Document:

Subordinated Security Agreement

 Exhibit 10.58 
 SUBORDINATED SECURITY AGREEMENT 
 This Subordinated Security Agreement (this
“Agreement”) is made and entered into as of January 17, 2007 by and between the undersigned (“Grantor”) and the lender listed on the signature page hereto (the “Lender”). 
 RECITALS 
 Grantor proposes to
execute and deliver to Lender its Secured Subordinated Revolving Promissory Note of even date herewith in the stated principal amount of $2,000,000 (the “Note”). Grantor wishes to secure performance and payment of all obligations to
Lender now existing or hereafter arising under the Note (the “Obligations”) with substantially all of its assets. All terms used without definition in this Agreement shall have the meaning assigned to them in the Note. All terms
used without definition in this Agreement or in the Note shall have the meaning assigned to them in the Uniform Commercial Code. 
 NOW,
THEREFORE, Grantor and the Lender agree as follows: 
 1. Grant of Security Interest. To secure all of the
Obligations, Grantor grants to the Lender a security interest in the property described in Exhibit A (the “Collateral”). 
 2. Grantor’s Representations and Warranties. Grantor represents and warrants as follows: 
 (a) Authorization. Grantor has authority and has obtained all approvals and consents necessary to enter into this Agreement, and Grantor’s execution, delivery and performance of this Agreement will not violate or conflict with
the terms of Grantor’s Articles or Certificate of Incorporation, Bylaws or other charter document, or any law, agreement, or other instrument or writing to which Grantor is party or by which is it bound. 
 (b) Title. The Collateral is owned by Grantor and is free of all liens, encumbrances and other security interests other than liens
and security interests permitted by the Note (the “Permitted Liens”). 
 (c) Solvency, Payment of
Debts. Grantor is solvent and able to pay its debts (including trade debts) as they mature. 
 (d) Further
Representations. Grantor further represents, warrants, and covenants that (i) Grantor is not in default under any agreement under which Grantor owes any money, or any agreement, the violation or termination of which could have a material
adverse effect on Grantor on a consolidated or consolidating basis; (ii) the information provided to Lender on or prior to the date of this Agreement is true and correct in all material respects; (iii) all financial statements and other
information provided to Lender fairly present Grantor’s financial condition, and there has not been a material adverse change in the financial condition of Grantor since the date of the most recent of the financial statements submitted to
Lender; (iv) Grantor is in compliance with all laws and orders applicable to it the failure to comply with which could have a material adverse effect on Grantor on a consolidated or consolidating basis; (v) Grantor is not a party to any
litigation or is the subject of any government investigation, and Grantor has no knowledge of any pending litigation or investigation or the existence of circumstances that reasonably could be expected to give rise to such litigation or
investigation, in each case where such litigation or investigation could have a material adverse effect on Grantor on a consolidated or consolidating basis; (vi) Grantor’s principal place of business is located at the address specified in
Section 11; and (vii) no representation or other statement made by Grantor to Lender contains any untrue statement of a material fact or omits to state a material fact necessary to make any statements made to Lender not misleading.

 3. Covenants. 
 (a) Encumbrances. Grantor shall not grant a security interest in any of the Collateral other than (a) to Lender, or (b) Permitted Liens or execute any financing statements covering any of the Collateral in favor of any
person other than Lender or a holder of a Permitted Lien. 
  

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 (b) Use of Collateral. The Collateral will not be used for any unlawful purpose or
in any way that will void any insurance required to be carried in connection therewith. Grantor will keep the Collateral free and clear of liens and adverse claims other than Permitted Liens and, as appropriate and applicable, will keep it in good
condition and repair, and will clean, shelter, and otherwise care for the Collateral in all such ways as are considered good practice by owners of like property. 
 (c) Indemnification. Grantor shall indemnify Lender against all losses, claims, demands and liabilities of any kind caused by the
Collateral except claims, losses or liabilities resulting from the Lender’s gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. 
 (d) Perfection of Security Interest. Grantor shall execute and deliver such documents as Lender reasonably deems necessary to
create, perfect and continue the security interest in the Collateral contemplated hereby. 
 (e) Insurance of
Collateral. 
 (i) Grantor, at its expense, shall keep the Collateral insured against loss or damage by fire, theft,
explosion, sprinklers, and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where Grantor’s business is conducted on the date hereof. Grantor shall
also maintain insurance relating to Grantor’s ownership and use of the Collateral in amounts and of a type that are customary to businesses similar to Grantor’s. 
 (ii) All such policies of insurance shall be in such form, with such companies, and in such amounts as reasonably satisfactory to Lender.
All such policies of property insurance shall contain a Lender’s loss payable endorsement, in a form satisfactory to Lender, showing Lender as an additional loss payee thereof and all liability insurance policies shall show Lender as an
additional insured, and shall specify that the insurer must give at least twenty (20) days notice to Lender before canceling its policy for any reason. Upon Lender’s request, Grantor shall deliver to Lender certified copies of such
policies of insurance and evidence of the payments of all premiums therefor. At any time after the occurrence and during the continuance of any Event of Default, all proceeds payable under any such policy shall, at the option of Lender, be payable
to Lender to be applied on account of the Obligations. 
 (f) Inventory and Equipment. 
 (i) Grantor shall not store its Inventory or the Equipment with a bailee, warehouseman, or other third party unless the third party has
been notified of Lender’s security interest and Lender (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Lender’s benefit or (b) is in pledge possession of the
warehouse receipt, where negotiable, covering such Inventory or Equipment. Grantor shall not store or maintain any Equipment or Inventory at a location other than the location set forth in Section 11 of this Agreement. 
 (ii) Grantor shall maintain the Collateral in good and saleable condition, repair it if necessary and otherwise deal with the Collateral
in all such ways as are considered good practice by owners of like property, use it lawfully and only as permitted by insurance policies, and permit Lender to inspect the Collateral at any reasonable time. 
 (iii) Not sell, contract to sell, lease, encumber (other than Permitted Liens) or transfer the Collateral (other than permitted by the
Note) until the Obligations have been paid or performed in full, even though Lender has a security interest in the proceeds of such Collateral. 
  

