RMB Short-Term Loan Agreement (This document is an English summary from the original Chinese version)
EXHIBIT
10.2
RMB
Short-Term Loan Agreement
(This
document is an English summary from the original Chinese version)
The
Borrower:
Jinzhou
Halla Electrical Equipment Co., Ltd.
The
Lender:
Bank of
China (Jinzhou Tiebei Branch)
Date
of
the Agreement: September 27, 2007
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1.
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The
amount of loan is RMB 30 million.
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2.
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The
term of the loan is 6 months, commencing on the drawdown date and
ending
on the last payment date.
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3.
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The
loan shall be used for the purpose of purchasing raw materials. Without
written consent of the Lender, the Borrower can not change the use
of the
loan. The loan can not be used to buy stocks, real estates in violation
of
regulations and other items prohibited by laws and regulations.
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4.
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The
semiannual interest rate is 6.48% and cannot be adjusted within the
term
of this Agreement. The Borrower shall make the interest payment on
a
quarterly basis on March 20th,
June20th,
September 20th,
and December 20th,
respectively.
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5.
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Conditions
of Drawing Loan
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The
Lender is entitled to refuse the Borrower’s drawing money before the following
conditions are satisfied:
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(1)
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The
Borrower submits a written application for the loan and documents
proving
the use of the loan five days before it draws
money;
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(2)
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This
Agreement and other relevant documents attached have taken into
effect;
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(3)
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The
Mortgage Agreement specified under Section 9 has taken into
effect;
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(4)
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The
Borrower has opened bank account in accordance with the requirements
of
the Lender for drawing money, paying interests and
fees;
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(5)
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The
Borrower has submitted to the Lender the resolutions of the board
of
director of the Borrower or the other competent authorities approving
the
execution and performance of this Agreement;
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(6)
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The
Borrower has submitted to the Lender the lists of personnel who have
the
power to execute this Agreement and relevant documents to this Agreement
and their sample of signature; and
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(7)
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No
occurrence of event of default specified under Section
11.
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6.
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The
Borrower
shall draw the whole amount of the loan on September 29,
2007.
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7.
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The
Borrower shall submit an application for the loan when drawing the
money
and go through respective
formalities.
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8.
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On
March 28, 2008, the Borrower shall pay back the principal of XXX
00
million. Prepayment is permitted, but a 15-day advance notice to
the
Lender is required. On such occasion, the Borrower shall be subject
to a
penalty equal to 2% of the interests that otherwise would be accrued
on
the portion of the principal that is
pre-paid.
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9.
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The
Borrower shall provide mortgage to secure the full payment of its
obligation under this Agreement. The Borrower and the Lender entered
into
a Mortgage Agreement, the number of the agreement is 2007
Xxx Xxxxx Yin Tie Ya Zi No. 001.
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10.
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Representations
and Warranties
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10.1
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The
Borrower represents that:
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(1)
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It
is duly registered and validly
existing;
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(2)
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It
has obtained all necessary authorization to execute this
Agreement;
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(3)
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All
documents, financial statements, and other materials provided by
the
Borrower to the Lender are true, complete, accurate and
valid;
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(4)
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The
Borrower has not disguised any of the following events which has
already
occurred or is occurring and will affect the performance capabilities
of
the Borrower:
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(ii)
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any
material violation of discipline and laws or claims to be made involving
the Borrower or its main leaders;
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| (iii) |
breach
of contract by the Borrower under other
agreements;
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(iv)
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obligations,
contingent obligations or mortgage or pledge to a third party which
the
Borrower shall bear;
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(v)
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pending
litigation or arbitration; and
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(vi)
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other
events which will affect the financial status and performance capabilities
of the Borrower.
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10.2
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The
Borrower hereby warrants:
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(1)
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To
provide the Lender the latest financial statements on a monthly basis
in
accordance with the requirements of the Lender, provide the Lender
the
audited financial statements of the previous year in the first quarter,
and to provide any time upon the request of the Lender other related
materials including but limited to the financial
statements;
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2
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(2)
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To
accept and fully coordinate the examination and supervision by the
Lender
to the use of the loans;
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(3)
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To
inform the Lender in advance of decrease of registered capital, or
any
material change of equity interest and adjustment of operation, including
but not limited to joint venture or cooperation with foreign investors,
division, merger, acquisition, reorganizes, lease, contracting,
trusteeship, etc. In case the aforesaid activities have an adverse
impact
on the Borrower’s capabilities to pay back the loan, consent of the Lender
is required;
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(4)
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The
Borrower can not dispose of its self-owned assets by decreasing its
capabilities to pay back the loan. The Borrower shall timely inform
the
Lender when mortgaging or pledging its self-owned assets and warrant
the
total amounts of debts it secured shall not exceed the net value
of the
assets which secures the debts;
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(5)
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The
Lender has a priority on the payback of the loan over the payback
of the
loan by the shareholders to the Borrower and shall at least be in
the same
position as other creditors to the same type of
debts;
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(6)
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The
Borrower shall deposit enough money for paying back the interests
at least
one day before the date which every interest is
due;
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(7)
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The
Borrower shall not distribute dividend and bonus to its shareholder
in any
means in case the net after-tax profit in the relevant fiscal year
is or
below zero, or is not sufficient to make up the accumulated losses
of the
previous fiscal year, or the before-tax profit is not used to pay
back the
principle and interests and fees which are due in such fiscal year
or the
before-tax profit is not sufficient to pay back the principle, interests
and fees in the next fiscal year;
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(8)
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To
immediately inform the Lender in case of occurrence of any of the
following events:
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(i)
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breach
of contract by the Borrower under this Agreement or other
agreements;
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(ii)
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change
of senior management of the Borrower, amendment of the articles of
association of the Borrower and material adjustment of the internal
organization structure of the
Borrower;
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(iii)
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deterioration
of financial situation of the Borrower;
and
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(iv)
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material
litigation or arbitration the Borrower is
involved.
