cogo_8k-ex1002.htm


    Exhibit 10.2

     

    

    
      


       

      Date : 7
August 2008

      Borrower
1: Comtech International (Hong Kong) Limited 

      Borrower
2: Comtech Broadband Corporation Limited 

      Borrower
3: Keen Awards Limited

      Borrower
4: Hong Kong JJT Limited

      (collectively,
the "Borrowers")

       

      


      
        	
                Important
      Notice:

              	
                This
      Facility Letter sets out the terms and conditions upon which our
      bank:would provide banking facilities to you. You are advised to read and
      understand the terms and conditions he fore acceptin2 this Facility
      Letter.

              


      

      


       

       

      Dear
Sirs,

       

      Re:
General Banking Facilities

       

      Further
to our recent discussions, the Bank is pleased to revise the following general
banking facility(ies) (the "Facility(ies)")
to the Borrowers jointly and severally unless otherwise specified subject
to the Bank's General Terms and Conditions for General Banking Facilities and
Loan Facility(ies), the Terms and Conditions for Treasury and Derivative
Products (the "TDP
Terms and Conditions"), Factoring Agreement previously executed and
delivered by the Borrowers to the Bank
(f applicable), Terms and
Conditions for Pre-Shipment Financing appended to the Application for
Pre-Shipment Financing previously (or to be) executed and delivered by the
Borrowers to the Bank (if
applicable) (as
amended from time to time, the "General
Terms") and the terms and conditions as stated below. Words and
expressions defined in the General Terms shall have the same meanings when used
in this Facility Letter. Any appendix hereto forms an integral part of this
Facility Letter.

       

      
        
          	
                  1.1
      Facility(ies)

                	
                  Amount

                	
                  Interest
      Rate / Terms and Conditions

                
	 	 	 
	
                  HKD
      O/D /

                	
                  Up
      to USD1,000,000.00

                	
                  ● Interest Rates for
      O/D:

                
	
                  USD
      O/D

                	
                  (or
      equivalent in HKD)

                	
                  -
      HKD 0/D : HIBOR + 2.25%p.a.

                
	 
      	 
      	
                  -
      USD O/D : LIBOR + 2.25%p.a.

                
	 	 	 
	
                  L/C

                	
                  USD40,000,000.00
      (1)(2)(3)

                	
                   

                
	 	 	

                  ● Interest rates* for
      T/R

                
	
                  T/R
      (75 days)

                	
                  USD40,000,000.00
      (1)(2)(3)

                	
                    
      First 75 days (including tenor of draft)

                
	 
      	 
      	
                    
      - Hong Kong dollars: HIBOR + 2.25%p.a.

                
	 
      	 
      	
                    
      - United States dollares: LIBOR + 2.25% p.a.

                
	
                  IIF
      (75 days)

                	
                  (1)(2)(3)(4)

                  (100%
      of the invoice amount)

                	
                    
      * All rates are subject to changes at the Bank's absolute
      discretion

                
	 
      	 
      	 
      
	
                  EID
      (75 days)

                	
                  (1)(2)(3)(4)

                  (100%
      of the invoice amount)

                	 
      


        

      

      


      
        	
                (1)

              	
                L/C
      and T/R (75 days) shall be interchanged with TIP (75 days) and/or EID (75
      days) up to the extent of USD14,000,000.00 and vice
  versa.

              
	
                (2)

              	
                The
      aggregate outstanding of L/C and T/R (75 days) and/or IIF (75 days) and/or
      EID (75 days) utilized by Borrower 4 shall not exceed
      USD10,000,000.00.

              
	
                (3)

              	
                If
      the aggregate outstanding of L/C and T/R (75 days) balance exceeds
      USD14,000,000.00, L/C and T/R (75 days) shall be made available to the
      Borrowers at the ratio of 2:1 against of export letter(s) of credit lodged
      with the Bank.

              
	
                (4)

              	
                Utilization of
      IIF (75 days) and
      EID (75 days) facilities are conditional upon the Bank's prior approval.
      Combined
      Facility

              


      

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      


       

      1.2
Commitment:

       

      Notwithstanding
any provisions of this Facility Letter, the General Terms (if applicable) or any
other documents between the Borrowers and the Bank to the contrary, the Bank may
at any time without prior notice modify, cancel or suspend the
Facility/Facilities at its sole discretion including, without limitation,
canceling any unutilized facilities, and declaring any outstanding amount to be
immediately due and payable.

