Document:

EXHIBIT
      10.6

    

    TERM
      SHEET FOR PROPOSED CREDIT FACILITY

    JUNE
      30,
      2006

    
      
        	 	 
	
                BORROWER:

              	
                Middle
                  Kingdom Alliance Corp. (“Borrower”)

              
	 	 
	
                LENDER:

              	
                Wachovia
                  Bank, NA (“Bank”)

              
	 	 
	
                CREDIT
                  FACILITY:

              	
                $250,000
                  Revolving Line of Credit

              
	 	 
	
                PURPOSE:

              	
                To
                  finance general working capital needs of the Borrower.

              
	 	 
	
                MATURITY:

              	
                24
                  months from date of closing 

              
	 	 
	
                INTEREST
                  RATE: 

              	
                LIBOR
                  + 200, as that rate may change from time to time

              
	 	 
	
                FEES:

              	
                .25%
                  of the committed amount, due and payable at closing

              
	 	 
	
                REPAYMENT:

              	
                Repayable
                  in monthly payments of accrued interest only with outstanding principal
                  and interest due at maturity. 

              
	 	 
	
                GUARANTOR(S):

              	
                None

              
	 	 
	
                
                  FINANCIAL

                  INFORMATION:

                

              	
                The
                  following financial information will be provided to
                  Bank.

              
	 	 
	 	
                ·  Audited
                  financial statements of Borrower within 90 days of Financial Year
                  End

              
	 	
                ·  Tax
                  returns of Middle Kingdom Alliance Corp. within 30 days of
                  filing

              
	 	 
	
                COLLATERAL:

              	
                Letter
                  of Instruction to be issued to the Trustee assigning the final
                  $300,000 of
                  the $1,000,000 in interest to be transferred to operating accounts
                  of
                  Middle Kingdom Alliance Corp. for the sole purpose of paying off
                  the
                  remaining outstanding principal and interest balances.

              
	
                 

              	 
	
                
                  DEPOSITORY

                  RELATIONSHIPS:

                

              	
                The
                  primary depository accounts of Borrower will be maintained with
                  Bank.

              
	 	 
	
                DOCUMENTATION:

              	
                An
                  opinion letter from an attorney confirming the above conditions
                  do not
                  violate any SEC regulations. The Facility will be evidenced by
                  documents
                  prepared by and acceptable to Bank.

              
	 	 
	
                COSTS:

              	
                Borrower
                  will pay all costs and expenses associated with closing the
                  loan.

              
	 	 

      

    This
      is a non-binding Loan Proposal and does not constitute a commitment or offer
      to
      lend by Bank. Bank shall be obligated to lend to Borrower only under a written
      loan commitment executed by an authorized officer of Bank and Borrower or
      executed loan documents intended for that purpose. This Loan Proposal is not
      intended to be exhaustive and loan documents or a loan commitment may include
      additional terms and conditions required by Bank that are not in this
      Proposal.Exhibit
      10.1

    Credit
      Facility Agreement

    

    Reduced
      Revolving Line of Credit of up to RMB 80,000,000 

    

    The
      Borrower: Jinzhou Halla Electrical Equipment Co., Ltd.

    The
      Lender: Bank of China (Jinzhou Tiebei Branch) 

    

    
      	1.  	
              Scope
                of Business 

            

    

     

    Subject
      to the terms of this Credit Facility Agreement (the “Agreement”) and separate
      agreements to be entered into by the Borrower and Lender (collectively, the
      “Parties”), Lender hereby agrees to make loans to the Borrower for purposes of
      RMB short-term loan and foreign currency short-term loan, etc. 

    

    
      	2.  	
              Types
                of Loan and Commitment Amount 

            

    

     

    The
      Lender hereby grants to the Borrower the following line of credit of up to
      RMB
      80 million:

     

    
      	(i)  	
              RMB
                Short-Term Loan: RMB 30 million 

            

    

     

    
      	(ii)  	
              Bank’s
                Credit: RMB 20 million

            

    

     

    
      	(iii)  	
              Commercial
                Invoice Discount: RMB 30 million

            

    

     

    
      	3.  	
              Use
                of the Loans 

            

    

     

    Within
      the term of the Agreement as specified in Section 5, the Borrower may use the
      loans in a revolving way up to the amount as provided under Section 2.

