EXHIBIT 10.31.9
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DATED 29TH OCTOBER, 2004
(BUT WITH EFFECT FROM 30TH SEPTEMBER, 2004)
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TARRANT COMPANY LIMITED (1)
AND
MARBLE LIMITED (2)
AND
TRADE LINK HOLDINGS LIMITED (3)
(AS BORROWERS)
AND
UPS CAPITAL GLOBAL TRADE FINANCE CORPORATION (4)
(AS AGENT)
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NINTH DEED OF VARIATION
TO
SYNDICATED LETTER OF CREDIT FACILITY
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XXXXXX XXXX & XXXXXXX
SUITE 1901, 19TH FLOOR, XXXXXX KONG CENTER
0 XXXXX'X XXXX XXXXXXX
XXXX XXXX
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THIS DEED is made the 29th day of October 2004 (but with effect from 30th
September, 2004)
BETWEEN:
(1) TARRANT COMPANY LIMITED a company incorporated in Hong Kong under
company number 163310 with its registered office at 00xx Xxxxx, Xxxxxx
Xxxxxx, 00-00 Xxx Xxxx Road, Xxxx Xxxx, Kowloon, Hong Kong ("TARRANT");
(2) MARBLE LIMITED a company incorporated in Hong Kong under company number
399753 with its registered office at 00xx Xxxxx, Xxxxxx Xxxxxx, 00-00
Xxx Xxxx Road, Xxxx Xxxx, Kowloon, Hong Kong ("MARBLE");
(3) TRADE LINK HOLDINGS LIMITED a company incorporated in Hong Kong under
company number 592076 with its registered office at 00xx Xxxxx, Xxxxxx
Xxxxxx, 00-00 Xxx Xxxx Road, Xxxx Xxxx, Kowloon, Hong Kong ("TRADE
LINK"); and
(4) UPS CAPITAL GLOBAL TRADE FINANCE CORPORATION (the "AGENT").
WHEREAS:
(A) Under the terms of a syndicated letter of credit facility agreement
(the "FACILITY AGREEMENT" such expression shall include the same as
from time to time amended, supplemented or modified) entered into on
13th June 2002 by and between the Borrowers and the Beneficiaries, the
Agent (in its capacity as the Issuer) agreed, inter alia, to make
available to the Borrowers a facility for the issue of letters of
credit, upon the terms and subject to the conditions set out therein.
(B) Under various Deeds of Variation to the Facility Agreement entered into
on 26th February, 2003, 19th May, 2003, 2nd June, 2003, 18th June,
2003, 23rd December, 2003, 17th March, 2004, 5th May, 2004 and 17th
June, 2004 by and between the Borrowers and the Agent (the "PRIOR DEEDS
OF VARIATION"), the parties thereto agreed to vary the terms of the
Facility Agreement as set out in the Prior Deeds of Variation.
(C) The Borrowers have requested the Agent, and the Agent (in its capacity
as the Issuer) has agreed in principle, to the amendment of the
financial covenants and undertakings as hereinafter set out.
(G) The parties hereto have therefore agreed, pursuant to Clause 23 of the
Facility Agreement, to vary the terms of the Facility Agreement as set
out in this Deed of Variation.
NOW THIS DEED HEREBY WITNESSETH as follows:-
1. DEFINITIONS AND INTERPRETATION
Words and phrases which are not defined or construed in this Deed of
Variation but which are defined or construed in the Facility Agreement,
the Companies Ordinance or the Bankruptcy Ordinance shall be construed
as having the meanings ascribed to them therein. To the extent that
there is any inconsistency between the terms of this Deed of
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Variation and the Facility Agreement, the terms of this Deed of
Variation shall prevail. References to clause numbers are to those
clauses in the Facility Agreement, unless indicated otherwise.
2. VARIATION
2.1 The parties hereto hereby agree that the Facility Agreement shall be
varied in the following manner:-
2.1.1 By the deletion in their entirety from Clause 1.1 of the
Facility Agreement for the definitions of the terms "CASH
INTEREST EXPENSE" and "EBITDA".
