Exhibit 10.2
(English Translation)
SHORT TERM LOAN AGREEMENT
No.
Borrower: Shenzhen Digitainment Co., Ltd.
Lender: Shenzhen Huaqiang Holdings Ltd Financial Clearing Centre
In accordance with the relevant laws and regulations of the State, and to
clearly define the responsibilities, both parties negotiated and unanimously
agreed to enter into this agreement:
Clause 1. Loan Amount: (Currency) RMB
(in word) Two Million
(in number) 2,000,000
Clause 2. Purpose of the loan
For working capital.
Clause 3. Term of the loan: From July 28, 2005 to July 28, 2006.
Clause 4. Borrower applies the following source of funds, but not limited to
the following funds, to repay the interest and principal under this loan
agreement:
1. Internal funds and funds from operations .
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2. .
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3. .
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Clause 5. Upon expiry of this agreement, Borrower should repay the loan
principal and accrued interest in full. Failing to repay upon maturity, Borrower
agreed that Lender should collect and debit directly from the Borrower's account
maintained at the Lender's Financial Clearing Center.
Loan Interest and Interest Calculation
Clasue 6. The rate of interest to the loan under this Agreement will be
implemented in accordance with the relevant rules of the State as follow:
1. RMB loan will be charged with a monthly interest rate of 0.465%;
2. Foreign currency loan will be charged:
During the term of this Loan Agreement, should there be any change in interest
rate by the State, the Financial Clearing Center will adjust the interest rate
pursuant to the State's interest rate policy. Lender will inform Borrower within
three days after the adjustment of the interest rate.
Clause 7. Interest on the loan under this Agreement will accrue starting from
the date when Lender releases the loan money. Interest should accrue on a daily
basis and should be repaid on a monthly basis. Loan principal and any accrued
interest should be repaid in full upon maturity.
Clause 8. With the permission of Lender, Borrower may repay the loan prior to
its maturity. Interest should be calculated on actual borrowing days applying
the agreed rate of interest.
Clause 9. Borrower should make sufficient deposit into its account before the
due date for repayment of interest, so that Lender may debit directly from the
Borrower's account maintained with the Lender's Financial Clearing Centre.
Undertakings by Both Parties
Clause 10. Borrower undertakes:
1. To utilize the loan proceeds as agreed in this Agreement.
2. Not to utilize the loan proceeds in illegal activities and will not
violate any foreign exchange rules and regulations of the State
regarding any foreign currency loan.
3. Prior to the full repayment of the loan principal under this
Agreement, if Borrower is involved in any business disputes or any
change in its business operations or any other material changes,
Borrowers should inform Lender 30 days in advance and should guarantee
the full repayment of principal and interest.
4. to provide the information on a timely basis as requested by the
Lender (including balance sheet, statement of operations, all bank
account balances and deposits, etc.), and should cooperate with any
investigation or fact finding processes conducted by the Lender with
respect to the loan related production, operations and financial
position.
Clause 11. Lender undertakes:
1. to release the agreed loan proceeds.
2. to keep confidential the information regarding the Borrower's debt,
financial, production and operations situations.
Change to Agreement
Clause 12. If Borrower wishes to extend the term of this loan, Borrower should
make the application to the Lender 15 workings days prior to the expiry of the
Agreement, in order to obtain a written agreement from the Lender.
Clause 13. In case whereas the Borrower or Lender needs to change the terms and
conditions of this Agreement, each party should notify the other party in
writing. Any change should be negotiated and agreed by both parties unanimously
in writing.
Breach of Agreement
Clause 14. If Borrower defaults in repayment of principal and accrued interest
upon maturity, pursuant to the State's rules and regulations, Lender will levy
extra penalty interest of 0.021% per day on overdue RMB loan or additional ___%
interest on overdue foreign currency loan.
Clause 15. If Borrower is in breach of Clause 9 of this Agreement and fails to
repay interest due, Lender will levy the same interest on the overdue interest.
Clause 16. If Borrower is in breach of Clause 10 of this Agreement, Lender can
cease the release of any outstanding loan money, and demands repayment in full
or partially of the loan granted to Borrower. Should there be any portion of the
loan unpaid, it shall be deemed in default. Lender has the right to levy extra
interest on overdue loan amount in accordance with the Financial Clearing
Center's rules.
Others
Clause 17. This Agreement is effective when executed by the legal representative
or authorized agent of Borrower and the responsible person of the Lender, and
sealed with the corporate stamp of both the Borrower an
Clause 18. This Loan Agreement will lapse automatically upon the full repayment
of the drawn loan principal, accrued interest and any other possible costs
associated with the realization of the debt.
Clause 19. Other matters agreed by both parties:
1.
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2.
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3.
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Clause 20. Any issue not covered by this Agreement should be settled in
accordance with the relevant laws, rules and regulations of the State.
Clause 21. This Agreement is signed in two copies. Borrower and Lender should
keep one copy and each signed copy has the same legality.
Clause 22. Attachment to this Agreement:
(1) Loan Application 2) Loan Approval (3) Loan Receipt
// Sealed // Sealed
Borrower (Company Stamp) Lender (Company Stamp)
/s/ Xxxx Xx /s/ Xxx Xxx
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Legal Representative (signature) Legal Representative (signature)
(or Authorized Agent)
Handled by (Signature) Handled by (Signature)
July 28, 2005
