Exhibit 10.58

 

 

 

Line of Credit Agreement

Number: Wuzhongyinshouzi No. 0903044

 

Party A:  

Multi-Fineline Electronix (Suzhou) Co., Ltd.

Business License number:  

 

Legal representative:  

Lei Jin

Principal office address:  

Building A and B, Su Ning Industry Zone, Dong South Road, Suzhou

Postal code:  

215128

Deposit bank and account number:  

Bank of China Wu Zhong Branch 26819008092014

Telephone:  

0512-65130088

Fax:  

 

Party B:  

Bank of China Limited Wu Zhong Branch

Principal:  

Zhang Shu

Principal office address:  

No. 108 Dong Wu North Road, Wu Zhong District

Postal code:  

215128

Telephone:  

0512-65272848

Fax:  

0512-65289459

In order to develop a friendly and reciprocal partnership, on the principle of
voluntary, equality, mutual benefit and good faith, through negotiation, Party A
and Party B enter into the following agreement.

Article 1 Scope of business

Party B shall grant a line of credit to Party A in accordance with this
Agreement. Party A may apply to Party B for revolving use, use at its discretion
or use in one lump sum of credit in accordance with this Agreement and
applicable individual agreements for the purpose of processing RMB short-term
loans, foreign exchange short term loans, trade financing, letter of guarantee
and undertaking capital business and other financing businesses (collectively
referred to as “Individual Financing Business”).

Trade financing business referred to under this Agreement shall include opening
international letter of credit, opening domestic letter of credit, import bill
advance, shipping guarantee, packing loan, export bill purchase, discount of
acceptance draft under Usance letter of credit, buyer’s negotiation of domestic
letter of credit, seller’s negotiation of domestic letter of credit, negotiation
of domestic letter of credit and other international and domestic trade
financing business.

The business of letter of guarantee referred to under this Agreement shall
include opening letter of guarantee, standby letter of credit and other
international and domestic business of letter of guarantee.

Article 2 Types and amount of line of credit

Party B agrees to grant Party A the following lines of credit:

 

Currency:   Chinese Currency RMB/US$ Amount:   (in letters): one hundred million
RMB or equal to fourteen million US$            (in figures): RMB 100,000,000 or
US$ 14,000,000    

The types and amount are as follows:

 

1. Credit line: working capital loan RMB 40,000,000 or US$5,600,000

 

2. Trading Financing: RMB 60,000,000 or US$ 8,400,000

 

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Article 3 Use of line of credit

 

1. Within the credit period as specified under this Agreement, Party A may use
the line of credit by the revolving way within the scope for each individual
financing business as provided under this Agreement:

In case Party A needs to use the line of credit as specified under Article 1, it
shall file an application with Party B in writing. Party B shall decide whether
and how to use the line of credit at its discretion and inform Party A in
writing.

 

2. The balance of existing credit that Party A grants to Party B in accordance
with effective Line of Credit Agreement or similar agreements and its individual
agreements as of the effective date of this Agreement shall be deemed as the
line of credit incurred under this Agreement.

Among which, the balance of credit using the line of credit shall be deemed as
the line of credit incurred under this Agreement.

 

3. Unless otherwise provided for, the following businesses shall not occupy the
line of credit:

 

  1) Export bill purchase where the letter of credit is consistent with the
documents;

 

  2) Negotiation or financing based on the draft or money under the export
letter of credit or domestic letter of credit accepted, honored, confirmed to
pay or guaranteed to pay by the issuing bank or confirming bank and acceptable
to Party B;

 

  3) In case Party A can provide guarantee money, government bonds, deposit
receipt issued by Party B or bank acceptance draft, letter of guarantee or
standby letter of credit acceptable to Party B, then the amount of credit
corresponding to the guarantee will not occupy the line of credit;

 

  4) …

(…) Other businesses that shall not occupy the line of credit separately agreed
by the parties hereto in writing

Businesses that don’t occupy the line of credit and whose business agreements
still belongs to the individual agreements under this Agreement shall be an
integral part of this Agreement and bound by this Agreement, unless such
business agreement provides otherwise.