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 (g) Accounts, Chattel Paper and General Intangibles. As to Collateral which are
Accounts, Chattel Paper, General Intangibles and Proceeds, Grantor warrants, represents and agrees: 
 (i) All such Collateral
is genuine, enforceable in accordance with its terms and conditions precedent (except as disclosed to and accepted by Lender in writing). Grantor will supply Lender with duplicate invoices or other evidence of Grantor’s rights on Lender’s
request. 
 (ii) All persons appearing to be obligated on such Collateral have authority and capacity to contract. 

(iii) All Chattel Paper is in compliance with applicable law as to form, content and manner of preparation and execution and has been
properly registered, recorded, and/or filed to protect Grantor’s interest thereunder. Grantor will mark conspicuously all Chattel Paper with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper is subject
to the security interests of Lender and will, upon Lender’s request upon the occurrence of an Event of Default, deliver possession thereof to Lender. 
 (iv) Grantor agrees that following the occurrence and during the continuance of an Event of Default, Grantor shall not compromise, settle or adjust any Account or renew or extend the time of payment thereof without
Lender’s prior written consent. 
 (v) Until Lender exercises its rights to collect the Accounts pursuant hereto, Grantor
will collect with diligence all Grantor’s Accounts. Any collection of Accounts by Grantor, whether in the form of cash, checks, notes, or other instruments for the payment of money (properly endorsed or assigned where required to enable Lender
to collect same), shall be in trust for Lender. If an Event of Default has occurred and is continuing, Grantor shall keep all such collections separate and apart from all other funds and property so as to be capable of identification as the property
of Lender and deliver said collections daily to Lender in the identical form received. The proceeds of such collections when received by Lender may be applied by Lender directly to the payment of the Obligations. Any credit given by Lender upon
receipt of said proceeds shall be conditional credit subject to collection. Returned items at Lender’s option may be charged to the Grantor. All collections of the Accounts shall be set forth on an itemized schedule, showing the name of the
account debtor, the amount of each payment and such other information as Lender may request. 
 (vi) Until Lender exercises
its rights to collect the Accounts pursuant hereto, Grantor may continue its present policies with respect to returned merchandise and adjustments. However, Grantor shall immediately notify Lender of all cases involving repossessions, and material
loss or damage of or to merchandise represented by the Accounts. 
 (h) Binding Agreement. Anything herein to the
contrary notwithstanding, (a) Grantor shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed; (b) the exercise by Lender of any of the rights granted hereunder shall not release Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral; and
(c) Lender shall not have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement, nor shall Lender be obligated to perform any of the obligations or duties of Grantor thereunder or
to take any action to collect or enforce any claim for payment assigned hereunder. 
 (i) Instruments. Grantor will
deliver and pledge to Lender all Instruments that are part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. 
 (j) Records. Grantor shall prepare and keep, in accordance with generally accepted accounting principles consistently applied,
complete and accurate records regarding the Collateral and, if and when requested by Lender, shall prepare and deliver a complete and accurate schedule of all the Collateral in such detail as Lender may reasonably require. 
 (k) Inspection of Grantor’s Books. Grantor shall permit Lender or its designee at reasonable times, without interrupting
Grantor’s business and from time to time, but no more than twice a year (unless an Event 

  

