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Exhibit 2.3
[CREDIT COMMERCIAL DE FRANCE LETTERHEAD]
June 11, 1996
Nam Tai Electronic & Electrical Products Limited
Unit 513-520, 5/F.
No. 1 Hung To Road
Kwun Tong, Kowloon
Hong Kong
Attn: Mr. Maxwell Yeung
Dear Sirs,
We are pleased to confirm that Credit Commercial de France, Hong Kong Branch
(the "Bank") is prepared to revise its existing facility offer of October 19,
1995 to Nam Tai Electronic & Electrical Products Limited as follows subject to
the terms and conditions of this letter and the attached loan agreement of even
date:-
a) A US$3 million 3-year loan facility governed by the enclosed
loan agreement dated June 11, 1996.
b) A US$2 million short term trade credit facilities governed by
terms and as conditions stipulated hereunder.
THE SHORT TERM TRADE CREDIT FACILITY (THE "FACILITY")
1. BORROWER
Nam Tai Electronic & Electrical Products Limited.
2. FACILITY
US$2 million short term trade credit facility for:-
- Opening sight import letter of credit and trust receipt
refinancing up to 120 days;
- Issuance of shipping guarantee under letter of credit;
_ Negotiation of export letter of credit with discrepancies under
letter of guarantee;
- Discounting of documents against payment and documents against
acceptance;
- Sublimit of HK$l million for overdraft.
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CREDIT COMMERCIAL DE FRANCE
3. PURPOSE
Trade financing.
4. PRICING
L/C opening commission and Commission in-lieu-of exchange
First US$50,000 : 1/4%
US$50,001 to US$100,000 : 1/12%
Balance : 1/24%
Collection commission
First US$50,000 : 1/8%
US$50,001 to US$250,000 : 1/24%
Balance : 1/48%
Interest rate
Trust receipt & Transit financing : Cost of funds + 1/2% p.a.
Overdraft : HK$ Prime Rate
Other commissions and charges
Hong Kong Association of Banks' rules to be observed.
5. GUARANTEE
Corporate guarantee executed by Nam Tai Electronic, Inc. (the
"Guarantor") for US$2 million.
6. AVAILABILITY
a) No obligation to grant accommodation under the Facility shall
commence until the Bank has received as conditions precedent
the following documents duly executed in form and substance
satisfactory to the Bank:-
From the Borrower
i) A signed copy of this letter;
ii) Board resolution to authorise acceptance of the
Facility and opening of account with the Bank;
iii) Mandate for Limited Company;
iv) Letter of Set Off;
v) General Security and Credit Agreement;
vi) Trust Receipt Agreement;
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CREDIT COMMERCIAL DE FRANCE
vii) Specimen Signature Card (2 copies) and
viii) Account Opening Form and certified true copies of
Business Registration Certificate, Certificate of
Incorporation, Memorandum and Articles of
Association, Particulars of Directors (Form X), and
ID Card or Passport of the Directors and persons
authorised to sign for the account.
From the Guarantor
i) Endorsement on this letter;
ii) A duly executed Continuing Guarantee for
US$2 million.
iii) Board resolution to authorise the execution of the
Continuing Guarantee; and
iv) Certified true copies of its Certificate of
Incorporation, Memorandum and Articles of Association
and other constitutive documents.
b) Notwithstanding (a) above, accommodation under this Facility
remains the entire discretion of the Bank.
7. INTEREST AND CHARGES
Interest and banking charges shall accrue and be payable in respect of
accommodation provided under the Facility on the basis, at the rates
and on dates agreed between the Borrower and the Bank, or upon failure
in agreement, as determined by the Bank from time to time.
8. PAYMENTS
All payments by the Borrower to the Bank in respect of liabilities
under the Facility shall be made free and clear of all taxes,
withholdings and deductions whatsoever. If the Borrower is ever
required to make any withholding, deduction or otherwise, the amount
payable by the Borrower shall be grossed-up so that the Bank receives
the full amount which would have been payable if there had been no
withholding or deduction.
