Facility Agreement between Standard Chartered Bank (Hong Kong) Limited and Comtech International (Hong Kong) Ltd.
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Standard Chartered Bank (Hong Kong) Limited is providing Comtech International (Hong Kong) Ltd. with banking facilities totaling USD 5,000,000, including a USD 1,000,000 overdraft and USD 4,000,000 in trade finance. The agreement outlines the terms, including financial reporting requirements, covenants, and undertakings by Comtech, such as maintaining certain financial targets and promptly informing the bank of significant changes. The agreement is governed by Hong Kong law and remains effective as long as the specified conditions are met and the facility letter is signed and returned within the required timeframe.
EX-10.1 2 maryland_8kex10-1.txt FACILITY LETTER EXHIBIT 10.1 Standard Chartered Date: 29 September 2005 PRIVATE AND CONFIDENTIAL - ------------------------ Comtech International (Hong Kong) Ltd. Room 514, 5/F., Manhattan Centre, 8 Kwai Cheong Road, Kwai Chung, N.T. Hong Kong Attn: Mr. Allen Wu Financial Controller Dear Allen, We are pleased to confirm that the following facilities were available to Comtech International (Hong Kong) Limited as at 29 September 2005: Overdraft USD1,000,000 Trade Facilities USD4,000,000 - ------------------------------------- Total USD5,000,000 The facts above are given as at 29 September 2005 without any responsibility or liability whatsoever on the part of the Bank or its officials for or in respect of any of such facts or any defect in or omission from such facts. Yours faithfully, - ---------------------------------------------------- Derek Lee Relationship Manager Local Corporates Standard Chartered Bank (Hong Kong) Limited Accepted by For and on behalf of COMTECH INTERNATIONAL (HONG KONG) LIMITED - ---------------------------------------------------- Authorized Signature(s) Date: October 7, 2005 Standard Chartered Date: 21st June 2005 Our Ref: CR/LC/TEAM3/BKC CONFIDENTIAL - ------------ Comtech International (Hong Kong) Ltd. Room 514, 5/F., Manhattan Centre, 8 Kwai Cheong Road, Kwai Chung, New Territories. Attn: Ms. Hope Ni, Chief Financial Officer/ Mr. Allen Wu, Financial Controller - ---------------------------------------------- Dear Sirs, BANKING FACILITIES We, Standard Chartered Bank (Hong Kong) Limited, refer to our letter dated 11th May 2005 together with the Bank's Standard Terms and Conditions for Banking Facilities and Services (including the Trade Finance Supplement), which set out the facilities made available to the Customer below (the "Existing Facility Letter"). CUSTOMER: Comtech International (Hong Kong) Ltd. Following our recent discussions, we are pleased to confirm that the terms of the facilities will be varied as follows: The entire "COVENANTS AND UNDERTAKINGS" section is revised and replaced by the following: E. COVENANTS AND UNDERTAKINGS: The Customer undertakes to the Bank that it will: 1. procure that all its obligations in connection with the Facilities will at all times rank at least pari passu in terms of security and support (including third party) with all its other present and future obligations. 2. ensure share placement target of USD50,000,000.-, with a minimum achievable amount of USD20,000,000.-. 3. promptly submit to the Bank: o a certified copy of the audited financial statements of the Customer within 9 months after its financial year end; o a certified copy of the audited financial statements of Comtech Group, Inc. within 120 days after its financial year end; o certified copies of the quarterly management accounts of the Customer and Comtech Group, Inc. within 60 days after the end of the relevant accounting period; and o other information that the Bank may request from time to time. -1- CORNTECH INTERNATIONAL (HONG KONG) LTD. 4. immediately inform the Bank: o of any change of the Customer's directors or beneficial shareholders or amendment to its memorandum or articles of association or equivalent constitutional documents; o of any substantial change to the general nature of the Customer's existing business; or o if it becomes, or is aware that any of its directors, shareholders, partners or managers becomes, a Related Person (as defined in paragraph 7 of section F of this letter). The variations set out above will take effect when we have received: o the enclosed copy of this letter signed by a director on behalf of the customer. Please sign the enclosed copy of this letter and return it to the Bank's Credit Risk Control at 11th Floor, Standard Chartered Tower, 388 Kwun Tong Road, Kwun Tong, Kowloon, for the attention of Mr. Stephen Wong, within one month after the date of this letter. This letter will amend the terms of the Existing Facility Letter which the Bank has issued to any of the Customer, as set out above. In all other respects, the terms of the Existing Facility Letter and the Bank's Standard Terms and Conditions for Banking Facilities and Services (including the Trade Finance Supplement) will remain in full force and effect. This letter will be governed by the laws of Hong Kong SAR. If you have any queries, please contact our Relationship Manager Mr. Derek Lee, whose telephone number is 2821-1813. We are pleased to be of service to you and take this opportunity to thank you again for your custom. Yours faithfully, For and on behalf of STANDARD CHARTERED BANK (HONG KONG) LIMITED /s/ Karie Leung - -------------------------------------- Karie Leung Senior Credit Documentation Manager KL/SW/dc Encl. Agreed For and on behalf of COMTECH INTERNATIONAL (HONG KONG) LTD. - -------------------------------------- DIRECTOR Standard Chartered Date: 11th May 2005 Our Ref: CR/LC/TEAM3/BKC CONFIDENTIAL Comtech International (Hong Kong) Ltd. Room 514, 5/F., Manhattan Centre, 8 Kwai Cheong Road, Kwai Chung, New Territories. Attn: Ms. Hope Ni, Chief Financial Officer/ Mr. Allen Wu, Financial Controller - -------------------------------------------------- Dear Sirs, BANKING FACILITIES Standard Chartered Bank (Hong Kong) Limited (the "Bank") is pleased to offer the following banking facilities (the "Facilities") to the Customer below for the purpose(s) of general working capital and trade finance requirement, subject to the Bank's Standard Terms and Conditions for Banking Facilities and Services (including the Trade Finance Supplement) attached and the terms and conditions set out in this facility letter. A. CUSTOMER: Comtech International (Hong Kong) Ltd. B. FACILITY LIMITS:
-3- COMTECH INTERNATIONAL (HONG KONG) LTD. - -------------------------------------------------------------------------------- Handling Fee of Facilities: HKD10,000.-, payable upon your signing of this letter, and other handling fee to be mutually agreed and payable on each anniversary of the date of this letter if the Facilities are continuing. - -------------------------------------------------------------------------------- D. SECURITY AND CONDITIONS PRECEDENT: The availability of the Facilities is conditional upon the Bank's receipt of the following documents, items and evidence (both in form and substance) satisfactory to the Bank: 1. This letter duly executed by the Customer. 2. An all monies Charge Over Deposits executed by the Customer in favour of the Bank in an amount of not less than USD2,000,000.-. 10% extra margin required for other major foreign currencies other than HKD. The Bank reserves the right to require a higher margin.) 3. A corporate guarantee executed by Comtech Group, Inc. for USD5,000,000.- plus interest and other charges. 4. A letter of undertaking issued by Comtech Group, Inc. agreeing to maintain its minimum tangible net worth at not less than USD22,000,000.- at all times. 5. Certified true copies of the certificate of incorporation, memorandum and articles of association or equivalent constitutional documents of the Customer and Comtech Group, Inc. 6. Original/Certified copies of all necessary consents, approvals and other authorisations (including board resolutions) in connection with the execution, delivery and performance of this letter and all other documents mentioned above, if applicable. 7. (if any of the facilities referred to in this letter are made available by Standard Chartered Bank or other members of the Standard Chartered Group). All such documents, items or evidence with, in favour of or to Standard Chartered Bank or, as the case may be, such member of the Standard Chartered Group as the Bank may request. 8. Such other documents, items or evidence that the Bank may request from time to time. E. COVENANTS AND UNDERTAKINGS: The Customer undertakes to the Bank that it will: 1. not announce or pay any dividends without the prior consent of the Bank. 2. not create or permit to exist any mortgage, pledge, lien, charge, assignment or security interest over any of its assets without the prior written consent of the Bank. 3. ensure share placement target of USD50,000,000.-, with a minimum achievable amount of USD20,000,000.-. -4- COMTECH INTERNATIONAL (HONG KONG) LTD. 4. promptly submit to the Bank: o a certified copy of the audited financial statements of the Customer within 9 months after its financial year end; o a certified copy of the audited financial statements of Comtech Group, Inc. within 120 days after its financial year end; o certified copies of the quarterly management accounts of the Customer and Comtech Group, Inc. within 60 days after the end of the relevant accounting period; and o other information that the Bank may request from time to time. 5. immediately inform the Bank: o of any change of the Customer's directors or beneficial shareholders or amendment to its memorandum or articles of association or equivalent constitutional documents; o of any substantial change to the general nature of the Customer's existing business; or o if it becomes, or is aware that any of its directors, shareholders, partners or managers becomes, a Related Person (as defined in paragraph 7 of section F of this letter). F. OTHER TERMS AND CONDITIONS: 1. Prior written consent of the Bank must be obtained for any disposal of the shares of Mr. Jeffrey Kang in the Customer or the resignation of Mr. Jeffrey Kang from Comtech Group, Inc. as director / Chief Executive Officer / Chairman. 