**EXHIBIT 10.1**

 

Dated  May 6, 2004

 

 

**SMTEKINTERNATIONAL (THAILAND) COMPANY LIMITED**

 

 

as Borrower

 

 

### **BANKTHAI PUBLIC COMPANYLIMITED**

 

 

as Lender

 

 

**CREDIT FACILITY AGREEMENT**

 

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**TABLE OFCONTENTS**

 
| **CLAUSE** |   | **HEADING**                      |   |
|------------|--------|----------------------------------|--------|
|       |   |                             |   |
| 1.         |   | Interpretation                   |   |
| 2.         |   | Facilities                       |   |
| 3.         |   | Purpose                          |   |
| 4.         |   | Unavailability                   |   |
| 5.         |   | Conditions  Precedent            |   |
| 6.         |   | Drawdown                         |   |
| 7.         |   | Normal  Practise Banking         |   |
| 8.         |   | Interest                         |   |
| 9.         |   | Fees                             |   |
| 10.        |   | Repayment                        |   |
| 11.        |   | Change  in Circumstances         |   |
| 12.        |   | Representations and  Warranties  |   |
| 13.        |   | Events of Default                |   |
| 14.        |   | Security                         |   |
| 15.        |   | Currency  Indemnity              |   |
| 16.        |   | Stamp, Duties and Taxes          |   |
| 17.        |   | Taxes                            |   |
| 18.        |   | Assignment                       |   |
| 19.        |   | Notices                          |   |
| 20.        |   | Partial  Invalidity              |   |
| 21.        |   | Amendment                        |   |
| 22.        |   | Waivers                          |   |
| 23.        |   | Confidentiality                  |   |
| 24.        |   | Governing Law                    |   |
| SCHEDULE 1 |   | LENDER, ADDRESS AND  COMMITMENTS |   |
| SCHEDULE 2 |   | DRAWDOWN NOTICE                  |   |
| SCHEDULE 3 |   | FORM OF RECEIPT                  |   |
| SCHEDULE 4 |   | TRANSACTION DOCUMENTS            |   |
| SCHEDULE 5 |   | FORM OF LAND MORTGAGE            |   |
| SCHEDULE 6 |   | FORM OF MACHINERY MORTGAGE       |   |
| SCHEDULE 7 |   | FORM OF GUARANTEE                |   |
| SCHEDULE 8 |   | LIST OF MACHINERY                |   |
|            |        |                                  |        |  |  |  |

 

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**CREDIT FACILITY AGREEMENT**

 

This Agreement is made at BankThai PublicCompany Limited, Bangkok, Thailand on this 6th day of May, 2004 by and betweenBankThai Public Company Limited at 44 North Sathorn Road,  Silom Sub district,  Bangrak District, Bangkok, Thailand(hereinafter referred to as the “**Lender**”)of one part; and SMTEK International (Thailand) Company Limited located at 592,Moo 2 Bangpa-in Industrial Estate, Tambol Klongjig, Amphor Bangpa-in,Phranakornsriayudhaya Province, Thailand (hereinafter referred to as the “**Borrowe**r”) of the other part.

 

Bothparties do hereby agree as follows:

 

**WHEREAS:**

 

TheLender has agreed to provide the Facilities, as defined here below, to theBorrower for the purposes of (i) investment and (iii) expansion its project atBangpa-in Industrial Estate.

 

**THEREFORE,**both parties do hereby agree as follows:

 

**1.****                                     ****INTERPRETATION**

 

**1.1****                              ****Definitions**

 

Inthis Agreement:

 

“**Advance**” means the amount of any Drawdownfrom time to time under the Facilities;

 

“**Authorizations**” including anyauthorization, approval, consent, license, permit or permission granted by, andany filing and registration made at, any government authority, state enterpriseor bureau, and any resolution passed by shareholders and by the board ofdirectors to the relevant limited company, and any approval required from theLender or other persons;

 

“**Authorized Officer**” means (a) one or moredirectors who are authorized, whether singly or jointly, to act to bind alimited company; or (b) any person having authority to act to bind a limitedcompany by virtue of a power of attorney granted by the director(s) mentionedin (a) on behalf of such limited company;

 

“**Baht**” means the lawful currency ofThailand;

 

“**BOT Announcement**” means the announcement ofthe Bank of Thailand regarding instructions for commercial banks and financialinstitutions to perform with respect to interest and discount;

 

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“**Building”** means any buildings or structuresconstructed or to be constructed on the Land (including, without limitation,the factories);

 

“**Business Day**” means a day upon which banksare open in Bangkok for the transaction of the business contemplated by thisAgreement;

 

“**Capital Expenditures**” means any expenditureof a capital nature made by the Borrower to acquire, construct, improve,modify, repair or replace fixed assets, plant or equipment (including renewals,improvements and replacements);

 

“**Default Interest Rate**” means the interestrate (s) per annum as quoted by the Lender as a maximum default rate from timeto time chargeable on any or all of defaulted Facilities in accordance with thenotification of BOT Announcement (as a matter of reference only, the maximumdefault rate quoted by the Lender as at the date of this Agreement is 15% perannum);

 

“**Drawdown**” means the utilization of any ofthe Facilities by the Borrower under this Agreement;

 

**“Drawdown Notice**” means a request for the Advance, substantially in the form ofSchedule 2;

 

“**Event of Default**” means any event specifiedin Clause 13;

 

“**Facilities**” means Tranche A, Tranche B,Tranche C, Tranche D and Tranche E Facility and “**Facility**” means any of them.

 

“**Facility Office**” means in respect of theLender identified with the signature below, or such other office of the Lenderas may from time to time be notified to the Borrower;

 

“**Final Maturity Date**” means each of thefollowing dates, as the case may be:

 

(i)                                     in relation to Tranche A Facility, one (1)year from the execution date of this Agreement, unless otherwise extended atthe sole discretion of the Lender in accordance with the terms of this Agreement;

 

(ii)                                  in relation to Tranche B Facility, on thematurity date of each promissory note (s) issued;

 

(iii)                               in relation to Tranche C Facility, one (1)year from the execution date of this Agreement, unless otherwise extended atthe sole discretion of the Lender in accordance with the terms of thisAgreement;

 

(iv)                              in relation to Tranche D, within seven (7)years from the first Drawdown date of Tranche D Facility;

 

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(v)                                 in relation to Tranche E Facility, withinseven (7) years (inclusively of Grace Period) from the first Drawdown date ofTranche E Facility.