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of Default has occurred and is continuing) to inspect Grantor’s books, records and properties and to audit and to make copies of extracts from such
books and records. 
 (l) Fees and Costs. Grantor shall pay all reasonable expenses, including reasonable
attorneys’ fees, incurred by Lender in the preservation, realization, enforcement or exercise of any Lender’s rights under this Agreement. 
 (m) [Intentionally Omitted]. 
 (n) Corporate Existence. Grantor will maintain
its corporate existence and good standing and will maintain in force all licenses and agreements, the loss of which could have a material adverse effect on Grantor’s business. Grantor will pay all taxes on or before the date such taxes are due,
and will comply with all laws and orders applicable to it.; provided that Grantor need not make any payment on account of taxes if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against
(to the extent required by GAAP) by Grantor. 
 (o) Negative Covenants. Grantor will not (i) make any investments
in, or loans or advances to, any person other than as permitted in the Note, (ii) acquire any assets other than as permitted in the Note, (iii) make any distributions or pay any dividends to any person on account of Grantor’s shares
other than as permitted in the Note, (iv) create, incur, assume or be or remain liable with respect to any Indebtedness other than as permitted in the Note, (v) move, dispose of or encumber any portion of its assets, except as permitted in
the Note, (vi) merge or consolidate with or into any person or entity other than as permitted in the Note, (vii) create, incur, assume or suffer to exist any lien with respect to any of its property other than Permitted Liens, or assign or
otherwise convey any right to receive income, including the sale of any of Grantor’s Accounts, (viii) keep Inventory or Equipment at a location other than the address specified in Section 11 hereof; (ix) relocate its chief
executive office or state of incorporation, (x) or maintain or invest any of its property with a person other than Lender unless such person has entered into an account control agreement with Lender in form and substance satisfactory to Lender,
or (xi) permit the inclusion in any contract to which it becomes a party of any provisions that could restrict or invalidate the creation of a security interest in any of Grantor’s property. 
 (p) Further Assurances. At any time and from time to time, upon the written request of Lender, and at the sole expense of Grantor,
Grantor shall promptly and duly execute and deliver any and all such further instruments and documents and take such further action as Lender may reasonably deem desirable to obtain the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (a) to secure all consents and approvals necessary or appropriate for the grant of a security interest to Lender in any Collateral held by Grantor or in which Grantor has any rights not heretofore
assigned, (b) filing any financing or continuation statements under the UCC with respect to the security interests granted hereby, (c) transferring Collateral to Lender’s possession (if a security interest in such Collateral can be
perfected by possession), (d) placing the interest of Lender as lienholder on the certificate of title (or other evidence of ownership) of any vehicle owned by Grantor or in or with respect to which Grantor holds a beneficial interest and
(e) using its best efforts to obtain waivers of liens from landlords and mortgagees. Grantor also hereby authorizes Lender to file any such financing or continuation statement without the signature of Grantor. If any amount payable under or in
connection with any of the Collateral is or shall become evidenced by any Instrument, such Instrument, other than checks and notes received in the ordinary course of business, shall be duly endorsed in a manner satisfactory to Lender and delivered
to Lender promptly upon Grantor’s receipt thereof. 
 4. Events of Default. The occurrence of any Default under the Note or the
breach of any representation under this Agreement, or the failure to perform any obligation under Section 3 of this Agreement, shall constitute an “Event of Default” under this Agreement. 
 5. Remedies on Default. Upon the occurrence of an Event of Default, Lender shall have all rights, privileges, powers and remedies provided by law,
including, but not limited to, exercise of any or all of the following remedies. 
 (a) Lender may declare all amounts
outstanding under the Note to be immediately due and payable, and thereupon all such amounts shall be and become immediately due and payable to the Lender. 
  

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 (b) Lender may dispose of the Collateral in accordance with applicable law. 

(c) Lender may use, operate, consume and sell the Collateral in its possession as appropriate for the purpose of performing
Grantor’s obligations with respect thereto to the extent necessary to satisfy the obligations of Grantor. 
 (d) All
payments received and amounts realized by Lender shall be promptly applied and distributed by the Lender in the following order of priority: 
 (i) first, to the payment of all costs and expenses, including reasonable legal expenses and attorneys fees, incurred or made hereunder by Lender, including any such costs and expenses of foreclosure or suit, if any,
and of any sale or the exercise of any other remedy under this Section 5, and of all taxes, assessments or liens superior to the lien granted under this Agreement; and 
 (ii) second, to the payment to Lender of the amount then owing under the Note. 
 6. Power of Attorney. Grantor hereby appoints Lender, its attorney-in-fact to prepare, sign and file or record, for Grantor in Grantor’s
name, any financing statements, applications for registration and like papers and to take any other action deemed by Lender necessary or desirable in order to perfect the security interest of the Lender hereunder, to dispose of any Collateral, and,
upon the occurrence and during the continuance of an Event of Default, to perform any obligations of Grantor hereunder, at Grantor’s expense, but without obligation to do so. 
 7. Remedies Cumulative. Lender’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative.
Lender shall have all other rights and remedies not inconsistent herewith as provided under the Texas Uniform Commercial Code (the “UCC”), by law, or in equity. No exercise by Lender of one right or remedy shall be deemed an
election, and no waiver by Lender of any Event of Default on Borrower’s or Grantor’s part shall be deemed a continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence by it. No waiver by Lender shall be
effective unless made in a written document signed on behalf of Lender and then shall be effective only in the specific instance and for the specific purpose for which it was given. 
 8. Amendment of Loan Documents. Grantor authorizes Lender, without notice or demand and without affecting its liability hereunder, from time to
time to (a) renew, extend, or otherwise change the terms of any Loan Document, or any part thereof; (b) take and hold security for the payment of any Loan Document, and exchange, enforce, waive and release any such security; and
(c) apply such security and direct the order or manner of sale thereof as Lender in its sole discretion may determine. 
 9. Grantor
Waivers. Grantor waives any right to require Lender to (a) proceed against any other person obligated on the Obligations; (b) proceed against or exhaust any security held from any other person obligated on the Obligations;
(c) marshal any assets of any other person obligated on the Obligations; or (d) pursue any other remedy in Lender’s power whatsoever. Lender may, at its election, exercise or decline or fail to exercise any right or remedy it may have
against any other person obligated on the Obligations or any security held by Lender, including without limitation the right to foreclose upon any such security by judicial or nonjudicial sale, without affecting or impairing in any way the liability
of Grantor hereunder. Grantor waives any defense arising by reason of any disability or other defense of any other person obligated on the Obligations or by reason of the cessation from any cause whatsoever of the liability of any other person
obligated on the Obligations. Grantor waives any setoff, defense or counterclaim that any other person obligated on the Obligations may have against Lender. Grantor waives any defense arising out of the absence, impairment or loss of any right of
reimbursement or subrogation or any other rights against any other person obligated on the Obligations. 
 10. [Intentionally
Omitted]. 
 11. Notices. Unless otherwise provided in this Agreement, all notices or demands by any party relating to this
Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) 

