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Exhibit 10.6
[HongkongBank LETTERHEAD]
Ref: CORPORATE BANKING CENTRE ESD - TEAM C
CONFIDENTIAL
Zindart Industrial Co Ltd
Flat D 25/F Block 1
Tai Ping Industrial Centre
Lot No 1637 Ting Kok Road
Tai Po
New Territories
Attn: Madam Leung Wai King Domina 22 May 1996
Dear Madam
BANKING FACILITIES
A/C NO. 004-121141-001
With reference to our recent discussion, we are pleased to confirm our
agreement to revising the following banking facilities to your company. These
facilities are subject to review at any time and, in any event by 31 July 1996,
and also subject to our overriding right of withdrawal and repayment on demand,
including the right to call for cash cover on demand for prospective and
contingent liabilities.
New Previously
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OVERDRAFT (A/C 004-121141-001) HKD20,000,000.-@ HKD5,000,000.-*
Interest on the overdraft facility
will continue to be charged on daily
balances at 0.75% over our best
lending rate, (currently 8.5% per
annum, but subject to fluctuation at
our discretion) and payable monthly
in arrears to the debit of your
current account.
@ Temporary limit until
30 November 1996
* Temporary limit until
31 May 1996
IMPORT/EXPORT FACILITIES HKD20,000,000.-# HKD20,000,000.-#
Documentary credits with import finance
up to 90 days (less any usance/credit
periods granted by your suppliers)
and/or D/P bills purchased on approved
drawees
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CORPORATE BANKING CENTRE ESD - TEAM C
CONFIDENTIAL
Zindart Industrial Co Ltd 22 May 1996
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New Previously
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within which (HKD20,000,000.-#-) (HKD20,000,000.-#-)
- ------------
Goods under your control and/or
trust receipts and/or D/A bills
purchased up to 90 days on
approved drawees.
Interest on your HKD import loans
will be charged on a daily basis
at 1/2% over our best lending
rate (currently 8-1/2% per annum,
but subject to fluctuation at our
discretion) and payable monthly
in arrears to the debit of your
current account.
# Within Import/Export (Trust
Receipt/DA) line. HKD5,000,000.-
(HKD5,000,000.-) is switchable
to Overdraft facility.
- - A sub-limit of HKD5,000,000.- for
Clean Import Loan against valid
sales invoices and shipping/title
documents from regular unrelated
suppliers.
New SIBOR Lease Facility : USD equivalent of
- ------------------------ HKD5,000,000.-
1. Lessee : Zindart Industrial Co Ltd
2. Location of Goods : China
3. Initial Rental : 50% of invoice value
4. Lease Period - Primary Period : 16 quarters
5. Lease Period - Secondary Period : 16 quarters (USD20.-per year, payable
annually in arrears)
6. Details of Goods : Various machines
7. Drawdown : Drawdown will be supported by invoices
with minimum amount of USD equivalent
to HKD1,000,000.-
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CORPORATE BANKING CENTRE ESD - TEAM C
CONFIDENTIAL
Zindart Industrial Co Ltd 22 May 1996
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7. Rental-Primary period: Interest will be charged at 1-1/2%
over 3 months' Singapore Interbank
Offer Rate (SIBOR) payable in full on
maturity of each drawing to the debit
of your account with us.
8. Condition Precedent: The Lease will come into effect upon
receipt by us of:-
(a) a SIBOR Lease Agreement as
referred to below duly executed
on behalf of the Lessee; and
(b) the documents and evidence
referred to in the Appendix to
this letter, in form and content
satisfactory to us.
The leasing facility will be made available to you on our standard Terms and
Conditions as set out in the SIBOR Lease Agreement.
The terms and conditions of this offer are based on the current laws and
regulations. In the event of any material change in any law or regulation which
takes place between the date of the offer and the drawdown under the relevant
SIBOR Lease Agreement and which may affect this facility, the Bank reserves the
right to renegotiate the said terms and conditions.
Separate letter(s) will be issued to you upon receipt of the original
invoice(s) per drawdown.
Accrual of Interest and Other Sums
Please note that interest and other sums expressed to be chargeable or payable
on a periodic basis will nonetheless accrue from day to day and amounts so
accrued may be demanded at any time.
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CORPORATE BANKING CENTRE ESD - TEAM C
CONFIDENTIAL
Zindart Industrial Co Ltd 22 May 1996
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All other facilities, terms and conditions remain unchanged as previously
stated on our facility letters dated 21 August 1995 and 27 November 1995.
Please note that amendment fee of HKD15,000.- will be charged to the debit of
your current account upon receipt of your acceptance to these facilities.
Please arrange for the authorized signatories of your company, in accordance
with the terms of the mandate given to the bank, to sign and return to us the
duplicate copy of this letter to signify your continued understanding and
acceptance of the terms and conditions under which these facilities are granted.
These facilities will remain open for acceptance until the close of business on
12 June 1996 and if not accepted by that date will be deemed to have lapsed.
We look forward to be of continued assistance.
Yours faithfully
Carol K Y L Lui
Senior Corporate Relationship Manager
KM/rk
Enc
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THE APPENDIX
CONDITION PRECEDENT DOCUMENTS
(1) Original Invoices bearing the following certification:-
"The goods are supplied to Zindart Industrial Co Ltd in their capacity
as agent for The Hongkong and Shanghai Banking Corporation Limited."
(2) Original signed delivery receipts acknowledging receipt of the Goods in
good condition (a copy of our standard form delivery receipt is
attached).
(3) Original insurance policies as required by the SIBOR Lease Agreement and
the premium receipts.
(4) A certified copy of a Board Resolution authorizing your company to enter
into the SIBOR Lease Agreement and naming two authorized signatories.
(5) Original receipt of initial rental.
FOR SALE AND LEASEBACK ARRANGEMENT
(6) A certified copy of a Board Resolution authorizing your company to enter
into the SIBOR Lease Agreement(s) and Sale & Purchase Agreement(s) and
naming two authorized signatories.
(7) A Sale & Purchase Agreement as per sample attached.
(8) "Disclaimer Letters" to Commissioner of Inland Revenue.
(9) Original receipts.