 

**“Grace Period”**means six (6) months of suspension for repayment of the Indebtednessunder Tranche E Facility by the Lender, which is commencing from the firstDrawdown date of Tranache E Faciltiy and ending six (6) months thereafter;

 

**“Guarantee Agreement”**means a guarantee agreement duly signed bythe Guarantor substantially in the form set out in Schedule 7 including all ofits amendment and/or supplement made or to be made from time to time asprescribed by the Lender;

 

**“Guarantor”**means SMTEK International, Inc, a company incorporated under the lawsof the United States of America, having its registered office at 200 ScienceDrive, Moorpark, California,  the UnitedStates of America;

 

**“Indebtedness**” of any person or entity shall mean:

 

(a)                                  any indebtedness for borrowed money oroverdraft (whether principal, interest, fee or otherwise;

 

(b)                                 any indebtedness (actual or contingent) underany obligation to reimburse or indemnify any other person for or against anyliability which what other person may have or any payment that other person mayhave made under any guarantee, aval, indemnity, security or other assuranceagainst loss;

 

(c)                                  any indebtedness (actual or contingent) underswaps, derivatives and forward contracts and swap, derivatives and forwardtransactions;

 

(d)                                 any indebtedness under any acceptance credit;and

 

(e)                                  any rental payment under any lease enteredinto primarily for the purpose of raising or obtaining financing;

 

(f)                                    any liability under any bond, debenture,note, bill of exchange, trust receipt, letter of credit, note purchase, billdiscount or commercial paper;

 

(g)                                 any amount under any agreement for thehire-purchase or conditional sale of goods or equipment or deferred terms whichagreement was entered into primarily for the purpose of raising or obtainingfinancing;

 

(h)                                 any other obligation generally considered toconstitute a debt of the obligor;

 

(i)                                     the principal amount of any debts factoredwith recourse;

 

inso far as not otherwise included within any or all of the forgoing paragraphs,amounts utilized, Drawdown or borrowed under or in connection with any of theTransaction Documents;

 

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“**Insurance**” means all material policies andcontracts of insurance which are now or may hereafter be taken out or effectedin respect to or in connection with the Building to secure the Indebtedness tothe Lender at the values as set out in the Insurance Policy , and in relationto the Machinery to secure the Indebtedness to the Lender only or any partthereof by the Borrower in compliance with its obligations under Clause 12 andshall include rights in any reinsurance taken out in relation to such Insurance;

 

“**Insurance Policy**” means the policy derivedfrom the Insurance and related reinsurance;

 

“**Interest Payment Date**” means the last dayof the Interest Period, as the context may require. If an Interest Payment Datefalls on a day that is not a Business Day, such Interest Payment Date shall bethe preceding Business Day;

 

“**Interest Period**” means one (1) month (orany other period as may be agreed between the Borrower and the Lender)ascertained in accordance with Clause 8;

 

“**Land**” means a plot of land in BangpainIndustrial Estate Authority of Thailand (Export Zone) under land title deedsNo. 33685 located at Tambol Klongjig, Amphur Bangpa-in, PhranakornsriayudhayaProvince, having approximate area of 4 rai 27 square wahs, where the Buildingsituated;

 

“**Land Mortgage Agreement**” means an agreementto be made between the Borrower and the Lender, pursuant to which the Land andall Building and structures thereon are mortgaged in the first-ranking mortgageto the Lender as security for the Indebtedness, for the mortgage value of Baht100,000,000 substantially in the form set out in Schedule 5 including all ofits amendment and/or supplement made or to be made from time to time;

 

“**Machinery**” means all items of themachineries and equipments as per details set forth in Schedule 8 hereto;

 

“**Machinery Mortgage Agreement**” means anagreement to be made between the Borrower and the Lender, pursuant to which theexisting Machinery are mortgaged in the first-ranking mortgage to the Lender assecurity for the Indebtedness, for the mortgage value of Bath 100,000,000substantially in the form set out in Schedule 6, including all of its amendmentand/or supplement made or to be made from time to time;

 

“**Material Adverse Effect**” means a materialadverse effect on:

 

(a)                                  the perfection, priority or enforceability ofthe Security; or

 

(b)                                 the financial condition or business of theBorrower; or

 

(c)                                  the ability of the Borrower to observe andfully perform its payment obligations under the Transaction Documents; or

 

(d)                                 the legality, validity, or enforceability ofany of the Transaction Documents.

 

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“**MLR”** means a rate per annum of the interestrate which is announced from time to time by the Lender for charging on Bahtloans granted to its prime customers in Thailand and which prevails on the daythe interest is calculated pursuant to the terms of this Agreement.

 

**“MOR”**means a rate per annum of the interest which is announced from time to time bythe Lender for charging on overdraft facility granted to its prime customers inThailand and which prevail on the day the interest is calculated pursuant tothe terms of this Agreement;

 

“**Receipt**” means a receipt evidencing thereceipt of an Advance, substantially in the form set out in Schedule 3;

 

**“Security”**means the security set out in Clause 14;

 

**“Security Documents”** means the Guarantee Agreement, the Land Mortgage Agreement, theMachinery Mortgage Agreement and all security interests and collateral rightsgranted to the Lender pursuant to Clause 14 and any other security which isprovided to secure the Indebtedness.

 

“**Tranche A**” means overdraft facility up tothe amount of Baht 5,000,000 ;

 

“**Tranche A Availability Period**”****means the period commencing on the datehereof and ending one (1) year from the date hereof;

 

**“Tranche B”** means short-term loan facility up to the amount of Baht 15,000,000 ;

 

“**Tranche B Availability Period**”****means the period commencing on the datehereof and ending one (1) year from the date hereof;

 

**“Tranche C”** means the performance guarantee issued by the Lender in favor of thegovernment authorities to secure the use of electricity or other utilities ofthe Borrower up to the amount of Baht 3,000,000;

 

“**Tranche C Availability Period**”****means the period commencing on the datehereof and ending one (1) year from the date hereof;

 

 “**Tranche D**”means seven (7) years term loan facility in the total amount up to Baht28,000,000 provided to the Borrower in accordance with the terms and conditionshereof;

 

“**Tranche D Availability Period**” means theperiod commencing on the date hereof and ending on 30 June 2004;

 

“**Tranche E**” means seven (7) years term loanfacility in the total amount up to Baht 17,000,000 provided to the Borrower inaccordance with the terms and conditions hereof;

 

“**Tranche E Availability Period**” means theperiod commencing on the date hereof and ending on 31 December 2004;

 

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“**Transaction Documents**” means thisAgreement, the Drawdown Notice, all of the Receipts, the request for Tranche A,Tranche B and Tranche C Facilities, Security Documents and relateddocuments;

 

1.2.                              **Any reference in thisAgreement to:**

 

(a)                                  an “**authorization**”means an authorization, approval, consent, license, permit, franchise,permission, exemption or resolution of any governmental or other authority orany other person;

 

(b)                                 “**indebtedness**”shall be construed so as to include any obligation for the payment or repaymentof money, whether present or future, actual or contingent;

 

(c)                                  a “**month**”,unless the context requires otherwise, is a reference to a period starting onone day in a calendar month and ending on the numerically corresponding day inthe next calendar month, except that if there is no numerically correspondingday in the month in which that period ends, that period shall end on the lastday in that calendar month.

 

(d)                                 a “**person**”means any person, partnership, company, state enterprise, government, agency orany joint venture association or partnership (whether or not having separatelegal personality) of two or more of the foregoing;

 

(e)                                  “**Tax**”means any tax, levy, import duty, stamp duty or other charge of a similarnature (including, without limitation, any interest or penalty payable inconnection with any failure to pay or any delay in paying any of the same).

 

**1.3.****                           **Headings are for reference convenience only and shall not be construedas an interpretation of the provisions of this Agreement.

 

**2.****                                     ****TheFacilities**

 

**2.1.****                           ****Facilities**

 

(a)                                  Subject to the terms and conditions of this Agreement,the Borrower agrees to borrow or utilize the Facilities and the Lender agreesto make available the Facilities under this Agreement to the Borrower whichshall consist of;

 

2.1.1.                     Tranche A: overdraft Facility up to Baht 5,000,000;

 

2.1.2.                     Tranche B: short term loan Facility up toBaht 15,000,000;

 

2.1.3.                     TrancheC : letter of guarantee Facility up toBaht 3,000,000 ;

 

2.1.4                        Tranche D: long term loan Facility up to Baht28,000,000; and

 

2.1.5                        Tranche E: long term loan Facility up to Baht17,000,000;

 

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(b)                                 Tranche A Facility, Tranche B Facility andTranche C Facility shall be subject to review on the yearly basis or at anytime as the Lender deems appropriate. In case of the Borrower’s credit problemincurred with other financial institutions or the review of the financialstatus of the Borrower is unsatisfactory to the Lender, then the Lenderreserves the right to forthwith amend, alter or cancel any or all of the saidFacility for whatsoever reasons and without notifying the Borrower in advance.

