Promissory Note



 Exhibit 10.12 
 PROMISSORY NOTE 
  

															
	 Principal
 $10,000,000.00
	  	 Loan Date
 02-24-2006
	  	 Maturity
 03-31-2010
	  	 Loan No
 3000071
	  	Call/Coll	  	 Account
 IE.Abes
	  	 Officer
 8110
	  	Initials
	  	  	  	  	  	  	  

 References in the shaded area are for Lender’s use only and do not limit the applicability of
this document to any particular loan or item. 
 Any item above containing “***” has been omitted due to text length limitations.

  

							
	Borrower:	 	U.S. Auto Parts Network, Inc.	  	Lender:	 	East West Bank
		 	17150 S. Margay Avenue	  		 	407 W. Valley Blvd.
		 	Carson, CA 90746	  		 	Alhambra, CA 91803

  

			
	Principal Amount: $10,000,000.00	 	Date of Note: February 24, 2006

 PROMISE TO PAY. U.S. Auto Parts Network, Inc. (“Borrower”) promises to pay to East West Bank
(“Lender”), or order, in lawful money of the United States of America, the principal amount of Ten Million & 00/100 Dollars ($10,000,000.00), together with interest on the unpaid principal balance from February 24, 2006,
until paid in full. 
 PAYMENT. Subject to any payment changes resulting from changes in the index, Borrower will pay this loan in accordance with the
following payment schedule: 12 monthly consecutive interest payments, beginning March 31, 2006, with interest calculated on the unpaid principal balances at an interest rate of 4.580%; 35 monthly consecutive principal payments of $277,777.78
each, beginning March 31, 2007, with interest calculated on the unpaid principal balances at an interest rate based on the one month London Interbank offered rate (LIBOR) (currently 4.580%), plus a margin of 1.500 percentage points, resulting
in an initial interest rate of 6.080%; 35 monthly consecutive interest payments, beginning March 31, 2007, with interest calculated on the unpaid principal balances at an interest rate based on the one month London Interbank offered rate
(LIBOR) (currently 4.580%), plus a margin of 1.600 percentage points, resulting in an initial interest rate of 6.080%; and one principal and interest payment of $280,545.60 on March 31, 2010, with interest calculated on the unpaid principal
balances at an interest rate based on the one month London Interbank offered rate (LIBOR) (currently 4.680%), plus a margin of 1.500 percentage points, resulting in an initial interest rate of 6.080%. This estimated final payment is based on the
assumption that all payments will be made exactly as scheduled and that the Index does not change; the actual final payment will be for all principal and accrued interest not yet paid, together with any other unpaid amounts under this Note. Unless
otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any unpaid collection costs; and then to any late charges. The annual interest rate for this Note is computed
on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay
Lender at Lender’s address shown above or at such other place as Lender may designate in writing. 
 VARIABLE INTEREST RATE. The interest rate or
this Note is subject to change from time to time based on changes in an independent index which is the one month London Interbank offered rate (LIBOR) (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its
loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notice to Borrower. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate change will not
occur more often than each month. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 4.580%. The interest rate or rates to be applied to the unpaid principal balance of this Note will be the rate or
rates set forth herein in the “Payment” section, Notwithstanding any other provision of this Note, after the first payment stream, the interest rate for each subsequent payment stream will be effective as of the last payment date of the
just-ending payment stream. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. Whenever increases occur in the interest rate, Lender, at its option, may do one or more of the
following: (A) increase Borrower’s payments to ensure Borrower’s loan will pay off by its original final maturity date, (B) increase Borrower’s payments to cover accruing interest, (C) increase the number of
Borrower’s payments, and (D) continue Borrower’s payments at the same amount and increase Borrower’s final payment. 
 PREPAYMENT;
MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. In any event, even upon full prepayment of this Note, Borrower understands that Lender is entitled to a minimum interest charge of $100.00. Other than Borrower’s obligation to pay any minimum interest charge,
Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments under the
payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower’s making fewer payments. Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or
similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a
disputed amount must be mailed or delivered to: East West Bank, Loan Services Department, 407 W. Valley Blvd. Alhambra, CA 91803. 
 LATE CHARGE. If a
payment is 11 days or more late, Borrower will be charged 8.000% of the regularly scheduled payment. 
 INTEREST AFTER DEFAULT. Upon default, the
variable interest rate on this Note shall immediately increase by 5.000 percentage points, if permitted under applicable law. 
 DEFAULT. Each of the
following shall constitute an event of default (“Event of Default”) under this Note: 
 Payment Default. Borrower fails to
make any payment when due under this Note. 
 Other Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 
 False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Note or
the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 
 Insolvency. The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment
for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 
 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or









 PROMISSORY NOTE 
 (Continued) 
  

			
	Loan No: 3000071	 	 Page
 2


  

 a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its
sole discretion, as being an adequate reserve or bond for the dispute. 
 Events Affecting Guarantor. Any of the preceding events
occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability
under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be required to, permit the guarantor’s estate to assume unconditionally the obligations arising under the
guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. 
 Change In Ownership. Any change in
ownership of twenty-five percent (25%) or more of the common stock of Borrower. 
 Adverse Change. A material adverse change
occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. 
 Insecurity. Lender in good faith believes itself insecure. 
 Cure Provisions. If any default other than a default in
payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of
such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender’s sole discretion to be sufficient to cure the
default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. 
 LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. 
 ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court costs, in addition to all other sums provided by law. 
 JURY WAIVER. To the extent permitted by applicable law, Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other. 
 GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of California
without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of California. 
 DISHONORED ITEM FEE.
Borrower will pay a fee to Lender of $18.00 if Borrower makes a payment on Borrower’s loan and the check or preauthorized charge with which Borrower pays is later dishonored. 
 RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all
accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect
Lender’s charge and setoff rights provided in this paragraph. 
 CERTIFICATION OF ACCURACY. Borrower certifies under penalty of perjury that all
financial documents provided to Lender, which may include income statements, balance sheets, accounts payable and receivable listings, inventory listings, rents rolls, and tax returns, are the most recent such documents prepared by Borrower, that
they give a complete and accurate statement of the financial condition of Borrower, as of the dates of such statements, and that no material change has occurred since such time, except as disclosed to Lender in writing. Borrower agrees to notify
Lender immediately of the extent and character of any material adverse change in the Borrower’s financial condition. The financial documents shall constitute continuing representations of Borrower and shall be construed by Lender to be
continuing statements of the financial condition of Borrower and to be new and original statement of all assets and liabilities of Borrower with respect to each advance under this Note and every other transaction in which Borrower becomes obligated
to Lender until Borrower advises Lender to the contrary. The financial documents are being given to induce Lender to extend credit and Lender is relying upon such documents. Lender may verify with third parties any information contained in financial
documents delivered to Lender, obtain information from others, and ask and answer questions and requests seeking credit experience about the undersigned. 
 SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.

 GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extant allowed by law, waive any applicable statute of limitations, presentment, demand
for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security interest in the
collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several. 








 PROMISSORY NOTE 
 (Continued) 
  

			
	Loan No: 3000071	 	 Page
 3


  

 PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE
INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. 
 BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. 

BORROWER: 
  

			
	U.S. AUTO PARTS NETWORK, INC.
		
	By:	 	 /s/ Mehran Nia

		 	Mehran Yaghoub Nia CEO of U.S. Auto Parts Network, Inc.