  

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shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by
telefacsimile to Grantor or to Lender, as the case may be, at its addresses set forth below: 
  

			
	 If to Grantor:
	  	OPTEX SYSTEMS, INC.
		  	c/o 3001 Red Hill Ave., Bldg. 4-108
		  	Costa Mesa, CA 92626
		  	Attn: Chief Financial Officer
		  	FAX: (714) 444-8773
		
	 If to Lender:
	  	TWL GROUP, LP
		  	4306 Savannah
		  	Parker, TX 75002
		  	Attn: Timothy Looney

 The parties hereto may change the address at which they are to receive notices hereunder, by
notice in writing in the foregoing manner given to the other. 
 12. Choice of Law and Venue; Jury Trial Waiver. 
 This Agreement shall be governed by the laws of the State of Texas, without regard to conflicts of laws principles. GRANTOR WAIVES ANY RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED THEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER COMMON LAW OR STATUTORY BASES. Grantor submits to the
exclusive jurisdiction of the state and federal courts located in the County of Dallas, State of Texas. If the jury waiver set forth in this Section is not enforceable, then any dispute, controversy or claim arising out of or relating to this
Agreement or any of the transactions contemplated herein will be finally settled by binding arbitration in Dallas, Texas in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator
appointed in accordance with said rules. The arbitrator shall apply Texas law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration. Judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph.
The expenses of the arbitration, including the arbitrator’s fees and expert witness fees, incurred by the parties to the arbitration, may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the
parties in any manner deemed appropriate by the arbitrator. Unless and until the arbitrator decides that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrator’s fees as and
when billed by the arbitrator. 
 13. General Provisions. 
 13.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns
of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Grantor without Lender’s prior written consent, which consent may be granted or withheld in Lender’s sole discretion. Lender
shall have the right without the consent of or notice to Grantor to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Lender’s obligations, rights and benefits hereunder. 
 13.2 Indemnification. Grantor shall defend, indemnify and hold harmless Lender and its officers, employees, and agents against:
(a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or Lender Expenses in any way suffered, incurred, or paid
by Lender as a result of or in any way arising out of, following, or consequential to transactions between Lender and Grantor whether under this Agreement, or otherwise (including without limitation reasonable attorneys’ fees and expenses),
except for losses caused by Lender’s gross negligence or willful misconduct. 
  

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 13.3 Time of Essence. Time is of the essence for the performance of all
obligations set forth in this Agreement. 
 13.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. 
 13.5 Amendments in Writing, Integration. This Agreement cannot be amended or terminated orally. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto
with respect to the subject matter of this Agreement, if any, are merged into this Agreement and the Loan Documents. 
 13.6
Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement. 
 13.7 Survival. All covenants, representations and
warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding. The obligations of Grantor to indemnify Lender with respect to the expenses, damages, losses, costs and liabilities described in
Section shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Lender have run. 
 14. Subordination. Notwithstanding anything contained herein that may be to the contrary, the security interest created hereby, and the rights and remedies of Lender hereunder, are subordinate, inferior and subject to the security
interest in the Collateral of, and the rights and remedies in respect of such security interest of, Longview Fund, L.P. and Alpha Capital Anstalt, as provided in that certain Subordination Agreement of even date herewith, among Lender, Longview
Fund, L.P. and Alpha Capital Anstalt. 
 IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth above.

  

					
	GRANTOR:
	
	OPTEX SYSTEMS, INC.
		
	By:	 	/s/ JOHN J. STUART, JR.
		 	Name:	 	 John J. Stuart, Jr.

