EXHIBIT 10.31.8
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DATED 17TH JUNE, 2004
(WITH EFFECT FROM 10TH MAY, 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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EIGHTH DEED OF VARIATION
TO
SYNDICATED LETTER OF CREDIT FACILITY
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XXXXXX XXXX & XXXXXXX
00XX XXXXX
XXXX XXXXX'X XXXX XXXXXXX
XXXX XXXX
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THIS DEED is made the 17th day of June, 2004 (but has effect from 10th May,
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 and 5th May, 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
1
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 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 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 US$25,000,000
(TWENTY FIVE MILLION US DOLLARS; OR
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."
2.1.2 By the deletion in its entirety of Clause 4.8.3 (a) of the
Facility Agreement, and the substitution therefor with the
following:
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"(A) SUBJECT TO SUB-CLAUSE (B) BELOW, 1% PER ANNUM ABOVE
THE PRIME RATE OF BANK OF AMERICA (AS CONCLUSIVELY
DETERMINED BY BANK OF AMERICA) FROM TIME TO TIME; OR"
2.1.3 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:
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DATE TANGIBLE NET WORTH
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31ST MARCH, 2004 US$80,000,000
30TH JUNE, 2004 US$80,000,000
30TH SEPTEMBER,2004 US$80,000,000
31ST DECEMBER,2004 US$80,000,000
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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:
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DATE RATIO
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31ST MARCH, 2004 0.25 : 1
30TH JUNE, 2004 1.00 : 1
30TH SEPTEMBER, 2004 1.25 : 1
31ST DECEMBER 2004 2.00 : 1
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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:
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DATE RATIO
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31ST MARCH, 2004 1.50 : 1
30TH JUNE, 2004 1.60 : 1
30TH SEPTEMBER, 2004 1.60 : 1
31ST DECEMBER, 2004 1.50 : 1
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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.
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10.4.4 TO THE EXTENT THAT ANY FINANCIAL INFORMATION
FOR THE CALCULATION OF THE FOREGOING
FINANCIAL RATIOS IS IN MEXICAN PESOS, THE
BORROWERS ACKNOWLEDGE THAT A FIXED EXCHANGE
OF 11.202 MEXICAN PESOS TO 1 UNITED STATES
DOLLARS SHALL BE APPLIED."
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 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/ XXXXXXX XXX
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XXXXXXX 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
--------------------------
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
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WITNESS
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