Document:

Bank Line of Credit Agreement dated November 25, 2004

 EXHIBIT 10.6 
  
 Bank Line-of-Credit Agreement & General Agreement 
  

					
	 	 	Unit/Organization:	 	Hsinchu Department/Regional Center
			
	 	 	Customer:	 	Silicon Motion Inc.
			
	 	 	Contract Date:	 	November 25, 2004
			
	 	 	 	 	(Exclusively for general credit line)

  

  
 Bank General Credit Line
and Facility Agreement 
  
 The undersigned (hereinafter referred to as
“the Contractor”) applies for credit line with Chinatrust Commercial Bank Co., Ltd. (including the head office and its affiliates; hereinafter referred to as ‘the Bank”) and enters into the Bank Line-of-Credit General Agreement
(hereinafter referred to as “the Agreement”) for a total credit line (excluding syndication loans) of 
  
 þ SEVENTY MILLION NT Dollars or equivalent foreign currency; or 
  
  ̈                                      
                                        
           Dollars. 
 (Hereinafter refer to as “the Credit”, including all individual general
credit lines) for the Contractor to apply the credit line with the Bank. All transactions between the Contractor and the Bank are subject to the terms and conditions of the Agreement, in addition to other agreements entered into by and between the
parties and all documents and certificates issued to the Bank for application for the credit: 
  
 A: General Terms and Conditions 
  

	Article 1	The General Credit Line is the ceiling of all kinds of credits that the Bank grants to the Contractor for the agreed purposes. Within the General Credit Line, the Bank may specify
individual credit lines with respect to each credit purpose in related provisions of the Agreement as the maximum credit facilities. The total of each credit line may exceed the general credit line; however, in the event the total of the amounts to
be drawn and actually drawn has already exceeded the general credit line at the time when it is to be actually used by the Contractor, irrespective of the amount to be drawn still under the limits of individual credit lines, the credit line shall be
subject to the restriction of the general credit line and shall not be used, with the exception that the Contractor may use the revolving amount within the general credit line and individual credit lines. In case of any foreign currency involved in
the amount of drawdown, individual credit lines and the general credit line shall be calculated based on the exchange rate determined by the Bank at the time of drawdown. If the amount appropriated or advanced by the Bank provided or exceeds the
general credit line or each individual credit line due to fluctuation of the exchange rate, the Contractor shall still be liable for repayment of the excess amount. 

  

	Article 2	The bank may suspend the Contractor’s drawdown of the credit facility or decrease the credit line at its sole and absolute discretion if the Bank considers that the Contractor
improperly uses the credit facility, has a poor payment record, fails to provide a guarantee upon request, or if required by other business of the Bank. The Contractor shall be liable for any dispute or cost where a third party is involved, and
shall indemnify the Bank fully against any damages arising thereof. 

  

	Article 3	Unless otherwise provided by law, all debts under certificates, documents such as debit notes, negotiable notes, letters of credit, orders, or endorsed checks issued by the
Contractor to the Bank for each specific credit purposes shall be exempted only after all liabilities under the Credit are fulfilled. 

  
 In case the Contractor has any doubt over the amount of debts mentioned in the previous paragraph, it agrees that the data set forth on the Bank’s
debit card, account book, accounting slips, computer files, other certificates, transaction document or their photocopies or microfiles shall prevail. 
  

	Article 4	Unless provided in the Agreement, the contents, registration, release, guaranty scope and the method to exercise the right with respect to the guaranty of the Credit shall be
handled under applicable laws and regulations. 

  

	Article 5	The Agreement shall come into effect on the day of execution. In case the Bank has already appropriated the funds, issued guaranty letters or granted any other credit, the effective
date may be retroactive to the date on which the conditions are fulfilled. The Agreement shall remain in force before a new agreement is stricken when the Bank approves the Contractor’s application for renewal of the Agreement.

  

	Article 6	Any other agreements, documents and certificates between the Contractor and the Bank shall constitute a part of the Agreement and carry equal legal effects as the Agreement, unless
otherwise provided in the Agreement that the Agreement shall supersede. The Contractor covenants to observe all existing and future laws and regulations promulgated by the government, the Bank, the bank association, finance competent authorities.

  

	Article 7	In the event the Contractor is a foreign individual or a foreign legal person, the debts incurred from the Agreement, the related legal requirements and validity of each behavior
shall be governed by the laws of Republic of China, unless otherwise required by the law of                     .

  
 The place of performance of the Agreement shall
be of the place where the Bank is located. It is agreed that any law suit in which the Contractor is involved with respect to the Agreement shall be file jurisdiction of the local court of the place where the Bank’s head office or
                     branch is located, or of Taipei District Court for the first instance, unless any special provision is made on
exclusive jurisdiction by law. 
  

	Article 8	The Agreement, credit application form, documents and papers related to guaranty may be made in Chinese or in English. If there is any inconsistency between the Chinese and the
English version, the Chinese version shall supersede. 

  

	Article 9	(Clauses of Use of Information by Financial Holding Company and its Subsidiaries) 

  

	 	1.	The Contractor agrees that for the common promotion purpose the Bank may provide the Contractor’s information (including, but not limited to, basic, account, credit,
investment, insurance information,) to the financial holding company of the Bank and the subsidiaries controlled by the financial holding company in accordance with the Financial Holding Company Law for disclosure, transfer, or cross use.

  

	 	2.	The contents and scope of the information provided in the preceding paragraph are as follows: 

  

	 	(1)	Basic Information: including the name, birth date, ID number, telephone and address, etc. 

  

	 	(2)	Account Information: including the account number or number with similar functions, credit card number, deposit account number, transaction account number, deposits/loans, and other
transactions details and financial status, etc. 

  

	 	(3)	Credit Information: including records of dishonored notes, cancellation record, transaction refusals and business operation status, etc. 

  

	 	(4)	Investment Information: including the target of investment or disposal, the amount, time, etc. 

  

	 	(5)	Insurance Information: Including information related to insurance type, time limit, amount, premium, payment method, settlement status, insurance rejection records, etc.

  

	 	3.	The Contractor acknowledges and agrees that, within the operation scope or to the extent permitted by the applicable laws, the Bank, the financial holding company of the Bank and
the subsidiaries controlled by the financial holding company in accordance with the Financial Holding Company Law may collect, process by computer, transmit internationally, or use (including administrative research, promotion, sending consumption
information, etc.) the Contractor’s personal information. 

  

	 	4.	The Contractor further agrees that the Bank, the financial holding company of the Bank and the subsidiaries controlled by the financial holding company in accordance with the
Financial Holding Company Law may authorize a third party to handle transactions and operations under the Agreement; the Contractor also agrees to disclose all information of the Contractor as specified in Paragraph 1 herein to the Bank, the
financial holding company of the Bank and the subsidiaries controlled by the financial holding company in accordance with the Financial Holding Company Law, or any third party authorized thereby. 

  

 B: General Terms and Conditions 
  

	Article 1	(The Scope of Indebtedness) 

  
 Indebtedness or all indebtednesses mentioned in the Agreement refer to liabilities incurred from notes, loans, guaranty, advance payment, overdrawn,
discount, acceptance, entrust guaranty, opening letters of Credit, import collection, negotiation draft, import/export foreign exchange business, financial transaction business, funds receivable fund-raising business, handling charges, credit card
consumption and any other liabilities on the basis of basic legal relations of business with the Bank, including interests, delay interests, penalties, damages and related expenses. 
  

	Article 2	(Joint Liability) 

  
 In the event that the Contractor joins with other obligators to borrow funds from the Bank by signing written agreements or issuing invoices, the funds
shall be deemed to have been appropriated to the Contractor even if the Bank appropriates the funds only to other obligator who joins with the Contractor in signing written agreements or issuing invoices, under which circumstance, the Contractor
still recognizes its debt obligations and is willing to be held jointly responsible for repayments. 
  

	Article 3	(Notification of Changes and Delivery) 

  
 In case of changes of name, organization, articles of incorporation, stamp specimen, representative person, the authority of representative or others, the
Contractor shall immediately notify the Bank the reason of change in writing and file an application with the Bank for change or withdraw al of the original stamp specimen. The original stamp specimen provided by the Contractor in the Bank remains
valid till approval of the Bank and completion of procedure of change or withdrawal. The Contractor agrees to be held fully responsible for transactions with the Bank. 
  
 All payment requests or notices under the Credit shall be deemed to have been duly given when sent by courier or delivered
personally to the last notified addresses of the addressee (or its representatives) of the request or notices. The above-mentioned requests or notices shall also be deemed to have been delivered to the addressee after normal mailing period has
elapsed upon failure to be delivered to the last notified address because the addressee (or its representatives) has moved away from the last notified address or for any other reason that can be attributed to the addressee (or its representatives)
without prior notice to the Bank. The Contractors agrees to release the Bank from its obligation to give notice when the Bank, for the purpose of financial asset securitization, entrusts its creditor’s rights (or assets) against the Contractor
to a trustee or assign them to a special purpose company. 
  

	Article 4	(Interest) 

  
 The interest rate shall follow the rate ruling at the time the individual credit agreement is made or follow the agreement of the confirmation letter concerning drawdown of the credit line and other related documents.
If no such agreement is made, the interest rate shall be calculated by adding an annual interest rate of 4% to the base rate of the Bank ruling at the time the indebtedness is incurred. 
  
 The interest rate mentioned above may be adjusted in accordance with adjustment to the base interest rate or the agreed
interest rate; notwithstanding the forgoing, the interest rate announced by the Bank supersedes. Unless otherwise indicated, the interest shall be paid on a monthly basis. 
  
 The Bank may incorporate the deferred interest into the original principal in case where the interest is delayed for one
year and not paid upon the notice of payment request by the Bank. 
  

	Article 5	(Acceleration Clause) 

  
 In the event of any of the following circumstances occurs to all debts borne by the Contractor to the Bank, the Bank may cease or reduce the payment of
the credit line, shorten the credit period or regard all principals and interests as due from time to time. 
  

	 	1.	The Contractor fails to repay any debt as agreed or repay the principals. 

  

	 	2.	The Contractor (1) files the petition for settlement, bankruptcy, reorganization in accordance with Bankruptcy law; (2) is declared by the clearinghouse to be suspended as a
dishonored account; (3) ceases business operations; or (4) commences liquidation. 

  

	 	3.	The Contractor fails to provide guaranties under the Agreement. 

  

	 	4.	The Contractor’s heir of the Contractor declares limited succession or gives up succession due to death of the Contractor. 

  

	 	5.	Main properties of the Contractor are declared confiscated due to criminal charges. 

  

	 	6.	The Contractor fails to make pay interest in relation to any debt; 

  

	 	7.	Collateral is attached, lost, devaluated or is insufficient to warrant the credit. 

  

	 	8.	The actual use of loans that the Contractor owes to the Bank is not in consistency with the purpose approved by the Bank. 

  

	 	9.	The Contractor is subject to compulsory execution, provisional detention, provisional disposition, or other injunctions, which leads to the danger that the debts of the Bank may not
be paid. 

  

	 	10.	In addition to the forgoing, to secure rights of the Bank, circumstances that are specifically stipulated in the agreement and circumstances where acceleration of maturity is made
clear (whether notice is given or not). 

  
 Any
substantial agreed term contained in Paragraphs 1-5 and Paragraph 10 shall be exempted from notification or request by the Bank. 
  

	Article 6	(Exercising of Right to Offset against Immature Debts.) 

  
 In the event of breach by the Contractor, the Bank is entitled to offset all deposits of the Contractor in the Bank and all immature credits that the
Contractor have against the Bank (except any checking account not terminated yet) to pay off the Contractor’s indebtedness to the Bank, irrespective of whether the indebtedness is due or not. 
  
 The Contractor understands and consents any breach of any agreement between
the Contractor and the Bank and the bank’s claim of right to regard all debts as due and payable in accordance with the agreement shall constitute a condition to terminate the agreement concerning checking accounts between the Contractor and
the Bank. Once the condition of termination is satisfied, the aforesaid agreement of checking accounts shall be void. The Bank shall immediately reimburse all funds remaining in the checking account and offset all debts that the Contractor owes to
the Bank with funds that shall be reimbursed. 
  
 The
advance-offset intent specified in the previous two paragraphs shall be effective when the offset is recorded in the accounts. Meanwhile, the deposit slips, account books, checks or other certificates issued by the Bank to the Contractor shall
become void within the scope of offset. The Bank shall not exercise its right to offset under any of the following three circumstances: 
  

	 	1.	Prohibited by laws; 

  

	 	2.	Otherwise agreed to by the parties hereto; or 

  

	 	3.	The Bank makes payment to the Contractor due to management without obligation or trust by a third party because of transactions. 

  

	Article 7	(Change of Guarantor) 

  
 In the event that the Bank, based on concrete facts (or provision of acceleration clause relating to loss of deadline interest under article 5 of general
terms and conditions contained herein) considers it necessary to change guarantor due to poor credit records of the guarantor, the Contractor shall change the guarantor immediately after receiving notice from the Bank. The guaranty liabilities of
the original guarantor, whether an individual or several persons, shall be released upon the Bank’s notice after the new guarantor(s) sign(s) the guaranty agreement and consents of other original guarantors that have not been changed are
obtained. However, in the event it is agreed that the new guarantor shall not be responsible to guarantee debts occurring prior to change of guarantor, the guaranty liabilities of the guarantor changed can be released only after main debts occurring
prior to change of guarantor are fully paid and the procedure of change is completed. 
  

	Article 8	(Supervision, Audit, Review and Provision of Information) 

  
 The Contractor is willing to accept inspection for use of the credit, auditing of the Contractor’s operating and financial status and inspection and
detention of collaterals by the Bank from time to time, and review of relevant account books and reports (including consolidated financial statement of affiliates), bills, documents by the Bank or the Joint Credit Information Center (JCIC);
nevertheless, it is not the Bank’s obligation to conduct such supervision and auditing. The Bank or JCIC may request the Contractor to complete and submit credit information within the time limit or provide accounting & financial statements
audited by Certified Public Accountant recognized by the Bank and contact the CPA to provide working sheets. 
  
 The Bank and the JCIC are not obliged to supervise, audit and review the forgoing documents. If the Bank considers the Contractor’s financial
structure to be improved, the Bank may restrict the Contractor to distribute earnings by cash and request the Contractor to undertake capital increase or other improvements in the financial structure. 
  