Article 4 Agreement needs to be signed when undertaking individual credit
business

In case Party A applies to Party A for undertaking individual credit business
under this Agreement, it shall submit relevant application to Party B and/or
sign a corresponding contract/ agreement with Party B (collectively referred to
as “Individual agreements”).

Article 5 Term of the Credit

The credit term as specified under Article 2 shall run from the effective date
of this Agreement till July 31, 2010.

When the credit period as specified above expires, if Party B intends to grant a
further line of credit to Party A, both parties shall, through consultations,
sign a supplementary agreement in writing, specifying the new line of credit and
its credit period. Such supplementary agreement shall be an integral part of
this Agreement and have the same legal effect as this Agreement. Matters not
covered therein shall be governed by this agreement.

The expiration of the credit period shall not affect the legal effect of this
Agreement or cause the termination of this Agreement. Both parties shall
continue to undertake the individual credit businesses undertaken under this
Agreement before the expiration of the credit period subject to the provisions
of this Agreement and applicable individual agreements and perform their
obligations incurred before the expiration of the credit period.

 

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Article 6 Preconditions for individual credit business

To undertake individual credit business, Party A shall meet the following
conditions upon Party B’s request:

 

1. Reserve and sign related documents, bills, seals, list of related personnel
and sample of signature of the company with Party A and complete related
documents;

 

2. Establish necessary account for undertaking individual credit business;

 

3. Have effectively furnished guarantee as provided by this Agreement and
individual agreements;

 

4. Other preconditions for undertaking this business as provided by individual
agreements;

 

5. Other conditions that Party B thinks Party A should meet.

Article 7 Guarantees

Based on this agreement and individual agreement, Party A and Party B agree the
guarantees. The specific information is as below:

Security: Clean

If Party A or the guarantor think the Party B may have some events which may
have some bad effect on the liability, or if the guarantee contract is going to
become invalid, revocation, or be relieved, or if the financial situation of
both Party A and the guarantor is going to worse, which may result in lawsuit or
arbitrage, or if the guarantor or Party B default the contract, or if the
guarantees devaluated or destroyed or invalid, Party B has the right demand
Party A to provide the new guarantee or change the guarantor to endure all the
liability in this agreement.

Article 8 Representations and warranties

Party A hereby makes the following representations:

 

1. Party A is a company legally registered and validly existing and has the full
capacity for civil right and capacity to execute and perform this Agreement;

 

2. Party A executes and performs this Agreement and individual agreements out of
its own will. It has obtained legal and valid authorization in accordance with
the requirement of its Articles of Association or other internal management
documents and will not violate any other agreements, contracts or other legal
documents binding on Party B by doing so. Party A has obtained or accomplished
or will obtain or accomplish all related approval, permit, filing or
registration necessary for the execution and performance of this Agreement;

 

3. All documents, financial statements, vouchers and other data provided to
Party B by Party A under this Agreement and individual agreements are true,
complete, accurate and effective;

 

4. The transaction background of the business that Party A applies to Party B
for undertaking is true and legal and has not been used for money laundering and
other illegal purposes;

 

5. Party A has not concealed any matters that may affect the financial position
and capacity to perform this Agreement of Party A and the guarantor from Party
B.

Party A hereby warrants that:

 

1. It will submit its financial statements (including but not limited to annual
reports, quarter reports and monthly reports) and other related documents to
Party B regularly or in a timely manner according to the requirements of Party
B;

 

2. It will accept and coordinate with Party B’s examination and supervision on
its use of the line of credit and related production, operation and financial
activities;

 

3. If Party A signs a counter guarantee contract or similar contract with the
guarantor of this Agreement on its obligation of guarantee, such contract will
not impair any rights of Party B under this Agreement;

 

4. Party A will inform Party B in a timely manner in case of any circumstances
that may affect the financial position and capacity to perform this Agreement of
Party A and the guarantor, including but not limited to, any forms of division,
merger, joint operation, joint venture or cooperation with foreign businessman,
contracted management, restructuring, reform, IPO and any other changes in the
mode of operation, reduction of registered capital, transfer of significant
assets or shareholding, significant liabilities, any significant liabilities
newly created upon the collateral, sealing up of the collateral, dissolution,
cancellation, filing or being filed for bankruptcy or involving any significant
suit or arbitration;

 

5.

