Unassociated Document


    


    Summary
Translation of

    Comprehensive
Credit Facility Agreement

    No.:
10206108092

    


    Note:  This
is not a comprehensive translation.

    


    The Lender (Party A): Shenzhen
Futian Branch of GuangDong Development Bank

    Legal
Representative: Liu Chunchen

    Title:
Branch Manager

    


    
      The Borrower (Party B):
Comtech Communication Technology (Shenzhen) Company Limited

    

    Legal
Representative: Edward Chan

    Title:
Chairman

    


    
      	
              Part I 

            	
              Basic
      Terms of Credit Facility

            


    

    


    
      	
              Article 1. 

            	
              Definitions

            


    

    


    
      	
               
      

            	
               1.

            	
              Comprehensive
      Credit Line: the credit line Party A extends to Party B, including one or
      several types of the following: a loan, issuance of banker’s acceptance
      bill, commercial draft discount, trade finance, guarantee letter, funding
      business and other types of credit
lines.

            


    

    


    
      	
               
      

            	
               2.

            	
              Comprehensive
      Credit Line Amount: the maximum outstanding balance of the credit line
      that Party A extends to Party B under this
  agreement.

            


    

    


    
      	
               
      

            	
               3.

            	
              Maximum
      Credit Exposure Amount: the amount equal to the maximum outstanding
      balance of the credit line that Party A extends to Party B, less the
      outstanding balance of the guarantee
deposit.

            


    

    


    
      	
               
      

            	
               4.

            	
              Valid
      Term of Credit Line: the actual term of the credit line under this
      agreement.

            


    

    


    
      	
              Article 2. 

            	
              Amount and Type of
      Comprehensive Credit Line

            


    

    


    
      	
               
      

            	
               1.

            	
              The
      Comprehensive Credit Line Amount is stipulated in Article 13 of this
      agreement.

            


    

    


    
      	
               
      

            	
               2.

            	
              The
      specific type, amount and corresponding terms of the credit line under
      this agreement are stipulated in Article 22 of this
    agreement.

            


    

    


    
      	
               
      

            	
               3.

            	
              If
      the total outstanding balance of the credit line is within the aforesaid
      maximum credit amount, it is not necessary for Party B to provide the
      guarantee one at a time.

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    
      	
               
      

            	
               4.

            	
              Party
      A is not obligated to issue the full amount of the aforementioned maximum
      credit amount. The actual issuance amount shall be based on the amount
      stipulated in the borrowing certificate or other credit/debt
      certificates.

            


    

    


    
      	
              Article 3. 

            	
              Valid Term of
      Comprehensive Credit Line
Amount

            


    

    


    
      	
               
      

            	
               1.

            	
              The
      valid term of the Comprehensive Credit Line under this agreement is
      stipulated in Article 14 of this
agreement.

            


    

    


    
      	
               
      

            	
               2.

            	
              A
      loan that occurs within the maximum amount of the credit line and the
      valid term need not be repaid prior to the maturity date of the valid
      term. The actual occurrence date and the repayment date of each loan shall
      be based on the dates set forth in the borrowing certificate or other
      credit/ debt certificates.

            


    

    


    
      	
              Article 4. 

            	
              Conditions to Drawdown
      of Credit Line

            


    

    


    In the
event all of the conditions set forth below are fulfilled concurrently, Party B
may apply to draw down the aforesaid credit line:

    


    
      	
               
      

            	
               1.

            	
              There
      is an outstanding balance of the credit
line.

            


    

    


    
      	
               
      

            	
               2.

            	
              The
      purpose of the loan and the term comply with the terms of this
      agreement.

            


    

    


    
      	
               
      

            	
               3.

            	
              Party
      B provides the application and information in compliance with the
      operational management rules of Party
A.

            


    

    


    
      	
               
      

            	
               4.

            	
              Party
      B fulfills all of obligations under this
  agreement.

            


    

    


    
      	
               
      

            	
               5.

            	
              Other
      conditions required by Party A.

            


    

    


    
      	
              Article 5. 