	Article 9	(Acknowledge of Defects, Damages, Loss of Instruments or Debt Notes) 

  
 In the event that instruments, debts signed, endorsed, accepted and guaranteed by the Contractor and documents of obligation relating to all other debts
owned to the Bank are damaged or lost due to incidents, force majeure or reasons that are not attributed to the Bank, or documents of obligation such as debit notes are altered without gross diligence of the Bank, the Contractor is willing to
acknowledge and accept all records in account books, vouchers, documents produced via computer, photocopies and reduced edition of correspondence of the Bank unless the Contractor can actually prove there is any mistake in the aforesaid books and
documents which the Bank shall correct. The Contractor shall pay off all expenses, penalties, principals and interests surrounding debts that are due or furnish instruments, debit notes or other documents of obligations prior to maturity of the
debts as required by the Bank. 
  

	Article 10	(Provision of Credit Information) 

  
 For the purpose of enabling the Bank to understand the credit standing of the Contractor, credit evaluating and other specific purposes consistent with
needs of business items covered in business registration of the Bank, the Contractor agrees that the Bank may provide the basic information, financial information, deposit information, exchange information, various custom declaration information
furnished to the custom, credit card personal data, credit transactions, credit investigation report, personal data relating to credit granting, instrument credit information and any other personal data related to the Agreement, to the Bank,
financial institutes of same business, related parties, the Securities Central Depository Co., Ltd., the Financial Information Service Co., Ltd., the National Credit Card Center, the Joint Credit Information Center, the Small and Medium Business
Credit Guarantee Fund, the Overseas Chinese Credit Guarantee Fund and any person who would like to undertake the Bank’s credit and indebtedness and participate the syndicate loans (intent to undertake and join the syndication), or the person
who is authorized by the Bank to handle matters. The Bank may collect, process via computer, transmit internationally and use personal data of the Contractor for special purposes stipulated in the registered business items or articles of
incorporation. Furthermore, the Bank may inquiry the personal data of the Contractor and custom declaration information from the above-mentioned organizations. 
  

In the event the financial supervising authority in the location or registered office of the Contractor prohibits providing the foregoing documents to
the related institutes in accordance with local laws (e.g. Hong Kong or any area outside Taiwan), the Contractor agrees that the head office or affiliates of the Bank may control and disclose the total credit line, total balance and related
information within the scope of the Bank’s registered business items. 
  

	Article 11	(Exchange Rate of Foreign Currency Repayment) 

  
 If the Contractor does not repay the debts with agreed foreign currency, the Contractor shall, on the payment date, make payments by translating the
principals and interests of the debt into NTD in accordance with sight foreign exchange selling exchange rate published by the Bank at the time of payment or using the original currency. Any delay will result in delay interest and penalty in
accordance with related rules of credit business. 
  

	Article 12	(Authorization) 

  
 The Contractor hereby authorizes the Bank, depending on the actual situation, to fill in the maturity date in all promissory notes, debit notes issued by
the Contractor to the Bank. All transactions between the Contractor and the Bank shall be effective based on the signature or the registered stamp (stamp registered with MOEA), or the agreed method that either the stamp specimen or signature is
acceptable. 
  

	Article 13	(Penalty) 

  
 If the Contractor fails to pay interest timely, repay the principals and interests, repay debts as agreed, penalty will be imposed starting from the default date to the repayment date. The penalty is calculated in the
manner hereunder: 
  
 Delay Penalty: 
  
 Delay for no more than 180 (including) days, the agreed amount payable
during each period(including the returned principal during each period+interest payable) × agreed interest rate × number of delay days delay ÷ 365 × 1.1 
  
 Delay for over 180 days, the amount payable during each period (including the allocated principal during each
period+interest payable) × agreed rate × number of delay days÷ 365 × 1.2 
  
 Overdue Penalty: 
  
 no more than 180 (including) days overdue, unpaid balance of principal × agreed interest rate × number of delay days ÷ 365 × 0.1

  
 more than 180 days overdue, unpaid balance of principal
× agreed interest rate × number of delay days ÷ 365 × 0.2 
  

	Article 14	(Offset Clause) 

  
 In the event that the repayment proposed by the creditor or the amount the Bank obtains through agreed automatically transfer is insufficient to repay all
indebtedness of the Contractor, the indebtedness shall be offset in the order of various expenses (collateral insurance premium prepaid by the Bank), penalty, interest, delay interest and principal. The Contractor agrees to offset the insurance
premium prepaid by the Bank for the collateral within six months of prepayment by the Bank provided it is premium for fire and earthquake insurance, except for the indebtedness of the Contractor is mature, suffers any intended delay, or other
material credit devaluation. 
  

	Article 15	(Other Costs and Expenses) 

  
 In case of call for payment or litigation resulting from the Contractor’s failure to honor its debt obligations as agreed, the Contractor shall be
held jointly liable for the investigation fee, warehouse charge, transportation fee, attorney fee (the fee actual paid to the engaged lawyer) and other necessary costs incurred from exercising or securing the Bank’s credit right, unless a final
court rule is made against the Bank. 
  
 C: Guaranty Clause 
  

	Article 1	(Defects warranty) 

  
 The Contractor or the collateral provider represents and warrants that the collateral, to which nobody is entitled in any manner, is legally owned by the
Contractor or the provider. In case of any dispute, the Contractor or the provider shall be held sole liable without involving the Bank. The Contractor warrants that the secured movable property and its storage location are consistent with the
statements in the collateral list. In the event that documents of title such as a bill of lading or receipt of warehouse are provided as collaterals, the Contractor warrants that goods, types, quality, quantity, specification and other conditions of
actual collaterals shall be consistent with the statements in such documents of title. If the Contractor provides bill of lading or receipt of warehouse as collaterals, and if any quality discrepancy, shortage in quantity or any other material
misrepresentation is found, no matter whether such goods are stored in the Bank’s warehouses or other warehouses, unless it could be attributed to the Bank’s intent or gross-negligence, the Contractor or the provider shall immediately
replace or make up the collateral in conformity with or equivalent to the statements of those documents or repay all debts. 
  

	Article 2	(Storage and Maintenance of Movable Property) 

  
 In case of collateral of movable properties, the Bank has the right to make decisions on their storage location and maintenance measures and may inspect
them from time to time. In the event of inappropriate storage location or maintenance measures, the Bank may notify the Contractor or collateral provider to relocate or make improvements within a state time and the Contractor or the collateral
provider shall follow the Bank’s instruction immediately. When the Bank detains the collaterals legally, the Bank shall not be responsible for mistake of decision to relocate or damages arising from non-relocation, unless the reasons can be
attributed to the Bank. 
  

	Article 3	(Custody Obligation of Pledge) 

  
 Except for intent or gross negligence, the Bank shall take no responsibility for the collateral under its possession. For those attributable to the Bank
under the Agreement, the Bank’s obligation is limited to its intent or gross negligent behaviors. 
  

	Article 4	(Restrictions on Disposal of Collateral of Movable Property and Due Diligence Requirement For Use and Management) 

  
 Before fully repayment of indebtedness, the Contractor or the collateral
provider shall never assign, mortgage, pledge, lease, lien, move or dispose movable collaterals in any other manner without the Bank’s written consent. 
  
 In the event that the collaterals need to be changed, improved, added, or abandoned, the Bank’s written consent shall be obtained in advance. If
registration of change is therefore required, the Contractor or the collateral provider shall complete all necessary procedures for such change and bear all costs. 
  
 The Contractor or the collateral provider shall use and maintain the collateral cautiously with the due diligence of a good
custodian; furthermore, the Contractor or the collateral provider shall not slacken in repair or other necessary activities for conservation. Any tax or repair cost in related to collaterals shall be bore by the Contractor. 
  

	Article 5	(Replacement or Supplement of Collaterals) 

  
 In the event that the collateral is damaged, lost, corrupted, devalued, or in danger of any of the foregoing, the Contractor shall replace, add or
increase with collateral approved by the Bank or repay all indebtedness. 
  

	Article 6	(Going Through Various Procedures and Obtaining Insurance Coverage.) 

  
 In case it is necessary to go through such procedures as storage in warehouse, paying taxes, obtaining insurance coverage (including renewal and
addition), delivery, management, removal or other procedures as agreed or required by laws, the Contractor or the collateral provider shall implement all necessary procedures and pay all expenses and taxes arising thereof. 
  
 For insurable collaterals, the Contractor or the collateral provider agrees
to have the Bank as the preferred beneficiary and get full amount fire insurance or any other insurances requested by the Bank. All costs shall be bore by the Contractor or the collateral provider. If the Contractor or the collateral provider fails
to obtain or renew insurances and when the Bank considers it necessary, the Bank may obtain the fire insurance or other insurance in the Contractor or the collateral provider’s stead, the Contractor or the collateral provider shall pay
principals and interests of the above-mentioned premium to the Bank immediately, otherwise the Bank may include the principals and interests of the premium into the guarantee for prior payment. However, it is not the Bank’s obligation to obtain
or renew insurances for the Contractor. 
  
 If the collateral is
lost, the Contractor or the collateral provider shall repay all indebtedness immediately or provide another collaterals approved by the Bank. The Contractor shall not refuse to repay indebtedness because of the rejection of indemnification, delayed
compensation, or insufficient compensation from the insurance company, or any other reason. 
  

	Article 7	(Restriction on Disposal of Movable Collaterals and Common Use) 

  
 For immovable collaterals, the Contractor or the collateral provider shall not build, reconstruct, dismantle, or taker any action that will devaluate the
collaterals without written consent of the Bank. In the event of registration of mortgage right, charge-over land, lease or damage, loss or devaluation arising when or after immovable property is provided as collateral, the Contractor or the
provider shall inform the Bank of such occurrence accurately in writing. In case of any breach of, or any false statement contained in the above agreement that causes any damage to the Bank, the Contractor or collateral provider is willing to be
held civilly and criminally liable. The collaterals provided in the previous paragraph, regardless of the sequences of provision, the 

  

 
Bank may apply jointly to guarantee the Contractor’s indebtedness (including debts occurred in the past but not repaid currently) in the future, the
Bank may add 20% of total credit against the Contractor as the highest guarantee amount. 
  

	Article 8	(Return and Replacement of Collaterals and Certificates) 

  
 For those who hold the receipt or custody certificate of collaterals that is issued by the Bank to the Contractor or the collateral provider, or who hold
the bankbook, registered stamp of the Contractor, collection document signed by the Contractor, will be treated as the agent of the Contractor or the collateral provider, the Bank may approve the return or the replacement of collaterals. 

 

	Article 9	(Note Receivable) 

  
 If the Contractor provides note receivables transferred by endorsement to the Bank to guarantee the repayment or as the repayment method, the Contractor
hereby agrees to comply with the following provisions: 
  

	 	1.	For the convenience of credit management, the Bank may offset the indebtedness of the Contractor after cashed notes in the account accumulates to a certain amount. The Contractor is
still liable for in case of any insufficiency. 

  

	 	2.	After the note receivable are cashed and recorded into the account when due, if the Bank agrees that the Contractor may otherwise provide note receivable of an amount higher than or
equal to the cashed amount, the Bank may transfer the cashed amount to the Contractor’s account in the Bank or wire to the Contractor’s accounts in other financial institutes. The Contractor shall be fully liable to pay all debts owned to
the Bank in accordance with notes and debit notes it has signed. 

  

	 	3.	If the note receivable fails to be cashed, the Contractor fails to resolve it within the specified period after the Bank’s notification or the Contractor can not be contacted,
the Bank may at any amount lower than its face value with the note debtor depending on the financial conditions of the note debtor. 

  

	Article 10	(Notice of Collateral Change and Collection of Proceeds and Compensation) 

  
 In the event of changes such as damage, loss, devaluation, accrued interest, levy or necessity for a third party to make compensation for whatever reason
occurring to the collaterals, the Contractor or the collateral provider shall notify the Bank immediately. It is at the Bank’s discretion to collect them to offset the Contractor’s indebtedness. But the Contractor shall not collect them
without consent of the Bank. The Contractor shall indemnify the Bank in the event that the Contractor’s neglect to give such notice causes damages to the Bank. 
  

	Article 11	(Partial Repayment) 

  
 Should the joint borrower or the collateral provider request to return collaterals pro rata due to partial repayment, such return shall be proceeded after
obtaining the Bank’s consent. The Contractor or the collateral provider shall bear all expenses for registration change, if required. 
  

	Article 12	(Registration Fee) 

  
 In the event title of the collaterals provided by the Contractor or the collateral provider hall be registered or transferred, the Contractor or the
collateral provider shall immediately go trough the registration or title transfer procedures and submit the certificates to the Bank for filing. The expenses for registration or title transfer shall be borne by the Contractor or the collateral
provider. 
  
 D: Individual Negotiation Clause 
  
 Exclusively for Contractor (or joint note issuer or collateral provider or minor promissory
note issuer) 
  

					
	The Contractor declares that all clauses have been reviewed within reasonable period, particularly Section A, Article 1,5,9, Section B, Article 1,2,5,6,7,10,12,14,15, Section C,
Article 6,12 are negotiated separately by both parties. The Contractor fully understands the content and agrees to affix the stamp specimen.	 	 
			
	 (Stamp)    Silicon Motion, Inc.
	 	 	 	 
	                 /s/ James Chow
	 	 	 	 

  
 E: Base Rate and Others 
  

	 	I.	The Contractor agrees to adopt the below methods to calculate NTD rate for all credit lines with the Bank: 

  

	 	 ̈	(I) Adopt the method of the base rate plus % (Base Rate: 90 days interest rate of secondary market for promissory notes +Bank operation cost %) 

  

	 	x	(II) Others 

  

	 	II.	In addition to the explanations concerning the base rate stated below, the Contractor further agrees that in the event that the Bank adjusts the Base Rate, the interest payable
shall be calculated in accordance with the adjusted Base Rate after the adjusted date. 

  
 The explanation of the product structure such as “Base Rate” 
  
 A. The composition of Base Rate 
  
 “Base
Rate” consists of the monthly average rate of “90 days interests of secondary market for promissory note” plus “the Bank’s operation cost”. 
  

	(1)	The source of sampling information takes the Reuters daily-announced “TWCPBA FIXING RATE” as the standard for sampling. 

  

	(2)	The interest rate shall be adjusted regularly once every three months: 

  

									
	 I Effective date
	 	1/13-4/12	 	4/13-7/12	 	7/13-10/12	 	10/13-1/12
	 II Sampling Date
	 	12/1-12/31	 	3/1-3/31	 	6/1-6/30	 	9/1-9/30

  

	I.	“Base Rate” will be adjusted on every 1/13, 4/13, 7/13, 10/13 each year; the Bank shall replace the billboard announcement and reset the price. 

 

	II.	The monthly average rate of the “90 days of secondary market for the promissory note” will be the monthly average of every March, June, September, and December. (By simple
average to the second decimal place, numbers after the third decimal place will be rounded). 