       

      2.
Conditions Precedent / Collateral Security(ies)

       

      The
Facility(ies) shall not be made available for drawdown or utilization by the
Borrowers until the Bank has confirmed receipt of all the following condition
precedent documents in form and substance satisfactory to the
Bank:-

       

      
        	
                ·  

              	
                A
      duly signed copy of this Facility Letter indicating the Borrowers' and the
      security providers' acceptance of the Facility(ies) on the terms and
      conditions set out in this Facility
Letter;

              


      

       

      
        	
                ·  

              	
                Continuing
      cross guarantee(s) executed by the following guarantor(s) in the Bank's
      favour to cover general banking facilities from time to time and at any
      time granted or to be granted by the Bank to the Borrowers to such extent
      as the Bank may from time to time deem fit, provided that the total
      liability of each guarantor under the guarantee shall not be less than the
      guaranteed amount stated below, together with interest and any other money
      set out in the guarantee:-

              


      

      
        	
                Name of the Guarantor

              	
                Guaranteed Amount

              
	
                Comtech
      Broadband Corporation Limited

              	
                Unlimited
      Extent

              
	
                Comtech
      International (Hong Kong) Limited

              	
                Unlimited
      Extent

              
	
                Hong
      Kong HT Limited

              	
                Unlimited Extent

              
	
                Keen
      Awards Limited

              	
                Unlimited
      Extent

              


      

       

      
        	
                ·  

              	
                Continuing
      corporate guarantee(s) executed by the following guarantor(s) in the
      Bank's favour to cover general banking facilities from time to time and at
      any time granted or to be granted by the Bank to the Borrowers to such
      extent as the Bank may from time to time deem fit, provided that the total
      liability of each guarantor under the guarantee shall not be less than the
      guaranteed amount stated below, together with interest and any other money
      set out in the guarantee:-

              


      

      
        	
                Name of the Guarantor

              	
                Guaranteed Amount

              
	
                Comtech
      Group, Inc.

              	
                Unlimited
      Extent

              


      

       

      
        	
                ·  

              	
                Charge
      of Deposit(s) for the total principal amount of not less than
      USD15,000,000.00 (or its 100% equivalent in HK dollars or its 125%
      equivalent in other foreign currency acceptable to the Bank) together with
      interest accrued or to be accrued thereon. A Deed of Indemnity, Charge
      Over Deposit(s) and Set-Off duly executed by the deposit chargor in the
      Bank's favour to secure general banking facilities from time to time and
      at any time granted or to be granted by the Bank to the Borrowers to such
      extent as the Bank may from time to time deem fit.

              


      

       

      Name of Deposit
Chargor

      Comtech
International (Hong Kong) Limited

       

      
        	
                ·  

              	
                Security
      Deed (Proceeds) duly executed by the Borrowers in the Bank's favour in
      respect of assigning the Borrowers' rights, interest and benefit of the
      Borrowers' account receivable due from specified buyer(s) to the
      Bank.

              


      

       

      
        	
                ·  

              	
                Copy,
      certified by a director, of each of the following documents of the
      Borrowers:

              


      

       

      
        	
                ·  

              	
                Certificate
      of Incorporation.

              


      

      
        	
                ·  

              	
                Memorandum
      and Articles of Association or other constitutional documents (if
      any).

              


      

      
        	
                ·  

              	
                List
      of directors with their specimen
signatures.

              


      

      
        	
                ·  

              	
                Current
      Business Registration Certificate (if
any).

              


      

       

      


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      

       

      
        	
                ·  

              	
                If
      any of the Borrower(s) / the guarantor(s) / security provider(s) is a
      limited company, the relevant shareholder and board resolution and
      certified copies of the constitutional documents of that
      company;

              


      

       

      
        	
                ·  

              	
                Such
      other documents as the Bank may request including those as may be required
      to evidence any and all licences, authorizations, consents or approvals
      necessary for the performance by the Borrower or the security provider(s)
      of their respective obligations under this Facility Letter and the
      security documents.

              


      

       

      3.
Undertakings:

      The
Borrower and Comtech Group, Inc. (the "Parent Company") undertake and agree with
the Bank at all the times of the Facility(ies) that :-

       

      
        	
                ·  

              	
                The
      Parent Company shall maintain its listing of the status on the NASDAQ of
      the Stock Exchange of United States of
America;

              


      

       

      
        	
                ·  

              	
                Mr.
      Kang Jingwei and his family shall remain as the single largest beneficial
      owner (directly or indirectly) of the Parent Company and Mr. Kang Jingwei
      shall be the chairman of the Board of Directors of the Parent
      Company;

              


      

       

      
        	
                ·  

              	
                The
      Parent Company shall remain the ultimate holding company of the Borrowers
      and hold at all times in aggregate beneficially (directly or indirectly)
      of not less than 50% of equity interest of the
  Borrowers.

              


      

       

      
        	
                ·  

              	
                The
      Parent Company shall maintain its net worth at all time of not less than
      RMB450,000,000.

              


      

       

      
        	
                ·  

              	
                The
      account receivables due from the buyer(s) to whom the invoice(s) being
      discounted by the Bank under EID (75 days) Facility shall not be charged
      or assigned to any other banks and/or financial institutions and/or
      creditors except in the Bank's
favour.

              


      

       

      4.
Other Conditions

       

      
        	
                ·  

              	
                The
      Borrowers are required to render the Bank the inward and outward bills
      transaction volume in monetary term of not less than USD50,000,000.00
      within one year from the date of the Borrowers' countersigned this
      Facility Letter. If the Borrowers fail to do so, a fee of USD5,000.00 will
      be charged and payable by the
Borrowers.

