EX-10.9 3 leom10q2q2009x10-9.txt 10.9 LOAN AGREEMENT WITH SHINHAN BANK DATED MAY 27, 2009. Exhibit 10.9 CREDIT TRANSACTION AGREEMENT 27th, May, 2009 Creditor : Shinhan Bank Borrower: Leo Motors Co., Ltd. 291-1 , Hasangok-Dong, Hanam-Si, Gyounggi-Do The Borrower hearby acknowledges that the general Terms and Conditions for Bank Credit Transactions(for Corporation)(the "General Terms and Conditions")shall apply to the credit transaction between the borrower and Shinhan Bank(the "Bank") on the terms and conditions as set forth below, and further agrees to be bound by the following terms and conditions ARTICLE 1. TERMS AND CONDITIONS OF THE TRANSACTION The terms and conditions of the transaction shall be as follows 1. CREDIT TYPE : FOR REGULAR BUSINESS OPERATION 2. CREDIT AMOUNT : 500,000,000KRW 3. CREDIT COMMENCEMENT DATE : MAY 27 2009 4. MATURITY DATE(FINAL REPAYMENT DATE) : MAY 26 2010 5. INTEREST RATE AND OTHER -Floating -Base Interest Rate:+3.4% -Period : 6month 6. LOAN INTEREST AND DEFAULT INTEREST COMPUTATION METHOD -Loan interest and default shall be computed on Daily basis. In case of computing them on a daily basis, one year shall be deemed 365 days However, in the case of foreign exchange transaction, international practices and commercial customs shall apply 7. CREDIT EXTENSION METHOD -The loan shall be extended upon the borrower's request satisfying certain requirements. 8. REPAYMENT METHOD -The loan shall be fully repaid in lump sum on the Maturity Date 9. INTEREST PAYMENT DATE AND METHOD -The initial interest shall be paid within 1 months from the Credit Commencement Date and the interest accruing. Thereafter shall be paid within 1 months from the date following the last computation date of the paid interest ARTICLE 2. DEFAULT INTEREST 1. In the event that Borrower fails to pay the interest, the install payment amount and/or the principal and interest of the loan payable in installment on the agreed due date, the Borrower shall immediately pay default interest on such overdue amount. 2. In the event that Borrower fails to fulfill its obligation on the maturity date of the loan, or in the event that the borrower is subject to the acceleration obligation pursuant to article 7 of the General terms and Conditions( including occurrence of the obligation to repurchase a discounted bill under Article 9 of the General Terms and Condition), the Borrower shall immediately pay default interest on the remaining balance of the loan. 3. In the case of accumulative trust Loan ,the Borrower shall immediately pay of default interest on the interest accrued until the preceding date of the set-off, and the default interest on the remaining balance of the loan on or after the set -off. ARTICLE 3. DETERMINATION OF AGGREGATE LOAN AMOUNT AND NOTICE OF INSTALLMENT REPAYMENT SCHEDULE 1. In the case of loan extended in installment, the aggregate loan amount shall be finally determined after the extension of the last installment, and this determination shall be based on the installment repayment schedule, receipts and other supporting evidences. 2. In the case of loans to be repaid in installment repayment schedule for the fixed aggregate debt amount and notify this to the debt-related parties . ARTICLE 4. REDUCTION OR SUSPENSION 1. In the case of revolving credit facility and loans extended in installments, if the credit transactions are deemed to have been materially affected in an adverse in an adverse manner by repaid change in national economy or financial market conditions or substantial deterioration of the credit standing of the Borrower, the Bank may, by giving notice to the Borrower, reduce the agreed credit(limit)amount as set forth in Article 1 or temporarily suspend extension of credit even during the credit period . In such case, the Borrower shall immediately repay any amount in excess of the reduced credit limit. 2. If any of the event set forth in paragraph 1 above is cured and credit transactions may be conducted in a normal manner, the Bank shall immediately cancel the reduction of credit (limit)amount or suspension of credit extension(as the case may be) ARTICLE 5. REPAYMENT CURRENCY AND EXCHANGE RATE The principal and interest of the foreign loans may be repaid in borrowed currency or KRW and in case of repayment in KRW , the telegraphic transfer selling rate applied to the client on the date of repayment shall be applied as the relevant foreign exchange ARTICLE 6. ASSURANCE OF THE REPAYMENT OF THE LOANS 1. The Borrower convents to the Bank that it shall consult with the Bank before the Borrower performs any of the followings a) Merger, Business transfer and sale or lease of any material assets of the Borrower b) Investment in any of asset with the loan, which is not agreed here to: c) Provision of guarantees in favor of any third party; d) Engaging in new business or making overseas investment; and e) Probable material change in the business of Borrower, including commencement of workout plan and application for private composition. 2. The Borrower covenants to the Bank that if the Bank reasonably demands the borrower to perform any of the following to assure the performance by Borrower of the obligations hereunder, it shall comply with the demand of the Bank a) Sale of the real estate or securities owned by the Borrower. b) Capital contribution by major shareholders of the Borrower, and c) Capital increase with consideration or initial public offering 3. Paragraph 1 shall be applicable only where the Bank and borrower enter into a separate agreement with respect each such paragraph. ARTICLE 7. PROVISION OF DOCUMENTS 1. The Borrower agrees that it shall provide the following documents to the Bank in the case that the Bank requests such documents of the General Terms and Conditions and For the management of the loan: a) Quarterly: value added tax report, trial balance sheet of totals and balances, statement of current debt, and sales estimation of each purchaser of products and each product, etc; b) Semi-annually: semi-annually business report, value added tax report, trial balance sheet of totals and balances, statement of current debt, and sales estimation of each purchaser of products and each product, etc; c) Annually: an audited report prepared by a certified public accountants(closing financial statement); consolidated financial statement, commercial registry extracts, a business registration certificates, shareholders register, articles of incorporation, a summary sheet of earned income tax withholding, a business plan, pro forma financial statements(for 3 years), statement regarding major client, copies of various approval and permit and technical certificates(e.g., KS, ISO, patent, etc), statement regarding labor strike, other product manuals, and reference materials related to the same industry, etc. d) At any time: trial balance sheet of totals and balances, statement of current debt, any document evidencing the use of the loan, etc. 2. The Borrower shall submit the following documents to the Bank in the event that requests such documents to investigate the current status of foreign currency risk of the Borrower and management thereof by the Borrower in connection with the credit evaluation of the Borrower; a) Document relating to foreign currency risk management committee and regulations on foreign currency risk management; b) Document relating to current procurement of foreign currency and current operation of foreign currency; and c) Document relating to current derivatives transaction in foreign currency ARTICLE 8. OTHER SPECIAL CONDITION None Borrower: Leo Motors Co., Ltd. 291-1 , Hasangok-Dong, Hanam-Si, Gyounggi-Do Signed by: Jung Yong Lee /CEO & President Creditor: Shinhan Bank Trade Center Branch Singed by : Oh Jin Young / Manager