EXHIBIT 10.107.3
Dated 18th June, 2003
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)
FOURTH DEED OF VARIATION
TO
SYNDICATED LETTER OF CREDIT FACILITY
XXXXXX XXXX & XXXXXXX
00XX XXXXX
XXXX XXXXX'X XXXX XXXXXXX
XXXX XXXX
THIS DEED is made the 18th June, 2003
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, Honk 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 if
credit, upon the terms and subject to the conditions set out therein.
B) Under a Deed of Variation to the Facility Agreement (the "FIRST DEED OF
VARIATION") entered into on 26th February, 2003 by and between the
Borrowers and the Agent, the parties thereto agreed to vary the terms
of the Facility Agreement as set out in the First Deed of Variation.
C) Under a further Deed of Variation to the Facility Agreement (the
"SECOND DEED OF VARIATION") entered into on 19th May, 2003 by and
between the Borrowers and the Agent, the parties thereto agreed to vary
the terms of the Facility Agreement as set out in the Second Deed of
Variation.
D) Under a further Deed of Variation to the Facility Agreement (the "Third
Deed of Variation") entered into on 2nd June, 2003 by and between the
Borrowers and the Agent, the parties thereto agreed to vary the terms
of the Facility Agreement as set out in the Third Deed of Variation.
E) The Borrowers have requested the Agent, and the Agent (in its capacity
as the Issuer) has agreed in principle, to waive certain breaches of
the financial covenants set out in Clause 10.5 of the Facility
Agreement. In consideration, inter alia, of such waiver, the Borrowers
have agreed to the amendment of the financial covenants and
undertakings as hereinafter set out.
F) 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 of 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 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 as 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 its entirety of the definition of "ADJUSTED
NET WORTH" in Clause 1.1 of the Facility Agreement.
2.1.2 By the deletion in its entirety of the definition of
"BORROWINGS" in Clause 1.1 of the Facility Agreement.
2.1.3 By the deletion in its entirety of the definition of
"BORROWING COSTS" in Clause 1.1 of the Facility Agreement.
2.1.4 By the insertion of a new definition of "CASH INTEREST
EXPENSE" in Clause 1.1 of the Facility Agreement as follows"
"'CASH INTEREST EXPENSE' THE MEANING GIVEN TO IT IN CLAUSE
10.5;"
2.1.5 By the deletion in its entirety of a new definition of "CASH
OUTFLOW" in Clause 1.1 of the Facility Agreement.
2.1.6 By the insertion of a new definition of "Fiscal Quarter" in
Clause 1.1 of the Facility Agreement as follows:
"'FISCAL QUARTER' EACH AND EVERY PERIOD OF THREE
CALENDAR MONTHS DURING THE TERM OF
THIS AGREEMENT, COMPRISING:
(a) 1ST JANUARY TO 31ST MARCH
(BOTH DATES INCLUSIVE);
(b) 1ST APRIL TO 30TH JUNE
(BOTH DATES INCLUSIVE);
(c) 1ST JULY TO 30TH SEPTEMBER
(BOTH DATES INCLUSIVE); OR
(d) 1ST OCTOBER TO 31ST
DECEMBER (BOTH DATED
INCLUSIVE);"
2.1.7 By the deletion in its entirety of the definition of "GAAP" in
Clause 1.1 of the Facility Agreement, and the substitution
therefor of the following:
"'GAAP' (a) IN RESPECT OF PROVISIONS
IN THIS AGREEMENT THAT
APPLY ONLY TO THE
BORROWERS, GENERALLY
ACCEPTED ACCOUNTING
PRINCIPLES AND POLICIES IN
HONG KONG CONSISTENTLY
APPLIED; AND
(b) IN RESPECT OF PROVISIONS
IN THIS AGREEMENT THAT
APPLY EITHER TO (i) TAG;
OR (ii) TAG AND ALL OTHER
MEMBERS OF THE GROUP ON A
CONSOLIDATED BASIS,
GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES AND
POLICIES IN THE UNITED
STATES OF AMERICA
CONSISTENTLY APPLIED;"
2.1.8 By the insertion of a new definition of "TANGIBLE NET WORTH"
in Clause 1.1 if the Facility Agreement as follows:
"'TANGIBLE NET WORTH' THE MEANING GIVEN TO IT IN CLAUSE
10.5;"
2.1.9 By the insertion of a new definition of "TOTAL LIABILITIES" in
Clause 1.1 of the Facility Agreement as follows:
"'TOTAL LIABILITIES' THE MEANING GIVEN TO IT IN CLAUSE
10.5;"
2.1.10 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:
10.4.1 TANGIBLE NET WORTH: TANGIBLE NET WORTH SHALL
BE NOT LESS THAN THE FOLLOWING AMOUNTS ON
THE FOLLOWING DATES:
DATE TANGIBLE NET WORTH
30TH JUNE, 2003 US$75,000,000
30TH SEPTEMBER, 2003 US$75,000,000
31ST DECEMBER, 2003 US$80,000,000
10.4.2 FIXED CHARGE COVERAGE: THE RATIO OF (i)
EBITDA TO (ii) CASH INTEREST EXPENSE AS AT
THE FOLLOWING DATES, CALCULATED ON EACH SUCH
DATE USING THE RESULTS ON THE DATE OF THE
FISCAL QUARTER SPECIFIED BELOW AND THE LAST
DAY OF EACH OF THE THREE IMMEDIATELY
PRECEDING FISCAL QUARTERS, SHALL EXCEED THE
RATIO SPECIFIED BELOW:
DATE RATIO
-------------------- -----
30TH JUNE, 2003 0.7:1
30TH SEPTEMBER, 2003 1.1:1
31ST DECEMBER, 2003 1.1:1
10.4.3 TOTAL LEVERAGE RATIO: THE RATIO OF (i) TOTAL
LIABILITIES TO (ii) TANGIBLE NET WORTH ON
THE DATES SPECIFIED BELOW SHALL NOT EXCEED
THE CORRESPONDING RATIO SPECIFIED BELOW:
DATE RATIO
-------------------- -----
30TH JUNE, 2003 2.5:1
30TH SEPTEMBER, 2003 2.25:1
31ST DECEMBER, 2003 2:1
ALL 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."