2.1.2 By the deletion in its entirety from Clause 1.1 of the
Facility Agreement for the definitions of the term "LETTER OF
CREDIT FEE", and the substitution therefor with the following:
"`LETTER OF CREDIT FEE' THE MEANING GIVEN TO IT IN CLAUSE 17;"
2.1.3 By the deletion in its entirety from Clause 1.1 of the
Facility Agreement for the definitions of the term "SECURITY
DOCUMENTS", and the substitution therefor with the following:
"`SECURITY DOCUMENTS' (i) THE SYNDICATED COMPOSITE
GUARANTEE AND DEBENTURE (ii) EACH
OF THE PARENT GUARANTEES; (iii)
THE GUEZ GUARANTEE, (iv) A CHARGE
OVER SHARES EXECUTED ON EVEN DATE
HEREWITH BY FRI IN FAVOUR OF THE
AGENT ON BEHALF OF THE ISSUER AND
THE BANKS IN RESPECT OF ITS SHARES
IN TARRANT, (v) THE INTERCREDITOR
AGREEMENT, IN EACH CASE AS AMENDED
OR MODIFIED FROM TIME TO TIME;"
2.1.4 By the deletion in its entirety of Clause 2.1 of the Facility
Agreement, and the substitution therefor with the following:
"SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE
BANKS MAY MAKE AVAILABLE TO THE BORROWERS AN UNCOMMITTED
LETTER OF CREDIT FACILITY OF UP TO THE AMOUNT SPECIFIED IN
COLUMN 2 OF SCHEDULE 1 DURING THE APPLICABLE PERIOD SET OUT IN
THE CORRESPONDING ROW OF COLUMN 3 OF SCHEDULE 1 OR ITS
EQUIVALENT FROM TIME TO TIME IN OTHER CURRENCIES. THE FACILITY
SHALL COMPRISE THE PROVISION OF LETTERS OF CREDIT TO BE ISSUED
BY THE ISSUER (SUBJECT TO REIMBURSEMENT BY THE BORROWER AND
EACH OF THE BANKS ON THE TERMS SET OUT IN THIS AGREEMENT) IN A
MAXIMUM PRINCIPAL AMOUNT NOT EXCEEDING THE AMOUNT SPECIFIED IN
COLUMN 2 OF SCHEDULE 1 DURING THE APPLICABLE PERIOD SET OUT IN
THE CORRESPONDING ROW OF COLUMN 3 OF SCHEDULE 1 OR ITS US
DOLLAR EQUIVALENT FROM TIME TO TIME IN OTHER CURRENCIES."
2.1.5 By the deletion in its entirety of Clause 4.2 of the Facility
Agreement, and the substitution therefor with the following:
"4.2 LETTERS OF CREDIT
UPON THE REQUEST OF ANY BORROWER (CONTAINED IN A
UTILISATION NOTICE), THE ISSUER MAY, IN ITS SOLE AND
ABSOLUTE DISCRETION, ISSUE ONE OR MORE
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DOCUMENTARY LETTERS OF CREDIT, OR GRANT TO THAT
BORROWER ONE OR MORE IMPORT LOANS OR FINANCE ONE OR
MORE DOCUMENTS AGAINST ACCEPTANCE (EACH A "LETTER OF
CREDIT"), IN EACH CASE DENOMINATED IN US DOLLARS OR
ANY FOREIGN CURRENCY AS THE ISSUER MAY AGREE, FOR
THAT BORROWER'S ACCOUNT AND SUBJECT TO THE TERMS OF
THIS AGREEMENT. WITHOUT PREJUDICE TO THE ISSUER'S
OVERRIDING DISCRETION AS TO WHETHER TO ACCEPT OR TO
REJECT ANY REQUEST FOR THE ISSUE OF A LETTER OF
CREDIT:,
4.2.1 THE ISSUER WILL NOT ISSUE ANY LETTER OF
CREDIT:
(a) IF THE US DOLLAR EQUIVALENT OF THE
MAXIMUM FACE AMOUNT OF THE