		 	Title:	 	 Chief Financial Officer

  

					
	LENDER:
	
	TWL GROUP, LP
		
	By:	 	TWL Group Management, LLC,
		 	its General Partner
			
		 	By:	 	 /s/ TIMOTHY W. LOONEY

		 	    Name:	 	 Timothy W. Looney

		 	    Title:	 	 President

 Signature Page to Subordinated Security Agreement 
  

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 EXHIBIT A  
 COLLATERAL DESCRIPTION ATTACHMENT 
 TO SUBORDINATED SECURITY AGREEMENT 
 All personal property of Debtor (herein referred to as “Debtor”) whether presently existing or hereafter created or acquired, and
wherever located, including, but not limited to: 
 (a) all accounts (including health-care-insurance receivables), chattel paper
(including tangible and electronic chattel paper), deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), financial assets, general intangibles (including patents, trademarks,
copyrights, goodwill, payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including
returns and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment
containing said books and records; 
 (b) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the Texas Uniform Commercial Code, as amended or supplemented from time
to time. 
  

 8Credit Line Agreement

 Exhibit 10.31 
 Credit Line Agreement 
 No.: Wu Zhong Yin Shou Zi No. 0761001 
 Party A: Multi-Fineline Electronix (Suzhou) Co., Ltd. 
 Business license No.: 005874 
 Legal representative: Phil Harding 
 Phone: 0512-65638146 
 Party B: Bank of China Co., Ltd.
Suzhou Wuzhong Sub-office 
 Person in charge: Liu Li 
 Phone: 0512-65272848 
 To develop a friendly and mutually beneficial and cooperative
relationship, upon consensus, Party A and Party B have hereby reached the following agreement on the principles of voluntariness, equality, mutual benefit and good faith. 
 Article 1 Scope of Business 
 Party B hereby provides a lines of credit to Party A and, subject to
satisfaction of the prerequisites covenanted in this Agreement and related separate agreements, Party A may apply with Party B for revolving, swapping or one-time use in RMB short-term loans, foreign currency short-term loans and settlement
financing business (collectively referred to as “single-transaction credit-granting business”). As used in this Agreement, the settlement financing business shall refer to the opening letters of credit, import bill purchases, delivery
guarantees, packing loans, export bill purchases, acceptance of draft discount under usance letters of credit and the opening of letters of guarantee / standby letters of credit. 
 Article 2 Types and Amounts of Lines of Credit 
 Party B hereby agrees to provide Party A with the
following lines of credit, equivalent in value to a total of 100 million Yuan RMB; 
 The lines of credit that Party B agrees to
provide to Party A include: 
 1. A short-term credit in local and foreign currencies in the amount of 40 million Yuan RMB;

 2. Credit for issuing customs letters of guarantee in the amount of 60 million Yuan; 
 As of the date of execution of this Agreement, the balance of the credit that Party A has incurred with Party B shall be deemed as credit incurred this
Agreement and shall be part of the lines of credit granted by Party B for Party A under this Agreement. 
 Article 3 Use of Lines of Credit

 During the term of use of the lines of credit covenanted in Article 5 of this Agreement, Party A may use appropriate lines on a
revolving basis subject to the condition that it shall not exceed the range of lines granted by the single-transaction credit-granting business covenanted in the preceding clause: 
 In the event that Party A needs to swap the line of single-transaction credit-granting business covenanted in Article 1, it shall submit a written
application to Party B, and Party B shall decide whether to make the swap and the specific methods for the swap. 
  

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 Article 4 Agreements Required to Be Executed for the Use of Lines of Credit 
 When Party A applies for use of lines of credit with Party B under this Agreement, it shall sign the following agreements with Party B (collectively
referred to as “separate agreements”), including: 
 1. For short-term RMB loans, a “RMB Loan Contract (Short-Term)” shall
be signed with Party B; 
 2. For short-term foreign currency loans, a “Foreign Currency Loan Contract” shall be signed with Party
B; and 
 3. For settlement financing business, it shall choose, together with Party B, applicable or execute the following relevant
attachments or applications: 
 A. The following applicable attachments that have been subject to consultations, amendments and consent of
the parties shall constitute separate agreements and shall be an integral part of this Agreement: 
 In the following attachments, boxes
“ ̈” with a check mark “ü” shall indicate “applicable,” and boxes with an
“x” mark in them shall indicate “not applicable.” The parties shall not be required to affix their signatures and seals separately on appropriate attachments for applicable attachments, and neither party shall raise any
objections to the validity of legal documents comprising such attachments that are binding on both parties. 
  ̈ Attachments: Used for the business of issuing letters of guarantee. 
 B. The following applications shall be submitted when Party A applies to Party B for specific transactions of settlement financing business. Upon consultations and completion by the parties and affixation thereto by Party B of its corporate
or special business seals, they shall constitute separate agreements as well as an integral part of this Agreement: 
 (1) Application for
issuing a letter of guarantee. 
 (2) Application for amending a letter of guarantee. 
 4. Any other written agreements executed by the parties during single-transaction credit-granting business as well as loan certificates, applications,
letters for withdrawals of funds and supporting vouchers, etc., that are submitted by Party A to Party B or whose validity has been confirmed by Party B. 
 The separate agreements shall constitute an integral part of this Agreement. The parties shall determine their rights and obligations, especially the balance of the debt claims of Party B to Party A, in accordance
with the separate agreements and this Agreement. In the event of any inconsistency of contents between the separate agreements and this Agreement, the separate agreements shall control. 
 Article 5 Term of Use of Lines of Credit 
 Term of use of the lines of credit under this Agreement
shall be from the effective agreement date covenanted in Article 16 to January 24, 2008. 
 The term of use of the lines of
credit cannot be automatically extended. 
 Prior to the expiration of the term of use of the lines of credit, upon an application by Party A
to Party B and upon its receipt of consent from Party B and finalization of guarantee matters, an extension shall be granted in writing. The written extension agreement shall covenant the new term of use of the lines of credit. 
 Upon the expiration of the term of use of the lines of credit, based on the single-transaction credit-granting business actually incurred, Party A and
Party B shall continue to perform this Agreement and relevant separate agreements in accordance with their covenants. The debt claims and debts incurred shall not be affected. 
 Article 6 Prerequisites for Use of Lines of Credit 
 Party A’s application for the use of the
lines of credit under this Agreement shall satisfy the following conditions: 
 1. Prior to the expiration of the term of use of the lines of
credit covenanted in Article 5 of this Agreement, it shall submit an application for the appropriate single-transaction credit-granting business to Party B; 
  

