Exhibit 10.1
[HSBC Logo]
Commercial Banking - GP 3, Div M
(CARM 051116)
CONFIDENTIAL
Concord Camera HK Ltd
14/F Concord Technology Centre
00 Xxxxxx Xxxx
Xxxxx Xxx
NEW TERRITORIES 4 January 2006
Attn: Xx Xxxxxx Press / Mr Xxxx Xxxx
Dear Sirs
BANKING FACILITIES
A/C NO. 500-166012
With reference to the recent discussion, we are pleased to confirm our agreement
to the following revisions in your banking facilities which will be available on
the specific terms and conditions outlined herein and upon the satisfactory
completion of the security detailed below. These facilities are subject to
review at any time and, in any event by 30 June 2006, 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 Previously
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Import Facilities HKD60,000,000.-* HKD60,00,000.-
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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, less any usance/credit
periods granted by your suppliers
within which (HKD60,000,000.-)* (HKD60,000,000.-)
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Goods under your control and/or Trust Receipts
* Import Facilities limits should be HKD60,000,000.- or USD7,700,000.- which
shall match with the currency of pledged deposit to be placed with us.
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.
Interest on import loans will continue to be charged on a daily basis as follows
and payable monthly in arrears to the debit of your account:
HK Dollar : 1.75% over HIBOR on import loans
Foreign currency : 1.75% over SIBOR or 1% below our standard Trade Finance Rates
as published by us
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THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
HSBC Main Building, 0 Xxxxx'x Xxxx Xxxxxxx, Xxxx Xxxx
Tel: (000) 0000 0000 FAX: (000) 0000 0000
Telex: 73205 HSBC HX Telegrams: Hongbank Hongkong
Web: xxx.xxxx.xxx.xx
Incorporated in the Hong Kong SAR with limited liability
Registered at the Hong Kong Companies Registry No. 263876
[HSBC Logo]
Concord Camera HK Ltd 4 January 2006
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Interest at the above-mentioned rates over HIBOR (Hong Kong Interbank Offered
Rate) and SIBOR (Singapore Interbank Offered Rate) are subject to fluctuation at
our discretion and payable at the end of each interest period to the debit of
your account.
New Previously
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Guarantee
--------- EUR380,000.- EUR380,000.-
For issuance of a EUR380,000.-
open-ended guarantee in favour of
Rabobank
Commission on the above guarantee
facility will continue to be charged at
1.25% per annum on the amount of
guarantee 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 Nil HKD15,000,000.-
----------------------
For booking foreign exchange contracts
up to this limit in aggregate, with
individual contracts for periods of up
to a maximum of three months forward.
Default Interest
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Please note that interest will be payable on sums which are overdue, drawings
which are in excess of agreed limits and amounts demanded and not paid, at the
maximum rate stipulated in the Bank's Tariff which is accessible at
xxxx://xxx.xxxx.xxx.xx/xx/xxxxxxxxxx/xxxx/xxx/x_xxxxxx.xxx. The Bank will
provide you with a hard copy of the Tariff at your request. Interest at the
applicable rate will be payable monthly in arrears to the debit of your current
account.
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[HSBC Logo]
Concord Camera HK Ltd 4 January 2006
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Accrual of Interest and Other Sums
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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.
Security
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As security for the foregoing facilities, we continue to hold:-
1. A charge over your deposit for USD2,000,000.- or its equivalent in other
foreign currencies placed with us and is supported by the Registered
"Security Over Deposit" dated 8 November 2005 together with Board Resolution
dated 11 October 2005.
In the event of the value of the foreign currency deposit charged to us
falling below the required level and upon our request, you should
immediately pledge to us additional security acceptable to us to bring
the value back to the threshold.
2. A Registered Assignment of DC Proceeds form dated 4 May 2001 together with
the minutes of meeting dated 28 August 2000 executed by your company.
3. A Counter Indemnity dated 5 December 2003 in respect of the above guarantee
issued on your behalf (Re: L/G No. 46026).
As revised security, we require to hold an additional charge over your deposit
placed with us for USD6,200,000.- or its Hong Kong Dollar equivalent. We enclose
our standard form of "Security Over Deposit" for your completion and return,
together with a certified copy of a Board Resolution in substantially the form
as that enclosed with this facility letter.