     

    
      	4.  	
              Separate
                Agreements Required: 

            

    

     

    The
      Parties shall enter into a separate agreement as follows each time advances
      are
      made pursuant to this Agreement:

     

    
      	4.1  	
              For
                RMB Short-Term Loan: RMB Loan Agreement (Short
                Term)

            

    

     

    
      	4.2  	
              For
                Bank’s Credit: Bank’s Credit Agreement

            

    

     

    
      	4.3  	
              For
                Commercial Invoice Discount: Domestic Commercial Invoice Discount
                Agreement and Application for Commercial Invoice
                Discount

            

    

     

    
      	5.  	
              Term
                of the Agreement

            

    

     

    The
      term
      of this Agreement shall commence from the date as specified under Section 19
      and
      expires on August 8, 2007; 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    The
      term
      of this Agreement shall not be extended automatically. The term of this
      Agreement may be extended upon a written approval by the Lender of the
      Borrower’s application for extension and satisfaction of security interest
      provided by the Borrower. The written agreement on extension shall provide
      a new
      term of the loans. 

     

    
      	6.  	
              Conditions
                Precedent on Extending Credit Facility:

            

    

     

    The
      obligation of the Lender to extend any credit facility under this Agreement
      is
      subject to the satisfaction of the following conditions by the Borrower:

     

    
      	6.1  	
              Submit
                an application for the specific type of loan to the Lender before
                the
                expiration date of the Agreement under Section 5;
                

            

    

     

    
      	6.2  	
              Reserve
                and execute relevant corporate documents, record, seal, lists of
                personnel, sample of signature, etc.;

            

    

     

    
      	6.3  	
              Set
                up accounts necessary for drawing credit facility as required by
                the
                Lender; and 

            

    

     

    
      	6.4  	
              Complete
                all necessary legal and administrative procedures and submit to the
                Lender
                copies or appropriate photocopies of documents concerned.
                

            

    

     

    
      	7.  	
              Obligations
                of the Lender 

            

    

     

    Pursuant
      to the Agreement and respective agreements, promptly process applications for
      loans from the Borrower. 

     

    
      	8.  	
              Obligations
                of the Borrower

            

    

     

    
      	8.1  	
              Timely
                payment of all necessary fees pursuant to the Agreement and respective
                specific agreements; 

            

    

     

    
      	8.2  	
              Timely
                payment of all debts, including but not limited to, principals, interests,
                fees pursuant to the Agreement and respective specific agreements.
                

            

    

     

    
      	9.  	
              Security
                Interest: with respect to obligations arising from this Agreement
                and/or
                specific agreements, the Parties hereby agrees to adopt the following
                ways
                of guarantee: 

            

    

     

    
      	9.1  	
              The
                Borrower provides mortgage to secure the fully payment of its obligation
                under the Agreement and signs the Agreement on Mortgage of the Highest
                Amount; 

            

    

     

    
      	9.2  	
              If
                the Lender believes that the occurrence of certain events could affect
                adversely the capacity of the Borrower or the Mortgagor to perform
                the
                Agreement or result in insufficiency of collateral, the Lender shall
                have
                the right to request the Borrower to provide additional collaterals
                to
                secure the Lender’s interests. 

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	10.  	
              Representations
                and Warranties 

            

    

     

    
      	10.1  	
              The
                Borrower is duly organized, validly existing and in good standing
                under
                Chinese laws, and is duly qualified to conduct business and the
                performance of this Agreement and respective specific agreements
                is within
                the Borrower’s powers; 

            

    

     

    
      	10.2  	
              All
                documents, financial statements, and other materials provided by
                the
                Borrower to the Lender pursuant to this Agreement and specific agreements
                are true, complete, accurate and valid;

            

    

     

    
      	10.3  	
              The
                business conducted by the Borrower is legitimate, not for the purpose
                of
                money laundry; 

            

    

     

    
      	10.4  	
              The
                Borrower hereby covenants: 

            

    

     

    
      	(i)  	
              To
                provide the Lender financial statements on a regular basis (including,
                but
                limited to, annul, quarterly and monthly reports) and other related
                materials;

            

    

     

    
      	(ii)  	
              To
                immediately inform the Lender of any material change of the Borrower
                which
                would affect the Borrower’s financial status or capability to perform its
                obligations pursuant to this Agreement;

            

    

     

    
      	(iii)  	
              Not
                to enter into any merger, acquisition, reorganizes, or joint venture,
                etc.
                without written consent from the Lender;

            

    

     

    
      	11.  	
              Adjustment
                or Termination of the Line of Credit: the Lender shall have the right
                to
                adjust or terminate the line of credit at, if any of the following
                events
                occurs: 

            

    

     

    
      	11.1  	
              Occurrence
                of Events of Default under Section 12;

            

    

     

    
      	11.2  	
              The
                Lender believes there is material negative news with regard to the
                market
                or of the industry that the Borrower is engaged in;
                

            

    

     

    
      	11.3  	
              The
                Lender believes that certain restrictive policies or laws enacted
                by the
                domestic government, foreign governments or international organizations
                have or could have material adverse impact on the industry that the
                Borrower is engaged in.