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 2. Leave in advance with Party B corporate documents, notes, seals, list of relevant persons and sample
signatures related to this Agreement and the separate agreements and properly complete relevant supporting vouchers; 
 3. Open the accounts
required by Party B that are necessary for the completion of single-transaction credit-granting business; 
 4. Properly complete the legal
and administrative examination and approval procedures required for consummation of the single-transaction credit-granting business and submit copies of examination and approval documents or photocopies consistent with original copies as required by
Party B; in accordance with the provisions of state laws and regulations, when the relevant procedures must be completed by Party B, Party A hereby agrees to give all support; 
 5. Satisfy other prerequisites or withdrawal prerequisites for consummation of business as covenanted in the separate agreements; 
 6. Bonds have been posted or the guarantee agreements whose execution is required by Party B have taken effect; 
 7. Party A hereby agrees to make the statements and promises covenanted in Article 9 of this Agreement; and 
 8. Other conditions that Party B believes should be satisfied by Party A. 
 Article 7 Party B’s Obligations 
 Party B shall have the following obligations: 
 1. Promptly handle applications by Party A for single-transaction credit-granting business in accordance with the covenants in the separate agreements;

 2. Provide civilized services when handling applications by Party A for single-transaction credit-granting business; 
 3. Give serious consideration to the oversight, challenges and criticism given by Party A and properly handle same. 
 Article 8 Party A ’s Obligations 
 Party A shall
have the following obligations: 
 1. Promptly pay to Party B fees that should be borne by Party A during the use of the lines of credit in
accordance with the covenants of this Agreement and the separate agreements. For fee calculation methods, the regulations of Party B shall be implemented; 
 2. Promptly pay to Party B provisional funds for payments in accordance with the covenants of this Agreement and the separate agreements; 
 3. Promptly repay Party A’s debt to Party B, including but not limited to the principal, interest, penalty interest, relevant fees and loss from differences in the exchange rate resulting from Party A’s
breach of contract, in accordance with the covenants of this Agreement and the separate agreements; and 
 4. Use the proceeds obtained for
the purpose covenanted in this Agreement and the separate agreements. 
 Article 9 Statements and Promises 
 Party A hereby states as follows: 
 1. Party A
is a corporate person set up and existing in accordance with law and has completed and will promptly complete the procedures for industry and commerce registration. It has all the necessary rights to and can perform in its own name the obligations
under this Agreement and the separate agreements; 
 2. The execution and performance of this Agreement and the separate agreements is an
expression of the true intention of Party A. Legitimate and valid corporate authorization has been obtained in accordance with the requirements of the articles of association of the enterprise or other internal management documents, and no
agreement, contract and other legal documents that are binding on Party A shall be violated; 
  

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 3. All the documents, financial statements, supporting vouchers and other information provided by Party A
to Party B under this Agreement and the separate agreements are true, complete, accurate and valid; 
 4. The transactions for which Party A
applies for consummation with Party B have a true and legitimate background and are not used for illegal purposes such as money laundering. The provision by Party A of any document to Party B at Party B’s request shall not be interpreted as any
obligation and responsibility on the part of Party B to examine the veracity and legitimacy of the transaction engaged in by Party A; and 
 5. Party A has not concealed from Party B any event that possibly affects the financial status and contract performance capabilities of Party A and its guarantors. 
 Party A hereby makes the following promises: 
 1. Periodically submit its financial statements and other relevant information to Party B (including but not limited to annual statements, quarterly statements and monthly statements); 
 2. Accept and support examinations and oversight by Party B of its use of the lines of credit as well as relevant production, operational and financial
activities. 
 3. In the event that Party A has executed or will execute a counter guarantee agreement or any similar agreement with the
guarantor of this Agreement regarding its guarantee obligations, such an agreement shall not compromise any right of Party B under this Agreement; 
 4. Upon the occurrence of any circumstance that may affect the financial status and contract performance capabilities of Party A or its guarantor, including but not limited to any reduction in their registered capital, any major asset or
stock ownership transfer, the undertaking of any major debt or the encumbrance of any major debt on collaterals, dissolution, revocation and (being subject to) any bankruptcy application, etc., Party A shall notify Party B in the fastest manner
without hesitation; 
 5. In the event that Party A changes its operating methods by any form of partitioning, consolidation, joint
operations, joint ventures and cooperation with a foreign investor, contractual operations, restructuring, reorganizations or planning to go public on a stock exchange, etc., prior written consent of Party B shall be obtained; and 
 6. Regarding any matters not covenanted in this Agreement, Party A hereby agrees to handle them in accordance with international practices and applicable
requirements of Party B. 
 Article 10 Adjustment or Revocation of the Lines of Credit 
 During the term of use of the lines of credit, upon the occurrence of any of the following circumstances, Party B shall have the right to adjust or revoke
the lines of credit granted to Party A at any time: 
 1. The occurrence of any default event covenanted in Article 11 of this Agreement;