  

	(3)	“The Bank’s operation cost” shall be adjusted every April 13th and announced in the website of the bank. 

  

	(4)	In the event the adjusted date of “Base Rate” is a holiday, it will be adjusted on the following business day. 

  

	(5)	In the event that the Bank’s Basic Lending Rate is deviated from normal market interest rate level due to material force majeuer, the Bank may change the rate 10 days after
reporting to the Central Bank and announcing the change of the composition of “Base Rate” in the Bank’s business places, the Bank’s websites or any press or journalism. 

  
 b. The Composition of “Enterprise Interest Swap Index” 
  
 “Enterprise Interest Swap Index” constitutes of the monthly average of “NTD
one year IRS interest rate”. 
  

	(1)	The source of sampling information takes Reuter’s daily-announced “TWDIRS1 AVG RATE as the standard of sampling”. 

  

	(2)	The Index will be adjusted every once three months: 

  

									
	 I Effective date
	 	1/13-4/12	 	4/13-7/12	 	7/13-10/12	 	10/13-1/12
	 II Sampling Date
	 	12/1-12/31	 	3/1-3/31	 	6/1-6/30	 	9/1-9/30

  

	I.	“Enterprise Interest Swap Index” will be adjusted on 1/13, 4/13, 7/13, 10/13 each year; the Bank will replace the billboard announcement and reset the price.

  

	II.	The monthly average rate of the “NTD one year IRS interest rate” will be the monthly average of every March, June, September, and December. (By simple average to the
second decimal place, numbers after the third decimal place will be rounded). 

  

	(3)	In the event the adjustment date of “Enterprise Interest SWAP index” is on holiday, it will be adjusted on the following business day. 

  

	(4)	In the event that the Bank’s “Enterprise Interest SWAP index” is deviated from normal market interest rate level due to material force majeure, the Bank may after 10
days of announcement in the Bank’s business places, the Bank’s websites or any press or journalism, change the Index to Base Rate and continue the transactions based on the signed interest rate. 

  
 F: Individual Credit Special Clauses 
  
 General Credit Contract: 
  

	Article 1	(Borrowing amount) 

  
 It shall be limited to the amount agreed between the Contractor and the Bank. 
  

	Article 2	(Loan Period) 

  
 It shall start from the execution date of the agreement till the fulfillment of the Contractor’s liability under the Agreement or the date agreed by
the parties. 
  

	Article 3	(Interest, repayment and handling charge) 

  
 It shall follow the agreement with the Bank to pay and repay it. 
  

Overdrawn Contract: 
  

	Article 1	(Overdrawn Account) 

  
 The Contractor may issue checks or/and other checks approved by the Bank from the designated check deposits account in the Bank since the execution of the
Agreement. All overdrawn amounts in the designated account before execution will be repaid in accordance with this Overdrawn Contract. 
  

	Article 2	(Overdrawn Interest) 

  
 The interest for an overdrawn amount shall be calculated based on agreed annual interest rate and settled on a monthly basis. The interest will be
incorporated into the principal and recorded in the overdrawn account. If the principal and interest exceeds the limit of the agreed overdrawn amount, the Contractor shall repay the exceeded the amount without delay. 
  

	Article 3	(Overdrawn Period and Penalty) 

  
 The overdrawn period is from the execution to the agreed day. The Contractor shall repay the principal and interest immediately when due. Failure to repay
in time will incur the delayed interest at the agreed rate and penalty. If the Bank considers that the Contractor’s use of an overdrawn amount inappropriate or for other reasons, the Bank may reduce the overdrawn amount or cease the payments
based on notes or instruments issued by the Contractor; in such case, the Bank may require repayment of the overdrawn principal and interest within one month upon the notice from time to time without binding by the agreed repayment date hereof. The
Contractor shall agree without any objection. In case of any liabilities or expenses where a third party is involved, the Contractor shall be held liable for the third party and to indemnify the Bank fully against all damages or losses. 

 
 Entrust Guaranty Contract 
  

	Article 1	(The Object, Scope, Limit, Responsibility and Period of Entrust Guaranty) 

  
 The Contractor entrusts the Bank as the guarantor to issue guaranty documents to a third parties (a third party creditor) in accordance with the following
provisions: 
  

	 	1.	The Scope of the Entrust Guaranty: it shall be subject to the guaranty documents issued by the Bank. 

  

	 	2.	The Limit of Entrust Guaranty: it shall be subject to the amount agreed upon between the Contractor and the Bank. 

  

	 	3.	The Liability of Entrust Guaranty: If the Contractor breaches any of the agreed matters to the Third Party Creditor, the Bank shall execute its guaranty liability unconditionally
upon receipt of written request of Third Party Creditor. The Bank agrees to waive its defense that a guarantor may refuse performance to the creditor. 

  

	 	4.	Entrust Guaranty Period: shall be subject to period stipulated in the guaranty documents issued by the Bank. 

  

	 	5.	Other entrust matters: shall be subject to the agreement between the Contractor and third party creditors or the request of third party creditor. 

  

	Article 2	(Term and Validity Period) 

  
 The term of this contract shall be valid from the execution date of the agreement till the fulfillment of the Contractor’s liability under the
Agreement or fully repayment of indebtedness. During the term, the Contractor may entrust the Bank to handle the guaranty matters in the preceding subparagraph at one time, installments or revolving use, within the entrust limit. All guaranty
documents issued by the Bank pursuant to the Contractor’s application shall be valid during the term. Even the Bank actual payment date is later than the expiry date, the Contractor is still liable for it. 
  

	Article 3	(The Handling Charge of Guarantor) 

  
 The handling charge of guarantor shall be paid in accordance with the interest rate and the rules approved by the Bank; the minimum handling charge for
each guaranty is NTD1000. For a guaranty that is made by installments or revolving use, the Contractor shall pay handling charges in accordance with the Bank’s rules related to thereof. Handling charge shall be paid before the issuance of
guaranty documents, otherwise the Bank may refuse to issue guaranty documents. The Contractor shall be liable for any taxes payable or to be withheld under the Agreement, handling charge for currency exchange, loan, postage and other related
expenses, if any. 
  

	Article 4	(The Handling Charge before Discharge of the Guarantor’ Liability) 

  
 In the event that the Contractor fails to fulfill the liabilities against a third party creditor prior to expiry of the guaranty period, or the Contractor
does not apply to extend the guaranty period upon expiry, or the renewal application is rejected by the Bank, the Contractor shall pay guaranty handling charges subject to the preceding article based on the outstanding guaranty amount (calculated on
the outstanding guaranty amount in the Bank’s account or the outstanding amount after the third party creditor discharges the Bank’s guaranty liability in writing) in addition to fulfilling the agreement with the third party creditor. If
the default has occurred for less than or equal to six months, the handling fee will be charged as a half-year period, or a year period if it is overdue for over six months but less than a year, and so forth for a default overdue over one year. Such
charges shall be repaid within seven days after due. If the guaranty period is shortened, the Contractor shall not claim for reimbursement of handling charges already paid. 
  

	Article 5	(Interest and Penalty for Advance Payment) 

  
 In the event that the Bank makes advance payment and related deferred charge, interest, penalty, delayed interest and other expenses for the Contractor,
the Contractor shall repay to the Bank all advance payment of the Bank immediately. The interest shall be calculated based on the Bank’s Base Rate plus 4% from the Bank payment date till the Contractor makes full payment. In the event the
interest rate is adjusted after the Bank makes advance payment, the Contractor agrees to adopt the new Base Rate after the adjustment by adding 4% as the interest rate and it shall be calculated from the day the Bank made such payment. 

 

	Article 6	(Risk on the Fluctuation of Exchange Rate) 

  
 If the guaranty amount is calculated in foreign currency, the Contractor shall undertake all risks on the exchange rate. The Contractor shall be fully
liable for the Bank’s losses due to the changes of exchange rate. Unless agreed to by both parties, the exchange rate for converting the guaranty amount from foreign currency into New Taiwan Dollars shall be done at the highest rate during the
guaranty period or a rate decided by the Bank. 
  

	Article 7	(The Liquidation of Accounting Tax) 

  
 For the taxes of export material, semi-products, products that is guaranteed by the Bank for the Contractor, if at the expiration of offset period the
Contractor has not exported bonded materials in part or in all, the Contractor shall immediately obtain extension from the Ministry of Finance, the Contractor shall also pay all applicable taxes and 0.05% deferred charge from the date of tax
accounting in the book till the repayment to customs. Otherwise, the Bank may make the payment on behalf of the Contractor and dispose the collaterals, or claim repayment form the Contractor or the joint guarantor. 
  

	Article 8	(Performance of Guaranty Obligation without Conditions) 

  
 When the Contractor fails to perform the agreed matters with the Third Party Creditor, and the Bank receives a written notice from a third party creditor
claiming the performance of guaranty liability, the Bank shall perform its guaranty liability based on the guaranty documents issued by the Bank unconditionally. The Contractor shall not claim disclaimer by reason of defenses between the Contractor
and the third party creditor or any third party, or force majeure, such as acts of god, war, or any other reasons. 
  
 Entrust Acceptance of Instruments and Guaranty Contract 
  

	Article 1	(Validity) 

  
 The term of this contract shall be valid from the execution date till the fulfillment of the Contractor’s liability under the Agreement or fully repayment of indebtedness. 
  

	Article 2	(Limit) 

  
 The limit under this contract shall be based on guaranty (revolving or non-revolving) documents that the Contractor applies with the Bank to accept bills of exchange or guaranty promissory notes under this contract.

  

	Article 3	(The Term Limitation on Each Accepted Instrument or Guaranty) 

  
 The term of bills of exchange that the Contractor asks the Bank to accept or the promissory notes that the Contractor asks the Bank to guaranty under this
contract, from the date of acceptance or guaranty till maturity date, shall not exceed the agreed number of days. The payer or the payer that undertakes to pay shall be the Bank and the payment place shall be the place where the Bank is located.

  

	Article 4	(Interest and Penalty for Advance Payment) 

  
 For those instruments that the Contractor asks the Bank to accept or guaranty, the Contractor shall provide sufficient funds in the Bank before the
maturity date. In the event of any delay or the Bank shall make advance payment to the Contractor, no matter under what circumstance, the Contractor upon receipt of the notice by the Bank, shall immediately repay such amount and bear the interests
which will be calculated based on the Bank’s Base Rate plus 4% from the Bank payment date till the Contractor’s full repayment. In the event the interest rate is adjusted after the Bank’s advance payment is made, the Contractor agrees
to adopt the new Base Rate after the adjustment by adding 4% as the interest rate from the date of the adjustment. In addition to interests, the Contractor shall pay penalty according the Bank’s rules. 
  

	Article 5	(Handling Charges) 

  
 The Contractor shall pay handling charge according to the agreed terms or the Bank’s rules at one time upon acceptance of bills of exchanges or
guaranty. The minimum charge for each transaction is NTD 1000. 
  

	Article 6	(Liability to Clear after Prepayment) 

  
 The Contractor shall be liable for all debts incurred for authorizing the Bank to accept or guarantee instruments in accordance with this agreement even
the Bank makes advance payment on a date after the agreed acceptance or guarantee period according to provisions of this agreement. 
  

 If the Bank suffers any damage or loss due to the Contractor entrusting the Bank to accept or guaranty
instrument, regardless of whether the Contractor is negligent or not, the Contractor shall immediately repay the amount of instruments, delayed interest, penalty, expenses and indemnify the Bank’s damage without any excuse or defense.

  
 Entrust Open Domestic Letter of Credit Contract 
  

	Article 1	The term of this contract shall be valid from the execution date till the fulfillment of the Contractor’s liability under the Agreement or fully repayment of indebtedness.

  
 Even if the maturity date of Bills of exchange
issued under the letter of credit of this contract is later than the above period; the Contractor is still liable for it. 
  
 While the Contractor applies to an open letter of credit with the Bank, the Contractor shall submit the application form and all documents requested by
the Bank, and request the Bank to make advance payment. The Contractor shall be liable for the indebtedness incurred under the open letter of credit. 
  

	Article 2	“Domestic Letter of Credit” referred in this agreement means an open domestic sight letter of credit and (or) a domestic usance letter of credit, the terms of bills of
exchange issued under the domestic usance letter of credit shall not exceed the agreed number of days maximally. 

  

	Article 3	The Contractor acknowledges that the amount stated in the application for each open letter of credit and related interest and expenses arising thereof is the amount the Bank
guarantees payment or advance payment for the Contractor and agrees that relevant documents such as bills of exchange under the open letter of credit application form and the letter of credit may serve as evidence. The Contractor authorizes the Bank
to pay bill of exchange amount under every letter of credit. 

  

	Article 4	Each time when applying to an open letter of credit, within the amount of instruments with interest, the Contractor shall issue a promissory note which releases the obligation of
obtaining “Certificate of payment refusal” and the Bank is payer who undertakes to make payments. Such promissory note shall be submitted to the Bank as the repayment of Contractor indebtedness under this contract.

  

	Article 5	The Contractor acknowledges that the promissory note submitted to the Bank in accordance with Article 4 as a repayment measure, which is the “indirect payment” stipulated
in the Civil Code. Such liability co-exists with the indebtedness of the Contractor under this contract. 

  

	Article 6	For all bills of exchange and ancillary documents presented under the letter of credit of this contract, the Bank will review and make or accept advance payment, if the Bank
considers that they are consistent with the conditions stipulated in the letter of credit. After the Bank’s payment, no matter whether the notification is given in writing or orally, the Contractor shall repay every advance payment with
interest within 10 days after advance payment of the Bank, the interest shall be calculated based on the Bank’s Base Rate by adding 4% and be paid one time. In case of acceptance, the Contractor shall provide the amount of such instrument to
the Bank prior to the maturity date. If the Contractor fails to repay or provide funds for it before the above deadline, the interest will be calculated based on the Bank’s NTD Base Rate by adding 4% under instrument amount from the Bank’s
payment date or maturity date. In addition to interest, the default penalty shall be imposed as well in accordance with the Bank’s rules. 

  
 If the bills of exchange and instruments are proved to be counterfeit or altered, or any dispute results thereof (including quality or quantity is
inconsistent with the documents), the Bank bears no responsibility for it. The Contractor shall not refuse to make payments by defending with whatever reason. 
  

	Article 7	The Contractor shall pay all handling charges incurred by the application of the open letter of credit upon receipt of the Bank’s notification. 