Party A shall handle any matters not covered under this Agreement or individual
agreements in

 

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accordance with related provisions and business practice of Party B;

 

6. It will not mortgage its assets during the credit period;

 

7. The average days of turnover of receivables will not be more than 90 days
when it draws revolving funds.

Article 9 Related parties of Party A in its group and the disclosure of related
transactions

The parties hereto agree that the following Section 2 will be applied:

 

1. Party A is not a group client as specified by Party B subject to the
Guidelines on the Management of Risks of Credits Granted by Commercial Banks to
Group Clients (hereinafter referred to as “Guidelines”).

 

2. Party A is a group client as specified by Party B subject to the Guidelines.
Party A shall, subject to the provisions of Article 17 of the Guidelines, report
all related transactions accounting for more than 10% of its net assets to Party
B in a timely manner, including the relationship between the parties to the
transaction, item, nature, amount of the transaction or respective proportion
and pricing policy (including transactions without any amount or only with
negligible amount).

 

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Article 10 Breach of agreement and remedies

Any one of the following circumstances shall constitute or be deemed as breach
of this Agreement and individual agreement by Party A:

 

1. Party A fails to pay any sum or repay and debts to Party B according to the
provisions of this Agreement and individual agreements;

 

2. Party A fails to use the loans for the purpose as specified in this Agreement
and individual agreements;

 

3. The representations of Party A in this Agreement and individual agreements is
false or it breaches its warranties made in this Agreement and individual
agreements;

 

4. Any circumstances as specified in Article 2 Section 4 of this Agreement that
may affect Party A or the guarantor’s financial position or its capacity to
perform the Agreement in the view of Party B and that Party A fails to provide
new guarantee or change the guarantor according the provisions of this
Agreement;

 

5. Party A terminates its operation, dissolves, is cancelled or goes bankruptcy;

 

6. Party A breaches other provisions of this Agreement and individual agreements
regarding the rights and obligations of related parties;

 

7. Party A breaches other contracts between it and Party B or other agencies of
Bank of China Limited;

 

8. The guarantor breaches the guarantee contract or other contracts with Party B
or other agencies of Bank of China Limited.

Under any of the events of breach as mentioned above, Party B is entitled to
take the following measures respectively or at the same time according to actual
circumstances:

 

1. Request Party A and the guarantor to correct their breach within a fixed
period of time;

 

2. Reduce, suspend or terminate the line of credit granted to Party A in whole
or in part;

 

3. Suspend or terminate in whole or in part the acceptance of Party A’s business
application under this Agreement and individual agreements or other agreements
between Party A and Party B; to suspend or terminate in whole or in part the
granting and processing any outstanding loans, trade financing and letter of
guarantee;

 

4. Declare immediate expiration or maturity in whole or in part of this
Agreement and individual agreements, the principal and interests of any
outstanding loans, funds of trade financing and money advanced for the letter of
guarantee and other accounts payable;

 

5. Terminate or cancel this Agreement, or terminate or cancel individual
agreements or other agreements between Party A and Party B in whole or in part;

 

6. Claim compensation against Party A for the losses arising from Party A’s
breach of this Agreement;

 

7. Deduct the amount from Party A’s account established in Party B to offset
Party A’s debts to Party B in whole or in part by notice to Party B prior to or
after such deduction. Any immature sum in such account shall be deemed to mature
ahead of schedule; in case of difference between the currency of the account and
Party B’s currency of account, the amount deducted shall be converted according
to the rate for exchange settlement and sales then applicable to Party B;

 

8. Exercise its right to collateral;

 

9. Request the guarantor to bear the responsibility of guarantee;

 

10. Take any other measures that Party B deems necessary.

 

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Article 11 Reservation of rights

The failure of either party to exercise its right under this Agreement and
individual agreements in whole or in part, or require the performance by the
other party of its right and obligations in whole or in part, shall not
constitute a waiver of such right, obligations or responsibilities by such
party.