REQUESTED LETTER OF CREDIT, PLUS
ALL COMMISSIONS, FEES AND CHARGES
DUE FROM THE BORROWER IN CONNECTION
WITH ITS ISSUE, WOULD CAUSE THE
AMOUNT OF THE AVAILABLE FACILITY TO
BE EXCEEDED AT SUCH TIME; OR
(b) IF THE EXPIRY DATE OF THE LETTER OF
CREDIT WOULD BE LATER THAN 364 DAYS
FROM ITS DATE OF ISSUE; OR
(c) IF THE US DOLLAR EQUIVALENT OF THE
MAXIMUM FACE AMOUNT OF THE
REQUESTED LETTER OF CREDIT WHEN
AGGREGATED WITH THE US DOLLAR
EQUIVALENT OF THE MAXIMUM FACE
VALUE OF ALL LETTERS OF CREDIT THEN
IN ISSUE WOULD EXCEED:
(i) US$25,000,000 (TWENTY FIVE
MILLION US DOLLARS) ON OR
BEFORE 30TH SEPTEMBER,
2004;
(ii) US$23,000,000 (TWENTY
THREE MILLION US DOLLARS)
AFTER 30TH SEPTEMBER, 2004
BUT ON OR BEFORE 24TH
OCTOBER, 2004;
(iii) US$22,000,000 (TWENTY TWO
MILLION US DOLLARS) AFTER
24TH OCTOBER, 2004 BUT ON
OR BEFORE 24TH NOVEMBER,
2004;
(iv) US$21,000,000 (TWENTY ONE
MILLION US DOLLARS) AFTER
24TH NOVEMBER, 2004 BUT ON
OR BEFORE 24TH DECEMBER,
2004; OR
(v) US$20,000,000 (TWENTY
MILLION US DOLLARS) AT ANY
TIME ON OR AFTER 25TH
DECEMBER, 2004; AND
4.2.2 THE ISSUER WILL NOT FINANCE ONE OR MORE
DOCUMENTS AGAINST ACCEPTANCE IF THE US
DOLLAR EQUIVALENT OF THE MAXIMUM FACE AMOUNT
OF THE REQUESTED FINANCING EXCEEDS 90% OF
THE FACE AMOUNT OF THE UNDERLYING
CONTRACT(S) OF SALE TO WHICH THE FINANCING
RELATES,
UNLESS THE ISSUER HAS SPECIFICALLY AGREED WITH THE
BORROWER THAT IT IS PREPARED TO DO SO."
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2.1.6 By the deletion from Clause 4.7.1 of the Facility Agreement of
the words "ALL AS SPECIFIED IN CLAUSE 17.1 AND SCHEDULE 5",
and the substitution therefor with "ALL AS SPECIFIED IN CLAUSE
17 AND SCHEDULE 5"
2.1.7 By the deletion in its entirety of Clause 10.4 of the Facility
Agreement, and the substitution therefor with the following:
"10.4 FINANCIAL RATIOS
EACH OF THE BORROWERS SHALL ENSURE THAT, AT ALL
TIMES, THE FINANCIAL CONDITION OF TAG AND THE GROUP
(ON A CONSOLIDATED BASIS), MEASURED ON A QUARTERLY
BASIS, SHALL BE SUCH THAT TANGIBLE NET WORTH SHALL BE
NOT LESS THAN THE FOLLOWING AMOUNTS ON THE FOLLOWING
DATES:
DATE TANGIBLE NET WORTH
---- ------------------
30TH SEPTEMBER, 2004 US$20,000,000
31ST DECEMBER, 2004 US$22,000,000
31ST MARCH, 2005 US$22,000,000
30TH JUNE, 2005, AND ON THE LAST US$25,000,000
DATE OF EACH FISCAL QUARTER
THEREAFTER
AS CALCULATED BY REFERENCE TO THE ACCOUNTING
INFORMATION (THE "RELEVANT ACCOUNTING INFORMATION")
MOST RECENTLY DELIVERED UNDER THIS AGREEMENT BEING
(i) THE ANNUAL AUDITED FINANCIAL STATEMENTS DELIVERED
UNDER CLAUSE 10.2.1 AND (ii) EACH SET OF MANAGEMENT
ACCOUNTS (AS CONSOLIDATED FOR THE RELEVANT FISCAL
QUARTER) DELIVERED UNDER CLAUSE 10.2.2."