  

	Article 8	In the event of any mistake, delay incurred during the transmission of letter of credit; misinterpretation of terminology; or the documentation, or when goods stated in the
documents, or the quality, quantity, or value of the goods were partially or wholy lost, delayed or not arrived to the destination; or goods were lost or damaged, during the delivery or after its arrival, due to either (1) no insurance; or (2)
insufficient insurance; or (3) detained by third party; or (4) any other reason, the Bank shall not be held liable and the Contractor shall repay all amount of the letter of credit under any of the above mentioned circumstances.

  

	Article 9	The Contractor shall be liable for any indemnity in case that any goods purchased in accordance with each letter of credit is damaged because the beneficiary defaults, late
delivery, or any other force majeure. 

  

	Article 10	The Contractor agrees that any matters relating to operation, responsibility, obligation under the letter of credit not stipulated in this contract shall be governed by
“Uniform Customs and Practice for Documentary Credits” issued by the International Chamber of Commerce and agrees to regard all terms and conditions in internal relating to the interpretation of trade conditions as a part of this contract,
which shall be legally binding. 

  

	Article 11	The Contractor shall obtain the Bank’s consent in advance on the types of insurance and insurance terms for goods of every letter of credit or collaterals provided by the
Contractor, the Contractor shall obtain sufficient amount insurance and have the Bank as the beneficiary (or add special clause regarding mortgage), with all expenses relating to insurance bore by the Contractor. If the Contractor fails to obtain
insurances or renew the insurance upon expiry, the Bank has the right to proceed for the Contractor, which is not the Bank’s obligation. For any expense of insurance paid by the Bank, the Contractor shall repay immediately, otherwise the
Contractor shall pay interests in accordance with Article 7 of this contract. 

  

	Article 12	The Contractor shall provide bills of lading stated in every letter of credit under this contract, purchased goods or additional collateral to guaranty the indebtedness of bills of
exchange under every letter of credit. This contract shall be the proof of collateral submission. The foregoing purchased goods shall include sales revenues of its processing products (including cash or forward notes), if export, the Contractor
shall repay the indebtedness under this contract at the time the Bank process outward bills purchased. 

  

	Article 13	The Contractor shall immediately replace or provide additional collaterals if there is any danger that the collateral will be corrupted or devaluated. If the Bank considers it
necessary the Bank may dispose the collateral to pay principal and interest of the advance payment , interest and all expenses incurred by the disposition of collaterals. 

  

	Article 14	If the Contractor defaults, or the Bank considers that there is a risk that the Contractor may not be able to repay, the Bank may at any time request the Contractor to repay all
indebtedness. The Bank may dispose collaterals without notification to liquidate the advance payment made by the Bank and other expenses incurred thereof. The Bank may exercise lien or offset right on any properties of the Contractor deposited in
the Bank. 

  

 Entrust Open Sight Letter of Credit 
  

	Article 1	The Contractor shall submit the application form of an open letter of credit and request the Bank for advance payment in foreign currency to apply to an open letter of credit with
the Bank. The Contractor shall liquidate the indebtedness in accordance with this contract; the Contractor shall not raise any objection by submission of new application of the letter of credit or any other reason. 

  

	Article 2	The amount in this contract may be appropriated in other foreign currency. The interest shall be calculated based on the rate of the Bank’s foreign currency advance payment and
Articles 7 and 8 are applied. If the Bank’s advance payment exceeds the quota under this contract due to the change of exchange rate or other reason, the Contractor and the guarantor shall repaid the excess amount without delay.

  

	Article 3	The Contractor authorizes the Bank to pay bills of exchange amount under every letter of credit. 

  

	Article 4	The Contractor shall deliver to the Bank every import license (including the second copy of the open letter of credit for goods exempted from the license). The Contractor
acknowledges that the difference between the L/C amount stated in every certificate of settlement of foreign exchange or transactions and the settlement amount (i.e., unsettled foreign exchange), interest, penalty and related expenses are advance
payment made by the Bank. The Contractor agrees to adopt certificates of settlement of foreign exchange or transactions or any other documents of the Bank as proof without objections. 

  

	Article 5	The Contractor shall provide bills of lading stated in every letter of credit under this contract or imported goods to guaranty the indebtedness under every letter of credit. This
contract shall be the proof of collateral submission. If the Contractor fails to make repayment or the Bank considers that the Contractor’s financial capability becomes poor and may not be able to make repayment, in order to secure the credit,
the Bank may collect imported goods from customs on behalf of the Contractor and put such goods on auction or dispose the imported goods or other collaterals (including the method of disposal, time and price) to setoff the advance payment, interest,
and all expenses and loss incurred by the disposition (including taxes paid on the collection from customs, warehouse fee, transportation fee, etc.) . If the above amount is insufficient to repay all indebtedness, the Contractor shall be liable for
the remaining amount. 

  

	Article 6	Upon arrival of shipping documents under every letter of credit and after the receipt of written or oral notice from the Bank, the Contractor shall repay every advance payment and
interest within 10 days. The repayment shall be settled on the Bank’s sight foreign sold exchange rate at the repayment date or by the Contractor’s self-owned foreign currency. In the event that any of the following happens, the repayment
method shall be as follows: 

  

	 	1.	If the bill of lading arrives but the goods has not arrived yet, the Contractor agrees to provide proofs from the shipping company and repay within 3 days after the arrival of
goods. But if the bills of lading had arrived and over 30 days after the notice of the Bank the goods has still not yet arrived; the Contractor shall make repayments immediately. 

  

	 	2.	If the goods arrives but the bill of lading has not yet arrived and the guaranty collection of goods shall be applied, the Contractor shall make repayment immediately. It applies to
the application of endorsement on sub-bills of lading. 

  

	 	3.	Even the validity of the letter of credit expires and the bill of lading arrives after expiration, if the settlement is in conformity with all conditions, the Contractor shall make
repayment immediately. 

  

	 	4.	If the goods are delivered by installments, the Contractor shall repay the Bank’s advance payment by the amount in each shipment receipt. However, in case of air shipments,
unless agreed to by the Bank, the Contractor shall repay the total amount of the letter of credit at one time. 

  

	Article 7	If the Bank makes any advance payment, the interest of the advance payment shall be calculated from the actual payment date of the Bank (for a letter of credit with authorization of
withholding, it shall be the withholding date; for a letter of credit without authorization of withholding, it shall be the date on which the Bank records the withholding and delivers the payment notice) till the date fully repayment in accordance
with the preceding article. The interest rate is based on the agreed flexibility rate and shall be paid with the settled advance payment. 

  

	Article 8	If the Contractor delayed to repay the advance payment and interest, the delayed interest rate will be the “NTD Based Rate adding 4%” or “Foreign exchange credit
rate” (whichever is higher). In addition to the delayed interest, penalty shall be imposed as well. 

  

	Article 9	The Bank shall execute the guaranty collection of goods or endorse sub-bills of lading pursuant to the Contractor’s request, if the goods, specification, unit prices, total
amounts, and terms are inconsistent with the arrived bills of lading, the Contractor shall obey all terms stipulated in the arrived bills of lading to provide additional funds and go through any other procedures. If the Bank suffers any damages due
to the inconsistency between the executed documents and the arrived receipts, the Contractor shall be held liable. The contents in such application of guaranty collection of goods or sub-bills of lading constitute part of the contract and legally
binding upon the Contractor. 

  

	Article 10	In case of any goods (including goods on the way) under every letter of credit cause damages of the Bank due to seller’s (beneficiary’s) default, the delayed delivery or
other force majeure, such damages shall be bore by the Contractor. If the beneficiary fails to draw the amount of the letter of credit partly or fully or the letter of credit expires, the Bank may draw directly to offset every advance payment under
every letter of credit. 

  

	Article 11	The Contractor shall obtain the Bank’s consent in advance on the types of insurance and insurance terms for goods of every letter of credit by the Contractor. If the imported
goods delivered on the FOB, C&F basis or similar terms, the Contractor shall obtain appropriate insurance and have the Bank as the beneficiary. The original insurance policy and the premium receipt shall be provided to the Bank for records. All
expenses relating to insurance shall be bore by the Contractor. 

  
 If the Contractor fails to obtain insurances or renewals, the Bank has the right to proceed for the Contractor, which is not the Bank’s obligation. Any expense of insurance paid by the Bank shall be incorporated
in the indebtedness of the Contractor and shall be liquidated immediately; otherwise the Contractor shall pay interests and penalty in accordance with Articles 7 and 8 of this contract. 
  

	Article 12	In the event that a person who holds the written documents stating the receipt of import documents by the Contractor or the documents of providing collateral requests the Bank to
return or replace collaterals, the Bank shall treat such person as the agent of the Contractor and return or exchange collateral. If there is any dispute thereof, it shall be the Contractor’s sole liability to resolve it.

  

	Article 13	For any mistake, delay incurred during the transmission of letter of credit; misinterpretation of terminology; or the documentation, goods stated in the documents, or the quality,
quantity, or devaluation of goods, partially or wholy, delay failure to arrive at the destination; or goods lost or damaged, during the delivery or after its arrival, due to either (1) no insurance; or (2) insufficient insurance; or (3) detained by
third party; or (4) any other reason, the Bank takes no liability whatever. The Contractor shall repay all amount of the letter of credit. 

  

	Article 14	After the Bank has made acceptance or payment after reviewing and considering the compliance of those bills of exchange and documents presented under the letter of credit of this
contract on their face, the Contractor shall make payments by the liquidation date provided in Article 2. In the event such bills of exchange or documents are proved to be false, counterfeited, or defective (including the quality of goods or
quantity is inconsistent with documents), the Bank assumes no liability for it, the Contractor shall not refuse the repayment by any reason. 

  

	Article 15	The Contractor agrees matters relating to operation, responsibility, obligation of the letter of credit not stipulated in this contract shall be governed by “Uniform Customs
and Practice for Documentary Credits” issued by the International Chamber of Commerce and all clauses in the international rules regarding interpretation of trade conditions, and the said regulations shall be regarded as a part of this contract
,which is legally binding. 

  

 Entrust Open USANCE Letter of Credit 
  

	Article 1	The Contractor shall submit the application form of an open letter of credit to request the Bank issuing an open usance letter of credit. The Contractor acknowledges that within the
agreed amount the difference between every usance L/C amount stated in every certificate of settlement of foreign exchange or transactions and the settlement amount (i.e. unsettled foreign exchange), interest, penalty and related expenses are
foreign payment guaranty or advance payment made by the Bank. The Contractor agrees to adopt the application form of an open letter of credit, certificates of settlement of foreign exchange under a usance letter of credit, certificates of
transactions, bills of exchange or any other related documents as proof to liquidate the indebtedness without objections. 

  

	Article 2	If the region that the Contractor purchased material is not a USD region, the Contractor may apply to an open usance letter of credit in foreign currency. Total amount of every open
usance letter of credit converted into US dollar on the Bank’s exchange rate shall be used within the agreed amount. If the Bank’s payment exceeds the agreed amount due to change of exchange rate or for other reasons, the Contractor shall
still repay the exceeded amount. 

  

	Article 3	In addition to the collaterals provided by the Contractor, the Contractor shall provide bills of lading stated in every letter of credit under this contract or imported goods to
guarantee the indebtedness under every letter of credit. This contract shall be the proof of collateral submission. If after the arrival of goods the Bank considers that the Contractor’s financial capability becomes poor and may not be able to
make repayment, the Bank may collect imported goods and put such goods on auction or dispose the imported goods or other collaterals at its own discretion (including the method of disposal, time and price). If it is still insufficient to repay all
indebtedness, the Contractor is liable for the difference. All expenses incurred by the collection, including customs tax, warehouse fee, transportation fee, etc., shall be paid by the Contractor immediately. 

  

	Article 4	The longest term of the usance L/C opened revolvingly in accordance with the agreement shall not exceed the agreed period; the usance L/C shall recorded the deadline of the bill of
exchange or the payment based on the application form of the open letter of credit in order to determine the repayment date of each debt. If the Bank makes any advance payment, the interest shall be calculated from the actual payment date of the
bank (for a letter of credit with authorization of withholding, it shall be the withholding date; for a letter of credit without authorization of withholding, it shall be the date on which the Bank records the withholding and delivers the payment
notice) till the date of fully repayment in accordance with the preceding article. The interest rate is based on the agreed flexibility rate and shall be paid with the settled advance payment. 

  

	Article 5	The Contractor shall go through custom clearing and collection procedures once bills of lading for every letter of credit under this contract arrives. If the Bank suffers any damage
or loss or is in danger of suffering damages due to the Contractor’s inaction or delay, the Contractor shall immediately indemnify the Bank and be subject to the Bank’s management without any objection. 

  

	Article 6	The Contractor shall repay all principals and interests under every usance letter of credit on the maturity day using NT dollars at the sight foreign exchange selling rate announced
by the Bank or by the foreign currency. Any delay will incur the interest calculated by either “NTD Based Rate adding 4%” or “Foreign exchange credit rate (whichever is higher)”. In addition to the delayed interest, penalty shall
be imposed as well. 

  

	Article 7	The Bank shall execute the guaranty collection of goods or endorse sub-bills of lading pursuant to the Contractor’s request, if the goods, specification, unit prices, total
amounts, and terms are inconsistent with the arriving bills of lading, the Contractor shall observe all terms stipulated in the arriving bills of lading to provide additional funds and any other procedures. If the Bank suffers any damage due to
inconsistency between the executed documents and the arriving receipts, the Contractor shall be liable for it. The contents in such application of guaranty collection of goods or sub-bills of lading constitute part of the contract and is legally
binding upon the Contractor. 

  

	Article 8	Each time when applying an open usance letter of credit, within the agreed amount or the principal amount under every letter of credit converted into NTD based the Bank’s
exchange rate, the Contractor shall issue certificates to release the obligation of obtaining “Certificate of payment refusal”. The Contractor shall submit to the Bank the promissory notes that the financial institute is the payer that
undertakes to pay as the repayment of Contractor’s indebtedness under this contract. If the Contractor fails to fulfill the foregoing clauses, the Bank may exercise its right over the promissory notes under the Code of Bills. If the amount
stated in the promissory note is insufficient to repay the Contractor’s indebtedness, or the interest requested by foreign bank is higher than the interest calculated by Article 4, due to the changes of foreign exchange, the Contractor shall
immediately make up the difference. 

  

	Article 9	The Contractor shall obtain the Bank’s consent in advance on the types of insurance and insurance terms for goods of every letter of credit by the Contractor. If the imported
goods are delivered by FOB, C&F, or similar terms, the Contractor shall obtain appropriate insurance coverage and have the Bank, as the beneficiary, the original insurance policy and the premium receipt shall be provided to the Bank for records.
All expenses relating to insurance shall be bore by the Contractor. If the Contractor fails to obtain insurances or renew the insurance, the Bank has the right to proceed for the Contractor, which is not the Bank’s obligation. Any expense of
insurance paid by the Bank will be incorporated in the indebtedness of the Contractor and shall be liquidated immediately; otherwise the Contractor shall pay interests and penalty in accordance with Articles 4 and 6 of this contract.