 

(c)                                  Any Advance of the Facilities that remainsundrawn, and in respect of which no Drawdown Notice has been delivered, at theclose of business on the last day on which a Drawdown Notice is permitted to bedelivered shall be automatically cancelled on the last day of each of Tranche AAvailability Period, Tranche B Availability Period, Tranche C AvailabilityPeriod, Tranche D Availability Period or Tranche E Availability Period, as thecase may be.

 

**3.****                                     ****Purpose**

 

(a)                                  The Borrower shall use the Facility underTranche A exclusively for the purpose of financing its ongoing working capital;

 

(b)                                 The Borrower shall use the Facility underTranche B exclusively for the purpose of financing its ongoing working capital;

 

(c)                                  The Borrower shall use the Facility underTranche C Facility exclusively for the purpose of guarantee the use ofelectricity and utilities;

 

(d)                                 The Borrower shall use the Facility underTranche D Facility exclusively for the purpose of purchasing the Land andBuilding from Thai Factory Development Public Company Limited; and

 

(e)                                  The Borrower shall use the Facility underTranche E Facility exclusively for the purpose of expansion the Building.

 

TheBorrower shall apply the proceeds of this Agreement as provided herein. For theavoidance of doubt, the Borrower shall only utilize the Facilities for thepurposes permitted by this Agreement.

 

**4.****                                     ****Unavailability**

 

If,for whatsoever reason, the Facilities in whole or any part thereof is not fullyutilized or is unavailable, it shall neither affect nor impair the liabilitiesof the Borrower to perform any and all of its obligations. And if suchunavailability occurs the Lender may consider ceasing the undrawn portion orthe Lender may provide the Borrower with any credit Facilities other than asstipulated in this Agreement.

 

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**5.****                                     ****Conditions Precedent**

 

**5.1****                              ****General Condition Precedent**

 

Theobligation of the Lender to make available the Facilities to the Borrower shallbe subject to the following conditions precedent being fulfilled to thesatisfaction of the Lender or waived, on or the fifth (5th) BusinessDay of any Facilities:

 

(i)                                     The Lender shall have received all documentslisted in Clause 5.2;

 

(ii)                                  All Transaction Documents shall have beenexecuted by the Borrower and shall be in full force and effect; and

 

(iii)                               As at the date the Drawdown Notice is givenand as at the relevant Drawdown date:

 

(i)                                     no Event of Default has occurred;

 

(ii)                                  all representations and warranties made bythe Borrower under this Agreement are true and correct with reference to thefacts and circumstances then subsisting;

 

(iii)                               the Borrower shall to the extent applicable,have been in full compliance with the covenants specified in Clause 12;

 

(iv)                              all fees (including, without limitation, thefront-end fee, if any) and any other charges and expenses which are due andpayable on any Facility under this Agreement;

 

(iv)                              the Land Mortgage Agreement has been dulyexecuted by the Borrower and the first-ranking mortgage over the Land andBuilding has been duly registered and is in full force and effect in favor ofthe Lender for the mortgage value of Baht 100,000,000;

 

(v)                                 the Machinery Mortgage Agreement has beenduly executed by the Borrower and the first-ranking mortgage over the existingMachinery has been duly registered and is in full force and effect in favor ofthe Lender for the mortgage value of Baht 100,000,000; and

 

(vi)                              the Guarantee has been duly executed by theGuarantor.

 

**5.2.  Documents whichare General Conditions Precedent**

 

TheLender shall have received the following documents and /or shall have beensatisfied that the following conditions are fulfilled on or before the Drawdowndate :

 

(a)                                  each of the following documents in relationto the Borrower:

 

(i)                                     a copy of the Memorandum of Association,

(ii)                                  a copy of the Articles of Association,

(iii)                               a copy of the list of shareholders, and

(iv)                              an original certification document(affidavit) issued by the Ministry of Commerce.

 

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Withrespect to documents in item (i), (ii) and (iii) to be certified by theMinistry of Commerce within one (1) month prior to the first Drawdown date;

 

(b)                                 copies of the minutes of the board ofdirectors’ meeting of the Borrower approving the execution and delivery of therelevant Transaction Documents to which it is a party and the performancethereunder in the form acceptable to the Lender, at which the resolution wasadopted and certified by the Authorized Officer of the Borrower, as being atrue, complete and up-to-date copy of resolutions duly adopted and in fullforce and effect;

 

( c)                               specimen signatures of the Authorized Officerof the Borrower together with or providing herein copies of their identificationcards or passports, house registration certificates;

 

(d)                                 this Agreement duly executed by all partiesthereto and duly affixed with applicable stamp duty;

 

(e)                                  evidence to the satisfaction of the Lenderthat the Borrower has maintained the Insurance in full force and effect on theinsurable assets of the Borrower pursuant to Clause 12;

 

(f)                                    copies of all Authorizations which arenecessary for the execution and delivery of the relevant Transaction Documents,the obtaining of the Facilities under this Agreement, and the performance ofthe obligations under the Transaction Documents of the Borrower;

 

(g)                                 an appraisal report on the value of the Land,Building and Machinery provided by the Borrower; and

 

(h)                                 relevant Insurance policies.

 

**6.****                                     ****Drawdown**

 

**6.1****                              ****Tranche A**

 

(a)                                  The Borrower may request the Advance underTranche A, if the Lender receives Drawdown Notice not later than 11:00 a.m. onthe first (1) Business Day prior to the Drawdown date, provided that:

 

(i)                                     the conditions precedent under Clause 5.1.havebeen satisfied and being fulfilled to the Lender; and

 

(ii)                                  the Lender shall have received the overdraftfacility agreement in such form as prescribed by the Lender, duly signed by theBorrower and duly affixed with applicable stamp duty prior to the firstDrawdown.

 

(b)                                 The outstanding debit balance in Tranche AFacility account shall in any event be reduced to zero no later than the lastday of the Tranche A Final Maturity Date.

 

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**6.2****                              ****Tranche B**

 

(a)                                  The Borrower may request the Advance underTranche B, if the Lender receives Drawdown Notice not later than 11:00 a.m. onthe first (1) Business Day prior to the Drawdown date, provided that:

 

(i)                                     the conditions precedent under Clause5.1.have been satisfied and being fulfilled to the Lender;

 

(ii)                                  the Lender shall have received the short termfacility agreement in such form as prescribed by the Lender, duly signed by theBorrower and duly affixed with applicable stamp duty prior to the firstDrawdown; and

 

(iii)                               the Borrower shall, on each Drawdown date,issue to the Lender a promissory note in the form prescribed by the Lender,provided that the maturity date of each promissory not exceed 180 days from thedate issued.

 

(b)                                 The outstanding debit balance in Tranche BFacility account shall in any event be reduced to zero no later than the lastday of the Tranche B Final Maturity Date.

