EXHIBIT 10.1

Our Ref : IPH/CMB/OKH/AA/aas

PRIVATE & CONFIDENTIAL

Tor Minerals (M) Sdn Bhd
4 ½ Miles Lahat Road
P.O.Box 383
30200 Ipoh, Perak

15 December 2005

Dear Sirs

Banking Facilities

Customer No : 383-136280

We confirm having completed our review of your banking facility/facilities and are pleased to advise that we are agreeable to renewing the under mentioned facility/facilities for the purpose/s as stated for a further period subject to the terms and conditions outlined in the attached annexure.

This Letter of Offer supersedes our Letter of Offer dated 28 October 2005.

These facilities are subject to review at any time and, in any event by October 2006 , to our customary overriding right of withdrawal and repayment on demand; and subject to there being no breach of applicable guidelines as issued by Bank Negara Malaysia and/or the policies of the Bank in effect from time to time governing continued operations of current accounts that may subject the customer’s current account (regardless of whether any overdraft thereon has been granted or otherwise) to a right of closure.  We shall be obliged if you will note to send us two signed/certified copies of your next set of audited account (i.e. as at 31DEC2005) and that your holding company, TOR Minerals International, before that date.

**   USD1.0 million or equivalent to RM3.780 million whichever is lower.

*      Export Line interchangeable with Import Line but the total combined outstanding of Export Pre/Post Shipment Finance/BAE/IAE must not exceed RM8.0 million and total combined outstanding of Import BAI/IAP must not exceed RM3.780 million respectively at any one time.

#              Zero limit.

Note: Import Line of RM3.780 million will revert back to RM0.50 million upon utilization of the one-off purpose stated below.

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The bank shall have no obligation to monitor the usage of the facilities or ensure usage for their stated purposes and reserves the right to recall the facilities if not used for the purposes granted.

We wish to draw your attention to the attached terms and conditions dated 15 December 2005 which require your understanding and acceptance of the arrangement made.

Please confirm for your foreign currency borrowings (as computed on corporate group or single entity basis) that -

[     ]        where computed on corporate group basis, your foreign currency borrowings and your holding companies’ and subsidiaries’ (‘Group’) foreign currency borrowings; or

                [     ]        where computed on single entity basis, your foreign currency borrowings;

(as the case may be) from all sources (including from non-residents, offshore onshore banks and merchant banks) including those from us, do not in aggregate exceed the equivalent of RM50 million ⁺ at any one time in terms of ECM10 of  the Malaysian Exchange Control Notices. In the event you or a company in your Group decide to negotiate or seek additional foreign currency facilities from any other sources which may lead to such foreign currency facilities to your Group exceeding the equivalent of RM50 million ⁺ , you are required to inform us and also obtain any necessary approval from the relevant authority accordingly.

⁺      excluding trade financing facilities (e.g. letters of credit, loan against import, bankers acceptances, ECR, bills discounting facilities), trade guarantees, and foreign exchange lines.]

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It shall be your company’s sole responsibility to register any foreign currency facilities granted to you herein where the same is required to be registered with the Controller of Foreign Exchange, before drawdown in accordance with the Exchange Control Notices. We may require evidence of such registration prior to allowing drawdown.

[Where you are proposing to make any prepayments for any foreign currency facilities herein before their due date, it shall be your sole responsibility to register such prepayments with the Controller of Foreign Exchange in accordance with applicable Exchange Control Notices before effecting the payments. We may require evidence of such registration prior to allowing prepayment.]

Please confirm that all your forward exchange transactions shall be in compliance with Malaysian Exchange Control Regulations and supported by appropriate documentation, which may be required by the Bank prior to execution.

The accountholder hereby agrees that the facilities hereunder are subject to there being no breach of guidelines issued by Bank Negara Malaysia and/or policies of the Bank from time to time, and that the Bank reserves the right to recall the facilities granted hereunder in the event any of the accountholder’s current accounts are unsatisfactorily conducted as to render any of its current accounts maintained with any banks liable to closure under regulatory requirements and/or the prevailing policies of any of the banks with which such accounts are maintained, notwithstanding that the accountholder’s current account(s) with the Bank whether held solely or jointly with others has/have been conducted satisfactorily.  The Bank may rely on information furnished by the Credit Bureau established by Bank Negara Malaysia for information whether any of the customer’s current accounts have become liable to closure, and reliance by the Bank on such information shall not subject the Bank to any liability to us in the event of any inaccuracy of such information not known to the Bank.