In the event of the value of the total facilities outstanding exceeds the value
of the pledged deposits due to currency fluctuation, you undertake to
immediately pledge to us additional security acceptable to us to top-up the
security value to fully cover the total facilities outstanding.
Pursuant to Section 80 of the Companies Ordinance, a charge will have to be
formally registered with the Companies Registry within 5 weeks from the date of
the document. After the "Security Over Deposit" has been duly executed and
returned by you, we shall proceed with the filing on your behalf and the filing
fee of HKD340.- will automatically be debited to your current account.
Upon receipt of your acceptance to this facility letter and satisfactory
completion of the above security, we shall cancel the following:
1) An "all monies" debenture over all the assets and undertakings of your
company with minutes of meeting both dated 10 June 2004.
2) A Letter of Awareness dated 24 August 1998 from Concord Camera Corp together
with a Certificate of Assistant Secretary dated 3 September 1998.
3) A Corporate Guarantee for USD4,200,000.- from Concord Camera Corp with
minutes of meeting both dated 19 August 1999 and a copy of legal opinion
dated 9 August 1999 from Holland & Knight LLP.
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[HSBC Logo]
Concord Camera HK Ltd 4 January 2006
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4) A Corporate Guarantee for USD4,000,000.- from Concord Camera Corp with
minutes of meeting and Certification all dated 11 November 1999.
5) A Corporate Guarantee for USD5,500,000.- from Concord Camera Corp with
minutes of meeting and Certification all dated 18 October 2000.
6) A Corporate Guarantee for EUR380,000.- dated 16 December 2003 from Concord
Camera Corp with minutes of meeting and Certification both dated 31 January
2004.
7) 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.
8) A Letter of Undertaking dated 20 July 1999 from your company together with
the minutes of meeting dated 19 July 1999 undertaking:
(a) to direct to us all I/E bills business of your company;
(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.
9) A Letter of Undertaking from your company together with the minutes of
meeting both dated 28 August 2000 undertaking:
(a) to direct to us all I/E bills business of your company;
(b) to maintain the tangible net worth of your company at least
HKD250,000,000.- at all times;
(c) to maintain the net gearing ratio (after netting cash balance) of your
company at 45% or less at all times;
(d) not to declare dividends of more than 50% of recurrent net profit in any
fiscal year.
10) A Capitalization and Subordination Agreement dated 31 March 2005 from
Concord Camera Corp undertaking to recapitalize Concord Camera HK Ltd by
converting HKD250,000,000.- advance to Concord Camera HK Ltd into equity.
11) A Subordination Agreement dated 31 March 2005 from Concord Camera Corp in
respect of advances of HKD155,000,000.- to Concord Camera HK Ltd together
with the Board Resolution dated 29 March 2005 and Legal Opinion dated 10
November 2005 from Holland & Knight LLP.
As a special condition, Concord Camera HK Ltd is required to submit to our Bank
aged debtors' listing and inventory summary on a quarterly basis.
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[HSBC Logo]
Concord Camera HK Ltd 4 January 2006
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You will be required for so long as these facilities are available to you to
comply with the above covenant/undertaking. Your compliance or otherwise with
the above covenant/undertaking will not in any way prejudice or affect our right
to suspend, withdraw or make demand in respect of the whole or any part of the
facilities made available to you at any time. By signing this letter, you
expressly acknowledge that we may suspend, withdraw or make demand for repayment
of the whole or any part of the facilities at any time notwithstanding the fact
that the above covenant/undertaking is included in this letter and whether or
not you are in breach of any such covenant/undertaking.
Please note that all costs and expenses (including legal fees) incurred by us in
connection with the extension of these facilities and any matters arising are to
be reimbursed by you on demand.
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 revised facilities are granted.
Unless expressed in writing from you to the contrary, we may provide any
information relating to any of your accounts with us and any facilities we may
provide to you from time to time or their conduct or any other information
concerning your relationship with us to any other company or office which at the
relevant time belongs to or is part of the HSBC Group.
Section 83 of the Banking Ordinance
-----------------------------------
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.
These revised facilities will remain open for acceptance until the close of
business on 25 January 2006 and if not accepted by that date will be deemed to
have lapsed.
We are pleased to be of continued assistance.
Yours faithfully
/s/ Xxxxxx Xx
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Xxxxxx Xx
Senior Vice President
For and on behalf of
ac CONCORD CAMERA HK LTD
/s/ Xxxxxx Press
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Encl Xxxxxx Press, Director
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