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Ref: COMMERCIAL BANKING-DIVISION E
CONFIDENTIAL
Concord Camera HK Ltd
14/F Concord Technology Centre
98 Texaco Road
Tsuen Wan
NEW TERRITORIES
7 November 2003
Attention Mr Harlan Press / Mr Paul Wong
Dear Sirs
BANKING FACILITIES
A/C NO. 500-166012-001
With reference to our recent discussion, we are pleased to advise that we have
reviewed your banking facilities and offer a renewal within the following
revised limits subject to review at any time and, in any event by 15 July 2004,
and also subject to our overriding right of suspension, withdrawal and repayment
on demand, including the right to call for cash cover on demand for prospective
and contingent liabilities.
New Previous1y
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Import Facilities HKD187,500,000.-* HKD85,000,000.-
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Documentary Credits to your
suppliers and Import Loan
Facilities in either HK Dollars
or Foreign Currency for up to
120 days (previously 90 days),
less any usance/credit periods
granted by your suppliers
within which (HKD187,500,000.-)* (HKD85,000,000.-)
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Goods under your control and/or
Trust Receipts
Packing Credit * HKD20,000,000.
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Up to 70% of valid export Documentary
Credits in your favour deposited with
us for up to 75 days before shipment
date
* Within the above Import (TR) facilities of HKD187,500,000.-
(HKD187,500,000.-), a sub-limit of HKD20,000,000.- may be switchable to
Packing Credit facility.
We may, at our sole and absolute discretion, refuse to allow drawings under the
facilities if the transaction in question does not meet our operational
requirements in respect of these facilities.
The Hongkong and Shanghai Banking Corporation Limited
Hong Kong Main Office: 1 Queen's Road Central, Hong Kong
Tel: 2822 1111 Fax:
Telex: 73205 HSBC HX Telegrams: Hongbank Hongkong Page 2
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Concord Camera HK Ltd 7 November 2003
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Interest on the import loans and packing credit loans will continue to be
charged on daily basis as follows and payable monthly in arrears to the debit of
your current account:-
HK Dollar : 1.75% over HIBOR on import loans and packing credit loans respectively
Foreign currency : 1.75% over SIBOR or 1% below our standard Trade Finance Rates as published by us
Interest at the above-mentioned rates over HIBOR (Hong Kong Interbank Money
Market Offer Rate) and SIBOR (Singapore Interbank Money Market Offer Rate) are
subject to fluctuation at our discretion and payable at the end of each interest
period to the debit of your current account
GUARANTEES New Previously
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EUR380,000 NIL
To issue a EUR380,000 open-ended guarantee
in favour of Rabobank as per attached.
Commission on the above guarantee facility will be charged at 1.25% per annum on
the amount of guarantee to be issued/renewed, which is subject to change at the
Bank's discretion.
Please note the full amount of the commission will be payable in advance on a
yearly basis to the debit of your current account with us notwithstanding
subsequent return/cancellation of the guarantee issued/renewed prior to expiry.
The commission rate specified above will apply to the guarantee issued/renewed
on your behalf notwithstanding that a different rate may have been specified in
any Counter-Indemnity issued by you in our favour prior to the date of this
letter in respect of such guarantee and it is agreed that the rate specified
above will apply with effect from the issue/renewal of such guarantee or
otherwise as indicated above. All other terms of any such Counter-Indemnity
remain unchanged.
Foreign Exchange Limit New Previously
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For booking foreign exchange contracts HKD15,000,000.- HKDl5,000,000.-
up to this limit in aggregate, with
individual contracts for periods of up
to a maximum of three months forward.
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Concord Camera HK Ltd 7 November 2003
Contracts may only be entered into to cover trade related exchange exposure
incurred in the normal course of business.
Foreign Exchange facility remains subject to our overriding right to call for
cash cover on demand if in the Bank's view a negative foreign exchange position
requires such cover. Further, the Bank may, after having discussed the position
with yourselves, close out any or all of your outstanding forward foreign
exchange contracts and demand settlement of the balance due.
Foreign exchange contracts will be governed by the conditions appearing on the
reverse of the standard contract form. These contract forms should be checked
upon receipt and the copy signed and returned to the Bank.