 

**6.3****                              ****Tranche C**

 

(a)                                  The Borrower may request the Advance underTranche C, if the Lender receives Drawdown Notice not later than 11:00 a.m. onthe first (1) Business Day prior to the Drawdown date, provided that:

 

(i)                                     the conditions precedent under Clause5.1.have been satisfied and being fulfilled to the Lender;

 

(ii)                                  the Lender shall have received any agreementor documentation in relation to the Tranche C Facility in such form asprescribed by the Lender, duly signed by the Borrower prior to the utilizationof Tranche C Facility;

 

(iii)                               the Borrower has paid the fee for issuance ofthe letter of guarantee at the rate of 1.5% per year to the Lender; and

 

(iv)                              the validity of the letter of guaranteeissued by the Lender shall not exceed Tranche C Final Maturity Date.

 

(b)                                 The outstanding debit balance in Tranche CFacility account shall in any event be reduced to zero no later than the lastday of the Tranche C Final Maturity Date.

 

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**6.4.****                           ****Tranche D**

 

(a)                                  The Borrower may request the Advance underTranche D during the Tranche D Availability Period if the Lender receives notlater than 11:00 a.m. on the fifth (5) Business Day prior to the Drawdown date,provided that:

 

(i)                                     the conditions precedent under Clause 5.1have been satisfied and being fulfilled to the Lender;

 

(ii)                                  the Lender shall have received a dulycompleted Drawdown Notice in respect of each Drawdown on the fifth (5) BusinessDay prior to the Drawdown date; and

 

(iii)                               the Lender shall have received the originalof the Land and Building purchase and sale agreement duly signed by theBorrower and the seller of Land and Building.

 

(b)                                 Any remaining sum under Tranche D undrawn atthe expiry of Tranche D Availability Period shall be no longer available forany further Drawdown.

 

**6.5****                              ****Tranche E**

 

(a)                                  The Borrower may request the Advance underTranche E during the Tranche E Availability Period, if the Lender receives notlater than 11:00 a.m. on the fifth (5) Business Day prior to the Drawdown date,provided that:

 

(i)                                     the conditions precedent under Clause 5.1have been satisfied and being fulfilled to the Lender;

 

(ii)                                  the Lender shall have received a dulycompleted Drawdown Notice in respect of each Drawdown on the fifth (5) BusinessDay prior to the Drawdown date; and

 

(iii)                               the written report showing the progress ofthe construction, duly signed by the engineer responsible for the project.

 

(iv)                              the Lender shall have received a writtenreport showing the progress of the construction, duly certified by the engineerresponsible, before each Drawdown.

 

(b)                                 Any remaining sum under Tranche E undrawn atthe expiry of Tranche E Availability Period shall be no longer available forany further Drawdown.

 

**6.7****                              ****Utilization of Facilities**

 

TheDrawdown Notice issued by the Borrower shall be irrevocable and have legalbindings on the Borrower to make a Drawdown in accordance with the terms and conditionsthereunder and under this Agreement.

 

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**7.****                                     ****Normal Banking Practices**

 

TheDrawdown of the Facilities shall be effected in accordance with normal practiceof the Bank and customary banking practices in Thailand as determined by theBank of Thailand. The Borrower shall for such purposes comply with suchadministrative requirements in relation to utilization of the Facilities as theLender shall notify to it from time to time.

 

**8.****                                     ****Interest**

 

**8.1.****                           ****Interest Period andCalculation of Interest**

 

(a)                                  The Borrower shall pay interest and otheramounts falling due under any of the Facilities in accordance with the terms ofthis Agreement.

 

(b)                                 Interest Period applicable to the Facilitiesunder this Agreement shall be as follows:

 

(i)                                     each Interest Period shall have a duration ofone (1) month;

 

(ii)                                  the first Interest Period for each Advance onthe relevant Drawdown date shall commence on the day that such Advance isdrawn, and shall end on the last day of the subsisting calendar month in whichsuch Drawdown occurs; and

 

(iii)                               Interest shall accrue from day to day, andshall be calculated, and a 365 days year (including the first day of therelevant period during which it accrues but excluding the last).

 

Ifany interest dues and unpaid to the Lender on the relevant Interest PaymentDate, it shall be deemed that the Borrower is in default under Clause 13. TheBorrower hereby agrees to pay the Default Interest Rate of the overdue sums tothe Lender for the duration of the said overdue period.

 

**8.2****                              ****Interest Rate for Facilities**

 

(a)                                  The interest rate applicable to theFacilities under Tranche A and Tranche B will be calculated at the MOR rate perannum. The payment of interest shall be made the last Business Day of everymonth through the term of this Agreement or until such time as the outstandingbalance is amortized in full.

 

(b)                                 The interest rate applicable to the Facilityunder Tranche D will be calculated as follows:

 

(i)                                     On the 1st and 2ndyear, it shall be calculated at the fixed rate at 5.75% per annum.

 

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(ii)                                  From the 3rd year until the FinalMaturity Date, it shall be calculated at the MLR rate per annum.

 

Thepayment of interest shall be made the last Business Day of every month throughthe term of this Agreement or until such time as the outstanding balance isamortized in full

 

(c)                                  The interest rate applicable to the Facilityunder Tranche E will be calculated at the MLR rate per annum. The payment ofinterest shall be made the last Business Day of every month through the term ofthis Agreement or until such time as the outstanding balance is amortized infull

 

**8.3.****                           ****Interest Payment**

 

TheBorrower shall pay to the Lender interest on the relevant Interest Payment Datewhich shall be the last day of the Interest Period ascertained in accordancewith Clause 8.1 through the term of this Agreement or until such time as theoutstanding balance is amortized in full.

 

**8.4.****                           ****Default Interest**

 

Ifthe Borrower fails to pay when due any money payable under Facilities or incase of the occurrence of an Event of Default, the Borrower shall on a jointand several basis pay interest on the total outstanding Indebtedness during theperiod after the relevant date the occurrence of the said Event of Default, asthe case may be, to the date of actual payment (after as well as beforejudgment) at the Default Interest Rate quoted by the Lender, provided that incase of failure to pay interest on the relevant due date, the Default InterestRate determined as aforesaid shall be charged on the outstanding Indebtednessto which such interest relates.

 

**9.****                                     ****Fees**

 

**9.1****                              ****Tranche A, Tranche C Fees**

** **

The Borrower shall pay fees to the Lender inrespect to the utilization of Tranche A, Tranche C at the standard practicerate of the Lender.

** **

**9.2****                              ****Prepayment Penalty Fee**

 

TheBorrower shall pay to the Lender for all the amounts prepaid of the Facilitiesunder Tranche D and/or Tranche E, a prepayment fee, at the rate of two percent(2%) of each the prepaid amount under Tranche D and/or Tranche E, unless suchprepaid amount is derived from the Borrower’s operation (excess cash flow) andpayable on the prepayment date.

 

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**10.****                              ****Repayment**

** **

**10.1.****                    ****Repayment and Reduction ofIndebtedness**

** **

**10.1.1****             ****Tranche A**

 

TheBorrower shall reduce the Indebtedness under Tranche A to zero no later thanthe Tranche A Final Maturity Date.

** **

**10.1.2 Tranche B**

** **

Exceptthe renewal of the promissory note(s) issued has been approved by the Lender,the Borrower shall pay to the Lender the Indebtedness of each promissorynote(s) issued on the Final Maturity Date.

 

If the Lender approves the renewal of any orall of the promissory notes(s), such promissory note (s) shall be due andpayable on the following Final Maturity Date. In case the Lender cancels any orall of Tranche B Facility, the Indebtedness under the promissory notes(s) shallbe repaid in full to Lender on the Final Maturity Date under the promissorynote (s) issued.

** **

Subject to Clauses 10.1.1 and 10.1.2 above,the Lender shall inform the Borrower thirty (30) days in advance prior to theFinal Maturity Date, if the Lender extends the Tranch A Final Maturity Date orapproves the renewal of the promissory note(s), at the specified address of theBorrower given herein.

** **

**10.1.3****             ****Tranche C**

 

TheBorrower shall reduce the Indebtedness under Tranche C to zero no later thanthe Tranche C Final Maturity Date.

** **

**10.1.4 Tranche D and Tranche E**

 

**Tranche D:**

 

Exceptas otherwise agreed by the Lender, the Borrower shall reduce the Indebtednessunder Tranche D by repayment to Lender in 84 monthly installments as follows:

 

| **Installment** |   | **Baht/month** |
|-----------------|--------|----------------|
| 1-83            |   | 333,500        |
| 84              |   | 319,500        |

 

Thefirst repayment date shall be made on the following month after the first Drawdown.

 

**Tranche E:**

 

Exceptas otherwise agreed by the Lender, the Borrower shall reduce the Indebtednessunder Tranche E by repayment to Lender in 78 monthly installments as follows

 

| **Installment** |   | **Baht/month** |
|-----------------|--------|----------------|
| 1-77            |   | 218,000        |
| 78              |   | 214,000        |

 

Thefirst repayment date shall be made on the following month after the end ofgrace period.

 

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**10.2.****                    ****Demand Repayment**

 

At any time upon the occurrence of an Event ofDefault or at any time as the Lender deems appropriate, the Lender may, at any time declare allamounts outstanding at such time due and payable whereupon any Advance notdrawn shall be immediately reduced to zero (0).

** **

**10.3.****                    ****Business Day**

** **

Subject as otherwise provided for in thisAgreement, if any sum would otherwise become due for payment on a day which isnot a Business Day, that sum shall become due on the next succeeding BusinessDay, and interest shall be adjusted accordingly.

** **

**10.4.****                    ****Payment made by the Borrower**

** **

All sum payable by the Borrower under or pursuantto this Agreement and the other Transaction Documents (whether of principal,interest or otherwise) shall be paid in full without set-off or counterclaim orwithholding.

** **

**10.5.****                    ****Currency**

** **

Except as otherwise expressly provided for inthis Agreement and the other Transaction Documents, all amounts to be paid bythe Borrower under this Agreement and the other Transaction Documents shall bepaid in the currency which the Indebtedness is then denominated or determinedby the Lender. The Borrower hereby irrevocably waives any rights it may haveunder Section 196 of the Civil and Commercial Code of Thailand (or anymodification or re-enactment thereof for the time being in force) to makepayment in Baht of any sum due, which is then denominated in foreign currencyin lieu of payment in such foreign currency.

** **

**11.****                              ****Change In Circumstances**

** **

**11.1.****                    ****Unlawfulness orImpracticality**

** **

If the Lender determines that:

** **

(a)                                  any change of law or regulation in theinterpretation or application thereof: or

 

(b)                                 any compliance in good faith by the Lenderwith any application guideline direction, request or requirement (whether ornot having the force of law) of the Bank of Thailand or of any othergovernmental agency or authority, make it unlawful or impractical for theLender to make, fund or maintain the Facilities or any part thereof or tootherwise give effect to any provision of this Agreement, the Lender shallnotify the Borrower of such unlawfulness or impracticability and thereupon theLender’s obligation to make, fund or maintain

 

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the Facilities or any partthereof which shall have been affected by such unlawfulness andimpracticability shall terminate and the Borrower shall, at the end of the thenrelevant Interest Period, prepay all the affected Facilities or reduce to zerothe all of the affected Indebtedness together with interest accrued thereon andother sum due and payable in relation to the affected Facilities.

** **

**11.2. Increased Costs**

** **

If the Lender determines that:

** **

(a)                                  any change of Law or regulation or in theinterpretation or application thereof; or

 

(b)                                 any compliance in good faith by the Lenderwith any application guideline, direction, request or requirement (whether ornot having the force of law) of the Bank of Thailand or of any othergovernmental agency or authority, shall (i) increase the cost of the Lender formaking, funding or maintaining the Facilities or any part thereof; or (ii)reduce any fee or amount of any payment received or receivable by the Lenderunder this Agreement or the effective return to the Lender under thisAgreement, the Borrower shall, on the date the Borrower receives writtennotification of the increased cost or reduction from such increased cost orreduction and, subject to payment necessary to compensate if for such increasedcost or reduction and, subject to payment thereof, the Borrower may prepay allor part of the affected Facilities or reduce to zero all of the affectedIndebtedness together with interest accrued thereon and any sum due and payablein relation to the affected Facilities.

 

**12.****                              ****Representations and Warranties**

 

**12.1.****                    ****Representations and Warranties**

 

Forso long as all or any sum of the Indebtedness remains outstanding, the Borrowerhereby represents and warrants to the Lender as follows:

 

(1)                                  **Existence**:  theBorrower is a limited liability company, duly organized and validly existingunder the laws of Thailand, with power to enter into this Agreement and theSecurity Documents to which it is a party and to exercise its rights andperform its obligations under them, and all corporate and other actionsrequired to authorize its execution and delivery of this Agreement and theTransaction Documents to which it is a party and the performance of itsobligations under them (except those which are not required until a later date)have been duly taken;

 

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(2)                                  **Corporate power**:  ithas full power and authority to own its assets and to carry on its business asit is presently being conducted and the Borrower and the Transaction Documentshave full power and authority to enter into, to exercise the rights and to andperform the obligations and Transaction Documents;

 

(3)                                  **No Breach**:  theBorrower has not received any notice that it is in breach of any provision inthis Agreement and the Security Agreements to which it is a party or which isbinding on it or any of its assets or Revenues, which breach could have aMaterial Adverse Effect;

 

(4)                                  **No Proceeding**:  nolegal, arbitration or administrative proceeding (other than those of avexatious or frivolous nature) of or before any court, tribunal or agency hasbeen commenced against the Borrower and the Guarantor which, if determinedadversely to the Borrower, would result in a Material Adverse Effect, otherthan those otherwise disclosed to the Lender in writing;

 

(5)                                  **Authorizations**: all authorizations necessary or advisablefor or in connection with the execution, validity, performance orenforceability of the Transaction Documents and the conduct of the Borrower’sbusiness have been obtained and are in full force and effect;

 

(6)                                  **No Litigation**:   nolitigation, arbitration or administrative proceedings or other procedure forthe resolution of dispute is taking place, pending or, to the knowledge ofBorrower, threatened against the Borrower or its respective assets or revenueswhich will have a Material Adverse Effects;

 

(8)                                  **Taxes:**  allrequired tax returns have been filed and all taxes paid, except those contestedin good faith;

 

(9)                                  **No Subsidiaries**:  theBorrower has no subsidiaries and holds no interest of any kind in the sharecapital of any other person;

 

(10)                            **Bankruptcy**:  nobankruptcy, winding-up, liquidation, re-organization, re-adjustment of debt,dissolution or similar proceedings of or relating to the Borrower or theGuarantor has been filed or is pending under the law of Thailand or any otherjurisdiction;

 

(11)                            **Insurances**:  allmaterial insurances required by this Agreement are in full force and effect,procure insurances on business risk and other insurance as required by theLender and maintain the Lender as sole beneficiary;

 

(12)**                           ****Compliance with Law**: comply in all material respects with all applicable laws and materialgovernmental approvals;

 

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(13)                            **Compliance**: comply with any or all of the terms and conditions of the documentationor contract in relation to or in connection with the utilization of theFacilities of terms and conditions imposed by the Lender.

 

(14)**                           ****Notice of Defaults**: give prompt notice of Events of Default of which it is aware;

 

(15)                            **Performance of Obligations**: perform its material obligations under this Agreement;

 

(16)                            **Notice of Proceedings**: notify the Lender in writing of any legal, arbitration or administrativeproceeding of or before any court, tribunal or agency which has been commencedagainst the Borrower which, if determined adversely to the Borrower, wouldresult in a Material Adverse Effect;

 

(17)                            **Notice of Breaches**: notify the Lender in writing as soon as practicable after it receivesany notice that it is in breach of any agreement to which it is a party, whichbreach could have a Material Adverse Effect;

 

(18)**                           ****Constitutional Documents**: procure that no amendment or supplement is made to its memorandum andarticles of association which would give rise to a Material Adverse Effect;

 

(19)**                           ****Appraisal Report**: Delivery of appraisal report of Land, Building, and Machinery owned bythe Borrower upon request of the Lender, which such request be made from timeto time in accordance with the Bank of Thailand’s regulations;

 

(20)**                           ****Land Mortgage**: On the first Drawdown date of theFacilities, the Borrower shall complete the first ranking mortgage in relationto the Land and Building for the mortgage value of Bath 100,000,000 to securethe indebtedness of the Borrower under the Transaction Documents as representedby the agreement substantially in the form set out in Schedule 5;

 

(21)**                           ****Machinery Mortgage**: the Borrower shall complete, within four(4) months from the first Drawdown date of Tranche D Facility and Tranche EFacility, the first ranking mortgage in relation to the Machinery andequipments, which shall be appraised by the Lender or any appraisal firmacceptable to the Lender, for the mortgage value of not be less than Baht100,000,000 substantially in the form set out in Schedule 6;

 

(22)                            **Capital Expenditure**: the Borrower shall inform the Lender at anytime upon making any single capital expenditure in excess of Baht 20,000,000 ata time;

 

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(23)                            **Validity of Security: **the Security provided under this Agreement shall become and in fullforce and effect until the Indebtedness under this Agreement shall have beenperformed in full.

 

(24)                            **No Security Interest**:  noencumbrance exists over all or any of the present or future assets or revenuesof the Borrower.;

 

(25)**                           ****Ranking:**the claims of the Lender against the Borrowerunder the Transaction Documents will rank at least *pari passu*with other unsecured claims of the Borrower.

 

**12.2.  AffirmativeCovenants**

 

TheBorrower covenants that so long as this Agreement is in effect and until all ofthe obligations of the Borrower hereunder have been discharged in full, theBorrower, as the case may be, and as clearly specified shall:

 

(1)                                  **Existence**: the Borrower shall maintain their corporateexistence and conduct their business in a proper and efficient manner and incompliance with all laws, agreements and obligations binding upon them orapplicable to their assets or revenues, except for such non-compliance as wouldnot have a Material Adverse Effect;

 

(2)                                  **Financial Statements**: as soon as the same become available, butin any event within ninety (90) days after the end of each financial year ofthe Borrower, deliver to the Lender in sufficient copies for the Lender theaudited annual financial statements of the Borrower for such financial year;and as soon as it is available, but in any event within sixty (60) days afterthe end of each of its monthly and quarterly financial period, a copy of itsfinancial account for such monthly and quarterly financial period;

 

(3)**                                 ****Records**: maintain business and financial records in accordance with generallyaccepted accounting principals in Thailand and, upon a request from the Lender,provide the Lender with such other information about its business and financialcondition (including, without limitation to, twelve (12) month projected cashflow statements) as the Lender may reasonably require;

 

(4)**                                 ****Notice of Event of Default**:  promptlyinform the Lender of the occurrence of any Event of Default and of any stepsbeing taken to remedy or mitigate the effect of such Event of Default and takesuch practical and reasonable steps to remedy such Event of Default and/orconfirm to the Lender that no other Event of Default has occurred;

 

(5)                                  **Notice of Proceedings**: promptly inform the Lender in writing of any legal, arbitration oradministrative proceeding of or before any court, tribunal or agency which hasbeen commenced against the Borrower

 

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which,if determined adversely to the Borrower, would result in a Material AdverseEffect;

 

(6)**                                   ****Inspection**: the Borrower shall allow the Lender ortheir representatives to inspect their operations and books and accounts uponreasonable notice;

 

(7)**                                 ****Insurances**: the Borrower shall procure insurances onand in relation to their business and assets, including but not limited toBuilding, Machinery in operation (the “Insurance”) as well as procure endorsementsof such Insurances in accordance with the terms as set out hereto and theTransaction Documents; it is agreed that the Borrower shall endorse andmaintain the name of the Lender as sole beneficiary and loss payee of theInsurance relating to the Security at all time commencing no later than theDrawdown date;

 

(8)**                                 ****Accuracy of Disclosure**: as of the date on which the latestfinancial statements were prepared the Borrower incurred no materialliabilities (contingent or otherwise) which were not disclosed in suchfinancial statement (or by the notes thereto) or reversed against therein norhave any unrealized or anticipated losses which were not so disclosed orreversed against and which will have a material adverse effect on the abilityof the Borrower to perform its payment obligations under this Agreement;

 

(9)**                                 ****Law** : the Borrower shall comply with allapplicable laws, except for such non-compliance as would not have a MaterialAdverse Effect;

 

(10)**                           ****Change of Major Shareholders**: the Borrower shall inform tothe Lender any change of major shareholders, provided that the Guarantor shallmaintain the shares in the Borrower not less than seventy five percent (75%) ofthe total shares of the Borrower;

 

**12.3.  NegativeCovenants**

 

TheBorrower’s negative covenants, for as long as any obligations remainoutstanding under this Agreement, include but are not limited to the following:

 

(1)                                  **Sale of Assets**: sell, lease, transfer or otherwise dispose of by one or moretransactions (whether related or not), the whole or any material part of itsassets or revenues, except for sales, leases, transfers or disposals which (a)are for good consideration in the ordinary course of business, (c) are ofobsolete assets or raw materials, inventory, spare parts and supplies in the normalcourse of business, (d) could not reasonably be expected to a Material AdverseAffect the Borrower’s obligations under this Agreement,

 

(2)                                  **Merge**: merge with or into or consolidate with any person or acquire all orsubstantially all of the assets, stock or any class of, or any

 

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partnershipor joint venture interest in, any person, or create or acquire any subsidiary;

 

(3)                                  **Reduction of Capital**: cancel or reduce its share capital, provided however that the Borrowermay reduce its par to offset retained losses;

 

(4)**                                 ****Settlements**: consent to any settlement, resolution or compromise of any litigation,arbitration or other dispute which would be reasonably likely to have aMaterial Adverse Effect;

 

(5)                                  **Immunity**: claim for itself or any of its assets, immunity from suit, execution, aattachment or legal process;

 

(6)                                  **Assignment**: assign any or all of its rights under any this Agreement;

 

(7)                                  **Create Encumbrance**: sell, transfer, dispose, pledge, mortgage or create any encumbrance overthe Machinery to any creditor or any person without obtaining the priorapproval in writing from the Lender.