Please arrange for the authorised signatories of your company, in accordance with the terms of the Board Resolution given to the bank, to sign and return to us this letter together with the required documents before 14 January 2006 to signify your understanding and acceptance of the terms and conditions under which these facilities are granted, after which date this offer will be deemed to have lapsed.

Please also ensure that the attached list of securities is checked and the correctness confirmed together with the acceptance of this offer.

In compliance with Bank Negara Malaysia’s directive, it is a term and condition of this offer that if the credit facilities are not drawn down after a period of three months from completion of documentation, and upon failure on your part to deliver your advice to the Bank in writing within 30 days from the expiry of the aforementioned three month period that the facilities are still required, we shall have the right to withdraw the facilities offered without further reference to you.

We are pleased to be of assistance to you and look forward to the development of a mutually beneficial and lasting relationship. However, should you have any query, please do not hesitate to contact our Encik Amran Ahmed  at telephone no 05-5226352.

Yours faithfully

for and on behalf of

HSBC Bank Malaysia Berhad

………………………………

Ahmad Haliman Abdul Halim

Manager Commercial Banking

We confirm acceptance of the above offer as stated in your Letter of Offer dated 15 December 2005 (Ref:IPH/CMB/OKH/AA/aas) and that the Bank's agreement to provide us with the abovementioned facilities will not contravene the provisions of Section 62 of the Banking and Financial Institutions act 1989.  We accept that the Bank reserves the right to recall the facilities in the event that the facilities extended to us is not in compliance with the aforementioned section of the Act.

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We further agree that your Letter of Offer embodies in writing all the terms for the Banking Facilities to be granted to us and hereby confirm that any warranties, promises, representations collateral agreements that may have been made or made to us, orally or otherwise by you in the course of the pre-contractual negotiations that have not now been included in your Letter of Offer shall hereafter be deemed by us to have lapsed and not legally binding upon you nor shall it be raised by us as a defence or to support any claim by us in any legal proceedings.

We confirm that all our forward foreign exchange transactions shall be in compliance with Malaysian Exchange Control Regulations and supported by appropriate documentation which may be required by the Bank prior to execution.

We acknowledge that we are entering into each FEX transaction in reliance only upon our own judgement and in accordance with Section 7 of IFEMA terms.

We agree that each party may electronically record all telephonic conversations and any such tape recordings may be submitted in evidence in any proceedings for any purpose relating to any FEX transaction.

We hereby agree that the facilities hereunder are subject to there being no breach of applicable guidelines as issued by Bank Negara Malaysia and/or the policies of the Bank in effect from time to time governing continued operations of current accounts that may subject the customer’s current account to a right of closure (whether by the Bank, or any other bank with which the customer maintains a current account, following its or their respective prevailing policies) and the Bank reserves the right to recall the facilities granted hereunder in such event notwithstanding that the accountholder’s current account(s) with the Bank whether held solely or jointly with others has/have been conducted satisfactorily.

At your request, we hereby irrevocably and unconditionally authorise you to debit our current account no 383-136280-001 maintained at your Ipoh branch with monthly interest and loan repayments due and payable to you, insurance premium, service charges and all other monies due and arising out of the facilities extended and/or security given.

We confirm our foreign currency borrowings (as computed on corporate group or single entity basis) —

[     ]        where computed on corporate group basis, our foreign currency borrowings and our holding companies’ and subsidiaries’ (‘Group’) foreign currency borrowings; or

                [     ]        where computed on single entity basis, our foreign currency borrowings;

(as the case may be) from all sources (including from non-residents, offshore onshore banks and merchant banks) including those from us, do not in aggregate exceed the equivalent of RM50 million ⁺ at any one time in terms of ECM10 of  the Malaysian Exchange Control Notices. In the event we or a company in our Group decide to negotiate or seek additional foreign currency facilities from any other sources which may lead to such foreign currency facilities to your Group exceeding the equivalent of RM50 million ⁺ , we shall inform you and also obtain any necessary approval from the relevant authority accordingly.

⁺                     excluding trade financing facilities (e.g. letters of credit, loan against import, bankers acceptances, ECR, bills discounting facilities), trade guarantees, and foreign exchange lines.]

It shall be our company’s sole responsibility to register any foreign currency facilities granted to us herein where the same is required to be registered with the Controller of Foreign Exchange, before drawdown in accordance with the Exchange Control Notices.

[Where we are proposing to make any prepayments for any foreign currency facilities herein before the due date, it shall be our sole responsibility to register such prepayments with the Controller of Foreign Exchange in accordance with applicable Exchange Control Notices before effecting the payments.]

