The Construction Bank of China
LOAN AGREEMENT
Type of the Loan: Foreign Currency Short-term Loan for Working Capital
No. of Contract: 96(W)004
Debtor: Xianyang Daming Electronics Co. Ltd.
Address: 00 Xxxx Xxxxxxx Xxxx, Xianyang Telephone:
Legal Representative: Mr. Du, Qingsong
Bank Account:
Fax: Post code:
Creditor: Construction Bank of China, Xianyang Branch
Address: Telephone:
Legal Representative:
Fax: Post code:
Debtor (Party A): Xianyang Daming Electronics Co., Ltd
Creditor (Party B): Construction Bank of China, Xianyang Branch
The parties agree as follows:
1. Total amount of the Loan Facility US$1,100,000.
2. The party A will use the loan for importing raw materials.
3. The term of the Loan Facility will be scheduled from Sept. 16, 1996 to mature
and expire on March 15, 1997.
4. The loan's prime rate per annum is 7.4375%, and is computed on the basis of
every three months. The interest of the loan is calculated from the date when
the loan is transferred to the Party A's account. During the period of the
agreement, the interest rate is subject to any change by the Bank of China.
5. The Party A plans to spend the loan as following:
1996 year 9 month US$1,100,000 amount
__year_month_____amount
__year_month_____amount
__year_month_____amount
6. The Schedule for the Party A to return the loan will be as following:
1997 year 3 month US$1,100,000 amount
__year_month_____amount
__year_month_____amount
__year_month_____amount
The Party A should notice the Party B __ business days in advance when it plans
to return the loan before the scheduled date.
7. The interest will be deducted directly from the Party A's Foreign Currency
account on the scheduled interest-pay-day. If the Party A fails to do so, the
Party B may stop releasing the loan.
8. If the Party A fails to return the loan as the scheduled date, the Bank or
other authorized party has the right to deduct the principle, interest and other
costs from Party A's bank account.
9. Modification or dismiss of the agreement:
(1). After this agreement enters into force, neither Party A or Party B is
allowed to make modifications nor cancel the agreement without the consent of
the other party.
(2). In case Party A is not able to pay off the loan at maturity due to
situations out of its control, Party A may apply for extension of the loan which
can only be allowed one time only. Party A is supposed to submit the application
form __ business days before the mature date and prepare the third Party's
warranty agreement, then sign the Loan Facility Extension Agreement in face of
the Party B.
(3). If Party A wishes to transfer the right and obligation under this agreement
to any other Party, it should inform Party B beforehand. This transfer will not
come to be effective until the Third Party sign another Loan Facility Agreement
with the Party B.
(4). In case any of the Parties change their status during the period of the
agreement, the reorganized party will continue to fulfill the obligation and
enjoy the right under the agreement.
10. In respect of the principle, interest and other costs, Xianyang Pianzhuan
Group Corp will be the guarantor for Party A, and Party A will supply the
collateral to secure the full payment. Two agreements will be signed
respectively thereafter.
11. During the period of the agreement, Party A can not change its status
without the written approval of Party B (e.g. Contractual term, joint venture,
merge, etc.).
12. The right and obligation of Party A and Party B:
(1) Party A has the right to ask for release of the loan from Party B as agreed.
(2) Party A will return the principle and the interest at maturity.
(3) Party A must use the loan for the purpose as agreed in the agreement.
Without the written approval of Party B, Party A is not allowed to appropriate
the loan for any other purpose.
(4) Party A will provide all the relevant financial statements for the
reference of the Party B.
(5) Party B has the right to supervise the use of the loan by Party A.
(6) Party B has the right to supervise the financial processing of Party A.
(7) Party B will release the loan as the scheduled date under the agreement.
13. Events of Default:
(1) If Party A does not use the loan for purposes other than stipulated in the
agreement, Party B may charge extra interest rate for the amount which is
misused.
(2) If Party A does not return the loan as the scheduled date or as the planned
amount each time, Party B may charge extra interest rate--.
(3) Upon default of No.11 of the agreement, causing Party A to lose the whole
amount of the loan thereafter, Party B may declare the entire unpaid principle
balance and accrued unpaid interest immediately due.
(4) If Party A is in default of No.15 of the agreement, Party B may charge
penalty fee ________ from Party A.
(5) Under the following situations, Party B may stop releasing the rest of the
loan, declare the unpaid principle and the accrued interest due, or dispose the
Collateral and also has the right to deduct that amount directly from Party A's
account.
a. Party A uses the loan for purposes other than stipulated in the agreement and
insists on doing so in spite of Party B's notice.
b. Party A provides false financial statements to the Party B.
c. The guarantor is in default or the collateral is accidentally damaged, and
Party A cannot find a new qualified guarantor or another collateral.
d. Party A gets involved in serious lawsuit or arbitration.
e. Any events that make Party A unable to pay the loan or if Party A is found no
longer a bonafide debtor.
14. Any dispute between the two parties which failed to be settled through
negotiation should be settled in a court in the area where Party B is located.
Before the court makes the decision, the two parties will continue to fulfill
their obligations which are not under the dispute.
15. Miscellaneous.
(1) Before Party A pays off the loan, it is not allowed to use this loan to any
third party as the collateral.
(2) Before Party A pays off the loan, it is not allowed to act as anyone's
guarantor.
(3)
(4) ___________________________________________
16. Anything beyond the contract is abided by the related law and regulations.
17. The contract came into force after authorized Representative's signature and
seal, it will terminate when the principal and interests under the agreement are
paid off.
18. The contract is in triplicate, one for each party and one for guarantor.
Xianyang Daming Electronics Co.,Ltd International Division of Construction
Bank, Xianyang Branch
seal seal
Legal representative: Legal representative:
Sep. 16, 1996 Sep. 16, 1996
