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EXHIBIT 1
Date : March 17, 2000
BEIJING HOLDINGS LIMITED
IMPORTANT NOTICE: This letter sets out the terms and conditions upon which
our bank would provide term loan facility to you. You
are advised to read and understand the terms and
conditions before accepting the facilities.
Dear Sirs,
RE: TERM LOAN FACILITY UP TO AN EXTENT OF USD2,500,000.00
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We are pleased to offer you the captioned Banking Facility ("the Facility") on
the following terms and conditions.
1. Borrower : Beijing Holdings Limited.
2. Lender : Bank of China, Hong Kong Branch.
3. Facility : Term Loan up to the extent of USD2,500,000.00.
4. Purpose : To finance the Borrower for acquisition of shares
of Tramford International Limited.
5. Availability Period : Three (3) months from the date of this letter
having been duly countersigned by the Borrower,
or the date on which the Facility is fully drawn
or cancelled, whichever is the earlier.
6. Drawdown : Subject to the due fulfillment and observance of
all conditions precedent contained in Clause 13
and other procedures from time to time required
to be fulfilled, advances under the Facility
shall be made by way of drawdowns
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against Drawdown notices received by the Lender
at least Three Business Days (which shall mean a
day on which commercial banks in Hong Kong are
open for business but excluding Saturdays),
prior to the relevant drawdown dates during the
Availability Period duly signed by the
authorized signatories of the Borrower.
7. Final Maturity Date : Three (3) years from the end of the Availability
Period or the date on which the Facility is
fully drawn or cancelled, whichever is the
earlier.
8. Interest : (a) Interest on the Facility will be charged at
Two percent (2%) per annum over London
Interbank Offered Rate (LIBOR) for a Interest
Period of three months as quoted on the
Reuters Screen LIBO Page two days in which
banks in London and Hong Kong are open for
business prior to drawdown, following the
market practice in taking the arithmetic mean
of such quotations and rounded upwards to the
nearest 1/16 of one percent. If for any
reason whatsoever, LIBOR is not available or
it does not reflect the cost to the Lender of
funding the Facility or the Lender is unable
to obtain deposits to fund the Facility,
interest for the Facility shall be charged at
Two percent (2%) per annum over the Lender's
cost of fund for the Facility.
(b) Interest will accrue from day to day and be
calculated on the basis of the actual number
of days elapsed and a 360-day year.
(c) All interest periods shall be of three months
and accrued interest shall be paid at the end
of each interest period (Interest Payment
Date) and if not so paid shall be capitalized
as principal advance and bear interest at the
same rate. Notwithstanding the foregoing
provision, no interest period shall extend
beyond the Availability Period and if any
interest period would extend beyond such
period, it shall end at the end of the
Availability Period.
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(d) The first Interest Payment Date of the last
drawdown shall end on the same day as the
current Interest Payment Date of the previous
drawdown. Thereafter, all Interest Payment
Dates shall be co-terminus and all drawdowns
shall be treated as one loan.
(e) In the event if any interest period shall
end on a day not being a Business Day, it
shall end on the immediately succeeding
Business Day; and if it shall fall unto
another calendar month, on the immediately
preceding Business Day.
(f) At the sole and absolute discretion of the
Lender, due but unpaid interest may be
capitalized as principal advance which itself
bears interest at the rate as aforesaid.
9. Default Interest : (a) Time shall be of the essence of any payment/
repayment to be made by the Borrower. Any
payment/repayment required to be made
hereunder which is not made when due shall
bear default interest, payable in the
currency of such payment. Such default
interest shall accrue and be calculated from
the date when the relevant payment was due
to the date of its final payment in full, on
a day to day basis, at the rate certified by
the Lender's officers as being 6% per annum
over the Lender's prevailing prime rate for
United States Dollars (the "Prime Rate") as
quoted by the Lender from time to time or
the Lender's cost of fund, whichever is
higher, subject to fluctuation provided that
the Lender may vary the basis of calculation
of such rate upon 30 days' prior notice
displayed or posted in the Lender's banking
halls.
(b) In addition to the default interest mentioned
above, the Lender reserves the right to
charge the Borrower an administration fee of
HKD200.00 whenever the Borrower fails to
make any instalment payment on its due
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date, in order to cover the administrative
costs incurred by the Lender as a result of
such failure.