              


      

       

      
        	
                ·  

              	
                The
      Borrowers are required to supply to the Bank annually the reports of its
      sales transaction volume and account receivables relating to its
      buyers.

              


      

       

      4.
Fees

      
        	
                · Handling
      Charge

              	
                :
      USD25,000.00
      payable upon acceptance of this Facility Letter.

              
	 	 
	
                · Arrangement
      Fee, O/D

              	
                If
      the undrawn balance exceeds 50% of the 0/D facility,
      arrangement fee of 0.125%
      p.a. will be charged daily on the undrawn balance of the 0/D
      facility and will be payable by the Borrower monthly in arrears (and may
      be debited to the
      Borrower's current account).

              


      

       

      All fees
and charges shall not be refundable under any circumstances.

      


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      

       

       

      Currently,
the Borrowers represents that the Borrowers do not have any relationship with
the Bank's directors or employees. If the Facility(ies) is/are secured by any
guarantee(s) or securities provided by any third party ("Security Provider"),
the Borrowers also represent that none of the Security Providers is so related.
The Borrowers undertake that if the Borrowers or any Security Provider become
related to the Bank's directors or employees, the Borrowers will promptly notify
the Bank in writing. Please
disregard the undertaking required under this paragraph should you have
already done so.

       

      Please
signify your receipt of the General Terms and your understanding and acceptance
of this offer by signing and returning to us the duplicate copy of this Facility
Letter on or before 7 October
2008, failing which this offer shall automatically lapse. This Facility
Letter, once accepted and upon our satisfaction of all the Conditions Precedent
/Collateral Securities specified above, shall supersede all our previous
facility letters and arrangement (unless otherwise specified) and the
outstanding thereunder shall be transferred as outstanding
hereunder.

       

      Should
you have any queries, please contact our Mr. Chan at 3419 3492 at any time. We
are here to serve you better.

       

      Yours
faithfully,

       

      For and
on behalf of

       

      Bank
of China (Hong Kong) Limited

       

      /s/Signature


        
          

        

      

      Authorized
Signature(s)

       

      
        	
                 
      Encl.

              	
                General
      Terms and Conditions for General Banking Facilities and Loan Facility(ies)
      [080115]

              


      

       

      
        	
                 
      

              	
                Certified
      Extract of the Minutes of Board Resolutions (4
  sets)

              


      

       

      


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      


       

      


       

      
        	
                After
      due and careful consideration of the contents of this Facility Letter and
      the General Terms (as defined above), I/we agree to accept the
      Facility(ies) and to be bound by all the above terms and
      conditions.

              	 
      	
                After
      due and careful consideration of the contents of this Facility Letter and
      the General Terms (as defined above), I/we agree to accept the
      Facility(ies) and to be bound by all the above terms and
      conditions.

              
	 
      	 
      	 
      
	
                For
      and on behalf of

                COMTECH
      BROADBAND CORPORATION LIMITED

              	 
      	
                for
      and on behalf of

                COMTECH
      INTERNATIONAL (HONG KONG) LIMITED

              
	
                /s/
      signature

              	 
      	
                /s/
      signature

              
	
                Borrower:
      Comtech Broadband Corporation Limited

              	 
      	
                Borrower:
      Comtech International (Hong Kong) Limited

              
	
                Date:

              	 
      	
                Date:

              
	 
      	 
      	 
      
	
                After
      due and careful consideration of the contents of this Facility Letter and
      the General Terms (as defined above), I/we agree to accept the
      Facility(ies) and to be bound by all the above terms and
      conditions.

              	 
      	
                After
      due and careful consideration of the contents of this Facility Letter and
      the General Terms (as defined above), I/we agree to accept the
      Facility(ies) and to be bound by all the above terms and
      conditions.

              
	 
      	 
      	 
      
	
                For
      and on behalf of

                HONG
      KONG JJT LIMITED

              	 
      	
                For
      and on behalf of

                KEEN
      AWARDS LIMITED

              
	
                /s/
      signature

              	 
      	
                /s/
      signature

              
	
                Borrower:
      Hong Kong JJT Limited

              	 
      	
                Borrower:
      Keen Awards Limited

              


      

      


      


      


      After due
and careful consideration of the contents of this Facility Letter and the
General Terms (as defined above), I/we consent to all the above terms and
conditions, and where this Facility Letter in any way whatsoever varies, amends
and/or supplements the facility letter(s) previously issued by you to the
Borrower, I/we confirm that the guarantee and/or security document executed by
me/us is not discharged, prejudiced or affected in any way whatsoever
notwithstanding such variations, amendments and/or supplements, and I/we
acknowledge that I/we fully understand, confirm and agree to be bound by all the
above terms and conditions, and to continue to be liable for all debts and
liabilities of the Borrower upon the terms and conditions of the guarantee
and/or security document executed or to be executed by me/us.

       

       

      /s/ signature

        
          

        

      

      Name: Comtech Group,
Inc.

      Date:

       

      Witness:

       

       

      
        
          

        

        Name:

         

         

         

        5