EXHIBIT 10.4
BANK OF CHINA (HONG KONG) LIMITED
REF: L/CO1/205/05/00554 & 00554-1/F/51619
Date: 22nd July, 2005
COMTECH INTERNATIONAL (HONG KONG) LIMITED
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IMPORTANT NOTICE: This letter sets out the terms and
conditions upon which our bank would
provide/continue/renew banking facilities to
you. You are advised to read and understand
the terms and conditions before accepting
this letter.
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Dear Sirs,
RE: GENERAL BANKING FACILITIES
Further to our recent discussions, we are pleased to grant the following general
banking facilities (the "FACILITIES") to you subject to our General Terms and
Conditions for General Banking Facilities (the "GENERAL TERMS"), an Export
Factoring Agreement previously executed and delivered by you to us (if
applicable) and the terms and conditions as stated below . Words and expressions
defined in the General Terms shall have the same meaning in this letter:-
1. FACILITIES AMOUNT
O/D # For United States Dollars:
Interest shall be charged
at LIBOR+ 2.25%p.a.
For Hong Kong Dollars:
Interest shall be charged
at HIBOR + 2.25%p.a.
IIF (90 days) USD 4,000,000.00 # Please refer to "Tariffs"
(100% of the invoice amount)
ETD (60 days) USD 5,000,000.00 @ Please refer to "Tariffs"
(80% of the invoice amount)
# IIF shall be interchanged with O/D up to the extent of USD
1,000,000.00 and vice versa.
# The Supplier(s) under IIF (90 days) should be approved by us.
@ Utilization of EID (60 days) are subject to the following conditions:
1. The Buyer(s) under EID should be approved by us.
2. The fund collected from the invoice(s) to be discounted
under EID shall be deposited into your designated account
maintained with us.
3. The maximum limit for EID discounted for the Invoice(s)
drawn on each Buyer should be approved by us.
2. CONDITIONS PRECEDENT / COLLATERAL SECURITY(IES):
The advance of the Facility shall be subject to the conditions
precedent that our Bank has received in form and substance satisfactory
to us all of the following:-
o Continuing personal/corporate guarantee(s) executed/to be
executed by the following guarantor(s) in our favour to cover
general banking facilities from time to time and at any time
granted or to be granted by us to you to such extent as we may
from time to time deem fit, provided that the total liability
of the guarantor(s) under the guarantee shall not be less than
the guaranteed amount stated below, together with interest and
any other money set out in the guarantee:-
Name of the Guarantor(s) Guaranteed Amount
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Comtech Group, Inc. All monies
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BANK OF CHINA (HONG KONG) LIMITED
REF: L/CO1/205/05/00554 & 00554-1/F/51619
o Charge of Deposit(s) for the total principal amount of not
less than USD 3,000,000.00 (or its 100% equivalent in HK
dollars or its 125% equivalent in other foreign currency
acceptable to us) together with interest accrued or to be
accrued thereon, executed/to be executed in our favour to
secure general banking facilities from time to time and at any
time granted or to be granted by us to you to such extent as
we may FROM time to time deem fit.
o Assignment of your Account Receivables due from ZTE (H.K.)
Limited, Huawei Tech. Investment Co., Limited, Hongdin
International Trading Limited and TCL Mobile Communication
(HK) Company Limited duly executed by you in favour of us to
secure general banking facilities from time to time and at any
time granted by us to you.
o Legal Opinion issued by United States of America Law Firm for
the validity, legality and enforceability in respect of the
Guarantee to be executed by Comtech Group, Inc. together with
any resolutions and such other documents in a form and
substance satisfactory to us.
o Process Agent Appointment Letter issued by the Guarantor(s)
and xxxx accepted and confirmed by the Process Agent.
o Such other documents as we may request including those as may
be required to evidence any and all licences, authorizations,
consents or approvals necessary for the performance by you or
the security provider(s) of their respective obligations under
this facility letter and the security documents.
3. OTHER CONDITIONS:
o The Facilities shall be made available to you against USD
deposit(s) (or its 100% equivalent in HK dollars or its 125%
equivalent in other foreign currency acceptable to us) from
time to time being deposited and charged to us on the
proportion base of 3:1 (Facilities : Deposit). The Amount of
deposit(s) charged for each time must be in a minimum of USD
1,000,000. 00 and in any higher integral multiples thereof.
o You shall undertake with us that your Account Receivables due
from the Buyer(s) to whom invoice(s) have been discounted for
EID shall not be charged or assigned to other banks and/or
financial institutions and/or creditors except in our favour.
o Xxxx Xxxxxxx shall maintain to be a director and with a
controlling interest of at least 50% (direct or indirect) over
Comtech Group, Inc..
o Comtech Group, Inc. shall be your ultimate holding company and
with a controlling interest of at least 50%.
o You are required to render us the bills transaction volume in
monetary term of not less than USD12,000,000.00 within one
year from the date of your acceptance of this letter. If you
fail to do so, USD3,000.00 will be charged and payable by you.
o You are required to promptly supply to us annually the reports
of your sales transaction volume and account receivables
relating to your buyers.
