Exhibit 10.8

Date: 27 June 2006

Our ref: D/P/HIMJ/00534/06

Atlantic Components Limited
B24-27, 1st Floor, Block B
Proficient Industrial Centre
6 Wang Kwun Road
Kowloon Bay, Kowloon

Dear Sirs,

BANKING FACILITIES

DBS Bank (Hong Kong) Limited (the “Bank”, which expression shall include its
successors and assigns) is pleased to advise that it is prepared to consider
making available or continuing to make available the banking facilities detailed
below (the “Facilities”) to the Borrower described below, subject to the
provisions of this facility letter and the attached “Terms and Conditions
Governing Banking Facilities and Services”.

 

 

A.

BORROWER:

 

 

 

Atlantic Components Limited

 

 

B.

FACILITY LIMITS:

 

 

 

 

 

Type(s) of Facility

Facility Limit(s)

 

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1.

Overdraft

HKD200,000.-

 

2.

Installment Loan (I)

HKD14,000,000.-

 

3.

Installment Loan (II)

HKD1,600,000.-

 

4.

Letter of Credit

HKD30,000,000.-

 

5.

Trust Receipt

HKD30,000,000.-

 

6.

Account Payable Financing

HKD30,000,000.-

 

 

 

 

 

Important Condition(s) Governing Facility Limits:-

 

 

 

 

 

•

The aggregate outstanding of Facilities 4 to 6 shall not at any time exceed
HKD30,000,000.-.

 

 

 

C.

PRICING AND CONDITIONS:

 

 

 

 

Unless otherwise provided herein, interest and commission(s) on the Facilities
will be charged at the Bank’s standard rate that may be varied from time to time
at the Bank’s discretion.

 

 

 

 

Overdraft

Interest: 0.5% per annum over Prime Rate, on the outstanding amount from
drawdown until repayment in full, as conclusively calculated by the Bank.

 

 

 

 

 

DBS Bank (Hong Kong) Limited

 

Tel 852221 8 8598

 

Enterprise Banking

 

Fax 8522285 3628

 

16th Floor, The Center

 

www.dbs.com

 

99 Queen’s Road Central

 

 

 

Central, Hong Kong

 

 

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Atlantic Components Limited

Our ref: D/P/HIMJ/00534/06

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Installment Loan (I)

 

Interest: 2.75% per annum below Prime Rate on the outstanding amount from
drawdown until repayment in full, as conclusively calculated by the Bank.

 

 

 

 

 

 

Repayment: Principal together with accrued interest will be repayable by 240
equal monthly installments (except final payment which shall be the then
outstanding balance and accrued interest). At the Bank’s discretion and without
prior notice, the amount and/or the number of monthly installments may be varied
if the interest rate changes. The first installment shall be paid one month
after the date of advance of the loan and the subsequent installments shall be
paid on the corresponding day of each succeeding month until the loan and all
accrued interest are repaid in full.

 

 

 

 

 

 

Prepayment:

 

 

 

 

 

 

•

one month prior written notice.

 

 

 

 

 

 

•

if full prepayment is not on an installment due date, interest shall be
calculated and payable up to upcoming installment due date.

 

 

 

 

 

 

•

Prepayment Fee. A fee will apply for a prepayment during the stipulated period
after drawdown:

 

 

 

 

 

 

 

Fee on Full Prepayment

 

 

 

 

 

 

 

Within 1st six months:          1% of amount prepaid

 

 

 

 

 

 

 

Fee on Partial Prepayment

 

 

 

 

 

 

 

Within 1st six months:          1% of amount prepaid

 

 

 

 

Installment Loan (II)

 

Interest: 2% per annum below Prime Rate on the outstanding amount from drawdown
until repayment in full, as conclusively calculated by the Bank.

 

 

 

 

 

 

Repayment: Principal together with accrued interest will be repayable by 60
equal monthly installments (except final payment which shall be the then
outstanding balance and accrued interest). At the Bank’s discretion and without
prior notice, the amount and/or the number of monthly installments may be varied
if the interest rate changes. The first installment shall be paid one month
after the date of advance of the loan and the subsequent installments shall be
paid on the corresponding day of each succeeding month until the loan and all
accrued interest are repaid in full.

 

 

 

 

 

 

Prepayment:

 

 

 

 

 

 

•

one month prior written notice.

 

 

 

 

 

 

•

if full prepayment is not on an installment due date, interest shall be
calculated and payable up to upcoming installment due date.