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3
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11.
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Event
of Default
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11.1
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If
the Borrower fails to repay the principal or interest when it becomes
due
and obtain an extension from the Lender, then during the overdue
period,
the interest rate for the portion of the payment that becomes due
shall be
150% of the agreed-upon interest rate; if the Borrower uses the proceeds
of the loan for any purposes other than agreed upon herein, the interest
rate for that portion of the proceeds will be 100% higher than the
agreed-upon interest rate. In case the Borrower fails to repay the
interest in full amount on time, the Lender is entitled to collect
double
interest on a quarterly basis on the amount of the interest which
becomes
due and unpaid according to the same interest rate as the rate for
the
principle.
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11.2
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In
any of the following events, the Lender is entitled to stop the Borrower
to draw the money or cancel the loan which the Borrow has not drawn
and
declare that the principle and all the interests under this Agreement
become due immediately:
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(1)
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The
Borrower fails to repay the principle or interests in delay for more
than
30 days;
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(2)
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The
total amount of the principle and interest that the Borrower fails
to
repay or uses for any purposes other than agreed upon herein has
amounted
to RMB one million;
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(3)
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Any
representation furnished by the Borrower under Section 10 proves
to be
incorrect or the Borrower breaches any of its representations/warranties
under this Agreement;
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(4)
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Occurrence
of an event of default by the Borrower under other
agreements;
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(5)
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Occurrence
of an event of default by the mortgager under the mortgage agreement,
adversely affect the Borrower’s capabilities to perform its obligations
under this Agreement;
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(6)
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The
Borrower ceases its operation, dissolves or bankrupts;
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(7)
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Serious
deterioration of financial situation of the Borrower;
and
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(8)
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The
collaterals are damaged, lost, destroyed, sealed up or frozen and
the
Borrower fails to provide new security according to the requirements
of
the Lender.
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12.
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The
Borrower agrees that the Lender may directly deduct any amounts which
become due under this Agreement from the bank accounts the Borrower
has
opened in all the branches of Bank of China.
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13.
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All
the taxes, charges and fees relevant to the execution, performance
of this
Agreement and its dispute resolution shall be borne by the Borrower.
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4
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14.
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Offset,
Assignment and Rights Reservation
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14.1
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The
Borrower shall fully repay the principle and all the interests which
become due under this Agreement and cannot offset such principle
and
interests, unless agreed by the
Lender.
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14.2
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Without
prior written consent from the Lender, the Borrower shall not assign
any
obligations under this Agreement to a third
party.
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14.3
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Any
tolerance, extension and preference given by the Lender to the Borrower
or
any delay to execute the rights under this Agreement by the Lender
shall
not affect, impair or restrict any enjoyable rights of the Lender
according to this Agreement and other laws and regulations, nor be
deemed
a waiver of the aforesaid rights of the Lender under this Agreements,
nor
exempt any obligations of the Borrower under this
Agreement.
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15.
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Amendment
and Termination
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15.1
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This
Agreement may be amended, supplemented or terminated based on mutual
written agreement between both Parties. Any amendments and supplements
to
this Agreement shall constitute an integral part of this
Agreement.
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15.2
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Any
unenforceable provision of this Agreement will not affect the
enforceability of all the remaining provisions of this
Agreement.
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16.
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Application
of Law, Dispute
Settlement and Jurisdiction
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16.1
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The
Agreement will be governed by laws of People’s Republic of
China.
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16.2
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Any
disputes, which cannot be settled through consultation, shall be
adjudicated by the court in the jurisdiction where the Lender
domiciles.
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17.
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Effectiveness
of the Agreement
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This
Agreement shall take into effect as of the date when the legal representatives
or authorized representatives of both Parties sign and attach the seals to
the
Agreement. There are two official copies of the Agreement. Both Parties shall
hold one original set, which shall be equally authentic.
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18.
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Special
Note
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The
Parties have conducted sufficient negotiations on all terms of this Agreement.
The Lender has reminded the Borrower of paying special attentions to all the
terms regarding the rights and obligations of both Parties and of understanding
these terms comprehensively and accurately. Upon the request of the Borrower,
the Lender has respectively informed and explained the aforesaid terms to the
Borrower.
5
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Jinzhou
Halla Electrical Equipment Co., Ltd.
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/s/
Yuncong Ma
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Seal
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September
27, 2007
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Bank
of China (Jinzhou Tiebei Branch)
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/s/
Xxx Xxxx
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Seal
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September
27, 2007
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6
