Sample Business Contracts

Banking Facilities Agreement - Hang Seng Bank and Bonso Electronics Ltd.

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Hang Seng Bank

Our Ref.: Commercial Banking - Relationship Management

Private & Confidential

Bonso Electronics Limited                                         21 May 2003
Unit 1106-1110 11/F
Star House
3 Salisbury Road

Attention: Mr. Anthony So

Dear Sirs


With reference to our recent discussions, we wish to advise that we have
reviewed your banking facilities and offer you the undermentioned revised
limits (the "Facilities") which will be made available subject to the terms and
conditions outlined herein:-

Facilities and Limits

For establishment of documentary letters of credit (LC) for
your account in favour of third parties and covering import
of goods in the ways acceptable to us and/or acceptance of
bills drawn thereunder, and/or

for trust receipt facility (TR) relating to goods imported    HK$28,000,000.00
and financed under our documentary letters of credit
established for your account, and/or

for purchase of documentary export D/P bills (DP) drawn on
parties acceptable to us, and/or

for purchase of documentary export D/A bills (DA) drawn on
parties acceptable to us, of which

for extension of export trade loans (ETL) to finance your     (HK$10,000,000.00)
export of goods as evidenced by your sale
invoices and any other relevant documents as required,

for overdraft facility (OD) on your current account No.       (HK$5,000,000.00)

The aggregate amount owing under LC, TR, DP, DA, ETL and OD
facilities shall not exceed HK$28,000,000.00 at any one



Bonso Electronics Limited

Negotiation of discrepant documents, secured or unsecured by   HK$15,000,000.00
goods, presented under export letters of credit issued by
banks acceptable to us.

For establishment of Stand-by Letters of Credit (SBLC) for     EUR$1,900,000.00
your account in favour of third parties and
covering services and/or other performances in the ways
acceptable to us and/or acceptance of bills drawn

Term Loan outstanding balance under A/C No. 272-826769.        US$440,000.10


(i)   As security, we continue to hold the "All Moneys" legal charge already
      executed in our favour on the property situated at Units 1106-1110 on 11th
      Floor of Star House, No.3 Salisbury Road, Kowloon.

(iii) Unlimited Deed of Guarantee already executed by Bonso Electronics
      International Inc. (the " Guarantor") in our favour.


(i)   Interest on financed bills/loans in Hong Kong Dollar shall be charged at
      0.5% per annum below the Hong Kong Dollar Prime Lending Rate as quoted by
      Hang Seng Bank Limited from time to time, the present effective Hong Kong
      Dollar Prime Lending Rate being 5% per annum and subject to fluctuation at
      our discretion. Interest on loans will be payable on monthly basis..

(ii)  Interest on financed bills/loans in United States Dollar and other foreign
      currencies shall be charged at 0.75% and 0.5% per annum below board rate
      respectively as quoted by us from time to time and subject to fluctuation.
      Interest on loans will be payable on monthly basis.

(iii) Interest on the overdraft facility shall be charged at 0.5% per annum over
      the Hong Kong Dollars Prime Lending Rate as quoted by us from time to time
      with monthly rests and subject to fluctuation at our discretion.


Maximum loan tenor for import loans will be 120 days.


A non-refundable facility review fee of HK$20,000.00 shall be payable by you
to us upon acceptance of the Facilities and thereafter a review fee in such
amount as we may prescribe from time to time shall be payable upon each review
of the Facilities. We are authorised to debit the current account maintained
by you with us for the facility review fee upon receipt of your acceptance of
the Facilities as mentioned in this letter and in all subsequent reviews.


