Facility Agreement between CITIC Ka Wah Bank Limited and Atlantic Components Limited (May 2007)

Summary

CITIC Ka Wah Bank Limited offers Atlantic Components Limited banking facilities totaling up to HKD13,000,000, including trade finance and an overdraft. The agreement outlines interest rates, fees, and conditions, such as providing security, a personal guarantee, and a mortgage over specified property. The bank may demand repayment at any time and can modify or terminate the facilities without notice. The borrower must provide financial reports semi-annually. The agreement is governed by Hong Kong law and is effective upon acceptance or use of the facilities.

EX-10.17 53 c55655_ex10-17.htm

Exhibit 10.17

Our Ref No. WBG/07/0558

9 May 2007

Atlantic Components Limited
Flat B24, 1/F., Block B,
Proficient Industrial Centre,
6 Wang Kwun Road,
Kowloon Bay, Kowloon.

Attention: Mr. Yang Chung Lun, Director

Dear Sirs,

FACILITY LETTER

CITIC Ka Wah Bank Limited (the “Bank”) is pleased to inform you that it will consider requests made by the Borrower specified below for the following banking facilities (the “Facilities”) on the following terms and conditions. The terms set out in this facility letter supersede and replace those set out in the previous facility letter.


A.	BORROWER:

	Atlantic Components Limited

B.	FACILITIES AND LIMITS:

	General Banking Facilities


Type(s) of Facility		Facility Limit(s)

1.	Trade Finance

	available subject to individual facility limit(s) below:

	Import Invoice Financing	HKD13,000,000.00

2.	Overdraft	HKD1,000,000.00


	Total Facility Limit:	HKD13,000,000.00


Remarks:

•	The aggregate outstandings of all the above Facilities shall not at any time exceed the Total Facility Limit.


CITIC KA WAH BANK LIMITED	232 Des Voeus Road Central, Hong Kong Cable: “KWABANK” Telex: 74636 KWBNK HX SWIFT: “KWHKHKHH”
	Fax: (852) 3603 4000 Tel: (852) 3603 6633


Our Ref No	: WBG/07/0558
Borrower	: Atlantic Components Limited


C.	FACILITIES CONDITIONS:

1.	Trade Finance

	Interest: 0.5% per annum below Prime or 3% per annum over 1-month HIBOR, whichever is higher.

	Handling fee under Import Invoice Financing:

	HKD Bills Commission is waived.

	Maximum tenor/advance percentage for:

	Import Invoice Financing: up to 45 days from drawdown date.

	Other Conditions for Import Invoice Financing:

	List of approved suppliers and individual limit(s) are subject to the Bank’s approval from time to time.

2.	Overdraft

	Interest: Prime or 3.5% per annum over 1-month HIBOR, whichever is higher, payable monthly in arrears. Accured interest, if not so paid, shall be capitalized as principal and bear interest accordingly.

Facilities Fees:

An annual fee in such amount as the Bank may prescribe is payable in October of each year for so long as the Facilities continue.

D.	SECURITY AND CONDITIONS PRECEDENT

The following documents, items and evidence (both in the form and substance satisfactory to the Bank) shall be delivered to the Bank prior to submitting any drawdown notice to the Bank:-

1.	This letter duly signed by the Borrower, the guarantor and the security provider.

2.	A Charge on Cash Deposit(s) duly executed by the Borrower in favour of the Bank in a principal amount of not less than USD700,000.00 or equivalent value in other approved currency(ies) at the lending ratio determined by the Bank.

3.	A Guarantee and Indemnity duly executed by Yang Chung Lun (the “Personal Guarantor”) for an unlimited amount.

4.	A First Legal Charge/Mortgage over the property at Workshop No. B10 on 1^st Floor of Block B, Proficient Industrial Centre, No. 6 Wang Kwun Road, Kowloon (the “Mortgaged Property”) in the name of Solution Semiconductor (China) Limited duly executed in favour of the Bank.

5.	Such other documents, items or evidence that the Bank may require from time to time.


CITIC KA WAH BANK LIMITED	232 Des Voeus Road Central, Hong Kong Cable: “KWABANK” Telex: 74636 KWBNK HX SWIFT: “KWHKHKHH”
	Fax: (852) 3603 4000 Tel: (852) 3603 6633


Our Ref No.	: WBG/07/0558
Borrower	: Atlantic Components Limited


E.	UNDERTAKINGS

	The Borrower shall provide the Bank with its accounts receivable aging report on a semi-annual basis.

F.	OTHER TERMS AND CONDITIONS

1.	Each application made by the Borrower to use any of the Facilities in whole or in part shall be a request by it to the Bank to extend financing on the terms and conditions set out or referred to in this letter. No commitment by the Bank to extend any financing shall arise until any application by the Borrower for such financing is accepted by the Bank either expressly or by its extending such financing to the Borrower.

2.	Notwithstanding any provision 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 collateralization of all or any sums actually or contingently owing to it under the Facilities. This letter stipulates the terms and conditions applicable to the Facilities, if granted, and does not oblige the Bank to extend any financing to the Borrower.

3.	The Bank may at any time immediately modify, terminate, cancel or suspend the Facilities or vary the terms applicable to the Facilities without the consent of any party and without subject to any conditions.

4.	The Bank’s Standard Terms for Banking Facilities (2007 Edition) attached and/or referred to this letter forms an integral part of this letter and the Borrower agrees to observe and be bound in by the Bank’s Standard Terms for Banking Facilities.

5.	Please note that Section 83 of the Banking Ordinance has imposed on the Bank certain limitations on advance to persons related to its directors and employees. In signing this letter, the Borrower confirms to the Bank that it is not in any way related to the Bank’s directors or employees within the meaning of Section 83. The Borrower undertakes to advise the Bank promptly in writing if it becomes so related subsequent to the signing of this letter.

6.	This letter shall be governed by and constructed in accordance with the laws of Hong Kong Special Administrative Region.

Please confirm your agreement to the terms and conditions of this letter (incorporating the Bank’s Standard Terms for Banking Facilities (2007 Edition) attached and/or referred to this letter) by signing and returning to us the duplicate of this letter to Mr. Thomas Lam of our Commercial Banking at 9/F., Lippo Center, Tower 1, 89 Queensway, Hong Kong by 30 May 2007.

If the Borrower utilizes the Facilities (or any of them) on or after 30 May 2007, the Borrower shall be deemed to have agreed to and accepted the terms and conditions set out above and the Bank’s Standard Terms for Banking Facilities (2007 Edition).


CITIC KA WAH BANK LIMITED	232 Des Voeus Road Central, Hong Kong Cable: “KWABANK” Telex: 74636 KWBNK HX SWIFT: “KWHKHKHH”
	Fax: (852) 3603 4000 Tel: (852) 3603 6633


Our Ref No.	: WBG/07/0558
Borrower	: Atlantic Components Limited

Should you have any queries on the completion of the required documents, please do feel free to contact our Ms. Anna Chan at 3603 2077. For queries on banking arrangements, please contact our Mr. Thomas Lam at 3606 6196 at any time.


Yours faithfully,
For and on behalf of		For and on behalf of
CITIC Ka Wah Bank Limited		CITIC Ka Wah Bank Limited



Frankie Lam		Thomas Lam
Vice President		First Vice President and Team Head
Credit Administration		Commercial Banking

FL/ac/sc


CITIC KA WAH BANK LIMITED	232 Des Voeus Road Central, Hong Kong Cable: “KWABANK” Telex: 74636 KWBNK HX SWIFT: “KWHKHKHH”
	Fax: (852) 3603 4000 Tel: (852) 3603 6633