The Construction Bank of China
LOAN COLLATERAL AGREEMENT
No. of Contract: 96(W)004
Xxxxxxx (Party A): Xianyang Daming Electronics Co. Ltd.
Address: 00 Xxxx Xxxxxxx Xxxx, Xxxxxxxx
Xxxxx Representative: Mr. Du, Qingsong
Bank Account: Construction Bank of China, Xianyang Branch
Mortgagee: Construction Bank of China, Xianyang Branch
Address:
Legal Representative:
To guarantee the fulfillment of Loan Agreement No.96(w)004, Party A will pledge
its property to Party B, under Party B's agreement. It is agreed as follows on
the basis of applicable law and regulation.
1. Party A will provide collateral goods under the attached appendix as
security.
2. Party A will get a loan of USD 1,100,000 from the bank. Term of the loan is
from Sep.16,1996 till Mar.15, 1997.
3 . Party A guarantees its ownership of the underlying collateral goods.
4. Party A will submit the title of pledged property to Party B during the
period of collateral contract, which will be kept by Party B.
5. The collateral assets include the Principle of USD 1,100,000, interest,
default fee, compensatory fee, and other costs occurred.
6. The enforcement of the collateral contract is not affected by the loan
agreement.
7. Party A will be responsible for any expenses on appraisal, insurance,
verification, registration and preservation.
8. During the period of the contract, Party A is obliged to maintain the good
condition of underlying collateral goods, keep them in good condition. Party B
may inspect the collateral goods at any time.
9. During the period of the contract, Party A should insure collateral goods.
Party B should be the first beneficiary. The insurance certificate will be
kept by Party B.
10. During the period of the contract, if a loss occurs within the insurance
policy or if there is devaluation on collateral goods due to a third party's
fault, the compensatory fee will be deposited into Party B's account by Party A.
Party A will have no right to use the fee.
11. If there is a devaluation on collateral goods, Party A will be asked to
provide a warranty equivalent to the value of the loss.
12. During the period of the contract , Party A will be solely responsible for
any environmental pollution or other damages caused by underlying collateral
goods.
13. During the period of contract, Party A is not permitted to grant, move,
transfer, lease and pledge the underlying collateral goods without Party B's
written consent.
14. During the period of the contract, the income from collateral goods will be
first used to pay off Party B's loan.
15. On the expiration date of the contract, Party B will be entitled to dispose
the collateral goods and receive the payment at first priority, if Party A fails
to pay off the loan.
16. Under the following situations, Party B may dispose the collateral goods,
stop releasing the loan under the Loan Agreement or declare the unpaid principle
and the accrued interest due.
1. Party A is bankrupt or dismissed.
2. If Party A does anything against Xx.0, Xx.0, Xx.00, Xx.00, Xx.00 of the
Agreement or seriously commits default of the agreement. 3. During the period of
the Loan Agreement, if the debtor is declared bankruptcy, be dismissed, or
change the status, fails to use the loan as its report in the agreement and
therefore get Party B involved into serious lawsuit (or arbitration), or
anything happen that enable the Debtor to pay off the loan or the Bank finds out
that it is no longer a bonafide Debtor any more.
17. If any economical loss occurred is due to co-own, dispute, detain or other
pledge under the same collateral goods, which facts is hidden by Party A, Party
A will be fined a default fee of % of the loan. If it cannot cover the actual
loss sustained by Party B, Party A would have to pay the rest of it.
18. Any income received by Party A from disposing the collateral goods will be
distributed as follows:
1. For payment of the expenses in connection with the
collateral goods;
2. Paying off the accrued interest due
3. Paying off the principle, default fee and compensatory fee;
4. Paying off other expenses.
19. Miscellaneous:
20. Any dispute arise concerning the collateral goods, should be settled in a
local court where Party B is located, if there is no agreement reached by two
parties.
21. The collateral contract will take effective on the date of registration.
22. The collateral contract is taking effective by authorized signature and
seal.
23. The contract is in duplicate, one for each party.
Xianyang Daming Electronics Co., Ltd. (Seal) Construction Bank, Xianyang Branch
(seal) (seal)
Legal Representative Legal Representative
Sep. 16, 1996 Sep. 16, 1996
I. Appendix of Collateral Contract Contract No. 96(w)004
Collateral Goods List
Name of collateral: Horiz. Yoke Winder
Type: 181-III
Unit: Set
Quality: 7
Muniments of title and number:
Address: Workshop in Daming Electronics
Co., Ltd.
Collateral assets: RMB 11.32 million
The other collateral asset by same pledge:
Remarks: Original value RMB14 million
Xxxxxxx: Xianyang Daming Electronics Co.,
Ltd. (seal)
Legal representative:
Pledgee: Construction of China Xianyang
Branch (seal)
Legal representative:
