Exhibit 10.7


Date: 30 May 2005


Our ref: D/P/HIMJ/0530/05


Atlantic Components Limited 

B24-27, 1st Floor, Block B

Proficient Industrial Centre

6 Wang Kwun, Road

Kowloon Bay, Kowloon


Dear Sirs,


BANKING
FACILITIES


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


	
 

	
 


	
A.

	
BORROWER:


	
 

	
 


	
 

	
Atlantic Components
 Limited


	
 

	
 


	
B.

	
FACILITY
 LIMITS:








	
 

	
 

	
 

	
 

	
 


	
 

	
Type(s) of Facility

	
 

	
Facility
 Limit(s)


	
 

	


	


	


	



	
 

	
1.

	
Letter of Credit

	
 

	
HKD10,000,000.- 


	
 

	
2.

	
Letter of Credit (Off-shore)

	
 

	
HKD10,000,000.- 


	
 

	
3.

	
Trust Receipt

	
 

	
HKD10,000,000.- 


	
 

	
4.

	
Account Payable Financing

	
 

	
HKD10,000,000.-


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Important Condition(s) Governing Facility Limits:-


	
 

	
 

	
 

	
 

	
 


	
 

	
•      The
 aggregate outstanding of Facilities 1 to 4 shall not at any time exceed
 HKD10,000,000.-.








	
 

	
 


	
C.

	
PRICING
 AND CONDITIONS:


	
 

	
 


	
 

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








	
 

	
 


	
Letter of Credit (“L/C”) 

 

 Letter of Credit (Off-shore)

	
Maximum Tenor: 6 months at sight.


	
 

	
 


	
Trust Receipt (“T/R”)

	
Maximum Tenor: 45 days.

 

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








	
 

	
 

	
 


	
DBS Bank (Hong Kong) Limited

 Enterprise Banking

 16th Floor, The Center

 99 Queen’s Road Central

 Central, Hong Kong

	
 

	
Tel
 852 2218 8598

 Fax 852 2285 3628

 www.dbs.com














	
 

	
 


	
Atlantic
 Components Limited

	
Our
 Ref: D/P/HIMJ/0530/05


	


	









	
 

	
 

	
 


	
 

	
 

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


	
 

	
 

	
 


	
Account Payable Financing

	
 

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


	
 

	
 

	
 


	
 

	
 

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


	
 

	
 

	
 


	
 

	
 

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


	
 

	
 

	
 


	
Set Up Fee of Facilities:

	
 

	
HKD15,000.-. 








	
 

	
 


	
D.

	
SECURITY AND CONDITIONS PRECEDENT:


	
 

	
 


	
 

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








	
 

	
 

	
 


	
 

	
1.

	
This letter duly executed by the Borrower.


	
 

	
 

	
 


	
 

	
2.

	
General Commercial Agreement duly executed
 by the Borrower.


	
 

	
 

	
 


	
 

	
3.

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


	
 

	
 

	
 


	
 

	
4.

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


	
 

	
 

	
 


	
 

	
5.

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


	
 

	
 

	
 


	
 

	
6.

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





2








	
 

	
 


	
Atlantic Components Limited

	
Our Ref:
 D/P/HIMJ/0530/05 


	


	









	
 

	
 

	
 


	
 

	
7.

	
Confirmation on release of Debenture dated 20 April
 2001 executed by the Borrower in favour of The Hongkong and Shanghai Banking
 Corporation Limited.


	
 

	
 

	
 


	
 

	
8.

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


	
 

	
 

	
 


	
 

	
9.

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


	
 

	
 

	
 


	
 

	
10.

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








	
 

	
 


	
E.

	
FACILITY
 ADJUSTMENT AND TOP-UP REQUIREMENT:


	
 

	
 


	
 

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


	
 

	
 


	
F.

	
COVENANTS AND UNDERTAKINGS:


	
 

	
 


	
 

	
The Borrower undertakes to the Bank that it will:








	
 

	
 

	
 


	
 

	
•

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


	
 

	
 

	
 


	
 

	
•

	
promptly submit to the Bank:








	
 

	
 

	
 

	
 


	
 

	
 

	
a)

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


	
 

	
 

	
 

	
 


	
 

	
 

	
b)

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


	
 

	
 

	
 

	
 


	
 

	
 

	
c)

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


	
 

	
 

	
 

	
 


	
 

	
•

	
immediately inform the Bank of:


	
 

	
 

	
 

	
 


	
 

	
 

	
a)

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





3








	
 

	
 


	
Atlantic
 Components Limited

	
Our
 Ref: D/P/HIMJ/0530/05


	


	









	
 

	
 

	
 

	
 


	
 

	
 

	
b)

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


	
 

	
 

	
 

	
 


	
 

	
 

	
c)

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


	
 

	
 

	
 

	
 


	
 

	
 

	
d)

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








	
 

	
 


	
G.

	
OTHER
 TERMS AND CONDITIONS:








	
 

	
 


	
 

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


	
 

	
 


	
 

	
Notwithstanding any
 provisions stated in this letter the Facilities are repayable on demand by
 the Bank. The Bank has the overriding right at any time to require immediate
 payment of all principal, interest, fees and other amounts outstanding under
 this letter or any part thereof and/or to require cash collateralisation of
 all or any sums actually or contingently owing to it under the Facilities.


	
 

	
 


	
 

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


	
 

	
 


	
 

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





Please signify your
understanding and acceptance of this offer by signing and returning to us the
duplicate copy of this letter and provide each of the items under the section
headed “Security And Conditions Precedent” above, for the attention of Mr.
Terence Fung (“Designated Relationship Manager”), within one month from the
date of this letter, otherwise the offer will lapse at the discretion of the Bank.


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


We are pleased to be of
service to you.


Yours faithfully,

For and on behalf of

DBS Bank (Hong Kong) Limited


	
 

	
 


	


	
 


	


	
 





Authorized Signatories

Documentation Services

Enterprise Banking


BW/yw

Encl.


4








	
 

	
 


	
Atlantic
 Components Limited

	
Our
 Ref: D/P/HIMJ/0530/05


	


	






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


Signed for and on behalf of

Atlantic Components Limited 


	
 

	
 


	


	
 


	


	
 


	
Authorized signor(s)