2. Shenzhen Comtech International Ltd. and Comtech Communications Technology (Shenzhen) Co. Ltd. must open their respective accounts with Standard Chartered Bank, Shenzhen Branch within 3 months from the Customer's date of acceptance of this banking facility letter. 3. The Facilities are available at the sole discretion of the Bank. The Bank may at any time immediately terminate, cancel or suspend the Facilities or otherwise modify the Facilities without the consent of any party. 4. Notwithstanding any provisions stated in this letter, the Facilities are repayable on demand by the Bank. The Bank has the overriding right at any time to require immediate payment and/or cash collateralisation of all or any sums actually or contingently owing to it under the Facilities. 5. The Bank's Standard Terms and Conditions for Banking Facilities and Services (including the Trade Finance Supplement) ("Standard Terms and Conditions") attached and/or referred to in this letter forms an integral part of this letter and the Customer agrees to observe and be bound by such Standard Terms and Conditions. 6. The terms and conditions set out or referred to in this letter supersede and replace those set out in our letter (if any) previously sent to the Customer. 7. Please note that section 83 of the Banking Ordinance imposes on the Bank certain limitations on advances to persons (including firms, partnerships and companies) related to its directors, employees with lending authority or controllers (each person so related shall be referred to as a "RELATED PERSON"). When acknowledging and accepting this facility letter, the Customer should advise the Bank if it is, or any of its directors, shareholders, partners or managers is, a Related Person within the meaning of the Banking Ordinance. If subsequent to the acceptance of this facility letter, the Customer becomes, or is aware that any of its directors, shareholders, partners or managers is or becomes, a Related Person, it should immediately advise the Bank in writing. 8. This letter shall be governed by and construed in accordance with the laws of Hong Kong SAR. -5- COMTECH INTERNATIONAL (HONG KONG) LTD. Please sign and return to us the enclosed copy of this letter together with the attached Standard Terms and Conditions for Banking Facilities and Services (including the Trade Finance Supplement) to the Bank's Credit Risk Control at 11th Floor, Standard Chartered Tower, 388 Kwun Tong Road, Kwun Tong, Kowloon within one month after the date of this letter, failing which this offer shall lapse. If you have any queries, please feel free to contact any of the following persons:-
Yours faithfully, For and on behalf of STANDARD CHARTERED BANK (HONG KONG) LIMITED /s/ Karie Leung - ----------------------------------- Karie Leung Senior Credit Documentation Manager KL/LK/dc Encl. We agree and accept all the terms and conditions set out above and the Bank's Standard Terms and Conditions for Banking Facilities and Services (including the Trade Finance Supplement) attached and/or referred to in this letter, which we have read and understood. For and on behalf of COMTECH INTERNATIONAL (HONG KONG) LTD. - -------------------------------------- -6- COMTECH INTERNATIONAL (HONG KONG) LTD. Appendix 1 TRADE FINANCE FACILITY Trade Finance Group All - ----------------------- o Negotiation of export credit documents with discrepancies on a with recourse basis Trade Finance Group 1 - --------------------- o Purchase of documents against payment bills with title documents on parties acceptable to the Bank on a with recourse basis o Purchase of documents against acceptance bills with ECA / approved insurance cover on a with recourse basis o Issuance of back-to-back letters of credit o Issuance of import letters of credit - sight and usance - with title documents Trade Finance Group 2 - --------------------- o Purchase of documents against acceptance bills without ECA/approved insurance cover on a with recourse basis o Purchase of documents against payment bills without title documents on parties acceptable to the Bank on a with recourse basis o Issuance of quasi back-to-back letters of credit - without title documents (i.e. Import letter of credit supported by export letter of credit acceptable to the Bank) o Issuance of import letters of credit - sight and usance - without title documents o Shipping guarantees Trade Finance Group 3 - --------------------- o Pre-shipment loan - i.e. packing credit o Acceptance of drafts under import letters of credit o Release of documents against acceptance supported by trust receipts o Loans against trust receipts o Import loans o Export Invoice Discounting/Import Invoice Financing