  

	Article 10	As with goods (including goods on the way) under every letter of credit, damages to the bank due to seller’s (beneficiary’s) default, delayed delivery or other force
majeure shall be bore by the Contractor. If the beneficiary fails to draw the amount of the letter of credit partly or fully or the letter of credit expires, the Bank may draw directly to offset every advance payment under every letter of credit.

  
 Entrust Import Collection Loan of Material Purchase Contract

  

	Article 1	The Contractor shall submit related documents to apply for advance payment in foreign currency with the Bank at the time the Contractor repays the foreign import A/R collection. The
Contractor shall repay the indebtedness under this contract. 

  

	Article 2	The amount of this contract may be used in other foreign currency, the interest will be calculated by the Bank’s foreign currency advance payment rate, to which Articles 5 and
8 shall apply. If the Bank’s payment exceeds the agreed amount due to change of exchange rate or for other reasons, the Contractor shall still repay the exceeded amount immediately. 

  

	Article 3	The Contractor authorizes the Bank to pay the amount of bills of exchange under every D/A or P/A. 

  

	Article 4	The Contractor shall deliver to the Bank every import license (including second page of open letter of credit for goods exempted from the license). The Contractor acknowledges that
the difference between the L/C amount stated in every certificate of settlement of foreign exchange or transactions and the settlement amount (i.e., unsettled foreign exchange), interest, penalty and related expenses are advance amount made by the
Bank. The Contractor agrees to adopt certificates of settlement of foreign exchange or transactions or any other documents of the Bank as proof without objection. 

  

	Article 5	The period of used advance payment in foreign currency under this contract shall not exceed the agreed number of days; the interest will be calculated from the Bank’s actual
payment date and based on the agreed fluctuation rate. 

  

	Article 6	The Contractor shall go through custom clearing and collection procedures upon arrival of bills of lading for every letter of credit under this contract. If the Bank suffers any
damages or losses or in danger of suffering damages due to the Contractor’s inaction or delay, the Contractor shall immediately indemnify the Bank and be subject to the Bank’s management without any objection. 

  

	Article 7	The Contractor shall provide bills of lading stated in every letter of credit under this contract and imported goods to guarantee the indebtedness under every import transaction.
This contract shall be the proof of collateral submission. If the Contractor fails to make repayment or the Bank considers that the Contractor’s financial ability becomes poor and may not be able to make repayment, in order to secure the
credit, the Bank may collect imported goods from customs on behalf of the Contractor and put such goods on auction or dispose the imported goods or other collaterals at its sole discretion (including the method of disposal, time and price) to offset
the advance amount, interest, all expenses and loss incurred by the disposition (including taxes paid on the collection from customs, warehouse fee, transportation fee, etc.) . If the above amount is insufficient to repay all indebtedness, the
Contractor is liable for the difference. 

  

	Article 8	If the Contractor delays to repay the advance payment and interest, the delayed interest rate shall be either “NTD Based Rate adding 4%” or “Foreign exchange credit
rate (whichever is higher)”. In addition to the delayed interest, penalty shall be imposed as well. 

  

	Article 9	The Bank shall execute the guaranty collection of goods or endorse sub-bills of lading pursuant to the Contractor’s request, if the goods, specification, unit prices, total
amounts, and terms are inconsistent with the arriving bills of lading, the Contractor shall observe all terms stipulated in the arriving bills of lading to provide additional funds and complete any other procedures. The Contractor shall be liable
for any damages due to the inconsistency between the executed documents and the arriving receipts that the Bank suffers. The contents in such application of guaranty collection of goods or sub-bills of lading constitute parts of the contract and is
legally binding upon the Contractor. 

  

	Article 10	As with goods (including goods on the way) under every letter of credit, damages to the Bank due to seller’s (foreign exporter’s) default, delayed delivery or other force
majeure shall be bore by the Contractor. 

  

	Article 11	The Contractor shall obtain the Bank’s consent in advance on the types of insurance and insurance terms for goods of every import transaction of the Contractor. If the imported
goods are delivered by FOB, C&F, or similar terms, the Contractor shall obtain appropriate insurance coverage and have the Bank as the beneficiary in priority, the original insurance policy and the premium receipt shall be provided to the Bank
for records. All expenses relating to insurance shall be bore by the Contractor. If the Contractor fails to obtain insurances or renew the insurances, the Bank has the right to proceed for the Contractor. Any expense of insurance paid by the Bank
shall be incorporated into the indebtedness of the Contractor and shall be liquidated immediately; otherwise the Contractor shall pay interests and penalty in accordance with Articles 5 and 8 of this contract. 

  

	Article 12	In the event that a person who holds the written documents stating the receipt of import documents by the Contractor or the documents of providing collateral requests the Bank to
return or replace collaterals, the Bank shall treat such a person as the agent of the Contractor and return or replace the collateral. In case of any dispute thereof, it shall be the Contractor’s sole liability to resolve it.

  
 Contract of currency conversion for financing debt in foreign
currency 
  
 The Contractor has executed the agreements with the Bank regarding
“Entrust Open USANCE Letter of Credit”, “Entrust Open Sight Letter of Credit” and related documents (separately or collectively “the Original Contract”) to entrust the Bank to issue letter of credits or to lend foreign
currency funds, the Bank agrees to have all financing debts in foreign currency converted, both parties hereby consent as follows: 
  

	Article 1	The balance of financing debts in foreign currency under the Original Contract may be converted into the agreed currency at the agreed exchange rate and in accordance with “The
application for currency conversion for financing debts in foreign currency” issued by the Contractor. 

  

	Article 2	Collaterals provided for the original financing debts shall be the collateral of the financing debts after the currency conversion; the maturity date and repayment shall follow the
Original Contract. 

  

	Article 3	The interest of financing debts before or after the conversion shall be calculated based on the Bank’s rate for applicable currency financing by adding certain percentage. It
shall be paid in NT dollars converted by the Bank’s sight selling exchange rate on the liquidating date stipulated in the Original Contract. The Bank may charge penalty in accordance with the Original Contract for delayed repayment.

  
 Outward Bills Purchase Contract 
  

	Article 1	The Contractor may conduct negotiation or discount within the agreed amount, both parties agree that all clauses stipulated in the domestic or outward bills and/or export documents
signed or endorsed by the Contractor shall be valid and applicable permanently. Bills and/or documents issued or endorsed by the Contractor, no matter whether such request of negotiation or discount to the Bank is directly from the Contractor or
from a third party shall be applied. Unless requested by the Bank, no new contract shall be executed for every negotiation or discount. 

  

	Article 2	The Contractor agrees to provide bills of lading for the applied negotiation or discount and related goods as collaterals, to guaranty the amount of bills and/or documents issued or
endorsed by the Contractor for negotiation or discount, interest and all expenses. 

  

	Article 3	The Contractor acknowledges that the payment made by the Bank for the Contractor’s negotiation or discount are not outright transaction, the Bank has the right to request the
Contractor’s repayment at any time. For bills and/or documents negotiated or discounted by the Bank, if the Bank’s discounting bank, negotiating bank, or banks related to letter of credit refuse to handle due to inconsistency between such
bills and/or documents and the letter of credit, or the issuing bank refused to make payments, or at the time of delivery or other circumstance the goods are found to be in discrepancy in quality or quantity, the Contractor shall be liable for it.
The Contractor shall repay all amount for the Bank’s negotiation / discount, interest (based on the Bank’s foreign loan interest rate on the date of bills purchase) and other ancillary expenses after the Bank’s notice. The Contractor
authorizes the Bank, if the Bank or the negotiation banks consider it necessary, to provide guaranty letter to the issuing bank or accepting bank without notice, the Contractor shall be held fully responsible. 

  

	Article 4	In the event the paying bank of bills, the issuing bank of letter of credit, the accepting bank of letter of credit, or the guaranty acceptance bank and any other banks related to
letter of credit is insolvent, or declared bankrupt, confiscated, provisional attached, injunction, auction, or voluntary bankruptcy or settlement, after the Bank’s notice the Contractor shall immediately repay the amount for Bank’s
negotiation and/discount, interest and all ancillary expenses. 

  

	Article 5	If the documentary bills and/or documents are damaged or lost, or are deemed to have been damaged or lost, or delayed to arrive the payment location due to mistakes, after the
Bank’s notification and without any legal processes, the Contractor agrees to issue new documentary bills and/ or documents to the Bank in accordance with the Bank’s booking records, or pursuant to the Bank’s instruction to repayment
all amount of the Bank’s negotiation/discount and all ancillary expenses. 

  

	Article 6	The Contractor authorizes the Bank and its negotiating bank to deliver documentary bills and/or documents in the way that the Bank and the negotiating bank consider appropriate

  

	Article 7	If the right under documentary bills does not establish due to lack of legal requirements, or the credit of the documentary bills expires due to statutory limitation or procedure
incompletion, the Contractor shall be liable for all face amounts of the Bank’s documentary bills, interests and ancillary expenses. 

  

	Article 8	The Contractor shall indemnify the Bank’s damage caused by defects in documentation for whatever reasons. 

  

	Article 9	In the event that the Contractor’s signature or stamp or writing affixed to the documentary bills or other documents are considered by the Bank to be consistent with the
records in the Bank or other documentary bills documents originally used by the Contractor, even they are counterfeited or stolen, the Contractor is still held liable and shall indemnify the Bank against damages incurred thereof.

  

	Article 10	The Contractor authorizes that any manager or agents of the Bank, or the holder of the documentary bills and/or documents, may (but not a requirement) obtain insurance coverage for
the collaterals of documentary bills and/or documents, including rubbery and ashore fire insurance, all insurance and related expenses shall be bore by the Contractor. The Bank has the prior right of compensation against such documentary bills and
/or documents, its collaterals and the above expenses, and the Bank may dispose them to get compensations or compensate to the third party who pay the insurance and other expenses. All of it shall not affect the Bank’s right to other debtors of
documentary bills. The Bank may sell parts of collaterals to pay necessary transportation fee, insurance fee and other expenses. Meanwhile, the Bank may act on behalf of the Contractor to proceed all requirements and charge for its handling. The
Contractor shall follow the instruction of the payer or acceptor to move goods to the docks or warehouse owned by the government or individuals, provided the Bank has no objection on the designated dock or warehouse. 

  

	Article 11	The Contractor authorizes any manager or agent of the Bank, or the holder of the above documentary bills and/or documents, to accept conditional acceptance made by payer. After the
maturity date and full payment, the Bank shall forward the guaranty documents with the documentary bills to the payer or acceptor. This authorization is applicable to the joint acceptance. However, if the payer ceases transactions before the payment
or acceptance, or declares bankrupt or is in liquidation, the following provisions shall apply. 

  

	Article 12	The Contractor authorizes the Bank, in a manner considered as appropriate by the Bank, or the acceptor or its agent, before the maturity date or anytime, the Bank may deliver goods
to anyone separately (but not a requirement). But the reasonable amount shall be collected for the delivery of goods in part or in all, such amount shall be with reasonable ratio, comparable to the prices stated in the invoice or the amount in the
guaranty instruments. 

  

	Article 13	The Contractor authorizes any manager or agent of the Bank or the current holder of the documentary bills and/or documents, if the presence of documentary bills of acceptance or of
payment is rejected, the Contractor shall waive the requirement of obtaining the “Certificate of rejection”. For the foregoing refusal of acceptance or payment, or the payer or acceptor ceasing to pay, declaration of bankruptcy, or
insolvent before the maturity date, regardless of whether such documentary bills is accepted with conditions, the Bank may sell the collaterals of such documentary bills and /or documents, in part or fully, in a manner considered as appropriate by
the Bank or the holder of documents. The Bank may use the amount received from such sale, after deduction of handling charges and commission, to repay the amount of the documentary bills and its remittance fee. If there is any remaining amount, the
Bank or the holder of the documents may use it to repay other instruments of the Contractor (regardless with collaterals or not), or to repay any liability against the Bank. If the insured goods are destroyed or lost, the Contractor authorizes the
Bank to be compensated by the insurance policy, and the Bank shall deduct handling charges, all remaining amount shall be handled the same as the disposition of goods. 

  

	Article 14	If the net sale amount of goods is insufficient to repay the above amount of negotiation/discount (including the loss incurred by the conversion of exchange market), the Contractor
authorizes any manager, agent of the Bank, or the current holder of documentary bills and/or documents, to issue documentary bills to the Contractor for repayment of insufficiency. However, it shall not affect the Bank’s recourse right against
other endorsers. The Contractor agrees that all bills from the Bank or the holder of documentary bills and/or documents are evidences of the damage and loss suffered of the sale of goods, the Contractor shall repay all in the presence of such
documentary bills. 

  

	Article 15	No matter whether the sale of goods will take place, prior to the maturity date the Contractor authorizes the Bank, any manager or agent of the Bank or holder of the documentary
instruments to accept the requests of payer or accepter and provide bills of lading and other documents to payer or accepter after the payment. If the Bank or the holder of the documentary bills approves the advance payments, the rebate shall be
calculated based on the normal rate in the location of payment. 

  

	Article 16	For the bill of lading that the bill of lading is furnished after the acceptance, the Contractor authorizes the Bank to forward the shipping document, which is ancillary to the
documentary bills as collaterals to the accepter after the acceptance. Under such circumstance, if the accepter fails to make payment when due, the Contractor shall be liable for it. The Contractor shall repay all or part of amount owed under such
documentary bills, and any additional expenses and handling charges to the Bank. The Contractor shall further warrant that the Bank would not suffer any damages incurred thereof. 

  

	Article 17	The Contractor agrees that anything relating to operation, responsibility, obligation of letter of credit not stipulated in this contract shall be governed by “Uniform Customs
and Practice for Documentary Credits” issued by the International Chamber of Commerce and all clauses in the international rules relating to interpretation of trade conditions, which shall be deemed as part of this Agreement, which is legally
binding. 

  
 Purchase of Bills in Foreign Currency Contract

  

	Article 1	The quota of purchase of bills in foreign currency will be subject to the amount agreed by the Contractor and the Bank. 

  

	Article 2	The bills in foreign currency that the Contractor requests the Bank to purchase are not altered, counterfeited and shall be free from other defects. If such a matter is proved later
and causes the Bank’s damage, the Contractor shall be liable for indemnification. 