One party’s consent to any allowance, grace or delay to exercise the right under
this Agreement and individual agreements by the other party shall not affect any
right that should be entitled to under this Agreement and individual agreements
or any applicable laws and regulations and shall be deemed as its waiver of such
right.

Article 12 Alteration, modification, termination and partial invalidity

Through mutual agreement, the parties hereto may alter or modify this Agreement
in writing. Any alterations or modifications to this Agreement shall be an
integral part of this Agreement.

Unless otherwise provided by the laws and regulations or the parties hereto,
this Agreement shall not be terminated before all the rights and obligations
under this Agreement and individual agreements have been fulfilled.

Unless otherwise provided by the laws and regulations or the parties hereto, the
invalidity of any provisions of this Agreement shall not affect the legal effect
of other provisions.

Article 13 Governing laws and settlement of disputes

Unless otherwise agreed by the parties hereto, this Agreement and individual
agreements shall be governed by the laws of the People’s Republic of China.

Unless otherwise agreed by the parties hereto, after this Agreement and
individual agreements go into effect, all disputes arising in connection with or
in the execution and performance of this Agreement and individual agreements
shall be settled by both parties through negotiation. In case no settlement can
be reached, either party may:

Bring a lawsuit in the People’s Court where Party B or other agency under the
Bank of China Limited exercising rights and obligations subject to this
Agreement and individual agreements is domiciled;

During the period of the settlement of dispute, if such dispute doesn’t affect
the fulfillment of other clauses of this Agreement and individual agreements,
such clauses shall continue to be fulfilled.

Article 14 Expenses

Unless otherwise provided by the laws or the parties hereto, Party A shall bear
all the expenses arising from the execution and performance of this Agreement
and individual agreements and the settlement of disputes (including legal
expenses).

Article 15 Annex

The following annexes, other annexes as commonly confirmed by the parties hereto
and the individual agreements shall be an integral part of this Agreement and
have the same legal effect as this Agreement.

Annex 1: Matters regarding the Opening of International Letter of Credit

Annex 6: Matters regarding the Establishment of Letter of Guarantee/Standby
Letter of Credit

Annex 11: Matters regarding the Financing under Outward Remittance

Article 16 Miscellaneous

 

1. Without written consent of Party B, Party A shall not transfer any of its
rights and obligations under this Agreement and individual agreements to any
third party.

 

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2. If, due to the business needs, Party B needs to entrust other agencies under
the Bank of China Limited to perform its rights and obligations under this
Agreement and individual agreements, Party A will agree to it. The agencies
under the Bank of China Limited entrusted by Party B shall have the right to
exercise all rights under this Agreement and individual agreements and to bring
lawsuits in court or submit disputes to arbitration body for arbitration under
this Agreement and individual agreements.

 

3. Without prejudice to other provisions of this Agreement and individual
agreements, this Agreement shall be legally binding on the parties hereto and
their successors and assignees by law.

 

4. Unless otherwise agreed herein, the parties hereto specify the address
provided herein is their respective mailing and contact address and promise to
inform the other party in writing in a timely manner in case of any change in
their mailing and contact address.

 

5. The headings and description of business contained herein are for convenience
of reference only and are not to be used in the interpretation of the clauses of
this Agreement and the rights and obligations of the parties hereto.

Article 17 Effectiveness

This Agreement shall go into effect from the date of execution hereof by the
legal representatives, principals or authorized representatives of the parties
hereto.

This Agreement is made in two copies, each copy to be held by the parties hereto
and the guarantor respectively with equal legal effect.