 2. Party B believes that major negative news has occurred in the market or industry involved; and 
 3. Party B believes that the state, any foreign government or international organization has promulgated a type of restrictive policy or may cause any
major adverse impact on the industry and trade involved in this Agreement. 
 Article 11 Default Event 
 Any one of the following events shall constitute a default by Party A under this Agreement: 
 1. Failure to perform its payment and repayment obligations to Party B in accordance with the covenants of this Agreement and the separate agreements;

 2. Failure to pay the provisional payment fund to Party B in accordance with the covenants of this Agreement and the separate agreements;

 3. Failure to use the proceeds obtained in accordance with the covenants of this Agreement and the separate agreements; 
 4. The statements made by Party A in this Agreement are untrue or it violates the promises made thereby in this Agreement; 
 5. Violation of other covenants with respect to the rights and obligations of the parties in this Agreement and the separate agreements; and 

6. The occurrence of any default event on the part of Party A under another contract with Party B; 
  

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 Upon the occurrence of any default event specified in clause 1 of this Article, Party B shall have the
right to separately or concurrently take the following measures: 
 1. Immediately declare that the principal and interest on any outstanding
loan / financing and other amounts payable under the separate agreements are all due without issuing any prior notice to Party A; 
 2.
Directly deduct from Party A’s accounts with Party B and other institutions of the Bank of China the principal, interest, penalty interest and loss from differences in foreign currency exchange rates repayable by Party A, without issuing any
notice to Party A first; any amount not yet mature in such accounts shall be deemed to be mature by acceleration. In the event that the currency of any such account is different from the business accounting currency of Party B, it shall be
calculated in accordance with the foreign currency exchange rate determined by Party B for the day the deduction is made; 
 3. Dispose of
the collateral properties and use the proceeds for repayment first or to make recoveries from the guarantor; and 
 4. Any other measures
that Party B deems necessary and possible. 
 Article 12 Other Covenants 
 Without the written consent of Party B, Party A shall not assign any right and obligation under this Agreement to any third party. 
 In the event that Party B must authorize any other branch and sub-offices of the Bank of China (including branch banks and the sub-offices within their jurisdictions) to perform the rights and obligations under this
Agreement, Party A shall indicate its acceptance of same. Other branch and sub-offices of the Bank of China authorized by Party B shall have the right to exercise all of Party B’s rights under this Agreement and shall have the right to file a
lawsuit with any court or submit any dispute under this Agreement to an arbitration agency for a ruling. Party A hereby waives any objection to the standing of any other branch and sub-offices of the Bank of China as a subject for the relevant
litigation or arbitration proceedings. 
 Without affecting other covenants of this Agreement, this Agreement shall be legally binding on the
parties as well as on the successors and assigns respectively generated thereby in accordance with law. 
 Article 13 Reservation of Rights

 No failure or by Party B to exercise some of the rights under this Agreement or to request the performance by Party A of some of the
obligations shall constitute any waiver or exemption by Party B of such rights or obligations, nor shall such a failure constitute any waiver by Party B of any other rights in this Agreement or any exemption of Party A from any other obligation.

 No grace, extension or delay in the exercise of any right under his Agreement by Party B with respect to Party A shall affect any right to
which Party B is entitled under this Agreement as well as laws and regulations, nor shall they be deemed as any waiver by Party B of the aforementioned rights. 
 Article 14 Change, Dissolution and Interpretation of Contract 
 Unless otherwise provided in this Agreement, this Agreement
may be amended, supplemented or dissolved by written consent between the parties. Any amendment and supplement to this Agreement shall constitute an integral part of this Agreement. 
 The invalidation of any clause of this Agreement shall not affect the validity of the remaining clauses. 
 The headings and business names in this Agreement and the separate agreements shall be used for the convenience of making specific references only and
shall not be used in the interpretation of the relationship of rights and obligations between the parties. 
 Article 15 Dispute Resolution

 This Agreement shall be governed by laws of the People’s Republic of China. 
  

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 All disputes and controversies arising from the performance of this Agreement or relating to this
Agreement may be resolved through consultations between the parties. Upon failure of such consultations, either party may resolve same by filing a lawsuit with a People’s Court with competent jurisdiction. 
 Article 16 Effectiveness of Agreement 
 This Agreement
shall take effect upon the date of affixation thereto of the signatures and seals of the legal representatives or authorized signatories of the parties and the affixation thereto of the corporate seals of the parties, whichever is later. 