  

	Article 3	If the instruments in foreign currency that the Contractor requests the Bank to purchase are lost or destroyed after delivery by the Bank, and if it is not attributed to the Bank
(including the foreign agent banks), the Contractor shall immediately repay the amount under such instruments or provide equivalent instruments in foreign currency, the Contractor shall hold the Bank harmless and prevent it from any damage.

  

	Article 4	In the event the bills in foreign currency that the Bank purchased are rejected, unless the Contractor has entrusted the Bank in writing and obtained the Bank’s consent, the
Bank shall have no obligation on behalf of the Contractor to issue “certificate of rejection” and conduct any legal procedures to secure the right of the bills. 

  

	Article 5	The Bank may appoint any negotiation bank as the collection bank. Even if the Contractor has appointed the collection bank, the Bank is free to change. 

  

	Article 6	To prevent loss, secure credit or by the banks’ customary, the Bank may indicate any letter or mark on such bills or on the reverse side of bills, the Bank has no obligation to
eliminate those marks upon rejection of those bills. The Bank has no recovery liability and may return those bills with marks to the Contractor. 

  

	Article 7	The interest for the bills in foreign currency that the Bank purchased will be calculated by the agreed rate at the time of appropriation. The interest from the appropriation date
to the bills collection incoming date shall be calculated and deducted in advance. All handling charges, postage, inquiry fee and related expenses shall be paid based on the Bank’s tariff and the Contractor shall pay the descriptions between
the Bank’s tariff and actual payment, if any. 

  

	Article 8	If there is any dishonored note or dispute involving bills in foreign currency that the Bank purchased, which, whatever the reasons, causes the Bank unable to collect the amount of
bills or the amount to be withheld after collection, the Contractor shall immediately repay all amount of bills after the Bank’s notification. The Contractor shall also pay interests based on the Bank’s foreign exchange credit rate at the
repayment day as well as any expense. Any delay shall result in delayed interest calculated by the foregoing rate and the penalty shall be imposed from the due date based on the amount of bills. 

  

	Article 9	The Contractor agrees to follow all clauses of “Uniform Rules for Collection – ICC Publication” issued by the International Chamber of Commerce and all related rules
of the competent authority. 

  

 Export Loan Contract 
  

	Article 1	The loan amount shall be the amount agreed to between the Contractor and the Bank. The purpose of such loan is limited to paying working capitals for for export need. The Contractor
shall not use the fund for other purposes and reject the Bank’s inspection from time to time. 

  

	Article 2	The period of this loan is from the execution date to the agreed date, the Contractor shall issue Release Confirmation Letter and export letter of credit or export collection and
other export documents to apply for revolving use. The period of each use shall not exceed the agreed number of days. Unless requested by the Bank, no new contract shall be executed. 

  

	Article 3	The interest shall be calculated at the interest rate stipulated in the Release Confirmation Letter or related documents or agreed interest rate. 

  

	Article 4	If the Contractor fails to repay on an agreed date, the delayed interest will be calculated from the due date based on the Bank’s Base Rate plus 4%. If the Bank adjusts its
rate, after the adjustment date the interest shall be based on the Bank’s new Base Rate plus 4%. In addition, the penalty shall be imposed as well. 

  

	Article 5	The Contractor agrees that all foreign currency obtained from foreign sale of export negotiation or export collection that entrusted to the Bank shall be irrevocably authorized to
be used directly by the Bank to repay the principal and interest on negotiation date or the notification date of collection, remittance and clean collection. In order to secure the source of repayment, the Contractor shall have the Bank undertake
the foregoing export negotiation, export collection, or remittance transactions. 

  

	Article 6	As with all instruments, purchase orders, letter of credits provided by the Contractor under this contract, if the payment is duly received priot to expiry date of the loan, the
Contractor and the guarantor agree that the Bank may directly offset the loan in advance. 

  

	Article 7	In the event that foreign banks reject to make payment to export negotiation handled by the Bank pursuant to the Contractor’s application, or no payment is received for export
collection due, or buyers from other nations fail to make payments as agreed, the debtor and the guarantor are willing to make repayment immediately unconditionally. 

  
 Other contracts: 
  
 TO: Chinatrust Commercial Bank Co., Ltd. 
  

			
	 Contractor:
	  	Silicon Motion Inc. (Personal signature with original seal agreed upon)
	 Legal Representative or Agent:
	  	/s/ James Chow
	 Tax No:
	  	97440546

  

			
	 Address (waived with the signature card presented):
	  	 
	 Guarantee Date:
	  	November 25, 2004.

  

			
	 Contractor:
	  	(Personal signature with original seal agreed upon)
	 Legal Representative or Agent:
	  	 
	 Tax No:
	  	 
	 Address (waived with the signature card presented):
	  	 
	 Guarantee Date:
	  	 
		
	 Contractor:
	  	(Personal signature with original seal agreed upon)
	 Legal Representative or Agent:
	  	 
	 Tax No:
	  	 
	 Address (waived with the signature card presented):
	  	 
	 Guarantee Date:
	  	 
		
	 Contractor and Joint Issuer:
	  	(Personal signature with original seal agreed upon)
	 Legal Representative or Agent:
	  	 
	 Tax No:
	  	 
	 Address (waived with the signature card presented):
	  	 
	 Guarantee Date:
	  	 
		
	 Contractor and Joint Issuer:
	  	(Personal signature with original seal agreed upon)
	 Legal Representative or Agent:
	  	 
	 Tax No:
	  	 
	 Address (waived with the signature card presented):
	  	 
	 Guarantee Date:
	  	 
		
	 Contractor and Joint Issuer:
	  	(Personal signature with original seal agreed upon)
	 Legal Representative or Agent:
	  	 
	 Tax No:
	  	 
	 Address (waived with the signature card presented):
	  	 
	 Guarantee Date:
	  	 

  

  
 Confirmation Letter of
Promissory Note for Credit Line 
  
 The confirmation issuer (“the
Issuer”) has executed promissory notes which are in compliance with the below statement to Chinatrust Commercial Bank Co., Ltd. (“the Bank”). Such promissory notes are issued to guaranty the repayment of the credit line under the
opening domestic letters of credit or fund use; or any repayment of the credit line or guaranty for any of the followings: opening foreign letters of credit; import finance; guaranty of goods for import collection/endorsement of sub-bills of lading;
export negotiation; purchase blank bills; A/R factoring; advance payment. For any letter of credit, finance, negotiation, assignment, advance payment within the same total credit line, the Issuer is not required to provide promissory notes
independently. The Bank may request repayment for the above or other liability of the Issuer, collectively or separately, partly or fully, based on the promissory note, this confirmation letter, applications and related contracts. The Issuer shall
immediately make repayment without objections. The Issuer hereby makes this letter as the evidence. 
  
 I. Amount of the promissory note: Fifty Million NT Dollars 
  
 II. Issuance date of the promissory note: November 25, 2004 
  
 III. Maturity date of the promissory note: 
  
 IV.
Payee: Chinatrust Commercial Bank Co., Ltd. 
  
 To Chinatrust Commercial Bank Co.,
Ltd. 
  

			
		
	Issuer (Note Issuer): Silicon Motion Inc.	 	 
	                                  /s/ James Chow	 	(signed)
		
	Issuer (Note Issuer):	 	(signed)
		
	Issuer (Note Issuer):	 	(signed)
		
	Issuer (Note Issuer):	 	(signed)

  
 Date: November 25,
2004.Financial Transaction Agreement dated November 25, 2004

 EXHIBIT 10.7 
  
 Financial Transaction Agreement 
  

			
	Unit/Organization:	  	Hsinchu Department/ Regional Center
		
	Customer:	  	Silicon Motion Inc.
		
	Contract Date:	  	November 25, 2004
		
	 	  	(Exclusively for general credit line)

  

  
 Financial Transaction
Agreement 
  
 I: Financial Transaction Master Agreement 
  
 The Contractor hereto agrees to observe the following terms and conditions with respect to
transactions with the Bank. Unless expressly indicated otherwise, any request, instruction, confirmation, transaction agreements and other documents submitted and signed by the Contractor shall be governed by provisions of this Agreement. For any
person authorized by the Contractor to undertake the transaction, see “Authorization Letter to Authorized Person”. 
  

	Article 1	Definition: 

  

	 	1.	Business day: refers to any day on which banks in Taipei, Taiwan, R.O.C are open for business. International market practices shall apply in case of any foreign currency involved.

  

	 	2.	Currency: refers to NTD and legal currencies of all other countries. 

  

	 	3.	Foreign Exchange: refers to all legal currencies other than NTD. 

  

	 	4.	Spot: transactions with physical delivery or cash settlement on the business date, the following business day or two business days after the transaction date.

  

	 	5.	Forward: refers to a transaction in which a business is designated as the expiration date for a certain amount of physical delivery or settlement for difference at a specific price.

  

	 	6.	Call: refers to the holder’s right (not obligation) to buy a certain amount of target currency at the exercise price from an option seller. 

  

	 	7.	Put: refers to the holder’s right (not obligation) to sell a certain amount of target currency at the exercise price from an option buyer. 

  

	 	8.	American option: refers to an option that can be exercised at any time between the purchase date and the expiration date. 

  

	 	9.	European option: refers to an option that can only be exercised on the date of expiration. 

  

	 	10.	Premium: refers to an amount of money acquired upon sale of the options. 

  

	 	11.	Knock-in: refers to a valid option when a spot price reaches an agreed price level. 

  

	 	12.	Knock-out: refers to a invalid option when a spot price reaches an agreed price level. 

  

	 	13.	Forward rate agreement: refers to a transaction with respect to receipt or collection of a certain amount of interests at a specific interest rate during a specific interest period
designated on the transaction date. 

  

	 	14.	Cap: refers to the holder’s right (not obligation) to pay the interest at the exercise interest rate where the market interest rate is above the exercise interest rate on the
agreed fixing date. 

  

	 	15.	Floor: refers to the holder’s right to receive the interests at the exercise interest rate where the market interest rate is below the exercise interest rate on the agreed
fixing date. 

  

	 	16.	Fixing Date or Expiry Date: the business day when the market price is compared with the agreed price. 

  

	 	17.	Settlement Date: the business day of physical delivery or settlement for difference, usually the second business day following the fixing date. 

  

	 	18.	Swap: a contract with respect to buying/selling foreign exchange in the spot or forward market and selling/buying the same amount of foreign exchange in the forward market at the
same time. 

  

	 	19.	Interest Rate Swap: a contract where interests are periodically exchanged with different exchange rates of a single currency as the object of exchange. 

  

	 	20.	Cross Currency Swap: a contract where principals and interests are exchanged between different currencies. 

  

	 	21.	Structure Investment Contract: a contract with respect to a deposit interest rate linked to one or more objects; the interest rate may rise properly under some circumstances or fall
otherwise. The principal of structure deposit may be impaired depending on the regulated conditions. 

  
 Unless otherwise specified in this Agreement, the terms and definitions used herein and the transaction agreement shall be governed by and construed in
accordance with applicable national laws, the latest version of ISDA, or current market conventions. 
  
 Terms and definitions not covered in this Agreement shall be construed in accordance with the individual transaction confirmation, the memorandum on
conditions, or market convention. 
  

	Article 2	Transaction Agreement 

  

	 	1.	Quotation: The Contractor may require the Bank to provide reference prices at any time but the Bank is not obliged to make transactions with the Contractor according to the
reference prices. No transaction agreement is made unless the Contractor issues requests for transactions and completes the necessary transaction processes. 

  

	 	2.	Memorandum on conditions: The written memorandum on conditions provided by the Bank in terms of the transaction nature, conditions and/or risks shall be regarded as the reference
quotation. 

  

	 	3.	Suggestions: The Contractor may require the Bank to provide transaction suggestions for reference only. All transactions shall be carried out at the Contractor’s own
discretion. The Bank is not responsible for gains and losses from the transactions. The bank may refuse to provide any suggestions depending on the situations. 

  

	 	4.	Request: The Contractor may make transaction requests in oral or written form (referred to as “the Request” hereinafter). The Contractor shall be subject to the Request
once such a request is fulfilled during the agreed period or before withdrawal of the Request. The Bank may reject the request depending on the situations. 

  

	 	5.	Instructions: For the purpose of this Agreement or as required by the transactions, the Contractor may send instructions in oral or written form (referred to as “the
Instruction” hereinafter). The Bank shall process the Instruction accordingly without any objection of the Contractor. 

  

	 	6.	Oral and Written Form: For the purpose of this Agreement, the Contractor authorizes the Bank, at its sole and absolute discretion, to identify and process Contractor’s oral/
written requests, instructions, confirmation and other relevant behaviors. “Oral form” refers to a behavior conducted by a Contractor’s authorized person personally or by telephone. The Contractor agrees that the Bank may record the
conversation between the parties and file them as evidence. “Written form” refers to a behavior conducted through hard copy, telegraph or facsimile. Without objection, the Contractor authorizes the Bank to deal with a telegraph or fax copy
as the original copy. The Bank shall confirm with the Contractor unclear words or numbers on the facsimile copy or questions. 

  

	 	7.	Close-out: Upon confirmation of the transaction, the Contractor has the right to make reverse transaction to close out all or part of the original transaction.

  

	Article 3	Confirmation, Clearance, and Delivery: 

  

	 	1.	Confirmation: Except spot transactions, the Bank will send a written confirmation letter to the Contractor within three business days after the following day of the transaction
date. Upon confirmation, the Contractor shall affix the corporate stamp and the responsible person’s stamp, or the confirmation stamp authorized with the forgoing two stamps, and shall reply such a confirmation letter. Should the Contractor
have any question about the transaction details described in the confirmation letter, the Contractor shall immediately contact the Bank by telephone for objection. The Bank shall investigate the transaction terms in question. If there is any
inconstancy between oral transaction and the transaction details described in the confirmation letter, the oral transaction shall supersede. No matter whether the Bank has received the Contractor’s confirmation letter, the Contractor shall be
deemed to have accepted and agreed on the confirmation latter if it doesn’t raise objections within one business day after receipt of the confirmation letter, seven days after the sending such a confirmation letter or fourteen days after the
transaction date (which is earlier). The Bank shall re-send the confirmation letter in case of any inconsistency found through investigation. The Contractor obliged to reply the confirmation letter to the Bank even if delivery or settlement has been
completed prior to the said reply. 

  

	 	2.	Clearance: Gains or losses of a close-out shall be paid by the party of loss to the other party. The Contractor agrees that the Bank calculates gains or losses of the close-out. The
two parties are subject to the unclosed-out position that is still valid. 