 

Party A: Multi-Fineline Electronix (Suzhou) Co., Ltd.     Party B: Bank of China
Limited Wu Zhong Branch Authorized Representative (signature):     Authorized
Representative (signature):

/s/ Lei Jin

   

/s/ illegible signature

Signing Date: January 25, 2010    

 

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Annex 1: Matters regarding the Opening of International Letter of Credit

 

1. If it has any difference between this attachment and The Agreement on Credit
Facility (hereinafter referred to “the Agreement”), the former shall be deemed.

 

2. Party A which desires to apply to Party B for opening letter of credit shall
meet with all the preconditions set forth in the Agreement.

 

3.

Party A shall agree that Party B will handle all matters under letter of credit
pursuant to The Uniform Customs and Practice for Documentary Credit made by the
International Chamber of Commerce (¨UCP500/¨UCP600, similarly hereafter), and
Party A shall be responsible for all the obligations and liabilities thereof.

 

4. Opening and amendment of letter of credit:

 

  I. If Party B accepts the application of opening letter of credit from Party
A, it shall open the letter of credit in accordance with The Application of
Opening International Letter of Credit which is provided by Party A. And the
letter of credit opened by Party B shall be final.

 

  II. Party B shall be entitled to demand Party A to provide all relative
documents or files such as commercial contract etc. However, it shall not
interpreted that Party B shall be responsible to open letter of credit in
accordance with such documents or files.

 

  III. If Party A desires to amend the letter of credit, it shall provide The
Application of Amending International Letter of Credit to Party B. Party A shall
agree that Party B will handle all matters in connection with amendment under
the letter of credit pursuant to The Uniform Customs and Practice for
Documentary Credit mentioned above, and it shall be responsible for all the
obligations and liabilities thereof. The amendment shall be binding on Party A
once it has been sent out.

 

  IV. Party B shall have sole discretion on the amendment of letter of credit.
It shall be entitled to refuse the application of amendment provided by Party A
or offer its suggestion on amending content. The amendment of letter of credit
shall refer to amount, currency, interest rate and term etc. If Party B
considers in its opinion that the amendment will increase the guarantor’s
obligation, Party B shall be entitled to require Party A to add more deposit,
and/or require that The Application of Amending International Letter of Credit
of Party A shall be approved by the guarantor with its signature on such
application. Otherwise Party B shall be entitled to refuse Party A’s application
of amendment.

 

  V. The amendment of letter of credit shall not change the other rights and
obligations of Party A under the Agreement and this attachment.

 

  VI. The contents in connection with letter of credit of The Application of
Opening International Letter of Credit and The Application of Amending
International Letter of Credit shall be written in English. All liabilities
arising from the ambiguity due to unclear writing or semantic ambiguity shall be
born by Party A.

 

  VII. Party A shall pay to Party B in time all expenses arising from opening
and amending letter of credit (including bank charge which is rejected by
overseas beneficiary), and the expenses shall be calculated as per Party B’s
provisions.

 

5. Outward payment under letter of credit:

 

  I.

Party A, on its receipt of Party B’s notice on documents’ arrival during the
term of letter of credit, shall notify Party B about its treating comment on
such documents within the time set forth in such Party B’s notice, otherwise
Party A shall be deemed that it won’t refuse payment on such documents and will
agree Party B to make outward payment/acceptance/undertaking

 

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payment; in the event that Party A notifies Party B that it agrees and accepts
such documents within the time set forth in such Party B’s notice, and Party B
agrees Party A’s treating comment on such documents, Party B may make outward
payment/acceptance/undertaking payment;. Party A shall deposit the amount to be
paid in accordance with the provisions of The Application of Opening
International Letter of Credit.

In the event that Party A notifies Party B that it agrees and accepts such
documents, while Party B does not agree Party A’s treating comment on such
documents, Party B, only on the base that whether such documents are compliant
or not, shall be entitled to decide solely whether to refuse outward payment or
not; in the event that Party A agrees to pay full deposit or provide other
guarantee on payment, Party B shall be entitled to release its right to refuse
outward payment or retain such right, as the case may be.