Hang Seng Bank Limited


Bonso Electronics Limited


The above property shall be insured against the risks of fire, earthquake (fire,
shock & flood), landslip and subsidence endorsement, explosion, typhoon,
windstorm and flood for the facilities amount or the cost of reinstating the
property. The insurer must first be approved by us and the insurance policy
denoting our interest as chargee, together with the receipt for premium paid,
has to be lodged with us on or before execution of the Legal Charges; the
renewal policy, also with our interest being denoted thereon, must be lodged
with us no later than fourteen days prior to the renewal date of the policy.
Otherwise, we will insure the property on the Borrower's behalf, the premium of
which shall be debited to your account with us. If the insured amount is based
on the reinstatement cost, a valuation and administration fee will be charged
for the initial, and each subsequent renewal. The current valuation and
administration fee of each mortgaged property is HKD1,000.00.

Default Interest

Notwithstanding the provisions above for the charging of interest, all sums
(whether principal,' interest, fees, charges or otherwise) due but unpaid in
respect of the Facilities shall bear interest at such rate from time to time
determined by us at our absolute discretion.


We may, at any time and without notice, apply and set-off any credit balance to
which you are entitled on any account with us or any other moneys owed by us to
you in or towards satisfaction of any obligations owing to us by you. For this
purpose, we are authorised to purchase, at our prevailing exchange rate, such
other currencies as may be necessary to effect such application with the moneys
standing to the credit of such account or to effect conversion of one currency
into another in any other manner.


All expenses, legal or otherwise, if any, in connection with the Facilities are
to be borne by you.


All payments of principal and interest on amounts due under the Facilities shall
be made free and clear of all present and future taxes, withholdings of any
nature whatsoever.

Governing Law

These Facilities are subject to the laws of Hong Kong Special Administrative
Region with non-exclusive jurisdiction of Hong Kong Special Administrative
Region Courts.


Hang Seng Bank Limited


Bonso Electronics Limited


(1)  You and the Guarantor shall provide us with certified copies of the annual
     audited accounts within 6 months following the end of each financial year
     and such other relevant financial information as we shall from time to time
     reasonably request.

(ii) The legal charge and discharge of the above property will contain the usual
     provisions that are currently in use in Hong Kong to be approved by
     solicitors designated by us.

(iii)We may from time to time at our absolute discretion and without prior
     notice to or consent from you, impose further charges and fees which may be
     chargeable on facilities of the same type and change the terms of the
     existing and future charges and fees, including the rate thereof.

Notwithstanding anything to the contrary hereinbefore contained, we shall not be
bound to grant any of the Facilities at all or beyond such sum as we may at our
sole discretion consider safe to the intent that we retain the absolute right to
withdraw, suspend and/or reduce from time to time the Facilities or any of them
and/or the extent of any of the Facilities for so long and to or in such amount
as we may at our sole discretion deem fit without prior notice to or consent
from you.

The Facilities are subject to our usual review annually and at any time as well
as our customary overriding right of repayment on demand and are subject to our
right to call for cash cover on demand for prospective and contingent

Kindly sign and return to us the duplicate of this letter together with the
attached "Extracts from the Minutes of a Meeting of the Board of Directors" to
indicate your acceptance of this credit facility arrangement by 21 June 2003 and
if not accepted by that date, unless extended by us at our sole and absolute
discretion, will be deemed to have lapsed. All other security documentation
required, if any, under the Facilities must be executed to our complete
satisfaction within thirty days from the date of this letter, failing which the
Facilities are subject to withdrawal or revision at our absolute discretion.

Our Insurance Agency Department offers a full range of insurance services and
will be pleased to quote you competitive rates on fire, marine and other
coverages upon your request. Should you require further information, please feel
free to contact Mr. Yeung Tung, Manager, Marketing at 2198 4960.

Should you have any queries, please do not hesitate to contact our Miss Sarah
Lau at 2198 4103.


Hang Seng Bank Limited


Bonso Electronics Limited

We trust that you will make active use of the Facilities and are pleased to be
of continued assistance to you.

Yours faithfully

/s/  Dennis Chan
     Dennis Chan
     Assistant General Manager

 /s/  Donald Lam
      Donald Lam
      Department Head, Relationship Management
      Commercial Banking

For and on the behalf of

/s/ Anthony So                  Chop & Sign



Hang Seng Bank Limited