            	
              Interest
      Rate

            


    

    


    
      	
               
      

            	
               1.

            	
              The
      interest rate of the loan under this agreement is stipulated in Article 15
      of this agreement.

            


    

    


    
      	
               
      

            	
               2.

            	
              In
      the event the interest rate set forth in Article 15 is inconsistent to the
      interest rate of specific type of credit line, the interest rate of such
      type of the credit line shall
prevail.

            


    

    


    
      	
              Article 6. 

            	
              Other Expense,
      Interest Rate and Exchange
Rate

            


    

    


    The
expenses that Party A shall receive under the banker’s acceptance bill, banker’s
guarantee letter, international trade finance and other types of credit lines,
the discount rate of the draft discount, interest rate and the exchange rate
under the import and export negotiation shall be agreed by Party A and Party B
in the specific business.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    
      	
              Part II 

            	
              Guarantee

            


    

    


    
      	
              Article 7. 

            	
              Guarantee

            


    

    


    
      	
               
      

            	
               1.

            	
              A
      guarantor shall provide guarantees for the debts that Party B shall repay
      under this agreement. The specific guarantee is stipulated in Article 16
      under this agreement.

            


    

    


    
      	
               
      

            	
               2.

            	
              In
      the event Party A believes that adverse changes to the guarantee under
      this agreement occurred or is going to occur, Party A is entitled to
      request the guarantor to cease such activities. In case the value of
      collateral decreases, upon the notice of Party A, the guarantor shall
      restore the value of the collateral, or provide a collateral with the
      corresponding decreased value. In the event the guarantor neither restores
      the value of the collateral, nor provides additional guarantee, Party A is
      entitled to request Party B to repay the debt prior to its
      maturity.

            


    

    


    
      	
              Part
      III

            	
              Representations
      and Warranties of Party B

            


    

    


    Article
8.

    


    
      	
               
      

            	
               1.

            	
              Party
      B hereby makes the following
representations:

            


    

    


    
      	
               
      

            	
              (1)

            	
              It
      is legally incorporated and has right and ability to execute and perform
      this agreement;

            


    

    
      	
               
      

            	
              (2)

            	
              The
      execution and performance of this agreement are based on the true intent
      of Party B, and do not violate any agreement, contract or other legal
      document binding Party B. Party B obtained legal and valid approvals in
      accordance with its articles of association and other managing documents.
      Party B obtained or is going to obtain all necessary permissions,
      approvals, filings or registrations for executing and performing the
      agreement;

            


    

    
      	
               
      

            	
              (3)

            	
              All
      of the documents, financials, certificates and other information provided
      by Party B to Party A under this agreement are true, accurate, legal and
      valid;

            


    

    
      	
               
      

            	
              (4)

            	
              The
      background information of transactions for specific types of credit line
      that Party B applied is true, legal and not for illegal purposes such as
      money laundering;

            


    

    
      	
               
      

            	
              (5)

            	
              Party
      B did not conceal any events that could affect its or the guarantors’
      financial condition and ability to perform the
  agreement.

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    
      	
               
      

            	
               2.

            	
              Party
      B hereby makes warranties as below:

            


    

    


    
      	
               
      

            	
              (1)

            	
              It
      shall provide Party A with financial reports (including but not limited to
      annual reports, quarterly reports and monthly reports) and other relevant
      information periodically or in time as requested by Party
    A;

            


    

    
      	
               
      

            	
              (2)

            	
              It
      shall comply with the requests of Party A to provide relevant documents in
      connection with the loan and cooperate with Party A in regard to the
      inspection and supervision of the performance, the use of credit lines and
      funds, the production operations and financial activities. Party B shall
      promise to cooperate with Party A in connection with the management of
      loans in accordance with the loan management guideline of China Banking
      Regulatory Commission or other competent
  authorities;

            


    

    
      	
               
      

            	
              (3)

            	
              If
      Party B entered into or is going to enter into a guarantee agreement with
      the guarantor of this agreement to provide the guarantor with the
      corresponding guarantee, Party B shall warrant such guarantee shall not
      affect any right of Party A under this
  agreement;