 

 

 

 

 

 

•

Prepayment Fee. A fee will apply for a prepayment during the stipulated period
after drawdown:

 

 

 

 

 

 

 

Fee on Full Prepayment

 

 

 

 

 

 

 

Within 1st year: 1% of amount prepaid

 

 

 

 

 

 

 

Fee on Partial Prepayment

 

 

 

 

 

 

 

Within 1st year: 1% of amount prepaid

2

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Atlantic Components Limited

Our ref: D/P/HIMJ/00534/06

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Letter of Credit (“L/C”)

 

Maximum Tenor: 6 months at sight.

 

 

 

 

Trust Receipt (“T/R”)

 

Maximum Tenor: 45 days.

 

 

 

 

 

 

Maximum Tenor (T/R plus Acceptance): 45 days.

 

 

 

 

 

 

Interest: (i) 1.25% per annum below Standard Bills Rate quoted by the Bank from
time to time for HKD bills and (ii) 0.75% per annum below Standard Bills. Rate
quoted by the Bank from time to time for other currency bills, on the
outstanding amount from drawdown until repayment in full, as conclusively
calculates by the Bank.

 

 

 

 

Account Payable Financing

 

Financing percentage: 100% of invoice value against original or copy of
supplier’s invoice duly certified as a true copy by the Borrower.

 

 

 

 

 

 

Maximum Tenor: 45 days, less: (i) supplier’s credit period (if any); and (ii) in
case payment is made to the supplier after the payment due date, the period
already lapsed.

 

 

 

 

 

 

Interest: (i) 1.25% per annum below Standard Bills Rate quoted by the Bank from
time to time for HKD bills and (ii) 0.75% per annum below Standard Bills Rate
quoted by the Bank from time to time for other currency bills, on the
outstanding amount from drawdown until repayment its full, as conclusively
calculated by the Bank.

 

 

 

 

Review Fee of Facilities:

 

HKD5,000.-

 

 

 

D.

SECURITY AND CONDITIONS PRECEDENT:

 

 

 

The Facilities will be made available or continue to be made available to the
Borrower provided that the Bank has received each of the following, in a form
and substance satisfactory to the Bank:

 

 

 

1.

This letter duly executed by the Borrower.

 

 

 

 

2.

General Commercial Agreement duly executed by the Borrower.

 

 

 

 

3.

All monies Charge on Cash Deposit(s) duly executed by the Borrower in favour of
the Bank in an amount of not less than HKD5,000,000.- or its equivalent in a
foreign currency, together with all interest accrued thereon. (The Bank has the
right to require a margin on top of the amount specified above as pledged
deposits)

3

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Atlantic Components Limited

Our ref: D/P/HIMJ/00534/06

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4.

All monies Second Legal Charge/Mortgage over the property at S.S. 155 of S.A. of
Lot No. 1945 in D.D. 7, Hong Lok Yuen, Tai Po, New Territories and an assignment
of insurance policy in respect of the above property duly executed by and in the
name of Systematic Information Limited.

 

 

 

 

5.

All monies First Legal Charge/Mortgage over the property at Sub-section 154 of
Section A of Lot No 1945 in D.D. 7. Tai Po, New Territories and an assignment of
insurance policy in respect of the above property duly executed by and in the
name of the Borrower.

 

 

 

 

6.

All monies First Legal Charge/Mortgage over the property at Workshop B24-27 on
1st Floor of Block B. Proficient Industrial Centre, No 6 Wang Kwun Road, Kowloon
and an assignment of insurance policy in respect of the above property duly
executed by and in the name of the Borrower.

 

 

 

 

7.

All monies Second Legal Charge/Mortgage over the property at Flat E on 9th Floor
of Block 1, Royal Ascot, No. 1 Tsun King Road, Shatin. New Territories and an
assignment of insurance policy in respect of the above property duly executed by
and in the name of City Royal Limited.

 

 

 

 

8.

Guarantee and Indemnity for an unlimited amount duly executed by Yang Chung Lun.

 

 

 

 

9.

Original or Certified copies of all necessary consents, approvals and other
authorizations (including but not limited to those required by relevant
governing authorities and/or the resolutions of the directors and shareholders
of the Borrower and/or any security provider(s)) in connection with the
execution, delivery, performance and enforcement of this letter and all other
documents mentioned above, if applicable.

 

 

 

 

10.

Original or Certified copies of all necessary registrations and filings as may
be required by relevant governing authorities in connection with the execution,
delivery, performance and enforcement of this letter and all other documents
mentioned above, if applicable.

 

 

 

 

11.

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

 

 

 

E.