10. Repayment : (a) All amounts borrowed under this Facility
shall be repaid in full on the Final
Maturity Date (Repayment Date).
(b) In the event if the Repayment Date shall end
on a day not being a Business Day, it shall
end on the immediately succeeding Business
Day; and if it shall end unto another
calendar month, on the immediately preceding
Business Day.
11. Prepayment : (a) The Borrower may prepay all or any part of
the Facility on any Repayment Date in
minimum amount of USD500,000.00 or any
higher integral multiples of USD100,000.00
provided that seven (7) days' prior written
notice shall have been given to the Lender.
(b) Such prepayment of principal shall include
all interest accrued thereon and shall not
be reborrowed.
(c) A prepayment fee of 0.25% flat on the amount
prepaid shall be paid by the Borrower on the
date of prepayment.
12. Payment without
Deduction : All payments made by the Borrower to the Lender
are to be made in the currency of the Facility
in immediately available funds without set-off
or counter-claim and free and clear of and
without withholding or deduction for any and all
present or future taxes, duties or other
charges.
13. Conditions
Precedent : The Facility will be available for drawing when
the Lender has received the following documents
in form and content to its satisfaction:
(a) The signed copy of the duplicate of this
letter together with Board
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Resolutions indicating the Borrower's
acceptance of the Facility on terms and
conditions set out in this letter.
(b) A Deed of Charge Over Securities confirming a
first fixed charge of 3,523,306 shares of
Tramford International Limited duly executed
by the Borrower's authorized officer(s)
together with Board Resolutions .
(c) Original duly stamped bought and sold note of
the shares as mentioned in Clause 13(b)
above.
(d) An instrument of transfer of the shares
as mentioned in Clause 13(b) above duly
signed by the Borrower's authorized
officer(s).
(e) Written legal opinion issued by our USA
counsel.
14. Other Conditions : (a) No material change is allowed in the existing
registered or ultimate beneficial
shareholding of the Borrower without prior
written consent of the Lender.
(b) All necessary corporate resolutions required
to be passed by the Borrower and on the part
of the Borrower's shareholders, directors
and officers to authorize this letter and
its execution and performance have been
properly passed in accordance with the laws
of Hong Kong SAR and the Borrower's
Memorandum and Articles of Association and
this letter constitutes legal, valid and
binding obligations on the Borrower's part.
Otherwise, no further advances is allowed and
all amounts outstanding under the Facility
shall immediately become due and payable.
15. Representations
and Warranties : The Borrower hereby makes the following
representations and warranties to the Lender:
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(a) The Borrower is a company incorporated with
limited liability under the laws of Hong Kong
SAR;
(b) The Borrower has the corporate power and
authority and the legal capacity to perform
and observe its obligations hereunder;
(c) The obtaining of the Facility and/or the
borrowing hereunder and/or the acceptance
of this letter has been (or when signed will
have been) duly authorized by all necessary
action of the Borrower under all applicable
laws and regulations to which the Borrower
is subject. The terms and conditions
contained in this letter constitute (or when
signed will constitute) valid and legally
binding obligations of the Borrower in
accordance with its terms;
(d) The Borrower is not in default in the payment
of any principal of or interest on any
indebtedness for borrowed money and is not
in breach of or in default under any other
provision of any indenture, deed of trusts,
agreement or other instrument to which it is
a party and under or subject to which any
such indebtedness for borrowed money has
been issued and is outstanding and no event,
condition or act which with the giving of
notice or lapse of time, or both, would
constitute an event of default under any
such indenture, deed of trust, agreement or
other instrument has occurred or is
continuing which has not been properly
waived or remedied thereunder;
(e) No litigation, arbitration or administrative
proceeding before or of any court, tribunal
arbitrator or governmental authority is
presently taking place, pending or to its
knowledge (having made all reasonable
enquiries) threatened against the Borrower,
or any of its properties or assets, which
could result in a material adverse change in
the business, assets or condition of the
Borrower;
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(f) The above representations and warranties
shall continue in full force and effect by
reference to the facts and circumstances
then existing whilst any part of the
advances under the Facility remains
outstanding and shall be repeated, where not
inapplicable, on each drawing of the
Facility.