            


    

    
      	
               
      

            	
              (4)

            	
              Party
      B shall obtain the prior consent of Party A, in the event the financial
      conditions or abilities of performance of Party B and the guarantor under
      this agreement might be affected. The aforesaid events are including but
      not limited to the split, merger, co-operating, joint venture,
      cooperation, outsource, lease, reorganization, reform, plan of going
      public, transfer of material assets, share transfer, shareholding reform,
      foreign investment, material debt assumption, debt/ equity financing
      through the primary market, or attach material debts on the
      collateral;

            


    

    
      	
               
      

            	
              (5)

            	
              Party
      B shall promptly notify Party A in writing, in the event the financial
      conditions or abilities of performance of Party B and the guarantor under
      this agreement might be affected.  The aforementioned events are
      including but not limited to the foreclosure of the collateral, suspension
      of business, cessation of operations, dissolution, bankruptcy application,
      involvement in material litigation or arbitration proceedings,
      management’s possible engagement in criminal activities, the adverse
      change of its business operation or financial condition, or Party B’s
      default under other contracts;

            


    

    
      	
               
      

            	
              (6)

            	
              Party
      B warrants that its operation and relevant activities comply with the
      industry policy, tax policy, market standards, environmental evaluations,
      energy saving, pollution control, land and urban plan, labor protection
      and relevant regulations. In the event the aforesaid are or might be
      violated, Party A is entitled to cease issuing loans, accelerate the
      repayment, dispose the pledged/ mortgaged properties prior to the maturity
      of loans, and to request Party B to increase the relevant liability
      insurance in connection with the energy exhaust and
    pollution;

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (7)

            	
              Debts
      owed to Party A are superior to funds borrowed from shareholders of Party
      B, and are not subordinated to the similar debts of other
      creditors;

            


    

    
      	
               
      

            	
              (8)

            	
              In
      the event that the net profit after tax of this fiscal year is zero or
      negative, or the net profit after tax of this fiscal year is not adequate
      to compensate the cumulative losses of past years, or the profit before
      tax is not used to repay the principal, interest or expense that shall be
      repaid in this fiscal year, or the profit before tax is not adequate to
      repay the principal, interest and expense of the next installation, Party
      B shall not distribute dividends;

            


    

    
      	
               
      

            	
              (9)

            	
              Party
      B shall not dispose its own assets to the extent that it would affect its
      ability to repay the loan, and shall promise its total guarantee amount
      and each guarantee amount shall comply with the limitation set forth in
      its articles of association;

            


    

    
      	
               
      

            	
              (10)

            	
              Party
      B warrants to repay the principal and interest of loans on schedule, and
      bear all expenses and fees under this agreement, including but not limited
      to the notary fees, legal expenses, attorney fees, or appraisal
      fees.

            


    

    


    
      	
               
      

            	
               3.

            	
              Authorization
      of Party B:

            


    

    


    
      	
               
      

            	
              (1)

            	
              Party
      B authorizes that Party A may submit all of credit information during the
      term of loan to the Credit Reference Center of the People’s Bank of China
      or other competent authorities, and that Party A may look up the aforesaid
      information submitted to such
institutions.

            


    

    
      	
               
      

            	
              (2)

            	
              Party
      B authorizes Party A to withdraw the principal, interest, punitive
      interest, compound interest, penalties and other relevant expenses that
      should be repaid in accordance with the agreement from the accounts Party
      B opened with Party A or affiliates of Party A, without the prior consent
      of Party B.

            


    

    


    
      	
              Part
      IV

            	
              Event
      of Default

            


    

    


    
      	
              Article 9. 

            	
              Default

            


    

    


    
      	
               
      

            	
               1.

