Exhibit 4.18
[NATEXIS BANQUES POPULAIRES LETTERHEAD]
HONG KONG BRANCH
12th Floor, ClTIC Tower, I Tim Mei; Avenue, Central, Hong Kong
Telephone: (852) 28 28 09 99 - Fax: (852) 25 83 98 0 I
Tlx : 80186 BFCEX
Our ref: CCIB/SC/ww/04-L0003BONSO
15th January 2004
Bonso Electronics Limited
Unit 1106-1110
11/F, Star House
3 Salisbury Road
Hong Kong
Attn.: Mr. Hung-Gun Anthony SO
Chairman
Dear Sirs,
RE: GENERAL BANKING FACILITIES
- ------------------------------
We are pleased to inform that Natexis Banques Populaires, Hong Kong Branch (the
"Lender") is prepared to make available the following uncommitted general
banking facilities (the "Facilities") to you subject to the accompanying terms
and conditions as stipulated in this letter (the "Facility Letter") and subject
to the terms contained in our standard General Commercial Agreement, which terms
shall apply to all transactions contemplated by this Facility Letter.
1. BORROWER
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Bonso Electronics Limited
2. CORPORATE GUARANTOR
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Bonso Electronics International Inc.
Pagr 2 of 6
Our Ref. CCIB/SC/ww/O4-L0003BONSO
3. FACILITIES
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Up to USD2,500,000.00 (Say, United States Dollars Two Million and Five
Hundred Thousand only) available for:
a) Discount of export buyers' invoice with or without Export Credit
Insurance Corporation ("ECIC") coverage up to 80% of total value of
invoice for maximum tenor of 120 days;
b) negotiation of export Letter of Credit with discrepancies;
c) packing loan up to 70% of the value of the Export Letter of Credit
issued by banks acceptable to the Lender up to 90 days;
d) purchase of Export Bills on the basis of Document against Payment
("D/P") and/or Document against Acceptance ("D/A") with recourse for a
maximum duration of 90 days;
with sub-limit of:
------------------
e) Up to USD2,000,000.00 available for:
i) the issuance of sight and/or usance Letter of Credit ("LlC") for a
maximum usance period of 120 days;
ii) Trust Receipt financing ("T/R") for a maximum tenor of 120 days
for imports under LlC issued by the Lender;
jji) the issuance of shipping guarantee under LlC issued by the
Lender;
iv) T/R against suppliers invoice for a maximum tenor of 120 days
v) up to a notional sum of USD2,000,000.00 or its equivalent in other
major convertible currencies available for Foreign Exchange
Spot/Forward Contracts with a maximum tenor of six months;
f) Up to USD500,000.00 for discount of D/P, D/A export bills to Korona
Haushaltswaren GmbH & Co. KG in Germany up to 120 days.
Remarks:
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1) e) + f) shall not exceed USD2,000,000.00.
2) Aggregate tenor of T/R and Usance LlC shall not exceed 120 days.
3) The discount of D/P, D/A and export invoice is restricted to the
pre-approved drawees only. Advance will be made against submission of
invoice copy and/or copy of bill of lading and/or transport document.
Upon maturity of the financing period, the relevant buyers shall remit
payment directly to the Lender in favor of the Borrower.
4. PURPOSE
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Trade activities requirements.
5. SUPPORT/COLLATERAL
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>> Corporate Guarantee duly executed by Bonso Electronics
International Inc. with limit of USD2,500,000.00.
>> Assignment of ECIC policy on approved drawees with the Lender as
loss payee for discount of ECIC covered export buyers' invoice.
Page 3 of 6
Our Ref. CCIB/SC/ww/O4-LOOO3BONSO
6. UNDERTAKING
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The Borrower and Corporate Guarantor undertake to :
a) deliver to the Lender certified true copies of the Borrower's and
the Corporate Guarantor's annual audited financial statements within
180 days after each fiscal year and such other information (financial
or otherwise) as the Lender may request;
b) notify the Lender promptly of the occurrence of any event which
might affect the Borrower's and the Corporate Guarantor's ability to
perform their obligations hereunder or any change in the shareholding
or control of the Borrower or of the Corporate Guarantor.
7. FACILITY ARRANGEMENT FEE
------------------------
HKD10,000.00 (Say, Hong Kong Dollars Ten Thousand only), payable upon
acceptance of this Facility Letter.
8. BILL COMMISSIONS
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LlC Opening Commission and In Lieu of Exchanqe Commission
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First US$50,000 or its equivalent 1/4 %
Balance 1/16 %
Handling Fee for Export Invoice Discount
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1/16% flat on the invoice value or minimum charge at HKD300.00.
All other banking charges shall be subject to the Lender's standard
scale of charge and the rules of The Hong Kong Association of Banks.