 

  II. In the event that Party A considers such documents have incompliant points
and requires Party B to refuse outward payment/acceptance/undertaking payment
within the time set forth in Party B’s notice on documents’ arrival, Party A
shall specify all the incompliant points at a time, and provide a statement on
reasons for refusing payment in duplicate which has been affixed with the
preserved seal of Party A. In regard with the incompliant points specified by
Party A on the statement on reasons for refusing payment, Party B shall be
entitled to deem such points as all the incompliant points provided by Party A
on such documents. In the event that Party B agrees all the incompliant points
provided by Party A, Party B may refuse to make outward payment; in the event
that Party B examines and considers that the incompliant points provided by
Party A are not brought into existence in accordance with the international
usage, or such incompliant points are not material and can not comprise the
reasons for refusing payment, Party B shall be entitled to decide to make
outward payment/acceptance/undertaking payment, and make the outward payment
directly by the amount deposited by Party A for payment. Party A shall bear all
the obligations and liabilities thereof.

 

  III. In the event that the amount deposited by Party A for payment is not
enough and it makes Party B advance for due payment, once the due payment is
paid, it forms the debt of Party A to Party B under the Agreement and this
attachment, and Party A shall pay off such debt in time. The interest rate and
interest of the advanced money shall be referred to the provisions of relative
applications.

 

6. Additional commitment:

In order to operate transactions under this attachment, besides the provisions
of the Agreement, Party A shall make hereby additional commitment to Party B as
follow:

 

  I. In the event that the import and export commercial contract is changed in
connection with the letter of credit after such letter of credit has been
opened, Party A shall notify Party B immediately in writing form;

 

  II. After Party B pays advance or makes acceptance or undertakes to pay, Party
B shall have the rights to handle the whole set of documents/goods under the
letter of credit, or other security interests or rights and interests in
property which may be owned in accordance with any applicable laws and/or
regulations. In the event that the rights to handle the whole set of
documents/goods shall be owned by Party A in accordance with the applicable laws
and/or regulations or the award of court or arbitral authority with
jurisdiction, Party A shall agree to transfer unconditionally such rights to
Party B to the extent of the applicable laws, and recognize all the acts or
omissions on documents/goods taken by Party B. In the event that the rights to
handle the whole set of documents/goods shall be owned by Party B in accordance
with the applicable laws and/or regulations or the award of court or arbitral
authority with jurisdiction, Party B shall retain such rights until Party A
retires documents or pays off the advances of Party B.

 

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In regard with usance draft which has been accepted by Party B or the deferred
payment which has been confirmed by Party B, Party A shall not require Party B
in any reason to stop such payment, and to the extent of laws release its right
to apply to the People’s Court in any reason for freezing all payments under the
letter of credit or submit an appeal to the People’s Court in any reason for
requiring to stop such payments.

 

  III. Party A shall undertake all the risks on transactions under the letter of
credit against loss, delay, error, negligence and damage etc. arising from
posting, telecommunicating or sending letter and telegraph and documents in
other methods, as well as the risks arising from that Party B uses the service
of any third party.

 

7. Other details in connection with operating the transactions under this
attachment shall be referred to the provisions of The Application of Opening
International Letter of Credit and The Application of Amending International
Letter of Credit.

Annex 6: Matters regarding the Establishment of the Letter of Guarantee/ Standby
Letter of Credit

 

1. If it has any difference between this attachment and the Agreement, the
former shall be deemed.

 

2. Party A which desires to apply to Party B for opening letter of
guarantee/standby letter of credit shall meet with all the preconditions set
forth in the Agreement.

 

3. The opening and amending of letter of guarantee/standby letter of credit:

 

  I. If Party B accepts the application of opening letter of guarantee/standby
letter of credit from Party A, it shall open the letter of guarantee/standby
letter of credit in accordance with the provisions of both parties.