            	
              Anticipating
      Default

            


    

    


    Prior to
the issuance of the Facility, the Lender may cease performing its obligations
under the agreement in the event of any of the following:

    


    
      	
               
      

            	
              (1)

            	
              The
      business operations of Party B severely
worsen;

            


    

    
      	
               
      

            	
              (2)

            	
              Party
      B transfers its assets or funds so as to avoid
  debts;

            


    

    
      	
               
      

            	
              (3)

            	
              Damage
      to the business reputation of Party
B;

            


    

    
      	
               
      

            	
              (4)

            	
              Party
      B becomes or appears to become
insolvent.

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    Party A
may terminate the agreement if Party B does not regain its ability to perform
its obligations and cannot provide guarantees acceptable to Party A within
thirty (30) days after Party A ceases performing it obligations.

    


    
      	
               
      

            	
               2.

            	
              Events
      of Default

            


    

    


    
      	
               
      

            	
              (1)

            	
              The
      occurrence of any o the following events shall be deemed a default under
      the Facility:

            


    

    


    
      	
               
      

            	
              (i)

            	
              Party
      B does not perform the obligations of payment and repayment under this
      agreement;

            


    

    
      	
               
      

            	
              (ii)

            	
              Party
      B does not use the funds obtained under the agreement in accordance with
      the agreed purpose;

            


    

    
      	
               
      

            	
              (iii)

            	
              The
      representations Party B made under the agreement are not true or Party B
      violates the promises made under the
agreement;

            


    

    
      	
               
      

            	
              (iv)

            	
              In
      the event the conditions set forth in Section 2 of Article 8 occur, Party
      A believes that the financial condition and ability of performance of
      guarantor are affected, and Party B does not change guarantors or provide
      new guarantees;

            


    

    
      	
               
      

            	
              (v)

            	
              Party
      B violates other covenants related to the rights and obligations under
      this agreement;

            


    

    
      	
               
      

            	
              (vi)

            	
              Party
      B breaches other contracts by and between Party B and Party A or other
      entities of Party A;

            


    

    
      	
               
      

            	
              (vii)

            	
              The
      guarantor breaches the guarantee contract, or breaches other contracts by
      and between the guarantor and Party A and other entities of Party
      A;

            


    

    
      	
               
      

            	
              (viii)

            	
              Party
      B ceases business operation, dissolves or a bankruptcy event
      occurs;

            


    

    


    
      	
               
      

            	
              (2)

            	
              If
      any of events of default occurs, Party A is entitled to take any or all of
      the following actions:

            


    

    


    
      	
               
      

            	
              (i)

            	
              To
      request Party B and the guarantor cure the default within the certain
      period;

            


    

    
      	
               
      

            	
              (ii)

            	
              To
      decrease, cease or terminate the credit line extended to Party B in whole
      or in part;

            


    

    
      	
               
      

            	
              (iii)

            	
              To
      cease or terminate the drawdown applications of Party B under this
      agreement or under other agreements by and between Party A and Party B in
      whole or in part; to cease or terminate the issuance of loans that have
      not been issued, or the trade finance that has not been handled in whole
      or in part;

            


    

    
      	
               
      

            	
              (iv)

            	
              To
      accelerate the payment of all principal and interest outstanding under the
      agreement and under other agreements by and between Party A and Party B,
      and such sums shall become immediately
due;

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (v)

            	
              To
      terminate or cancel the agreement and other agreements by and between
      Party A and Part B in whole or in
part;

            


    

    
      	
               
      

            	
              (vi)

            	
              To
      request Party B to indemnify Party A’s loss incurred caused by the
      default;

            


    

    
      	
               
      

            	
              (vii)

            	
              Upon
      the prior or later notice to Party B, to withdraw the deposits in Party
      B’s accounts opened with Party A or with other entities of Party A to
      repay the whole or a part of debts under the
  agreement;

            


    

    
      	
               
      

            	
              (viii)

            	
              To
      exercise the rights under the mortgage/
pledge;

            


    

    
      	
               
      

            	
              (ix)

            	
              To
      request the guarantor to perform the guarantee
  obligations;

            


    

    
      	
               
      

            	
              (x)

            	
              To
      adopt more stringent payment management or methods; to monitor the
      payments of affiliates of Party B; to submit Party B as one on the
      blacklist to the regulatory authorities and credit reference
      institutions;

            


    

    
      	
               
      

            	
              (xi)

            	
              Other
      methods that Party A considers to be necessary and
    feasible.