9. INTEREST
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Trade Finance and export invoice : The Lender's cost of Funds + 2% p.a.
discount without ECIC covered
Export invoice discount with : The lender's Cost of Funds + 1% p.a.
ECIC covered
The interest shall be calculated on the basis of actual number of days
elapsed on a year of 360 or 365 days, whichever is applicable to the
currency concerned in accordance with general banking practice.
Interest on Trade Finance and export invoice discount is to be payable
in arrears on the last day of each interest period.
If any sum is not paid when due, that sum shall bear an overdue
interest at a rate of 3% per annum above the rate as specified above
from the due date to the date when actual payment is made in full.
Page 4 of 6
Our Ref. CCIB/SC/ww/O4-LOOO3BONSO
10. CONDITIONS PRECEDENT
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The Facilities will be available until further notice subject to the
availability of funds and the receipt of the followings that are in
form and substance satisfactory to the Lender:
a) the attached copy of the Facility Letter duly signed by authorized
signatories of the Borrower and the Corporate Guarantor signifying the
acceptance of the agreement to the terms and conditions contained
herein, with respective supporting board resolutions;
b) the Corporate Guarantee duly executed by the Corporate Guarantor,
with supporting board resolutions;
c) certified copies of constitutional documents of the Borrower and the
Corporate Guarantor, including Certificate of Incorporation, Business
Registration Certificate, and Memorandum & Articles of Association;
(received)
d) the General Commercial Agreement duly completed and executed by the
Borrower, with supporting board resolutions; (received)
e) account opening documentation duly completed by the Borrower;
(received)
f) certified copies of Identification/Passport of the authorized
signatories of the Borrower and the Corporate Guarantor; (received)
g) the Receivables Purchase Agreement duly completed and executed by
the Borrower, with supporting board resolutions;
h) such other documentation as may be reasonably requested by the
Lender to validate the above Facilities.
11. WARRANTY
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The Borrower and the Corporate Guarantor hereby warrant that there has
been no material adverse change in their respective financial
conditions which would reduce their ability to meet their obligations
hereunder.
12. LAW AND VENUE
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This Facility Letter and the execution thereof shall be governed by and
construed in accordance with the laws of Hong Kong Special
Administrative Region ("Hong Kong"). The Borrower and the Corporate
Guarantor hereby irrevocably agree to submit to the non-exclusive
jurisdiction of the Hong Kong courts.
13. SERVICE AGENT
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The Corporate Guarantor hereby appoints the Borrower to be its service
agent to receive and acknowledge on behalf of the Corporate Guarantor
of any writ, summons judgement or other notice of legal process in Hong
Kong issued in relation to this Facility Letter. If for any reason the
service agent named above (or
Page 5 of 6
Our Ref. CCIB/SC/ww/O4-L0003BONSO
its successor) no longer serves as service agent of the Corporate
Guarantor for this purpose, they shall promptly appoint a successor
service agent and notify the Lender thereof. The Corporate Guarantor
agrees that any such legal process shall be sufficiently served on the
Corporate Guarantor if delivered to such service agent for service at
its address for the time being in Hong Kong whether or not such agent
gives notice thereof to the Corporate Guarantor.
As a general banking practice and notwithstanding any terms and
conditions specified above, the Lender reserves its overriding right to
cancel, modify or demand immediate repayment of all outstanding
balances whether due or owing, actual or contingent under the
Facilities without prior notice. The usage and the continual
availability of the Facilities are subject to the Lender's standard
documentation, periodic review and the usual requirement that there
will be no material adverse change in the financial position of the
Borrower and the Corporate Guarantor.
Please indicate your acceptance of the above terms and conditions by
signing and returning to us the duplicate of this Facility Letter.
This Facility Letter, once accepted and upon our confirmation that all
Conditions Precedent have been satisfied, shall supersede our Facility
Letter dated 13th February 2003 (Our ref. CORP/SC/mch/02-L00013Bonso)
and the outstanding thereunder shall be transferred as outstanding
hereunder.
We are pleased to be of service to your company and look forward to a
mutually beneficial relationship.
Yours faithfully,
For and on behalf of
Natexis Banques Populaires
Hong Kong Branch
/S/ /S/
---------------------- -------------------
Tony AU Frederick FAN
Deputy General Manager Head of Operations
Page 6 of 6
Our Ref. CCIB/SC/ww/O4-LOOO3BONSO
We confirm our acceptance on the terms and conditions stated in above
and agree to be bound thereby.
FOR and on behalf of
Bonso Electronics Limited
/S/
-------------------------------------
Name " So Hung Gun Anthony
Title Chairman
Date 28 January 2004
We, as Corporate Guarantor, hereby countersign for our notification,
understandings and agreement of the terms and conditions of the
Facilities.
For and on behalf of
Bonso Electronics International Inc.
/S/
------------------------------------
Name " So Hung Gun Anthony
Title Chairman
Date 28 January 2004