** **

(8)**                                 ****Dividend**: declare or pay any dividend or any benefitin whatever form, directly or indirectly, to the shareholders or any persons,unless such payment of dividend is derived from the Borrower’s operation(excess cash flow)

 

(9)                                  **Create Indebtedness:**incur any further liability or encumbrance(including grant any guarantee, third party indemnity) with any person and/orfinancial institution except incur any liability is for repayment of theFacilities under this Agreement

** **

**13.****                              ****Events of Default**

 

**13.1.****                    ****The following events shall be Events of Default:**

 

(1)**                                 ****Non Payment**:  theBorrower fails to pay any sum payable under this Agreement and the TransactionDocuments when due or otherwise in accordance with the provisions hereof;

 

(2)                                  **Breach of Agreement**: the Borrower fails duly and punctually toperform or comply with any terms, conditions, covenants, obligations oragreement under the Transaction Documents which are material and, in respect ofa failure which is capable of remedy, does not remedy such failure withinthirty (30) days;

 

(3)                                  **Misrepresentation**:  anyrepresentations, warranties or covenants made or deemed to be made by theBorrower in this Agreement and the Transaction Documents or any otherdocuments, notice, certificate or statement delivered by or on behalf of theBorrower pursuant hereto or thereto or in connection herewith or therewith isor proves to have been incorrect or misleading in any material respect;

 

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(4)                                  **Breach of Covenant**: failure by the Borrower to perform or observe any of its affirmativecovenants or negative covenants under this Agreement, the consequence of whichfailure results in a Material Adverse Effect;

 

(5)                                  **Insolvency**:  theBorrower:

 

(i)                                     is being declared bankrupt or other customaryinsolvency;

 

(ii)                                  is unable to, or admit in writing of itsinability to, pay its debts as they fall due;

 

(iii)                               enter into or seeks to enter into a materialscheme for the rehabilitation, reorganization, arrangement, composition orrescheduling of any debt, an assignment for the benefit of its Lender, or acomposition with the Lender under the law of Thailand or other jurisdiction;

 

(iv)                              assigns or transfers its assets or right tomanage its assets in relation to this Agreement to third party or the receiverhas been appointed to control over part or all of the business or assets of theBorrower;

 

(v)                                 commits any act as a result of which it ispresumed to be insolvent pursuant to the assumptions prescribed by bankruptcylaw;

 

(6)                                  **Dissolution:**  anyproceeding is commenced or any other action is taken for rehabilitation,reorganization, bankruptcy, liquidation, dissolution or winding up of theBorrower, or the Borrower commits an act of bankruptcy or and order is made orand effective resolution is passed or analogous proceeding is taken foramalgamation, dissolution or winding up of the Borrower or with respect toinsolvency or bankruptcy of the Borrower;

 

(7)                                  **Receivership**:  anydistress, attachment, execution or other legal process is levied, enforced orattempted or an encumbrance takes possession of, or any action is taken for orwith a view to the appointment of a receiver, trustee, custodian or similarofficer, in any such case, in relation to bankruptcy proceedings in respect ofthe Borrower, or a substantial part of the assets of the Borrower and suchaction is not dismissed within thirty (30) days;

 

(8)                                  **Litigation:**  Anyaction, proceeding or litigation is instituted in any courts or authorities toprohibit or sustain the performance of the Borrower under this Agreement inwhatsoever nature which affects the legality, completeness, binding effect orenforceability of the Transaction Documents;

 

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(9)                                  **Material Government Approval**:  amodification, revocation or cancellation of any governmental approval which hasa Material Adverse Effect;

 

(10)**                           ****Cross Default**:  anyother Indebtedness of the Borrower which has a commercial effect of borrowingnature becomes due or is cancelled prior to its stated maturity or is subjectto creditor action, based on a payment or non-payment default, or is capable ofbeing declared due and payable prior to its specified maturity date due to theoccurrence of an Event of Default;

 

(11)                            **Material Adverse Effect**:  theoccurrence of any material adverse change in the condition of the Borrowerwhich, in the reasonable judgment of the Lender, may have material adverseeffect on the ability of the Borrower to perform its obligations under theTransaction Documents;

 

(12)                            **Nationalization:**  theBorrower’s assets are seized, nationalized, expropriated or compulsorilyacquired by the governmental agency which would be likely to have a MaterialAdverse Effect or the ability of the Borrower to perform its obligations underthe Transaction Documents;

 

(13)                            **Cease the Business:**  TheBorrower ceases or threaten to cease the business operation of the Borrower.

 

**13.2.****                    ****Consequences of Event ofDefault**

** **

Uponthe happening of any Event of Default and at any time thereafter, the Lendermay without prejudice to any other available rights and remedies, by writtennotice to the Borrower, take any or all of the following actions:

** **

(a)                                  declare all or part of the Indebtedness andall commissions, fees and other sums payable hereunder to be, whereupon thesame shall become, immediately due and payable without further demand, noticeor other legal formality of any kind in such case the Borrower shall be liableto forthwith repay all such amount together with all accrued interest thereon;

 

(b)                                 declare any or all of the undrawn theFacilities terminated, whereupon the obligation of the Lender to make availablethe Facilities hereunder shall terminate immediately;

** **

(c)                                  accelerate all or part of the Indebtednessand all commissions, fees and other sums payable hereunder to be, whereupon thesame become, due and payable at any time without further demand, notice orother legal formality of any kind in such case the Borrower shall be liable toforthwith repay all such amount together with all accrued interest thereon; and/or

 

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(d)                                 enforce any or all of the TransactionDocuments.

** **

**14.****                              ****Security**

** **

**14.1.****                    ****Detail of Security**

** **

The obligations of the Borrower to the Lenderunder this Agreement shall be secured by the following Security as evidenced bythe Security Documents which shall continue to be valid enforceable until theIndebtedness under the Transaction Documents has been repaid in full:

** **

(a)                                  The first ranking mortgage over the Land andBuilding;

** **

(b)                                 The first ranking mortgage over theMachinery;

 

(c)                                  The Guarantee in favor of the Lender by theGuarantor;

 

(d)                                 Endorsement of Insurance over Building andthe right to the Insurance Proceed; and

** **

(e)                                  Endorsement of Insurance over the Machineryand the right to the Insurance Proceed.

 

**14.2.****                    ****Insurance Policy**

 

Throughoutthe period the Borrower remains indebted to the Lender under this Agreement orother agreements between the Lender and Borrower, the Borrower shall maintainthe following conditions, unless prior written approval from the Lender isgranted;

 

**14.2.1**  the Borrower shall obtain and maintaininsurance with reputable insurance companies which are acceptable to the Lenderwhich contain terms, conditions and coverage to all product risks insurance atthe highest insured amount.  Theinsurance policy must specify the Lender as the beneficiary in amount theLender deems appropriate.

 

**14.2.2**              the Borrower shall pay the insurance premiumsand the insurance policy must specify the Lender as the beneficiary includingdeliver the insurance policy to the Lender before the Drawdown date. If theBorrower fails to pay the insurance premium and the Lender pays the same in anyamount, the Borrower shall, upon requested by the Lender, repay to the Lendersuch insurance premiums in full together with interest at the rate of 15%(fifteen percent) per annum from the date of payment by the Lender therefore.

 

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**14.3.  Security Form**

 

EachTransaction Documents shall be in a form prescribed by the Lender.