2.1.11 By the deletion in its entirety of Clause 10.5 of the Facility
Agreement, and the substitution therefor with the following:
"10.5 FINANCIAL RATIOS - DEFINITION OF TERMS
10.5.1 CASH INTEREST EXPENSE: MEANS, IN RELATION TO
ANY FINANCIAL PERIOD, THE AGGREGATE AMOUNT
OF ALL CASH INTEREST EXPENSE PAID OR PAYABLE
BY TAG OR ANY OTHER MEMBER OF THE GROUP (ON
A CONSOLIDATED BASIS) IN RESPECT OF SUCH
PERIOD (AND WHETHER PAID OR NOT).
10.5.2 EBITDA: MEANS, IN RELATION TO ANY FINANCIAL
PERIOD, THE AGGREGATE AMOUNT OF ALL THE NET
INCOME BEFORE TAXES PLUS INTEREST EXPENSE,
DEPRECIATION, DEPLETION, AMORTIZATION AND
OTHER NON-CASH CHARGES OF TAG AND ALL OTHER
MEMBERS OF GROUP (ON A CONSOLIDATED BASIS).
10.5.3 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 THE GROSS BOOK VALUE OF THE
ASSETS OF TAG AND THE GROUP (ON A
CONSOLIDATED BASIS) LESS:
(a) ANY MINORITY EQUITY INTEREST IN ANY
ENTITY OWNED OR CONTROLLED BY TAG
OR ANY MEMBER OF THE GROUP,
GOODWILL, PATENTS, TRADEMARKS,
TRADE NAMES, ORGANIZATION EXPENSE,
UNAMORTIZED DEBT DISCOUNT AND
EXPENSE, CAPITALIZED OR DEFERRED
RESEARCH AND DEVELOPMENT COSTS,
DEFERRED MARKETING EXPENSES,
DEFERRED RECEIVABLES, AND OTHER
LIKE
INTANGIBLES, AND MONIES DUE FROM
ANY MEMBER OF THE GROUP TO OTHER
MEMBERS OF THE GROUP, OFFICERS,
DIRECTORS, EMPLOYEES, OR
SHAREHOLDERS OF ANY MEMBER OF THE
GROUP); AND
(b) TOTAL LIABILITIES; AND
(c) ANY ACCRUED AND DEFERRED INCOME
TAXES, AND ANY RESERVES AGAINST
ASSETS; AND
FOR THE PURPOSES OF CALCULATING TANGIBLE NET
WORTH, THE VALUE OF ANY ASSETS OF THE GROUP
LOCATED IN MEXICO SHALL BE CALCULATED USING
THE VALUE OF THE MEXICAN PESO, DETERMINED AS
OF THE ACCOUNTING INFORMATION DATE.
10.5.4 TOTAL LIABILITIES: MEANS THE SUM OF CURRENT
LIABILITIES PLUS LONG-TERM LIABILITIES.
2.1.12 By the insertion of a new Sub-Clause 11.3.12 of the Facility
Agreement as follows:
"11.3.12 CAPITAL EXPENDITURE: WITHOUT THE PRIOR CONSENT OF THE
AGENT, IT WILL NOT (WHETHER BY A SINGLE TRANSACTION
OR A NUMBER OF RELATED OF UNRELATED TRANSACTIONS AND
WHETHER AT ONE TIME OR OVER A PERIOD OF TIME), INCUR
ANY CAPITAL EXPENDITURE WITH AN AGGREGATE VALUE IN
EXCESS OF US$800,000 IN ANY ONE FISCAL QUARTER."
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 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 or China.
IN WITNESS WHEREOF this Deed of Variation has been entered into the day and year
first written above.
THE BORROWERS
-------------
THE COMMON SEAL OF [TARRANT SEAL]
TARRANT COMPANY LIMITED
WAS HEREUNTO AFFIXED
IN THE PRESENCE OF:
------------------------------
DIRECTOR
------------------------------
DIRECTOR/SECRETARY
THE COMMON SEAL OF [MARBLE SEAL]
MARBLE LIMITED
WAS HEREUNTO AFFIXED
IN THE PRESENCE OF:
------------------------------
DIRECTOR
------------------------------
DIRECTOR/SECRETARY
THE COMMON SEAL OF [TRADE LINK HOLDINGS SEAL]
TRADE LINK HOLDINGS LIMITED
WAS HEREUNTO AFFIXED
IN THE PRESENCE OF:
------------------------------
DIRECTOR
------------------------------
DIRECTOR/SECRETARY
THE AGENT
---------
SIGNED FOR AND ON BEHALF OF
UPS CAPITAL GLOBAL
TRADE FINANCE CORPORATION
BY: XXXXX X. XXX /s/ Xxxxx X. Xxx
IN THE PRESENCE OF: -------------------------
SIGNATURE
/s/ illegible
------------------------------
WITNESS
