adjudicated by the court in the
jurisdiction where Lender domiciles.
13. Effectiveness,
Modification and Termination of the Agreement
14. There
are
5 copies of this agreement.
15. Representation
and warranties of the Lender
Jinzhou
Halla Electrical Equipment Xx.Xxx.
/s/
Yuncong Ma
Seal
China
Construction Bank
/s/
Xxx Xxxx
Seal