  

	 	3.	Delivery: The Contractor is entitled to acquire the proceeds from the transactions only after delivering to the Bank the payable immediately available funds.

  

	 	4.	Automatic Close-out: The Bank may automatically close out a transaction which matures on a business day at the then market price without instruction at 3 p.m. Taipei Time where
necessary. 

  

	 	5.	Offset: The Bank and the Contractor shall pay to each other the net balance after mutual offsetting with respects to gains and losses of transactions which expire on the same
business day. 

  

	Article 4	Premium 

  

	 	1.	Payment: Unless otherwise stated by the parties in written, premiums shall be paid to the other party on respective payment dates according to international and domestic market
conventions. 

  

	 	2.	Delay: If the seller of the objective right doesn’t receive the premium on the payment date, it may choose to: 

  

	 	(1)	accept the delayed payment of the premium: 

  

	 	(2)	notify the buyer in written. The buyer will be deemed to have breached the contract upon failure to pay the premium within two business days after the notification, and the seller
may exercise the right to the dispose the objective right. 

  

	 	3.	Compensation for Delay: The buyer shall indemnify the seller fully against all expenses, interests and losses arising from the seller’s handling of delayed payment of premium.

  

	 	4.	Currency and Amount: The currency and an amount of premium under this Agreement are determined by the Bank. 

  

	Article 5	Losses and Collateral 

  

	 	1.	Margin: The Contractor shall at all times maintain Collateral with the Bank of not less
                 percent (            %) of the then outstanding Transactions (as calculated
and determined by the Bank). (* If no margin is required, insert “zero” in the blank.) 

  

	 	2.	Mark-to-market Losses: 

  
 At any time on each day, the Bank may mark to market all Transactions and if at any time the mark-to-market losses of the Contractor exceed the Loss
Limit, the Bank shall be entitled to request from the Contractor Collateral, in addition to any Collateral provided for in Section 2.1, in an amount equal to the amount by which mark-to-market losses exceed the Loss Limit. The calculation of
mark-to-market losses shall be as determined by the Bank. 
  

	 	3.	Close-out: 

  
 If any Collateral is not received by the Bank when due, the Bank shall be entitled, but not obliged to, and shall not be liable to the Customer in any respect for any loss arising from any failure to close-out any and
all Transactions immediately. Should the Bank be entitled to effect such closing out, the timing thereof shall be determined by the Bank at its sole discretion. All expenses or losses incurred to the Bank in relation to close-out of the position
shall be determined by the Bank and borne by the Contractor 
  

	Article 6	Breach of Agreement 

  

	 	1.	Breach of the Agreement: Each of the events stated below is regarded as breach of the Agreement (referred to as “the breach” hereinafter): 

  

	 	(1)	The Contractor fails to make payments or provide margin as agreed in this Agreement or make payments with respect to other agreements with the Bank when due.

  

	 	(2)	The performance of this Agreement becomes illegal, incapable or difficult to the Contractor or the Bank. 

  

	 	(3)	The Bank finds that the financial statements and transaction-related agreement and documents provided by the Contractor to be untrue or misleading. 

  

	 	(4)	The Contractor declares or is declared bankrupt, dissolved, reorganized, or collateral lien or detained. 

  

	 	(5)	The Contractor fails to make timely payments under agreements with others. Or, the Bank releases a written statement that the Contractor’s (as principal debtor or guarantor)
financial liability has accelerated due or has been allowed to accelerate due. 

  

	 	(6)	Any situation, which the Bank views that the Contractor is to default or fails to fulfill the obligations contained herein or any obligations pertaining to a transaction based on
its reasonable judgment; however, the situation shall be only deemed as a breach when the Bank submits a declaration in written. 

  

	 	2.	Consequence of Breach: Upon occurrence of any of the breaches, the Contractor has no right to conduct any transaction with the Bank. The Bank shall be entitled, but not obliged to,
take any of the actions below at any time: 

  

	 	(1)	Declares that all payments relating to this Agreement, the transaction contract, and transaction amounts payables to the Bank to be immediately due. 

  

	 	(2)	Cancels transaction requests and/or close out all Transactions immediately in accordance with fair market prices. The Contractor shall not claim rights to positions favorable to the
Contractor only. 

  

	 	(3)	Disposes the Margin or the Collateral and use the proceeds to offset the due payments. The Bank is not obliged to exercise the above-mentioned rights at a time or in such a manner
as in favor of the Contractor. 

  

	 	3.	Deferred Interest Rate: Upon the Contractor’s failure to make timely payments under this Agreement or Transaction Contract, the Contractor shall pay the Bank extra amount of
fund cost plus 2% during the deferred period, from the due date to the payment date. The manner in which the Bank obtains the funds and its source shall be determined by the Bank at its sole discretion. 

  

	 	4.	Temporary Credits of the Bank: The Contractor hereby authorizes the Bank to decide at its sole discretion, whether the Collateral or other offset funds shall be allocated as the
Bank’s temporary credits to maintain its rights against the Contractor before the Contractor’s indebtedness to the Bank under this Agreement is due. 

  

	Article 7	Indemnifications 

  
 In addition to provision in the previous article, the Contractor shall be responsible for the Bank’s expenses, losses, expenditures and liabilities
resulting from the Contractor’s failure to honor its obligations under this Agreement, and/or any transaction contract or other transactions. Furthermore, the damages shall include the Bank’s costs, expenses and other payables arising from
the Customer’s failure to receive/ pay money in accordance with terms and conditions of transactions. The damages shall also include the Bank’s losses (including lost gains), fines and other expenses because of the Bank’s fund cost to
implement this Agreement, and/or any transaction contract, or transaction due or almost due. 
  

	Article 8	Miscellaneous 

  

	 	1.	Expenses and Expenditures: At the Bank’s request, the Customer agrees to pay for the Bank’s expenditures and costs arising from exercising and maintaining its rights under
this Agreement, Transaction Contract or other transaction-related rights (including but not limited to interest, attorney fee and other expenses). 

  

	 	2.	Currency and Amount: The Customer shall pay for the currency and amount of the agreement in accordance with the Transaction Contract and shall not deduct any amount in the name of
expenses, taxes or any others. Upon payments with other currencies, the exchange rate shall be determined by the Bank based on the fair market price basis. The Bank is entitled to decline Customer’s payment with other currencies depending on
the situations. 

  

	 	3.	Legitimacy: In case where the Bank is required to suspend this Agreement or any Transactions pursuant to provisions or order of competent authorities, the Bank may close-out or
settle any and all Transactions herein immediately. The Customer shall be responsible for the losses caused and shall not claim any rights or make any requests against the Bank as a result of this. 

  

	 	4.	Right of set-off: Upon the Customer’s failure to make payments according to this Agreement or other agreements between the parties in time, the Bank is entitled to, but not
obliged to, off-set the above-mentioned amount payables with the Customer’s deposit at the Bank or the Bank’s amounts or debts payable to the Customer (no matter they are incurred due to this Agreement or others, and irrespective of the
currency and amount) within the maximum scope of the related laws (not limited to the existing rights under this Agreement and others.) 

  

	 	5.	Calculation Agency: The Bank is the calculation agency of all amounts related to the Agreement. 

  

	 	6.	Taxes: Taxes resulting from the Transaction shall be borne by the parties hereto in accordance with relevant laws. Unless agreed by the Bank in written, the Customer shall not
demand the Bank to pay taxes that shall be borne by the Customer. 

  

	 	7.	Other Agreements (if applicable): Agreements that have been signed or to be signed between the Customer and the Bank shall also apply to Transactions in this Agreement.

  
 II: Secured Transaction Contract 
  
 The Contractor agrees the time deposit at the Bank to be the Collateral of the transaction
performance of spot foreign exchange, forward foreign exchange, FX swap or FX option at the money market for 6 months. The Contractor agrees that the terms and conditions set forth in the “Financial Transaction Contract” of the Bank shall
apply. 
  

	Article 1	Before the Transaction, the value of the Collateral provided by the Contractor shall not be less than 5% of the transaction amount; while after the Transaction, the balance of
Collateral value minus the market-evaluated loss (referred to as Balance hereinafter) shall not be less than 3% of the transaction amount. In case of Balance ratio lower than 3%, the Contractor shall provide additional Collateral to restore the
Balance ratio to be 5% as soon as possible. Upon the Contractor’s failure to provide additional Collateral within two business days after the Bank’s notification, the Bank is entitled to close out the Contractor’s Transactions and the
Contractor shall be without objection. In case of balance ratio lower than 1%, no matter whether the additional Collateral is provided, the Bank is entitled to close out the Contractor’s Transactions and the Contractor shall be without
objection. Even if the value of Contractor’s position reverses thereafter or the additional Collateral is provided after the agreed period, the Bank is still entitled to close out the Contractor’s Transactions. The Bank shall have the
right to manage the calculation and determination of market-evaluated loss and Balance ratio. Upon dramatic fluctuation of the Transaction market, the Contractor shall agree to adjust the amount of Collateral in accordance with the Bank’s new
balance ratio. 

  

	Article 2	The Bank’s notification of additional Collateral shall be deemed to have been received upon the Bank’s telephone record, the first registered mail arriving the address
below, or the first registered mail delivered to the address below after a reasonable period. Upon failure to provide additional Collateral timely, the Contractor shall have no objection to the close-out of its transactions by the Bank and shall not
claim any damages against the Bank hereafter. 

  
 III: Agreement
on Spot Foreign Exchange, Non-spot Delivery 
  
 In consideration of spot
foreign exchange Transactions between the Contractor and the Band, the parties hereto agree as follows. 
  

	Article 1	The Transaction is valid after the confirmation of the parties on the trade date. The Contractor shall have the money and necessary documents ready on the delivery date to complete
the delivery with the Bank at the agreed price. 

  

	Article 2	Unless otherwise stated in this Agreement expressly, terms and conditions of this Agreement shall apply to any requests, instructions, confirmation letter, transaction contract, and
other documents issued and signed by the Contractor. Matters that have not been covered in this Agreement shall be governed in accordance with individual transaction’s confirmation letter, memorandum on conditions or market conventions.

  

	Article 3	The Contractor may require the Bank to provide reference prices at any time but the Bank is not obliged to make transactions with Contractor according to the above-mentioned
reference prices. No transaction agreement is made due to provision of reference prices by the Bank unless the Contractor requests so and completes the necessary Transaction processes. 

  

	Article 4	The Contractor may send Transaction requests or instructions orally or written. The Contractor is subject to of the request or instructions during the agreed period or before the
withdrawal. The Bank may refuse to accept the request or instructions depending on the situation. “Oral” refers to the activities by Contractor’s authorized person personally or by telephone. The Contractor agrees that the Bank may
record the conversations between the parties. “Written” refers to the activities through hard copy, telegraph or fax copy. Without any objection, the Contractor hereby authorizes the Bank to deals with telegraph or fax copy as the original
copy. 

  

	Article 5	In the event that the Contractor fails to complete the delivery on the delivery date as agreed in the warranty letter, or under any of the following circumstances:

  

	 	1.	The performance of this Agreement becomes illegal, incapable or difficult to the Contractor or the Bank. 

  

	 	2.	The Bank finds that the agreements, documents relating to the transaction provided by the Contractor or its representative to be untrue or misleading. 

  

	 	3.	The Contractor fails to make timely payments payable under agreements with others. Or, the Bank releases a written statement that the Contractor’s (as principal debtor or
guarantor) financial liability has accelerated due or has been allowed to accelerated due . 

  

	 	4.	Upon other events, the Bank reasons that the Contractor will not, or will be unable to honor its obligations under this Agreement, any of the Transactions or any transaction-related
obligations and the Bank releases a written statement; The Bank is entitled to, but not obliged to take the following actions at any time: 

  

	 	a.	declares that all payments payables to the Bank with respect to transactions between the Contractor and the Bank to be immediately due. 

  

	 	b.	cancels transaction requests and/or close out all Transactions immediately in accordance with fair market prices. The Contractor shall not claim any rights to any positions
favorable to the contractor. 

  

	 	c.	To the extent allowed under applicable laws (not limited to existing rights of the Bank under this warranty letter and other agreement) 

  

	 	(a)	the Contractor’s deposit at the Bank, and 

  

	 	(b)	the Bank’s payments payable or debt liabilities payable to the Contractor (no matter whether they are incurred due to this guarantee letter or other agreement and irrespective
of the amount and types of currency) may be offset by expenses, losses, expenditures and liabilities arising settlement payable by the Contractor or the Contractor’s failure to honor its obligations under this warranty letter.

  

	Article 6	This Agreement shall be governed by laws and statues of R.O.C; the parties hereby agree to submit to exclusive jurisdiction of the district court for the first instance where the
head office of the Bank and its branch are located with respect to any proceedings relating to this Agreement. 

  
 IV: Contract for Forward Bond Transactions: 
  
 The contract is made by and between the Bank (referred to as “Party A” hereinafter) and the Contractor (referred to as “Party B” hereinafter) with
respect to the operation guidelines for Party A in handling forward bond transactions. The parties agree to obey the following terms and conditions: 
  

	Article 1	Scope of Application 

  
 This Agreement is subject to the operation for OTC forward bond transactions between Party A and Party B. The forward transaction in this Agreement refers
to transactions longer than 10 days, from the trade date to the delivery date, and no longer than 6 months (referred to as Transaction hereinafter). Unless otherwise agreed to by the parties in written, each transaction is subject to terms and
conditions of this Agreement, supplementary provisions and relevant regulations of other appendixes. 
  

	Article 2	Definition 

  

	 	1.	Business Date: the day of which the OTC bond market is open. 

  

	 	2.	Trade Date: the day of the transaction done between the parties. 

  

	 	3.	Settlement Date: the agreed day of exchange of money and bond between the parties. 

  

	 	4.	Buyer: the bond buyer 

  

	 	5.	Seller: the bond seller 

  

	 	6.	Confirmation: refers to the provisions under Article 3.2 herein. 

  

	 	7.	Entire Contract: refers to the provisions under Article 9.1 herein. 

  

	 	8.	Major Events: Each party’s reorganization, liquidation, dissolution, bankruptcy, merger, temporary closing-down, being enforced under compulsory execution, being turned down by
the note exchange house or other events affecting the parties’ operations. 

  

	 	9.	Breach of the Contract: Non-performance of the settlement obligation by either party, or major events, untrue declaration, failure, inability or unwillingness of either party to
honor payment obligations under the contract. 

  

	Article 3	Commencement and Confirmation 

  

	 	1.	The commencement time of the Transaction can be fixed by the parties hereto either in oral or written. The transaction shall be valid as soon as it is concluded.