 

  II. The details of the letter of guarantee/standby letter of credit which has
been opened by Party B on Party A’s application shall be referred to The
Application of Opening Letter of Guarantee/Standby Letter of Credit provided by
Party A. And the letter of guarantee/standby letter of credit opened by Party B
shall be final.

 

  III. If Party A desires to amend the letter of guarantee/standby letter of
credit, it shall provide The Application of Amending Letter of Guarantee/Standby
Letter of Credit to Party B.

 

  IV. The amendment of letter of guarantee/standby letter of credit shall refer
to amount, currency, interest rate and term or other provisions which shall be
added necessarily in Party B’s opinion, Party B shall be entitled to require
Party A to add more deposit, and/or require that The Application of Amending
Letter of Guarantee/Standby Letter of Credit of Party A shall be approved by the
counter guarantor with its signature on such application. Otherwise Party B
shall be entitled to refuse Party A’s application of amendment.

 

  V.

The amendment of letter of guarantee/standby letter of credit shall not change
the other rights

 

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and obligations of Party A under the Agreement and this attachment.

 

4. Party A agrees that if there is any claim arising under the letter of
guarantee/standby letter of credit in the term of letter of guarantee/standby
letter of credit, after Party B examines and considers that the claiming
documents of beneficiary meet with the provisions of the letter of
guarantee/standby letter of credit, Party B shall be entitled to pay the claim
directly with the amount deposited by Party A for payment.

In the event that the amount deposited by Party A for payment is not enough and
it makes Party B advance for claimed payment, once the due payment is paid, it
forms the debt of Party A to Party B under the Agreement and this attachment,
and Party A shall pay the interest which will be calculated from the date which
Party B advances for such claimed payment to the date which Party A pays off
actually its debt, and the interest rate of the advance shall be referred to the
provisions of The Application of Opening Letter of Guarantee/Standby Letter of
Credit.

 

5. In order to operate transactions under this attachment, besides the
provisions of the Agreement, Party A shall make hereby additional commitment to
Party B as follow:

 

  I. In the event that the letter of guarantee/standby letter of credit is
opened or transmitted though other bank, Party A shall agree to undertake all
the risks arising from that Party B opens or transmits again the aforesaid
letter of guarantee/standby letter of credit to such other bank;

 

  II. In the event that there is any execution, amendment, change or termination
etc. of basic contract and basic transaction on which the letter of
guarantee/standby letter of credit bases and such condition mentioned above will
impact on the guarantee liability of Party B, Party A shall notify Party B
immediately;

 

  III. Party A shall cooperate with Party B to handle the relative procedures
about fulfilling agreement under outward guarantee.

 

  IV. Party A shall undertake all the risks on transactions under the letter of
guarantee/standby letter of credit against loss, delay, error, negligence and
damage etc. arising from posting, telecommunicating or sending letter and
telegraph and documents in other methods, as well as the risks arising from that
Party B uses the service of any third party;

 

  V. If the letter of guarantee/standby letter of credit has not specified a
date on which such letter will cease to be effective, or that it is applicable
to foreign laws or practices, or such letter has not specified the guaranteed
amount etc., Party A shall agree to indemnify Party B against all risks,
liabilities and losses thereof;

 

  VI. Other details in connection with operating the transactions under this
attachment shall be referred to the provisions of The Application of Opening
Letter of Guarantee/Standby Letter of Credit and The Application of Amending
Letter of Guarantee/Standby Letter of Credit.

Annex 11: Matters regarding the Financing under Outward Remittance

 

1. If it has any difference between this attachment and the Agreement, the
former shall be deemed.

 

2. The outward remittance under trade means the payment which is made by Party A
as the importer of the signed import goods contract in accordance with the
provisions of such contract in the method of bank remittance.

The financing under outward remittance for the purpose of this contract and all
documents in connection with this contract means that Party B as the remitting
bank of the payment under Party A’s trade, due to that Party A requires
accommodation of funds, provides fund to Party A and makes the outward
remittance, and Party A pays off the financed amount to Party B;

 

3.