Default Interest
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Please note that interest will be payable on sums which are overdue or overlimit
(as well as amounts demanded and not paid) in respect of all or any of these
facilities and such interest is the same as that charged by us from time to time
on unauthorised overdrafts. Such interest will be payable monthly in arrears to
the debit of your Current Account.
Security
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As security, we shall continue to hold:-
1) A Letter of Awareness dated 24 August 1998 from Concord Camera Corp
together with a Certificate of Assistant Secretary dated 3 September 1998.
2) A Letter of Undertaking from your company together with the minutes of
meeting both dated 24 August 1998 undertaking:
(a) to direct to us bills business of not less than HKD100,000,000.- on an
annual basis;
(b) to maintain the tangible net worth of your company above
HKD110,000,000.- at all times;
(c) to maintain the net gearing ratio (after netting cash balance) of your
company below 45% at all times;
(d) not to declare dividends of more than 50% of recurrent net profit in
any financial year.
3) A Letter of Undertaking dated 20 July 1999 from your company together with
the minutes of meeting dated 19 July 1999 undertaking to direct to us all
I/E bills business of your company.
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Concord Camera HK Ltd 7 November 2003
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4) A Corporate Guarantee for USD4,200,000.- from Concord Camera Corp with
Board Resolution both dated 19 August 1999.
5) A Corporate Guarantee for USD4,000,000.- from Concord Camera Corp with
Board Resolution and Certificate of Incumbency all dated 11 November 1999.
6) A Corporate Guarantee for USD5,500,000.- from Concord Camera Corp with
Board Resolution both dated 28 August 2000 and Certificate of Incumbency.
7) A Letter of Undertaking from your company together with the minutes of
meeting both dated 28 August 2000 undertaking to maintain a Tangible Net
Worth of your company at not less than HKD250,000,000. Tangible Net Worth
is defined as the aggregate of Paid Up Capital, Retained Earnings and
Reserves.
8) Registered Assignment of DC Proceeds form dated 4 May 2001 together with
the minutes of meeting dated 28 August 2000 executed by your company.
As security for the revised facilities, please let us have:-
1. A Corporate Guarantee of USD10,300,000.- from Concord Camera Corporation
together with i) a certified copy of a Board Resolution, signed sealed by
the Secretary or Assistant Secretary of Concord Camera Corp authorising a
named person to execute the guarantee; ii) a Certificate of Incumbency
signed sealed by the Secretary or Assistant Secretary identifying the
individual authorized to issue the guarantee. We enclose our standard form
of guarantee for your completion and return.
2. A Corporate Guarantee of EUR560,000.- from Concord Camera Corporation
together with i) a certified copy of a Board Resolution, signed sealed by
the Secretary or Assistant Secretary of Concord Camera Corp authorising a
named person to execute the guarantee; ii) a Certificate of Incumbency
signed sealed by the Secretary or Assistant Secretary identifying the
individual authorized to issue the guarantee.
A review fee of HKD40,000.- will be charged to the debit of your current account
upon your acceptance of this facility letter.
Please arrange for the authorised 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 confirmation as to the correctness
of the security held, and your continued understanding and acceptance of the
terms and conditions under which these facilities are granted.
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Concord Camera HK Ltd 7 November 2003
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Please note that Section 83 of the Banking Ordinance has imposed on us as a bank
certain limitations on advances to persons related to our directors or
employees. In acknowledging this Facility Letter you should advise us whether
you are in any way related to any of our directors or employees within the
meaning of Section 83 and in the absence of such advice we will assume that you
are not so related. We would also ask, should you become so related subsequent
to acknowledging this Facility Letter, that you immediately advise us in
writing.
This letter supersedes our previous letter dated 6 September 2003, which is now
considered null and void.
These facilities will remain open for acceptance until the close of business on
28 November 2003 and if not accepted by that date will be deemed to have lapsed.
We are pleased to be of continued assistance.
Yours faithfully
For and On behalf of
CONCORD CAMERA HK LIMITED
/s/ Nelson Ho /s/ Paul Wong
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NELSON HO
Relationship Manager
ac
Encl