            

    

     

    
      	12.  	
              Events
                of Default 

            

    

     

    
      	12.1  	
              The
                occurrence of any of the following will constitute an Event of Default
                by
                the Borrower: 

            

    

     

    
      	(i)  	
              The
                Borrower fails to pay when the payment is due under the Agreement
                or any
                other specific agreements; 

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	(ii)  	
              The
                Borrower uses the proceeds of the loan for purposes outside of the
                scope
                as agreed upon by the Parties under the Agreement and specific agreements;
                

            

    

     

    
      	(iii)  	
              Any
                representation furnished by Borrower proves to be incorrect or the
                Borrower breaches any of its representations/warranties;
                

            

    

     

    
      	(iv)  	
              The
                Borrower breaches other obligations contained in the Agreement or
                specific
                agreements. 

            

    

     

    
      	12.2  	
              In
                the event of 12.1(i), the Lender is entitled to take one or all of
                following actions: 

            

    

     

    
      	(i)  	
              Without
                any prior notice to the Borrower, declare the principal of and accrued
                interest on the loans, and any other amount payable due immediately
                and
                payable in full; 

            

    

     

    
      	(ii)  	
              Without
                any prior notice, deduct payment (including principal, interests,
                fees,
                etc) due directly from any accounts the Borrower has with the Lender;
                

            

    

     

    
      	(iii)  	
              Other
                action deemed necessary by the Lender.

            

    

     

    
      	13.  	
              Change
                of Exchange Rate - Borrower takes the risk of the change of exchange
                rates

            

    

     

    
      	14.  	
              Others

            

    

     

    
      	14.1  	
              Without
                prior written consent from the Lender, the Borrower shall not assign
                any
                rights or obligations under the Agreement to a third party;
                

            

    

     

    
      	14.2  	
              The
                Borrower acknowledges that Lender is entitled to assign and delegate
                rights or obligations under the Agreement to other branches of Bank
                of
                China if necessary. Upon the Lender’s authorization, any other branch of
                Bank of China is entitled to all rights under the Agreement, including
                but
                not limited to, the right to file claims with a court or submit disputes
                under the Agreement to certain arbitral institutions.
                

            

    

     

    
      	15.  	
              Reservation

            

    

     

    Failure
      to exercise any rights under the Agreement by the Lender does not constitute
      waiver of such rights. 

     

    
      	16.  	
              Amendment,
                Termination and Interpretation of
                Contract

            

    

     

    
      	16.1  	
              In
                the absence of provisions to the contrary, the Agreement may be amended,
                supplemented or terminated based on mutual agreement between parties.
                This
                Agreement, together with any amendments or supplements, constitutes
                the
                entire agreement of the parties; 

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	16.2  	
              Any
                unenforceable provision of the Agreement will not affect the
                enforceability of all the remaining provisions of the Agreement.
                

            

    

     

    
      	17.  	
              Dispute
                Settlement 

            

    

     

    
      	17.1  	
              The
                Agreement will be governed by laws of People’s Republic of China;
                

            

    

     

    
      	17.2  	
              Disputes,
                which cannot be settled through consultation shall be adjudicated
                by the
                court in the jurisdiction where Lender or the branch of Bank of China
                that
                exercises the rights and obligations under the Agreement domiciles.
                

            

    

     

    
      	18.  	
              Notarization:
                no notarization is required under the Agreement

            

    

     

    
      	19.  	
              Effectiveness
                of the Agreement - the Agreement is executed as of the date when
                both
                parties sign and attach the seals to the Agreement. There are two
                official
                copies of the Agreement. 

            

    

     

    
      	20.  	
              Special
                Note: 

            

    

     

    The
      Parties have conducted sufficient negotiations on the terms of the Agreement
      and
 other
      specific agreements. Lender has informed and explained all terms to Borrower.
      

     

     

    Jinzhou
      Halla Electrical Equipment Co., Ltd. 

    /s/
      Yuncong Ma

    Seal

    August
      21, 2006

     

     

    Bank
      of
      China (Jingzhou Tiebei Branch)

    /s/
      Jun Wang

    Seal
      

    August
      21, 2006

     

    
      
        
        

      

      5

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