Party A which desires to apply to Party B for operating the transaction of
financing under outward

 

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remittance shall meet with all the preconditions set forth in the Agreement.

 

4. In the event that Party B accepts the application of financing under outward
remittance from Party A, Party B shall remit the financed fund in the stipulated
currency and with the stipulated amount on The Application of Financing under
Outward Remittance which has been accepted by it to the nominated payee on the
remittance notice which has been provided by Party A.

 

5. Party A provides any document to Party B on Party B’s demand. However, it
shall not be interpreted that Party B will be responsible to examine if the
transaction undertaken by Party A is true, lawful or not;

 

6. Party A ensures hereby:

 

  I. Party B shall have the rights to handle the whole set of documents/goods
under the financing under outward remittance, or other security interests or
rights and interests in property which may be owned in accordance with any
applicable laws and/or regulations. In the event that the rights to handle the
whole set of documents/goods under he financing under outward remittance shall
be owned by Party A in accordance with the applicable laws and/or regulations or
the award of court or arbitral authority with jurisdiction, Party A shall agrees
to transfer unconditionally such rights to Party B to the extent of the
applicable laws and/or regulations, and recognize all the acts or omissions on
documents/goods taken by Party B. In the event that the rights to handle the
whole set of documents/goods under the financing under outward remittance shall
be owned by Party B in accordance with the applicable laws and/or regulations or
the award of court or arbitral authority with jurisdiction, Party B shall retain
such rights until Party A pays off all the financed fund which is provided by
Party B to it.

 

  II. When Party A applies to Party B for holding documents/goods and pays the
financed fund by the sales revenue to Party B, Party A only act as the assignee
of Party B, including but not limited to keeping relative documents on behalf of
Party B, handling matters of storage, keeping, transporting, processing, selling
and insurance etc. on behalf of Party B, keeping the sales revenue on behalf of
Party B or remit the sales revenue to the nominated account of Party B. Party A
shall specify its status mentioned above to any third party when it sells goods
to such third party.

 

  III. Party A shall undertake all the expenses (including but not limited to
insurance, storage, transportation and terminal handling charge etc.) arising
during its keeping goods; Party A shall promise that it will cover the goods
against all risks which may raise up at the market price of the goods, nominate
that Party B is the insurant on the original insurance policy, and hand the
original insurance policy to Party B for keeping; in the event that the covered
goods has any loss, Party B has the rights to claim against such loss to the
insurer directly.

 

  IV. Party A shall not handle the goods by changing the payment terms or
deferring payment, or by any other non-monetary methods without Party B’s
approval. Party A shall not mortgage or pledge such goods to any other person,
or it shall not make such goods being bond by any lien. Party A shall
immediately provide to Party B the account and any sales revenue of such goods
or all details of sales contract in connection with such goods; Party B shall
have the access to warehouse to examine the actual condition of such goods or it
shall be entitled to hold such goods again.

 

  V.

The currency which is used by Party A when it fulfills its obligations shall be
uniform with the currency of price of Party B. When Party B deducts amounts from
Party A’s account actively in

 

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accordance with the relative provisions of the contract, if any difference
between the currency of such account and the currency of price, the published
rate on the date which the account is deducted shall be used for converting.

 

7. Additional commitment:

In order to operate transactions under this attachment, besides the provisions
of the Agreement, Party A shall make hereby additional commitment to Party B as
follow:

Party A shall undertake that the sales revenue of the imported goods will be
used firstly for repaying the financed funds which has been given to Party A by
Party B.

Party A shall be careful and diligent when it handles the imported goods under
the financing contract. The contract on handling the goods shall specify that
the buyer shall transfer directly the payment to Party B’s account with the
purpose of repaying the principal, interest of the financed funds and other
expenses under the contract.

 

8. Other details in connection with operating the transactions under this
attachment shall be referred to the provisions of The Application of Financing
under Outward Remittance.

 

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