FACILITY ADJUSTMENT AND TOP-UP REQUIREMENT

 

 

 

The Borrower shall comply with (and procure any security provider to comply
with) at all times the security coverage ratio(s) specified in this letter or as
may be determined by the Bank from time to time. If any of the security coverage
ratio(s) shall at any time fall below the level required by the Bank, the
Borrower shall provide additional security acceptable to the Bank and/or reduce
the outstanding of the Facilities designated by the Bank, in order to comply
with the relevant requirements within the time limit imposed by the Bank from
time to time. Without prejudice to the rights of the Bank under this letter, the
Bank is authorized, from time to time, to uplift, realize, collect or sell as
the Bank may think fit and without being liable for any loss to the Borrower or
any security provider, if applicable, all or any part of the securities pledged
to the Bank without any prior notice to the Borrower or any security provider,
if applicable, and to apply the proceeds in or towards satisfaction of the
Borrower’s indebtedness owing to the Bank.

4

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Atlantic Components Limited

Our ref: D/P/HIMJ/00534/06

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F.

COVENANTS AND UNDERTAKINGS:

 

 

 

 

The Borrower undertakes to the Bank that it will:

 

 

 

•

ensure that all consents, licences, approvals, registrations and filings (as
appropriate) in connection with the Facilities, guarantee or securities as may
be provided in relation to the Facilities granted hereunder are duly obtained,
completed and will remain in full effect throughout the period when there is
outstanding under the Facilities.

 

 

 

 

•

promptly submit to the Bank:

 

 

 

 

 

a)

a certified copy of the audited (and, as appropriate, consolidated) financial
statements of the Borrower and all corporate security provider(s), if
applicable, as soon as they are available, but in any event within 10 months
after the end of the financial year end and at any other time requested by the
Bank;

 

 

 

 

 

 

b)

with reasonable promptness, details of any litigation, arbitration or
administrative proceeding current or, to its knowledge, threatened or commenced
against it; and

 

 

 

 

 

 

c)

other information that the Bank may request from time to time.

 

 

 

 

 

•

immediately inform the Bank of:

 

 

 

 

 

a)

any change of the Borrower’s directors or beneficial shareholders (except where
the Borrower is a listed company) or amendment to its memorandum or articles of
association or equivalent constitutional documents.

 

 

 

 

 

 

b)

any substantial change to the general nature of the Borrower’s existing
business.

 

 

 

 

 

 

c)

any factor which may inhibit, impair or delay performance by the Borrower or the
security provider(s), if any, of the obligations under any loan and security
documents to which they are a party.

 

 

 

 

 

 

d)

the failure to continue to obtain consents, licences, approvals, registrations
and filings (as appropriate) in connection with the granting of the Facilities
and/or the provision of securities (including without limitation guarantee(s))
in relation to the Facilities granted hereunder throughout the period when there
is outstanding under the Facilities.

 

 

 

 

G.

OTHER TERMS AND CONDITIONS

 

 

 

The Facilities are available at the sole discretion of the Bank and are in all
respects uncommitted. The Bank may at any time immediately modify, terminate,
cancel or suspend the Facilities or any part of it, or otherwise vary the
Facilities or any part of it, without the consent of the Borrower or any other
person.

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 of all principal, interest, fees and other amounts
outstanding under this letter or any part thereof and/or to require cash
collateralisation of all or any sums actually or contingently owing to it under
the Facilities.

 

 

 

The “Terms and Conditions Governing Banking Facilities and Services” attached
and/or referred to in this letter form an integral part of this letter and the
Borrower agrees to observe and be bound by them.

 

 

 

This letter and the Facilities shall be governed by the laws of the Hong Kong
Special Administrative Region and the parties hereto hereby submit to the
non-exclusive jurisdiction of the Hong Kong Courts.

5

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Atlantic Components Limited

Our ref: D/P/HIMJ/00534/06

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Please signify your understanding and acceptance of this offer by signing and
returning to us the duplicate copy of this letter and provide each of the items
under the section headed “Security And Conditions Precedent” above, for the
attention of Mr Terence Fung (“Designated Relationship Manager”), within one
month from the date of this letter, otherwise the offer will lapse at the
discretion of the Bank. When accepted, this letter will supersede the facility
letter the Bank has sent to the Borrower with reference number: D/P/HIMJ/0530/05
and its supplemental facility letter(s), if any.

We enclose a set of documents which should also be completed and returned to us.
If you have any queries, please contact the Designated Relationship Manager at
telephone number 2218-8901.

We are pleased to be of service to you.

Yours faithfully,
For and on behalf of
DBS Bank (Hong Kong) Limited

 

 

(ILLEGIBLE) [c55301020.jpg]

 

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Authorized Signatories

 

FN/mh
Encl.

We hereby confirm our understanding and acceptance of all the terms and
conditions set out in (i) this letter and (ii) the “Terms and Conditions
Governing Banking Facilities and Services” attached to this letter and our
agreement to be bound by all of them.

 

 

Signed for and on behalf of

 

Atlantic Components Limited

 

 

 

(ILLEGIBLE) [c55301021.jpg]

 

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Authorized signor(s)

 

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