16. Affirmative
Undertakings : The Borrower undertakes with the Lender that it
will:
(a) Promptly on becoming aware of the occurrence
of any Events of Default or prospective
Events of Default or any other events or
circumstances which might materially and/or
adversely affect the Borrower's operations,
prospects, business or condition (financial
or otherwise) or the Borrower's ability to
perform its obligations under this letter or
other security document(s) notify the Lender
of the same;
(b) Promptly and duly pay or cause to be paid all
taxes, duties and other governmental charges
imposed upon the Borrower;
(c) Promptly supply or procure to be supplied to
the Lender annually the accounts (where
appropriate, audited accounts) of the
Borrower prepared according to
internationally accepted standards;
(d) From time to time upon the demand of the
Lender provide or procure to be provided to
the Lender such further security acceptable
to the Lender having current market value
not less than the then outstanding Facility;
(e) Ensure that the Borrower's obligations under
this letter, whether actual or contingent,
are not subordinated to, and that they will
at all times rank at least pari passu in
priority of payment and in all other
respects with any other of the Borrower's
unsecured obligations.
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17. Negative
Undertakings : The Borrower further undertakes with the Lender
that the Borrower will not, unless the Lender
otherwise expressly agrees in writing:
(a) Merge, or consolidate with or into any other
corporation or take any step with a view to
dissolution, liquidation or winding up;
(b) In any manner become or remain liable or
contingently liable for any indebtedness or
other obligation of any other person except
as may be necessary in normal course of the
Borrower's day to day business;
(c) Make any material change to the nature of the
Borrower's business as at present carried on;
(d) Make any material change to the existing
registered or ultimate beneficial
shareholding of the Borrower.
18. Events of Default : All amounts advanced under the Facility will
become immediately due and repayable in any of
the following events:
(a) The Borrower fails to pay any principal,
interest or other costs and expenses payable
to the Lender hereunder on the due date; or
(b) The Borrower for any reason whatsoever
fails promptly to discharge any obligation
under this letter to the Lender or be in
breach of any undertakings (affirmative or
negative) hereunder however and whenever
arising; or
(c) Any representation or warranty by the
Borrower hereunder or any information or
document delivered by the Borrower to the
Lender is shown to have been incorrect or
misleading in any material respect when made
or given; or
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(d) The Borrower fails to perform any
obligations on its respective part
contained in this letter; or
(e) The equitable or legal interest in any
shares in the Borrower is transferred
without the prior written consent of the
Lender; or
(f) Any governmental, tax, monetary or other
approval required by the Borrower as
mentioned aforesaid in this letter is
withdrawn or is changed in a way prejudicial
to the Lender; or
(g) Any event occurs which constitutes or,
with the passing of time or the giving of
notice or both, would constitute an event
of default under any other agreement to
which the Borrower is a party and which
would have, in the opinion of the Lender,
a material adverse effect on the ability
of the Borrower to perform its respective
obligations under this letter; or
(h) A receiver is appointed of any assets or
property of the Borrower or a resolution
is passed or an order is made for the
winding up of the Borrower or if the
Borrower otherwise becomes insolvent or
bankrupt under any court of law; or
(i) A distress, attachment, execution of other
legal process is levied, enforced or sued
out on or against the assets of the Borrower
and in the opinion of the Lender such event
has or could have a material adverse effect
on the Borrower; or
(j) Any present or future security on or cover
the assets of the Borrower becomes
enforceable and in the opinion of the Lender
such event has or could have a material
adverse effect on the Borrower; or
(k) There occurs, in the opinion of the Lender,
a material adverse change in the financial
position of the Borrower which would prevent
the Borrower
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from performing in any material respect its
obligations under this letter (as the case
may be); or
(l) This letter is not in full force and effect.
If any of the Events of Default has occurred,
then the Lender may by notice of any form to
the Borrower declare that an Event of Default
has occurred and that the advances under the
Facility and all interest accrued thereon has
become immediately due and payable whereupon:-
(a) the Lender shall not be required to make any
further advances under this letter; and
(b) all amounts outstanding under the Facility
shall immediately become due and payable.
19. Waivers and Rights
Cumulative : No delay or omission on the part of the Lender in
exercising any right, power, privilege or remedy
in respect of this letter shall impair such
right, power, privilege or remedy, or be
construed as a waiver of it, nor shall any
single or partial exercise of any such right,
power, privilege or remedy preclude any further
exercise of it or the exercise of any other
right, power, privilege or remedy. The rights,
powers, privileges and remedies provided in this
letter are cumulative and not exclusive of any
rights, powers, privileges or remedies provided
by law.