9. REPRESENTATIONS AND WARRANTIES
The Borrower and the Guarantor hereby represent and warrant that:-
a) The Borrower and the Guarantor are duly incorporated and
validly existing under the respective laws of their countries
of incorporation;
b) The Borrower has full power and authority to execute, deliver
and perform the terms of this letter;
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c) All such documents required have been duly authorized by all
necessary corporate actions and constitute or will constitute
valid and binding obligations on the Borrower enforceable in
accordance with their terms;
d) The Borrower and the Guarantor are not in default under any
other agreement nor are they the subject of any actual or
threatened legal proceedings or claims;
e) The financial statements of the Borrower and the Guarantor and
all other financial and other information delivered to the
Bank are true and accurate and reflect the true condition of
the affairs of the Borrower and the Guarantor as of a recent
date;
f) The Borrower and the Guarantor have good title to all
properties and assets referred to in its audited accounts;
g) The Borrower and the Guarantor have arranged all necessary
insurance policies to cover business risks on properties,
trading assets and executive management;
h) Each request for an advance shall operate as a warranty that
these representations and warranties will remain unaltered and
that there has not been and there is not likely to be any
material adverse change; and
i) All necessary tax returns have been filed and all assessments
which are due and payable have been paid.
10. UNDERTAKINGS
The Borrower and the Guarantor hereby undertake with the Bank:-
a) To ensure that the obligations of the Borrower and the
Guarantor under this letter are not subordinated to and will
at all times rank at least pari passu with all existing and
future short term obligations of the Borrower and the
Guarantor.
b) Not to create any mortgages or charges on the undertaking,
property and assets of the Borrower and the Guarantor
whatsoever and wheresoever both present and future without the
Bank's prior consent. Exception is allowed if and only if the
Borrower or the Guarantor are to obtain financing to purchase
certain assets and needs to pledge these assets as a
pre-requisite collateral;
c) To make available such information, financial or otherwise,
for which the Bank may reasonably request;
d) To provide the Bank with audited financial statements of the
Borrower and the audited consolidated financial statements of
the Guarantor within 150 days after the end of the relevant
financial years;
e) To inform the Bank promptly of any material adverse change;
and
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f) To inform the Bank promptly of any significant event of
default under any other agreement.
11. EVENT OF DEFAULT
If the Borrower fails to pay the Bank any amount on any due date or if
any information delivered by the Borrower or the Guarantor shall be
shown to have been wrong or misleading in any respect or if there is
any material adverse change about which the Bank has not been informed
or for which the Bank's acceptance has not been given, or fails to
comply with any undertaking, the Bank will be entitled to declare the
Facility cancelled whereupon all amounts and commitments outstanding
under the Facility shall become immediately due and payable, and the
Bank shall be under no further obligation to make available any
further advances under the Facility.
12. DEMAND
All indebtedness and liabilities of the Borrower under the Facility
shall be subject to the Bank's customary overriding right to call for
repayment on demand and to the Bank's continuous satisfaction of the
business affairs and financial conditions of the Borrower and the
Guarantor. The Bank also reserves the right to freeze the utilization
of the Facility after a demand for repayment is made.
13. REVIEW
The Facility is subject to the Bank's on-going reviews.
14. ASSIGNMENT AND WAIVER
The Borrower may not assign any of their rights or obligations in
respect of the Facility without the Bank's prior written agreement.
No time or indulgence granted by the Bank or failure or delay in
exercising any right hereunder shall operate as a waiver by the Bank.
15. COSTS, FEES AND COMMISSIONS
The Borrower and the Guarantor will reimburse the Bank promptly for
all commissions, fees, charges and expenses including legal fees
incurred by the Bank in respect of the maintenance or enforcement of
the terms of the Facility and/or other documents referred to herein.
16. LAW AND JURISDICTION
The Facility shall be governed by Hong Kong Law. The Borrower hereby
submits to the non-exclusive jurisdiction of the Hong Kong Courts.
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Please signify your acceptance of the terms and conditions of the Facility by
executing and returning the documents as stipulated under paragraph 6 within 45
days from the date of this letter. Upon satisfactory execution, this letter
supersedes our previous letter of offer dated October 19, 1995.
We are delighted to be able to work with you and look forward to establishing a
mutually beneficial relationship between our two institutions.
Yours faithfully,
For and on behalf of
CREDIT COMMERCIAL DE FRANCE
HONG KONG BRANCH
/s/ ALFRED LEUNG /s/ ALAIN CANY
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Alfred Leung Alain Cany
Assistant General Manager General Manager
Accepted by: Endorsed by:
[SIG]
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Nam Tai Electronic & Nam Tai Electronics, Inc.
Electrical Products Limited
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