4. TARIFFS (SUBJECT TO CHANGES AT OUR BANK'S SOLE AND ABSOLUTE
DISCRETION):
o INTEREST RATE FOR IMPORT INVOICE FINANCING (90 DAYS):
First 90 days (including tenor of draft)
United States Dollars : LIBOR + 2%p.a.
Hong Kong Dollars : HIBOR+ 2%p.a.
o INTEREST RATE FOR EXPORT INVOICE DISCOUNTING (60 DAYS):
First 50 days (including tenor of draft)
United States Dollars : LIBOR +2%p.a.
Hong Kong Dollars: H1BOR + 2%p.a.
o HANDLING COMMISSION FOR BILLS TRANSACTIONS
- On the first USD50,000.00 1/4%
- On any balance in excess of USD50,000.00 1/24%
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BANK OF CHINA (HONG KONG) LIMITED
REF: L/CO1/205/05/00554 & 00554-1/F/51619
UNLESS OTHERWISE STIPULATED HEREIN, ALL OTHER BANK CHARGES AND INTEREST WHICH
ARE NOT MENTIONED IN THIS LETTER WILL BE CHARGED AS PER OUR USUAL TARIFF SCALE
AND WE HEREBY RESERVE OUR ABSOLUTE RIGHT TO ALTER, AMEND OR REVIEW OUR TARIFF
SCALE AT ANY TIME WITHOUT PRIOR NOTICE.
5. FEES
o Handling Charge: : USD 10,000.00 payable upon acceptance
of this facility letter.
o Commitment Fee of O/D: : If the undrawn balance exceeds 50% of
O/D facility, a commitment fee
of 0.125% per annum will be
charged daily on the undrawn
balance of your O/D facility
and will be payable monthly
in arrears to the debit of
your current account.
Currently, you represent that you do not have any relationship with our Bank's
directors or employees. If the facilities are secured by any guarantee(s) or
securities provided by any third party (the "Security Provider"), you also
represent that none of the Security Provider is so related. You further agree
and undertake that if the foregoing is not true and correct or you or any
Security Provider becomes related with our Bank's directors or employees, you
will promptly notify us in writing.
Please signify your receipt of the General Terms and your understanding and
acceptance of this offer by signing and returning to us the duplicate copy of
this letter on or before 20TH SEPTEMBER, 2005 , failing which this offer shall
lapse.
-3-
BANK OF CHINA (HONG KONG) LIMITED
REF: L/CO1/205/05/00554 & 00554-1/F/51619
Should you have any queries, please do feel free to contact our Xx. Xxxx at
34193492 at any time. We are here to serve you better.
Yours faithfully,
For BANK OF CHINA (HONG KONG) LIMITED
/s/ signature
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Authorized Signature(s)
After due and careful consideration of the contents of this letter, I/we agree
to accept the Facilities and be bound by all the terms and conditions herein set
out.
FOR AND ON BEHALF OF
COMTECH INTERNATIONAL (HONG KONG) LIMITED
/s/ signature
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Authorized Signature(s)
/s/ signature
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Borrower : Comtech International (Hong Kong) Limited
Date:
After due and careful consideration of the contents of the Facilities and the
General Terms (as defined above), I/we agree and accept to act as the
Guarantor(s) be bound by all the terms and conditions set out at the above
/s/ signature
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Name : Comtech Group, Inc.
Date :
Witness:
/s/ signature
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Name:
We, Bank of China (Hong Kong) Limited hereby confirm that the Facilities as
mentioned in this letter will be made available to Comtech International (Hong
Kong) Limited on 30th September 2005.
For BANK OF CHINA (HONG KONG) LIMITED
/s/ signature
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Authorized Signature(s)
Accepted by
For and on behalf of
COMTECH INTERNATIONAL (HONG KONG) LIMITED
/s/ signature
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Authorized Signature(s)
Date: October 7, 2005
Encl. o General Terms and Conditions for General Banking Facilities
o Certified Extract of the Minutes of Board Resolutions
o Deed of Indemnity, Charge Over Deposit(s) and Set-off
o Deed of Guarantee (with Board Resolutions)
o Process Agent Appointment Letter
o Authorization Letter
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