20. Set-off : (a) In addition and without prejudice to any
general or banker's lien, right of set-off
or similar right to which the Lender may be
entitled, the Lender shall have the right
and is hereby irrevocably and
unconditionally authorized, to the fullest
extent permitted by law, from time to time
and at any time without notice to the
Borrower (any such notice being expressly
waived) to set-off and appropriate and apply
any credit balance on any of the Borrower's
accounts (whether subject to notice or not
and whether
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matured or not) with the Lender against or
on account of the Borrower's obligations and
liabilities hereunder.
(b) Where such combination, set-off or transfer
requires the conversion of one currency into
another, such conversion shall be calculated
at the Lender's then prevailing spot rate of
exchange (as conclusively determined by the
Lender) for purchasing the currency in which
the moneys, obligation or liabilities were
due owing or incurred with the existing
currency so converted.
(c) The rights herein conferred on the Lender
are in addition and without prejudice to
any rights conferred on the Lender under
any security documents at any time and
from time to time given in favour of the
Lender.
21. Conclusive Statement
of Account : (a) Any statement of account relating to the
Facility signed as correct by any of the
duly authorized officer(s) of the Lender
shall be conclusive evidence of the
Borrower's indebtedness to the Lender, save
for manifest errors.
(b) Any opinion, determination or decision by
the Lender as to any materiality, effect or
otherwise howsoever relating to anything
herein mentioned or referred to shall be
conclusive and binding on the Borrower.
22. Authorization to debit
account(s) : The Lender shall be entitled to debit at any
time and from time to time all or any of the
interests, fees, charges, commissions, costs,
expenses and other sums due and payable by the
Borrower hereunder to any of the Borrower's
account(s) without prior notice to the Borrower.
Such sums shall be deemed duly drawn or
overdrawn from the account(s) by the Borrower.
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23. Handling Charges : Handling charges of USD6,250.00 FLAT shall be
paid by the Borrower upon acceptance of this
letter. Once paid, such handling charges shall
not be refundable under any circumstances.
24. Commitment Fee : Commitment fee of 0.25% PER ANNUM on the undrawn
balance of the Facility shall be paid by the
Borrower which is calculated on a day-to-day
basis during the Availability Period. Such fee
shall be payable at the end of the Availability
Period.
25. Cancellation Fee : (a) The Borrower may cancel the whole or part of
the undrawn Facility in a minimum amount of
USD500,000.00 or any higher integral
multiples of USD100,000.00 provided that
seven (7) days' prior irrevocable written
notice shall have been given to the Lender.
(b) A cancellation fee of 0.5% FLAT on the
cancelled amount shall be paid by the
Borrower on the date of cancellation.
26. Expenses : All expenses including but not limited to legal
fees, communications and other out-of-pocket
expenses incurred by the Borrower in connection
with this Facility or any enforcement, or
attempted enforcement, of the Lender's rights
under this letter, are to be borne by the
Borrower on a full indemnity basis.
27. Debt collection : The Lender shall be entitled to employ debt
collecting agent(s) to collect any sum due but
unpaid by the Borrower hereunder. The Borrower
agrees, and acknowledges that the Borrower has
been warned, that the Borrower shall indemnify
and keep the Lender indemnified on a full
indemnity basis against all costs and expenses
which the Lender may incur in the employment of
debt collecting agent(s). The Lender shall be
entitled to disclose to such debt collecting
agent(s) any or all information relating to the
Borrower or this letter.
28. Governing Law : The laws of Hong Kong SAR.
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Please signify your understanding and acceptance of this offer by signing and
returning the duplicate of this letter to us on or before April 17, 2000,
failing which this offer shall lapse.
Should you have any queries, please do feel free to contact our Ms. Kanas Chong
at 2826 6892 at any time. We are here to serve you better.
Yours faithfully,
FOR BANK OF CHINA, HONG KONG BRANCH
Authorized Signature(s)
After due and careful consideration of
the contents of this letter, we agree
to accept the Facility and shall be
bound by all the terms and conditions
herein set out.
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Borrower:
Date :
Witnessed by :
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Name:
Encl. (a) Direct Debit Authorization.
(b) Deed of Charge Over Securities.
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