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We accept and shall comply with the following covenants: -

1)     Trade debts due from the holding company/any related company must not exceed 25% of total annual turnover OR RM10.0 million whichever is lower at the close of every financial year i.e. 31DEC.

2)     To maintain a gearing of not more than 150% so long as the facilities remain.

In consideration of your agreeing to trade and pay on maturity of the HSBC Amanah Accepted Bills-i drawn on/accepted by you up to a maximum limit of RM8.0 million for IAE and RM3.780 million for IAP respectively against trade bills drawn by us or drawn on us, we hereby make the following undertaking and authorisations:-

1.     It is hereby agreed that in the event a pledge is not for any reason whatsoever created or perfected as herein stated, we shall nevertheless, and we hereby unconditionally agrees to the executed Trade Financing General Agreement/General Security Agreement Relating to Goods be deemed to have created a charge over the Documents and the Goods, in favour of the Bank, and the provisions herein relating to a pledge shall apply, mutatis mutandis, to a charge.

2.     We hereby unconditionally agree that the Bank shall not be deemed to have approved, ratified or accepted any act done by us in our capacity as agent of the Bank in the event the Bank shall be of the opinion, which opinion shall be final, that such act was done without proper authority and we shall indemnify the Bank, its officers and employees against or in respect of all liabilities, claims, losses, costs (including on solicitor-client basis) and damages of any kind which may be incurred by any of them and all actions or proceedings which may be brought by or against them in connection with the same or any matter related thereto.

3.     We hereby unconditionally agree that the Bank shall not be liable or responsible for any misrepresentations made or frauds or other acts of similar nature committed by us or any of our officers, employees or agents in our or their capacity as agent of the Bank and we shall indemnify the Bank, its officers and employees against or in respect of all liabilities, claims, losses, costs (including on a solicitor-client basis) and damages of any kind which may be incurred by any of them and all actions or proceedings which may be brought by or against them in connection with the same or any matter related thereto.

        Undertaking and authorisations of 1, 2 and 3 of above are deemed to be incorporated into the conventional Trade Financing General Agreement/General Security Agreement Relating to Goods.  Where its application to Islamic financing, clauses in the conventional Trade Financing General Agreement/General Security Agreement Relating to Goods that are contrary to Syariah does not apply.

4.     On the maturity date of each Amanah Accepted Bill drawn on/accepted by you, to debit our current account with the full amount of the selling price in respect of each such Amanah Accepted Bill, without any obligation on the Bank to give us notice of dishonour and without any reference to us.  If the credit balance in our current account shall be insufficient to cover the amount of any matured Amanah Accepted Bill drawn on/accepted by you, notwithstanding anything herein to the contrary, the Bank shall be entitled by notice in writing to us, to forthwith convert the amount of the selling price in respect of such matured Amanah Accepted Bill to be an amount outstanding as a principal

sum under the Bankers Acceptance Facility ("Converted Sum").  Upon such conversion, the Converted Sum shall be deemed to form part of the principal sum outstanding under the Bankers Acceptance Facility and accordingly to be secured by the existing securities listed in this Letter of Offer.

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5.     In addition to our authorisations and undertakings contained in this Letter of Offer and without affecting any other provision contained in this Letter of Offer, we unconditionally authorise the Bank, in the Bank's absolute discretion, to debit our current account or any other account held with the Bank without any reference to us, with the aggregate of  the amounts of the selling prices payable under the HSBC Amanah Accepted Bills-i Facility granted to us even before the respective maturity dates of such HSBC Amanah Accepted Bills-i and any costs or expenses arising therefrom ("Aggregate Selling Prices").  In such event if the credit balance in our current account shall be insufficient to cover the amount of the Aggregate Selling Prices and notwithstanding anything to the contrary herein contained, the Bank shall be entitled by notice in writing to us, to forthwith convert the amount of the Aggregate Selling Prices to the amount outstanding as a principal sum under the Clean Import Loan or Loan Against Export Facility ("Converted Sum") whichever is applicable.  Upon such conversion, the Converted Sum shall be deemed to form part of the principal sum outstanding under the Clean Import Loan or Loan Against Export Facility and accordingly be secured by the existing securities listed in this Letter of Offer.

6.     To dispose of the proceeds of the trade Bill(s) collected towards reimbursement of the HSBC Amanah Accepted Bills-i and to debit our account with any shortage however arising.