2.1.8 By the deletion in its entirety of Clause 10.5 of the Facility
Agreement, and the substitution therefor with the following:
"10.5.1 TANGIBLE NET WORTH: MEANS A SUM EQUAL TO THE
AGGREGATE AMOUNT, AT THE DATE (THE "ACCOUNTING
INFORMATION DATE") AS OF WHICH THE RELEVANT
ACCOUNTING INFORMATION SHALL HAVE BEEN PREPARED AND
CALCULATED BY REFERENCE TO THE RELEVANT ACCOUNTING
INFORMATION, OF ALL ASSETS (AS THAT TERM IS
INTERPRETED IN ACCORDANCE WITH GAAP CONSISTENTLY
APPLIED) OF TAG AND THE GROUP (ON A CONSOLIDATED
BASIS), BUT EXCLUDING:
(a) ALL ASSETS THAT ARE PROPERLY CLASSIFIED
UNDER GAAP AS INTANGIBLE ASSETS (AS THAT
TERM IS INTERPRETED IN ACCORDANCE WITH GAAP
CONSISTENTLY APPLIED) OF TAG AND THE GROUP
(ON A CONSOLIDATED BASIS); AND
(b) MONEYS DUE AND PAYABLE BY XX. XXXXXX XXXX TO
TAG AND THE GROUP (ON A CONSOLIDATED BASIS),
LESS TOTAL LIABILITIES.
10.5.2 TOTAL LIABILITIES: MEANS THE AGGREGATE AMOUNT OF ALL
LIABILITIES OF TAG AND THE GROUP (ON A CONSOLIDATED
BASIS)."
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2.1.9 By the deletion in its entirety of Schedule 1 to the Facility
Agreement, and the substitution therefor with the following:
"SCHEDULE 1
BANKS AND COMMITMENTS
COLUMN 1: BANK COLUMN 2: COMMITMENT COLUMN 3: APPLICABLE PERIOD
-------------- -------------------- ---------------------------
UPS CAPITAL GLOBAL TRADE US$25 MILLION ON OR BEFORE 30TH SEPTEMBER,
FINANCE CORPORATION 2004
US$23 MILLION AFTER 30TH SEPTEMBER, 2004
BUT ON OR BEFORE 24TH
OCTOBER, 2004
US$22 MILLION AFTER 24TH OCTOBER, 2004 BUT
ON OR BEFORE 24TH NOVEMBER,
2004
US$21 MILLION AFTER 24TH NOVEMBER, 2004 BUT
ON OR BEFORE 24TH DECEMBER,
2004
US$20 MILLION AT ANY TIME AFTER 24TH
DECEMBER, 2004
3. GENERAL
3.1 The parties hereto hereby acknowledge and confirm that:-
3.1.1 the terms of the Facility Agreement as varied and amended in
accordance with this Deed of Variation shall remain in full
force and effect; and
3.1.2 neither the obligations of any Borrower nor the rights and
remedies of the Agent under the Facility Agreement, any
Security Document or any other Finance Document or otherwise
conferred by law shall be discharged, prejudiced or impaired
by reason of the execution of this Deed of Variation or the
variation of the terms and conditions of the Facility
Agreement in accordance with this Deed of Variation.
3.2 This Deed of Variation may be executed in any number of counterparts and
by the different parties hereto on separate counterparts each of which
when so executed and delivered shall be original but all the
counterparts together shall constitute one and the same instrument.
3.3 This Deed of Variation shall be governed and construed in accordance
with the laws of the Hong Kong Special Administrative Region of the
People's Republic of China and the
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parties hereto agree to submit to the non-exclusive jurisdiction of the
Courts of the Hong Kong Special Administrative Region of the People's
Republic of China.
IN WITNESS WHEREOF this Deed of Variation has been entered into the day and year
first above written.
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THE BORROWERS
THE COMMON SEAL of )
TARRANT COMPANY LIMITED )
was hereunto affixed )
in the presence of: )
/S/ XXXXX XXX
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Xxxxx Xxx, DIRECTOR
/S/ XXXXX XXX
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Xxxxx Xxx, DIRECTOR/SECRETARY
THE COMMON SEAL of )
MARBLE LIMITED )
was hereunto affixed )
in the presence of: )
/S/ XXXXX XXX
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Xxxxx Xxx, DIRECTOR
/S/ XXXXX XXX
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Xxxxx Xxx, DIRECTOR/SECRETARY
THE COMMON SEAL of )
TRADE LINK HOLDINGS LIMITED )
was hereunto affixed )
in the presence of: )
/S/ XXXXX XXX
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Xxxxx Xxx, DIRECTOR
/S/ XXXXX XXX
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Xxxxx Xxx, DIRECTOR/SECRETARY
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THE AGENT
SIGNED for and on behalf of )
UPS CAPITAL GLOBAL )
TRADE FINANCE CORPORATION )
by: )
in the presence of: ) /S/ XXXXX X. XXX
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Xxxxx X. Xxx, U.S. Country Manager
/S/ ILLEGIBLE
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WITNESS
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