  

	 	2.	After the transaction is concluded, either party or the parties shall immediately confirm the transaction with the other party in written or in any other manner as recognized by the
parties hereto or in conformity with market conventions. The confirmation letters shall include relevant terms and conditions of each Transaction and confirm that terms and conditions in conflicts with this Agreement shall be invalid.

  

	Article 4	Confirmation Documents 

  
 The Transaction shall be established in written, signed by Party A and Party B, and contain the terms stated below: 
  

	 	1.	Confirmation of the identification of Party A and Party B to be the buyer or seller respectively. 

  

	 	2.	Transaction bond and its terms. 

  

	 	3.	Transaction date. 

  

	 	4.	Payment and settlement date. 

  

	 	5.	Transaction face value. 

  

	 	6.	Transaction price or yield. 

  

	Article 5	The content, amount calculation and payment method of the Collateral 

  

	 	1.	To insure the payment and settlement obligations are honored in a timely manner, it is agreed that due to the fluctuations of the market price of the transaction bond, during the
contract period, the supplementary articles concerning the Collateral’s content, amount calculation and payment method may be negotiated. 

  

	 	2.	The content of Collateral shall be cash (“secured cash”) or bond (“secured bond”) and be delivered in such a manner as agreed by the parties. The calculation of
Collateral shall adhere to the principle of maintaining the total replacement cost losses of a single contract. 

  

	 	3.	The parties may take “replacement cost loss”, “the ratio of replacement cost loss accounting for the transaction amount” or “a certain period of time”
as the payment condition of Collateral. 

  

	Article 6	Payment and Market Conventions 

  

	 	1.	Each transaction shall be paid by means of cashing income and expense unless otherwise agreed to by the parties. 

  

	 	2.	Price paid by the buyer shall be immediately available funds to the seller. 

  

	 	3.	The bond delivered by the seller shall be flawless and assignable. The buyer may demand the seller to sign on necessary documents, endorsement and other warranty to ensure the Buyer
obtains the ownership. 

  

	 	4.	The transaction bond shall be delivered through the Central Government Bond Entry System or in other manners as agreed to by the parties. 

  

	 	5.	It is agreed that the market conventions shall be obeyed and that the terms and conditions of the contract shall not be in conflicts with market practices related to transaction and
settlement. 

  

	Article 7	Declaration 

  
 The parties hereto make the declaration hereunder to each other and the declaration is deemed to be repeated by the contractor upon each transaction on the business day: 
  

	 	1.	The contractor has the right to execute and deliver the General Agreement and to conduct the transactions, payment and settlement. 

  

	 	2.	Each party is entering into the contract as principal or has signed on separate written documents of commissioned agents as agreed to by the parties hereto to conduct transactions
by proxy. 

  

	 	3.	The representative signing the Agreement has been duly authorized. 

  

	 	4.	All the governmental permissions in connection with this contract have been obtained and remain valid. 

  

	 	5.	The performance, payments and settlement of this contract and transactions shall be governed by applicable laws, transaction conventions, articles of incorporations, guidelines, and
regulations of the Gretai Securities Market of ROC. 

  

	Article 8	Breach of the Agreement 

  

	 	1.	Upon the breach of the contract, the innocent party may declare the other party of breach and is entitled to take the following actions without notice: 

  

	 	(1)	Terminate part or all of the transactions. The damages, losses, costs and expenses shall be borne by the breaching party. 

  

	 	(2)	Offset the innocent party’s responsibilities including bonds, payables and properties against the breaching party. 

  

	 	(3)	The innocent party may dispose of all the secured bonds held at the market price or reasonably recognized price and use the proceeds from the disposal and the secured cash to offset
relevant liabilities under the contract. Or, the innocent party, at its own discretion, may provide the breaching party with credit line equivalent to the market value of the secured bonds. The latest bid price of security brokers in general markets
can be used as the basis for determining the market price of the secured bonds. 

  

	 	(4)	Other necessary actions related to the transactions to retain and strengthen the rights and negotiation interests. The innocent party shall advise the breaching party on the actions
to be taken within 3 business days after the day following the pronouncement of the breach. 

  

	 	2.	The innocent party may immediately take the Collateral and revenues back, pronounce the other party’s breach of the contract, and have the right to take the actions stated
below without notice: 

  

	 	(1)	Upon the breaching party’s failure to deliver the secured bonds, the innocent party may immediately back buy bonds of equivalent volume and value at the market price or
reasonably recognized price (replacement bond); or 

  

	 	(2)	The innocent party may back buy bonds at the latest offer price in the market of the security brokers. And the breaching party is responsible for returning the market price of the
replacement bond along with other secured cash. 

  

	 	3.	The breaching party shall assume the below-mentioned responsibilities for the innocent party: 

  

	 	(1)	The attorney fees and other expenses related to the breach of the contract. 

  

	 	(2)	The replacement costs, damages of hedge and hedge-termination and all the commissions, expenses and processing fees related to the transactions due to the breach.

  

	 	(3)	Other losses, damages, costs and expenses directly in connection with the beach. 

  

	 	4.	Subject to the laws, the default interest of liabilities of the breaching party shall be calculated based on the prime loan rate of Bank of Taiwan from the date of liabilities to

  

	 	(1)	the date of breaching party’s complete pay-back; or 

  

	 	(2)	the date of full realization of the innocent party’s rights 

  

	Article 9	Entire Agreement 

  
 It is mutually agreed that each transaction, the General Agreement and all the transactions shall constitute the entire Agreement. Both parties agree to
observe the following terms and conditions: 
  

	 	(1)	Each party shall fulfill its obligation under any transaction. Upon any party’s breach of any transaction, it is regarded as breach of the contract of all the transactions.

  

	 	(2)	Upon any breach of the transaction, the innocent party may ask for compensation for other transactions between the parties and apply for property provisional detention.

  

	 	(3)	Pursuant to this entire Agreement, accounts receivable or payable of transactions and other transactions may reciprocally set-off, paid or settled by the net amount or settled and
bonds. The netting settlement is regarded as the completion of settlement of each transaction. 

  

	Article 10	Risk Disclosure 

  
 Forward transactions involve significant risks. Each party shall evaluate its financial status, investment objects, limit by laws and regulations, the
resources to identify the the risks and the obligations of the terms and conditions of the transaction to determine whether to conduct such transactions or not. 
  
 The main risk of forward transactions is the price risk, namely the possible losses from fluctuations of market price or
interest rate from the trade date to the settlement date. The second is the default risk referring to the real losses from the other party’s failure to implement the settlement obligations on the settlement date including the possible loss of
the collateral given to the breaching party. The third one is the price manipulation risk. The other party may buy bonds frequently to make market or hedge becoming the monopoly of a certain bond, which cause our possible losses due to no bonds to
buy in the spot market or becoming the price-taker of the other party when settlement. The last one is the risk of close-out position resulting from the other party’s close-out of the positions upon the Contractor’s failure to assume the
responsibilities for the obligations under this Agreement of collateral submission and additional supplement collateral article. 
  

 The above-mentioned risk disclosure is so brief that it cannot include all the transaction risks in
detail. Before entering into the transaction, each party shall consult with its advisors of business, legitimacy, taxation and accounting, read carefully the content of the General Agreement to evaluate its suitability of such transactions. It is
agreed that the General Agreement and all the transactions are independently decided by the Contractor without any relationship of investment entrust or consulting with the Bank. 
  

	Article 11	Notice and Other Communication 

  
 The notice, declaration, requests and other communication shall be made by a party’s mail, fax, telegraph or note to the other party or its mailing
address or changed address. The notice may be made orally first and confirmed in written or the above-mentioned method. 
  

	Article 12	Non-Transferable Clauses and Termination of Contract 

  

	 	1.	Except as expressly agreed in written, the rights and obligations of the contractors shall be non-transferable and unchangeable. The transaction interests under this contract shall
belong to the contractor and the agreed heir only. Each party may terminate the contract by giving a written notice to the other party, but the previously established but unsettled transactions shall still be valid. 

  

	 	2.	The above article excludes the conditions described in Article 8. The innocent party may transfer or change all of or part of the interests and the breaching party shall have no
objections. 

  

	Article 13	Jurisdictions 

  
 The General Agreement is subject to laws and regulations of R.O.C. The terms and conditions in conflict thereto are invalid. 
  

	Article 14	Non-waiver of Rights 

  
 The deferred exercise of rights or privileges under the contract shall not be deemed as a waiver. The partial exercise of the rights or privileges shall
not be deemed as exemption of future exercise. 
  

	Article 15	Recording 

  
 It is mutually agreed to record price negotiation on the telephone by electronic media. 
  
 Risk Disclosure Statement for Financial Derivatives Transactions (Chinatrust Commercial Bank Co., Ltd. invites you to read this Notice in detail.) 
  
 The Customer shall pay attention to and evaluate the risks stated below in conducting
financial derivative transactions: 
  

	1.	The unfavorable market condition may cause damage to your position. 

  

	2.	Upon fluctuation of the market, the loss of your close-out position may be larger than expected. 

  

	3.	The Bank will trade contingent slip like stop & reverse when the market price exceeds the agreed price. Due to the fluctuation of the market, the contingent slip may not be
traded at the agreed price exactly, resulting in a larger loss or smaller gain than expected. 

  

	4.	At an extreme, national or international market may cease trading, causing the Customer’s failure to close out the positions, resulting in a larger loss or smaller gain.

  

	5.	The risk notice is so brief that it cannot detail all the transaction risks and factors affecting the market. Before entering into the transaction, the Customer shall evaluate it
thoroughly and develop financial plans as well as risk assessment to prevent from unbearable losses. 

  

	6.	The Bank recommends the Customer to consult with independent law and transaction advisors. 

  
 The Contractor has reviewed the “risk disclosure statement” and gained an understanding of the content and transaction risks after
the explanation of the Bank. The Contractor agrees to request for transactions either in oral or written after completely understanding the transaction risks. Upon the establishment of the transaction, the Contractor shall be responsible for the
gains and losses and shall not request the Bank to assume the responsibilities for insufficient understanding of risk or any other reason. 
  
 Authorization of the authorized person 
  
 To: Chinatrust Commercial Bank Co., Ltd. (referred to as “the Bank” hereinafter): 
  
 In connection with the “Financial Transaction Master Agreement” and ISDA-related transactions, the Contractor
hereby authorizes the following persons to be representatives. Each of the person is authorized to request for, instruct or complete transactions either in oral or written on behalf of the Contractor. This authorization is valid prior to the
Bank’s confirmation of receipt of the Contractor’s revision in written. 
  
 Authorization company: Silicon Motion Inc.                         Date: 2004/11/25 
  

							
	 Name
	  	Jiang Chi-Chien	  	Lin Yue-Hwa	  	Wang Chen-Yu
				
	 Title
	  	Vice president	  	Senior Director	  	Administrator

  
 Authorization of
Confirmation Stamp 
  
 To: Chinatrust Commercial Bank Co., Ltd. (referred to
as the Bank hereinafter): 
  
 The Contractor authorizes the
persons of the following signature to be the Contractor’s representatives and acknowledges that the confirmation stamps or the representatives’ signature below is authorized to enter into and confirm the “Financial Transaction Master
Agreement” and ISDA-related transactions. Upon change of the confirmation stamp and authorized signature, the original authorization stamp and signature are still valid to confirm transactions prior to the Contractor’s written notice to
the Bank about the termination and change of the authorization. The Contractor shall not deny the validity of the authorization stamp and signature as well as the transaction records. 
  
 Authorization company: Silicon Motion
Inc.                         Date: 2004/11/25 
                                        
 /s/ James Chow 
  

									
	 Authorization Stamp or Signature of Transaction Confirmation

	  	Confirmation
Person
(Confirmed by
Phone)

	  	Telephone No

	  	Confirmation
Person
(Confirmed
by Phone)

	  	Telephone
No

	 	  	Jiang Chi-Chien	  	03-5526888#2880	  	 	  	 
					
	 	  	Lin Yue-Hwa	  	03-5526888#2300	  	 	  	 
					
	 	  	Wang Chen-Yu	  	03-5526888#2301	  	 	  	 

  

	*	Delivery of transaction confirmation: 

 þ Fax first and mail out the transaction confirmation later, or 
  ̈No fax needed; directly mail out the transaction confirmation. 
 Mailing
address/ Department: No. 20-1 Taiyuan St., Jhubei City, Hsinchu County 302/ Department of Finance 
 Recipient: Wang Chen-Yu 
 Fax number: 03-5526988 
  

	*	The transaction confirmation and the phone confirmation are exclusively for the Customer’s review and confirmation. The actual transaction records will be subject to the
Bank’s preserved data. 

  
 Authorization of
Account Withholding 
  
 To: Chinatrust Commercial Bank Co., Ltd. (referred to
as “the Bank” hereinafter): 
  
 In connection with the
“Financial Transaction Master Agreement” and ISDA-related transactions, the Contractor hereby authorizes that the on each payment date, settlement fees, expenses and losses may be directly withheld from the Contractor’s deposits
account, NTD or foreign exchange by the Bank. Upon the conversion of different currencies, the exchange rates shall be determined by the Bank on the fair market value basis. This authorization is valid till the Bank’s confirmation of receipt of
the Contractor’s revision in written. 
  
 Authorization company: Silicon
Motion Inc.                          Date: 2004/11/25 
  

					
	 NTD Demand Deposits Account No.

	 	 FX Demand Deposits Account No.

	 	 OBU Demand Deposits Account No.

	299-11-8084703	 	299-13-8084709	 	 

  
 To: Chinatrust Commercial Bank Co.,
Ltd.: 
  

			
	Contractor:	  	Silicon Motion Inc. (Personal signature with original seal agreed upon)
	Representative:	  	/s/ James Chow
	ID Number:	  	97440546
	Address (can be waived with the stamp card):	  	 
	Date:	  	November 25, 2004.
		
	Contractor:	  	(Personal signature with original seal agreed upon)
	Representative:	  	 
	ID Number:	  	 
	Address (can be waived with the stamp card):	  	 
	Date:	  	 
		
	Contractor:	  	(Personal signature with original seal agreed upon)
	Representative:	  	 
	ID Number:	  	 
	Address (can be waived with the stamp card):	  	 
	Date:	  	 
	 	  	 
		
	Contractor:	  	(Personal signature with original seal agreed upon)
	Representative:	  	 
	ID Number:	  	 
	Address (can be waived with the stamp card):	  	 
	Date:	  	 

  

											
	 	  	Supervised
by	  	 	  	Undertaken
by /s/ Yu-yen Chang	  	Guaranteed
by /s/	  	 

  
  
  
 Date: November 25, 2004.

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