This Agreement shall be in triplicate copies, with one copy for Party A and two copies for Party B. Each of the copies shall have
equal validity. 
 Article 17 Special Reminders 
 Party A and Party B have conducted adequate consultations with respect to all clauses of this Agreement, including the separate agreements. 
 Party B has brought the special attention of Party A to all clauses with respect to the rights and obligations of the parties and to have a comprehensive and accurate understanding thereof. Party B has provided an
appropriate explanation of the aforementioned clauses at the request of Party A. 
  

							
	Party A :	 	 /s/ Philip A. Harding
	 	Party B:	 	Bank of China            Branch
		
	Legal representative or authorized signatory:	 	Authorized signatory:
				
	January 25, 2007	 	 [Multi-Fineline Electronix
 (Suzhou) Co., Ltd. seal]
	 		 	/s/    Liu Li
			
	Location: Bank of China Wuzhong Sub-office	 		 	[bank seal]

  

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 Attachment: To Be Used for the Business of Issuing Letters of Guarantee 
 This attachment hereby constitutes part of Wu Zhong Yin Shou Zi No. 0761001 “Credit Line Agreement” (hereinafter referred to as “The Agreement”
executed between Multi-Fineline Electronix (Suzhou) Co., Ltd. (hereinafter referred to as “Party A”) and Bank of China Co., Ltd. Suzhou Wuzhong Sub-office (hereinafter referred to as “Party B”) dated
January 25, 2007. 
 1. In the event that contents of the covenants in this attachment conflict with the Agreement, the covenants in this attachment
shall control. 
 2. An application by Party A to Party B for issuing a letter of guarantee shall satisfy the prerequisites covenanted to in Article 6 of the
Agreement. 
 3. The issuing of and amendment to any letter of guarantee: 
 (1) In the event that Party B accepts Party A’s application for issuing a letter of guarantee, it shall issue a letter of guarantee in accordance with the agreement between the parties. 
 (2) For detailed contents of any letter of guarantee issued by Party B at the request of Party A, reference shall be made to the application for issuing letter of
guarantee submitted by Party A to Party B, and the final contents shall be subject to the letter of guarantee issued by Party B. 
 (3) In the event that
Party A needs to amend the letter of guarantee, it shall submit an application for amendment to a letter of guarantee to Party B. In the event that any amendment to a letter of guarantee involves the amount, currency, interest rate and term, etc.,
and that Party B believes that the obligation of itself as a guarantor is increased, Party B shall have the right to request that Party A increase its bond, otherwise, Party B shall have the right to refuse the application by Party A for such an
amendment. 
 (4) No amendment to a letter of guarantee shall change any other rights and obligations of Party A in the Agreement and this attachment.

 4. Party A shall pay a provisional fund in accordance with the covenant of Article 2 of the application for issuing a letter of guarantee. 

5. Party A agrees that during the term of a letter of guarantee, upon the occurrence of any claim under the letter of guarantee, in the event that Party B finds that
the claims documents of the beneficiary are consistent with the covenants in the letter of guarantee, Party B shall have the right to make an appropriate deduction from the provisional fund paid by Party A to perform the payment obligation to an
outside party. In the event that due to a lack of the provisional funds of Party A, Party B advances the funds claimed by an outside party, once the funds claimed are paid, such funds shall constitute Party A ‘s debt to Party B and the
Agreement under this attachment. The interest rate for such an advance shall be calculated at the interest rate charged by Party B for overdue loans. 
 6.
Except for contents covenanted in Article 9 of the Agreement, to perform the business described in this attachment, Party A hereby makes the following additional promises to Party B: 
 (1) In the event that another bank is authorized to re-issue a letter of guarantee, Party A hereby agrees to undertake all risks and liabilities on the part of Party B to the re-issuing bank under the letter of
guarantee; 
 (2) In the event of any event, such as implementation, amendment, change and termination, etc., that affects the guarantee responsibilities of
Party B, Party A shall immediately notify Party B; 
 (3) Party A shall support Party B in completing the relevant approval procedures for performance of
the guarantee to an outside party; 
 (4) Any risk for any loss, delay, errors and omissions, damage and destruction during the mail delivery,
telecommunications transmission or other transmission process of any business correspondence, and vouchers under the letter of guarantee and any risk resulting from Party B’s use of any third-party service shall be borne by Party A; and

 (5) In the event that the letter of guarantee has no clear expiration date, is governed by foreign laws or practices and has no clear amount of
guarantee, etc., Party A hereby agrees to indemnify Party B for all risks, liabilities and losses resulting therefrom. 
  

	
	[Multi-Fineline Electronix
	(Suzhou) Co., Ltd. seal]

  

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 7. Except for the circumstances covenanted in Article 11 of the Agreement, any failure by Party A to comply with the
promises in Article 6 of this attachment shall also be deemed to be a breach event of Party A under the Agreement and this attachment. Party B shall have the right to exercise the rights covenanted in Article 12 of the Agreement. 
  

							
		 	[bank seal]	 	[Multi-Fineline Electronix	 	
		 	/s/    Liu Li	 	(Suzhou) Co., Ltd. seal]	 	

  

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