LOAN AGREEMENT
EXHIBIT
10.20
Execution
Copy
THIS
LOAN AGREEMENT
(this
“Agreement”) is entered into by and between MEDI-HUT INT’L (MFG) CO., LTD., a
corporation organized and existing under the laws of the Republic of Korea
(“Korea”) with its principal offices at 4-1 Godeung-Ri, Sojung-Myun, Yeonki-Kun,
Chungcheongnam-Do, Korea (“MHI”) and MEDI-HUT CO., INC., a corporation organized
and existing under the laws of the State of Nevada, United States of America,
with its principal offices at 0000 Xxxxxx Xxxxxxx, Xxxx Xxxxxxxx, Xxx Xxxxxx
00000, Xxxxxx Xxxxxx of America (“MHUT”; together with MHI, collectively, the
“Parties”).
WITNESSETH:
WHEREAS,
MHUT has
provided certain financing assistance to MHI in support of MHI’s operations; and
WHEREAS,
MHUT and
MHI desire to memorialize their agreement as to the terms and conditions for
the
repayment by MHI of such financing assistance.
NOW,
THEREFORE,
in
consideration of the foregoing premises and the mutual covenants and promises
set forth herein below, the Parties, intending to be legally bound hereby,
agree
as follows:
Article
1. Acknowledgement
of Financing Assistance; Maturity of the Loans; Interest
| 1.1 |
MHI
hereby acknowledges that the following amounts (the “Loans”) have been
received from MHUT in support of MHI’s
operations:
|
|
Disbursement
Date
|
Amount
(in
U.S. Dollars)
|
|||
|
June
7, 2002
|
US
$100,000
|
|||
|
June
29, 2002
|
US
$200,000
|
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|
February
4, 2003
|
US
$50,000
|
|||
|
February
28,2003
|
US
$100,000
|
|||
|
Total:
|
US
$450,000
|
|||
| 1.2 |
The
Loans shall be repaid in U.S. Dollars in installments as follows:
(a)
US$75,000 on or before December 31, 2004, together with interest
accruing
on the outstanding balance of the Loans from the respective Disbursement
Dates (as set forth in Section 1.1 above) to December 31, 2004 in
accordance with Section 1.3 below; (b) US$125,000 on or before December
31,2005, together with interest accruing on the outstanding balance
of the
Loans from January 1, 2005 to December 31, 2005 in accordance with
Section
1.3 below; (c) US$125,000 on or before December 31,2006, together
with
interest accruing on the outstanding balance of the Loans from January
1,
2006 to December 31, 2006 in accordance with Section 1.3 below; and
(d)
US$125,000 on or before December 31, 2007, together with interest
accruing
on the outstanding balance of the Loans from January 1, 2007 to December
31, 2007 accordance with Section 1.3 below. The Loans may be prepaid
at
any time at the option of MHI without any premium or
penalty.
|
| 1.3 |
Interest
on the outstanding balance of the Loans shall become due and payable
on
the respective due dates of the installments as set forth in Section
1.2
above (or if applicable, on the date of any repayment pursuant to
Section
1.4 below or any other prepayment) and shall accrue from the respective
Disbursements Dates (as set forth in Section 1.1 above) at the Applicable
Rate (as defined below) (but in no event higher than the highest
rate
permitted under applicable law) on the basis of a 365-day year and
actual
number of days elapsed. The term “Applicable Rate” as used herein shall
mean the following: (a) for interest accruing from the respective
Disbursement Dates (as set forth in Section 1.1 above) to December
31,
2004: 4% per annum; (b) for interest accruing from January 1, 2005
to
December 31, 2005: 5% per annum; and (c) for interest accruing from
January 1, 2006 to December 31, 2007: 6% per
annum.
|
| 1.4 |
Notwithstanding
anything to the contrary set forth herein, the Loans shall become
immediately due and payable to the extent that MHI repays any amounts
(“Related Party Indebtedness”) owed to any of its directors, officers,
affiliates and any other related parties, whether at the stated maturity
of such amounts or otherwise. MHI may not repay any portion of Related
Party Indebtedness unless MHI simultaneously repays the Loans on
a pro
rata basis (i.e., in proportion to the respective principal amounts
of the
Loans and Related Party Indebtedness outstanding as of the date of
the
proposed repayment).
|
Article
2. Covenants
In
addition to the other undertakings herein contained, MHI hereby covenants to
MHUT that so long as any amount payable hereunder is outstanding MHI shall
perform the following obligations:
| 2.1 |
MHI
shall maintain its existence in good standing under, and conduct
its
business in material compliance with, all applicable laws and shall
maintain adequate licenses and authorization to conduct its
business.
|
| 2.2 |
MHI
shall, promptly, upon acquiring actual knowledge of such matters,
give
notice to MHUT of each of the following events with respect to itself:
(i)
any material loss of or damage to its properties or assets; (ii)
the
commencement of any litigation or proceedings against it which may
materially adversely affect the ability of MHUT to fulfill its obligations
under this Agreement; (iii) any other circumstances that could materially
adversely affect the performance by MHI of its obligations under
this
Agreement; and (iv) the occurrence of any Event of Default described
in
Article 3 below.
|
| 2.3 |
MHI
shall as soon as practicable after the execution of this Agreement
obtain
and secure all governmental and other authorizations and approvals
(including, without limitation, any authorizations or approvals required
under foreign exchange regulations of Korea) necessary for the performance
of its obligations hereunder.