            


    

    


    
      	
               
      

            	
              (3)

            	
              In
      the event Party A is unable to perform its obligations under the agreement
      due to the changes of the credit policy of the State after the agreement
      is executed, Party A shall not be deemed to breach the
      agreement.

            


    

    


    
      	
              Part
      V

            	
              Other
      Covenants

            


    

    


    
      	
              Article 10. 

            	
              Effectiveness, Change,
      Cancellation and Termination

            


    

    


    
      	
               
      

            	
               1.

            	
              The
      agreement become effective as of the date each party signs off and seals
      the agreement (any mortgage and pledge become effective as of the date the
      registrations of such mortgage and pledge are completed), and is
      terminated upon the date that all of the principal, interest, compound
      interest, punitive interest and other related expenses are
      repaid.

            


    

    


    
      	
              Article 11. 

            	
              Notarization

            


    

    


    
      	
              Article 12. 

            	
              Special
      Reminder

            


    

    


    Party A
has reminded Party B with regard to all of waivers or limitation of obligations,
and fully explained the provisions of this agreement to Party
B.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    
      	
              Part VI 

            	
              Terms
      of Specific Type of Credit Line

            


    

    


    
      	
              Article 13. 

            	
              Credit
      Line

            


    

    


    
      	
               
      

            	
               1.

            	
              The
      Maximum Credit Exposure Amount (not including guarantee deposits) is RMB
      6,500 [sic].

            


    

    


    
      	
               
      

            	
               2.

            	
              Under
      the specific type of the credit line, Party B may use other currencies. If
      the other currency is used, the credit line shall be calculated based on
      the mid price of exchange rate published by Party A as of the occurrence
      of the specific type.

            


    

    


    
      	
               
      

            	
               3.

            	
              The
      Comprehensive Credit Line is
revolving.

            


    

    


    
      	
              Article 14. 

            	
              Valid Term of Credit
      Line

            


    

    


    The valid
term of the Comprehensive Credit Line under this agreement is twelve (12) months
commencing ___________________ through _______________________.

    


    
      	
              Article 15. 

            	
              Interest Rate of
      Calculation of Interest

            


    

    


    
      	
               
      

            	
               1.

            	
              The
      interest rate of loan is a floating rate. The interest rate of the initial
      installation is the benchmark rate of the People’s Bank of China with the
      corresponding term of the specific loan under the
    agreement.

            


    

    


    
      	
               
      

            	
               2.

            	
              The
      interest rate shall be stipulated in the borrowing
      certificate.

            


    

    


    
      	
               
      

            	
               3.

            	
              Formula
      of Calculation of Interest:

            


    

    


    
      	
               
      

            	
               4.

            	
              Interest
      Rate=Principal x Actual Days of The Loan x Daily Interest
    Rate

            


    

    


    
      	
               
      

            	
               5.

            	
              Daily
      Interest Rate=Yearly Interest Rate/
360

            


    

    


    
      	
               
      

            	
               6.

            	
              The
      interest is calculated monthly, the interest settlement date is the
      20th
      day of every month, the 21st day of every is the interest payment
      date.

            


    

    


    
      	
               
      

            	
               7.

            	
              In
      the event Party B does not repay on schedule, Party A shall receive the
      daily punitive interest for the deferral portion commencing the deferral
      date till the principal and interest are repaid. The punitive interest
      rate for deferral is the interest rate set forth in Article 1 plus
      50%.

            


    

    


    
      	
               
      

            	
               8.

            	
              In
      case the loan is not used in compliance with its purpose, Party A shall
      receive the punitive interest commencing the misuse date, till the
      principal and interest are repaid. The punitive interest rate for misuse
      is the interest rate set forth in Article 1 plus
  100%.

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    
      	
               
      

            	
               9.