        Either

a)     agree to sell debt(s) represented by the trade Bill(s) to you and further irrevocably authorise you to dispose of the proceeds therefrom towards reimbursement of the HSBC Amanah Accepted Bills-i; OR

b)    undertake to pay to you the full amount of the relevant selling price immediately upon your notifying us to do so and in this respect we further irrevocably authorise you to debit our account accordingly,

in the event that proceeds of the relevant trade Bill shall not have been received by you on or before the maturity date of HSBC Amanah Accepted Bills-i.

7.     To indemnify you against any amount outstanding in the event that you fail to recover all or any part of the selling price payable from time to time under the facility granted to us.

8.     Notwithstanding the exercise of all or any of the above specifically authorised by us, you shall have the right to take legal action to recover any moneys due to you.

9.     All terms and conditions as contained in the Bank's legal documentation shall continue to apply.

We also confirm that the securities list attached to the letter of offer is correct.

….……………………………………………..

Authorised signatories and Company's Chop

Date of Acceptances :

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TERMS AND CONDITIONS (Annexure to Letter of Offer dated 15 December 2005)

Existing Security: -

1)     An "all monies" debenture stamped for RM10.0 million over all the fixed and floating assets of TOR Minerals (M) Sdn Bhd, that is to say a debenture to secure "all monies" in respect of general banking facilities owing from time to time including future advances, with an unlimited covenant to pay on the part of the company.

        This debenture and registered charge to rank pari passu with same taken by RHB Bank Bhd (formerly known as Development & Commercial Bank Berhad).

2)     A collateral charge over HS(D)KA 1376/75 and 1377/75 for Lot Nos. 70808 and 70809 Mukim of Ulu Kinta in the name of TOR Minerals (M) Sdn Bhd as the Chargor, that is to say a Charge to secure "all monies" in respect of general banking facilities owing from time to time including future advances, with an unlimited covenant to pay on the part of the Chargor.

3)     Letter of Undertaking not to declare to pay any dividend without the prior consent of the Bank.

4)     Letter of Awareness from TOR Minerals International Inc. (formerly known as Hitox Corporation of America).

The third-party security provider/guarantor shall undertake not to divest its shareholding or any part thereof in your company without first obtaining the Bank's consent.

5)     General Security Agreement Relating To Goods dated 22 MAY 1991.

6)     Letter of Undertaking not to lend to related companies.

7)     Letter of Undertaking to upstamp the debenture whenever required by the Bank.

8)     Co-Lender's Agreement between RHB & HSBC.  HSBC's RM10.0 million rank pari passu with RHB's RM15.0 million dated 25 April 1991.

9)     Security Sharing Agreement between RHB Bank, HSBC Bank Malaysia Berhad, RHB Labuan and HSBC Labuan.

If at any time the Bank shall consider that the security is insufficient you shall within 14 days from the date of a notice from the Bank provide such further security as the Bank shall require whether in cash or otherwise of such value and for such tenure as the Bank shall in its absolute discretion decide.

Covenant:-

1)     Trade debts due from the holding company/any related company must not exceed 25% of total annual turnover OR RM10.0 million whichever is lower at the close of every financial year i.e. 31DEC.

2)     The company to maintain a gearing of not more than 150% so long as the facilities remain.

Required Documents: -

1)     Submission of your audited accounts FYE 31DEC2005 and that your holding company, Tor Minerals International within 6 months from the close of financial year end.

2)     Original Purchase/Contract Agreement.

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Overdraft: -

Interest

Interest will be charged by us, at 1.25% per annum at daily rests above our base-lending rate (presently at 6.25% per annum). The effective rate is therefore presently 7.50% per annum subject to fluctuations at our absolute discretion and interest will be payable monthly to the debit of your current account.

In the event the approved limit is exceeded, additional interest at the Bank's discretion will be charged and debited to your current account.

Please note that this rate is applicable even after judgement in the event of any legal proceedings.

Commitment Fee

Under the Rules of the Association of Banks in Malaysia, a commitment fee of 1.0% per annum will be levied on the unutilised portion of the overdraft facility.

Bank Guarantee: -

Commission

Commission of not less than 0.10% per month subject to a minimum of RM100-00 shall be charged for the full liability period (inclusive of the claim period of the guarantee issued).

Where a Guarantee does not have a claim period, additional commission of not less than 0.10% per month shall be charged from the date of expiry to the date of return of the Guarantee or on receipt of notification from the beneficiary that the Bank is no longer liable under the Guarantee.

Commission shall be charged when a guarantee is issued and no refund is to be allowed under any condition whatsoever.

All Guarantees issued by us must bear an expiry date and we are at liberty to refuse