|
| 2.4 |
MHI
shall execute all such other documents and instruments and do all
such
other acts and things as MHUT may reasonably require to carry out
the
transactions contemplated herein.
|
-2-
Article
3. Events
of Default
If
any of
the following events (“Events of Default”) shall occur and be
continuing:
(a) MHI
shall
fail to pay when due any amount owing to MHI hereunder; or
(b) MHI
shall
fail to perform any other obligation herein; or
(c) MHI
shall
commit a material breach of its obligations under the Joint Venture Agreement
among MHUT, MHI and certain other parties named therein (as the same may be
amended and/or restated from time to time); or
(d) a
petition in bankruptcy or similar proceeding shall be filed by or against MHI,
or any custodian or similar officer shall be appointed for MHI or for any
substantial part of the property of MHI, or any judgment, warrant of attachment
or execution or similar process shall be issued or levied against MHI or any
part of the property of MHI; or (e) for any reason materially and adversely
affecting MHI or any collateral or guarantor, MHUT shall at any time reasonably
deem itself insecure or shall reasonably believe the prospect of receiving
payment of MHUT’s obligations is impaired; then, or at any time thereafter, any
or all of the obligations of MHI hereunder, at MHUT’s option, shall become
immediately due and payable, without notice, presentation or demand for payment,
which are hereby expressly waived. If MHI shall fail to make payment when due
of
any sum owed hereunder (whether at its stated maturity, by acceleration or
otherwise), MHI shall pay to MHUT on demand interest from and including such
due
date until payment in full thereof at a rate equal to 4% over the Applicable
Rate (but in no event higher than the highest rate permitted under applicable
law). MHI shall reimburse and indemnify MHUT on demand for all costs and
expenses, including reasonable attorneys’ fees, that may be incurred by it as a
result of all Event of Default, whether or not MHUT accelerates the obligations
of MHI and whether or not MHUT commences legal proceedings against
MHI.
Article
4. Notices
Any
notices or other communications required or permitted hereunder shall be in
writing and shall be deemed sufficiently given if personally delivered, sent
by
registered or certified mail, return receipt requested, postage prepaid, or
transmitted by facsimile, in each case addressed as follows or to such other
address as any party hereto shall have notified the other party in accordance
with the provisions of this Article:
If
to
MHI:
Medi-Hut
Int’l (Mfg.) Co., Ltd.
4-1
Godeung-Ri, Sojung-Myun
Yeonki-Kun
Chungcheognam-Do,
Korea
Attention:
Representative Director
Facsimile:
00-00-000-0000
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If
to
MHUT:
Medi-Hut
Co., Inc.
0000
Xxxxxx Xxxxxxx
Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Xxxxxx
Xxxxxx of America
Attention:
President
Facsimile:
1-732-919-2799
With
a
copy to:
Kim,
Chang & Xxx
000
Xxxxxx-Xxxx,Xxxxxxx-Xx
Xxxxx,
Xxxxx
Attention:
Moon Han, Esq.
Facsimile:
00-0-000-0000
Article
5. Governing
Law and Adjudication
This
Agreement shall be governed by the laws of Korea. Each of the Parties agrees
that all actions arising out of or in respect of this Agreement may be brought
in the Seoul District Court located in Seoul, Korea as the court of first
instance.
Article
6. Miscellaneous
| 6.1 |
This
Agreement shall become effective as of June 7, 2002 (the “Effective
Date”).
|
| 6.2 |
If,
at any time subsequent to the date hereof, any provision of this
Agreement
shall be held by any court or arbitral tribunal of competent jurisdiction
to be illegal, invalid or unenforceable, such provision shall be
of no
force or effect, but the illegality, invalidity or unenforceability
of
such provision shall have no effect upon and shall not impair the
validity
or enforceability of any other provision of this Agreement. The Parties
shall be obliged to replace such illegal, invalid or unenforceable
provision by a new provision having similar
effect.
|
| 6.3 |
This
Agreement may be amended, supplemented or changed, and any provision
hereof may be waived, only by written instrument making specific
reference
to this Agreement or to such provision to be waived, signed by the
party
against whom enforcement of such amendment, supplement, modification
or
waiver is sought.
|
| 6.4 |
This
Agreement shall be binding upon and shall inure to the benefit of
the
Parties and their respective successors and permitted assigns; provided,
however, that neither this Agreement nor any rights or obligations
hereunder may be assigned, transferred or delegated by any party
without
the prior written consent of the other
party.
|
| 6.5 |
This
Agreement embodies the entire agreement of the Parties with respect
to the
subject matter hereof and supersedes and cancels any and all prior
agreements and understandings, oral or written, which may exist in
relation thereto.
|
| 6.6 |
This
Agreement may be executed in any number of counterparts, each of
which
shall be deemed an original, but all of which, taken together, shall
constitute one and the same
instrument.
|
| 6.7 |
This
Agreement is executed in the English language, which shall be controlling
in all respects between the Parties. No translation hereof shall
be of any
force or effect in the interpretation of this
Agreement.
|
[Signatures
on the following page]
-4-
IN
WITNESS WHEREOF,
the
Parties have caused this Agreement to be duly executed, intending to make it
legally binding as of the Effective Date.
| MEDI-HUT INT’L (MFG) CO., LTD. | MEDI-HUT CO., INC. | ||
| /s/ Young-Xxx Xxxx | /s/ Xxxxx X. XxXxxxx | ||
|
|
|
||
|
Name:
Young-Xxx Xxxx
Title: President
|
Name:
Xxxxx X. XxXxxxx Title: President and Chief Financial Officer |
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