** **

**15.****                              ****Currency Indemnity**

** **

(a)                                  If any monies are paid by the Borrower orreceives or recovered by the Lender pursuant the Transaction Documents in acurrency other than the currency in which the Indebtedness of or payment by theBorrower is due, then the Borrower shall on a joint and several basis pay suchadditional amounts as may be necessary so that after conversion of all suchmonies into the currency in which the relevant Indebtedness or payment is dueto the Lender shall have net in its hands and amount in that currency equal tothat Indebtedness then outstanding and due to the Lender.

** **

(b)                                 Where any judgment or order of any court ofcompetent jurisdiction in any country is given or made against the Borrower inrespect of all or any part of the monies owing under the Transaction Documentsin a currency other than that in which that payment by the Borrower is due,then the Borrower shall on a joint and several basis as a separate andindependent liability continuing after such judgment or order indemnify to theLender against any loss arising by reason of any difference between the rate ofexchange at which the currency in which the payment due is converted into thecurrency of the judgment or order for the purposes thereof and that at whichthe Lender can convert any amount actually received by it pursuant to and inthe currency of such judgment or order into the currency in which the paymentdue at the time of such receipt.

** **

(c)                                  For purposes of this Clause 15, monies shallbe converted from the currency of receipt in to currency in which the paymentis due at the Lender’s spot rate of exchange in accordance with its normalpractice as at 11.00 am on the date of such receipt or, if that is not aBusiness Day, on the next succeeding Business Day.

** **

**16.****                              ****Stamp****, Duties and Taxes**

** **

The Borrower shall pay or cause to be paidall present and future stamp and other like duties and taxes and allregistration, recording and other like fees, if any, to which this Agreementand the other Transaction Documents may be registrable or may be sought to beenforced and shall indemnify the Lender against any and all liabilities, costs,claims and expenses with respect to or resulting from any delay or omission inpaying such duties, taxes or fees. A certificate as to the amount in respect ofwhich the indemnity is so required submitted by the Lender shall be conclusiveand binding on the Borrower (in the absence of manifest error).

 

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**17.****                              ****Taxes**

** **

**17.1.****                    ****Net Payment**

** **

All sum payable by the Borrower under orpursuant to the Transaction Documents, whether principal, fees or otherwise,shall be paid in full without set-off or counterclaim and, to the extentpermitted by law, without deduction or withholding for or on account of anytax, If the Borrower is required by law or regulation to make any deduction orwithholding from any payment to the Lender, then:

** **

(a)                                  it shall ensure that such deduction orwithholding does not exceed the minimum legal liability therefore, and shallpay over to the relevant taxation or other authorities the full amount of suchdeduction or withholding (including the full amount of any necessary deductionor withholding from the additional amounts paid as provided below) and shallsimultaneously pay to the Lender, such additional amounts as will result in thereceipt by the Lender of a net amount equal to the full amounts which wouldotherwise have been received had no such deduction or withholding beenrequired; and

** **

(b)                                 it shall as soon as practicable (but in anyevent within thirty (30 ) days thereafter) forward to the Lender, as officialreceipt or other documentation with respect to such deduction and with respectto the payment of the tax adducted or withheld to the relevant taxation orother authorities as may from time to time be required by the Lender.

** **

**18.****                              ****Assignment**

 

**18.1.**                     This Agreement shall be binding upon andinure to the benefit of each party hereto and its successors and permittedassigns.

 

**18.2.****                    **The Borrower may not assign or transfer all or any of its rights andobligations hereunder.

 

**18.3.****                    **The Lender may assign all or any part of its rights and benefits underthis Agreement to any one or more banks or other financial institutions.

 

**19.  Notices**

 

**19.1**.Allnotices, certificates, receipts and other instruments provided for herein to beissued by each party hereto shall be binding up on each party and shall bevalidly signed by its respective authorized persons and shall be sent by handdelivery, registered mail, or facsimile or otherwise in writing and sent to therelevant party’s address, or facsimile number and marked for the attention ofthe persons as set out at the Facility’s office address or as from time to timenotified by each party to the other.

 

**19.2 **Any notice, demand or other communication soaddressed to such party shall be deemed to have been delivered and dulyaccepted by such party:

 

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(a)                                  in case of any notice, demand or othercommunication delivered by hand (e.g. by messenger) when actually received, orif sent by registered mail five (5) Business Day after mailing; or

 

(b)                                 in case of any notice, demand or othercommunication made by facsimile, (i) when dispatched and received in legibleform by the receiving party, and (ii) a printed facsimile confirmation of thattransmission is received by the sending party.

 

However,a notice given in accordance with the above but received on a Saturday, Sunday,public holiday or day on which banks and the relevant financial markets are notopen for business in the place of receipt or after business hours in the placeof receipt will only be deemed to be given on the next day (other than aSaturday, Sunday or public holiday) on which banks and the relevant financialmarkets are open for business in that place.

** **

**20.****                              ****Partial Invalidity**

 

Ifat any time any provision hereof is or becomes invalid, illegal orunenforceable in any respect the validity, legality or enforceability of theremaining provisions hereof shall not in any way be affected or impairedthereby.

 

**21.****                              ****Amendment**

 

No amendment or modification of theAgreement, shall in any event be effective unless the agreement among theparties in writing has been obtained. No waiver of any provision of the Agreement shall in any event beeffective unless the prior approvals of the Lender have been obtained.

 

**22.****                              ****Waivers**

 

Nofailure on the part of the Lender to exercise, and no delay by the Lender inexercising, any right hereunder shall operate as a waiver thereof, nor shallany single or partial exercise by the Lender of any right hereunder precludeany other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulativeand not exclusive of any other remedies provided by law.

 

**23.****                              ****Confidentiality**

 

ThisAgreement and all confidential information relating to the Borrower and thetransactions contemplated by this Agreement is for the Lender’s confidentialuse only and the terms thereof will not be disclosed by the Lender to anyperson:

 

(a)                                  other than its officers, directors,employees, accountants, attorneys and other advisors, and then only inconnection with the transactions contemplated thereby and on a confidentialbasis; and

 

(b)                                 other than to financial institutions, on aconfidential basis, for their use in connection with an assignment orparticipation in the Facilities.

 

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Notwithstandingthe foregoing, the Lender may make such public disclosures of the terms andconditions hereof as it required by applicable law, in the opinion of itscounsel, to make.

 

**24.****                              ****GoverningLaw**

 

This Agreement shall be governed by andconstrued in accordance with the law of Thailand.

 

 

**IN WITNESS WHEREOF**the duly authorized representatives of the parties hereto have executedthis Agreement the day and year first before written.

 

 

**SIGNATUREPAGES**

 

**BORROWER :**

 

**SMTEKINTERNATIONAL (THAILAND) COMPANY LIMITED**

 

 
| By     |   |   | By     |   |   |
|--------|--------|--------|--------|--------|--------|
|   | (      | )      |   |   | (      | ) |   |
|        |        |        |        |        |        |  |  |

 

 

**LENDER :**

 

**BANKTHAI PUBLIC COMPANY LIMITED**

 

 
| By     |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|
|   | (      | )      |   |   |   |   |   |
|        |        |        |        |        |        |  |  |

 

 

**WITNESSES:**

 

 
| By     |   |   | By     |   |   |
|--------|--------|--------|--------|--------|--------|
|   | (      | )      |   |   | (      | ) |   |
|        |        |        |        |        |        |  |  |

 

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