            	
              For
      a loan that is misused and deferred, the punitive interest rate shall be
      based on the interest rate of the punitive interest rate for misuse of the
      loan.

            


    

    


    
      	
               
      

            	
               10.

            	
              In
      the event Party B does not pay the interest on schedule, Party A shall
      receive compound interest on such
interest.

            


    

    


    
      	
              Article 16. 

            	
              Guarantee

            


    

    


    Under the
maximum guarantee amount, Party A and the guarantors enter into the guarantee
contracts as below:

    


    
      	
               
      

            	
               1.

            	
              Guarantee
      Contract 10206108092-1, by and between Party A and Shenzhen Comtech
      International Limited, dated
_______________.

            


    

    


    
      	
               
      

            	
               2.

            	
              Guarantee
      Contract 10206108092-2, by and between Party A and Keen Awards Limited,
      dated _______________.

            


    

    


    
      	
               
      

            	
               3.

            	
              Guarantee
      Contract 10206108092-3, by and between Party A and Comtech International
      (Hong Kong) Limited, dated
_______________.

            


    

    


    
      	
              Article 17. 

            	
              Extension of Credit
      Line

            


    

    


    
      	
              Article 18. 

            	
              Disclosure of Related
      Party Transaction

            


    

    


    
      	
              Article 19. 

            	
              Governing Law and
      Dispute Resolution

            


    

    


    
      	
               
      

            	
               1.

            	
              Governing
      Law: the laws of the People’s Republic of
China

            


    

    


    
      	
               
      

            	
               2.

            	
              Dispute
      Resolution: any dispute shall be submitted to the People’s
      Court.

            


    

    


    
      	
              Article 20. 

            	
              Miscellaneous

            


    

    


    
      	
              Article 21. 

            	
              Other
      Covenants

            


    

    


    The
interest rate of the loan in a foreign currency shall be set forth in the
borrowing certificate. In the event Party B does not repay on schedule, Party A
shall receive the punitive interest for deferral, till the principal and
interest are repaid. The punitive interest rate for deferral is 0.04% daily, In
the event Party B misuse the loan, Party A shall receive the punitive interest
for misuse, till the principal and interest are repaid. The punitive interest
rate for misuse is 0.05% daily.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    
      	
              Article 22. 

            	
              Specific
      Type of Credit Line and Terms

            


    

    


    
      	
               
      

            	
               1.

            	
              Credit
      Line for Issuance of Letter of
Credit

            


    

    


    The
Maximum Credit Exposure Amount is RMB65 million. This credit line is revolving,
and includes the issuance of Sight L/C and Usance L/C. No minimum guarantee
deposits are required.

    


    
      	
               
      

            	
               2.

            	
              Credit
      Line for Import Bill Advance

            


    

    


    
      	
               
      

            	
              (1)

            	
              Party
      B shall apply for the import bill advance to Party A at least two (2)
      business days prior to the payment date set forth in the import invoice
      for is approval.

            


    

    
      	
               
      

            	
              (2)

            	
              The
      maximum amount for the import bill advance is RMB65 million, and such
      credit line is revolving.

            


    

    
      	
               
      

            	
              (3)

            	
              The
      term of each import bill advance shall not exceed three (3)
      months.

            


    

    


    
      	
               
      

            	
               3.

            	
              Credit
      Line for Export Bill Negotiation

            


    

    


    
      	
               
      

            	
              (1)

            	
              Party
      B submits a set of export documentation (including but not limited to
      invoices and transportation documents) to Party A for its
      approval.

            


    

    
      	
               
      

            	
              (2)

            	
              The
      maximum amount for the export bill negotiation is RMB65 million, and such
      credit line is revolving.

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    Party A:
Shenzhen Futian Branch of GuangDong Development Bank

    Legal
Representative: Liu Chunchen   (with the signature and
seal)

    Date:
_______________

    


    Party B:
Comtech Communication Technology (Shenzhen) Company Limited

    Legal
Representative:  Edward Chan  (with the signature and
seal)

    Date:
_______________