TARRANT APPAREL GROUP
EX-10.31.7
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>ex10-31_7.txt
<DESCRIPTION>EX-10.31.7
<TEXT>
                                                                 EXHIBIT 10.31.7


--------------------------------------------------------------------------------

                               DATED 5TH MAY, 2004

--------------------------------------------------------------------------------





--------------------------------------------------------------------------------

                           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)

--------------------------------------------------------------------------------


--------------------------------------------------------------------------------

                            SEVENTH DEED OF VARIATION
                                       TO
                      SYNDICATED LETTER OF CREDIT FACILITY

--------------------------------------------------------------------------------




--------------------------------------------------------------------------------

                              BARLOW LYDE & GILBERT
                                   24TH FLOOR
                            NINE QUEEN'S ROAD CENTRAL
                                    HONG KONG

--------------------------------------------------------------------------------


<PAGE>


THIS DEED is made the 5th May, 2004.

BETWEEN:

(1)      TARRANT  COMPANY  LIMITED a  company  incorporated  in Hong Kong  under
         company number 163310 with its registered office at 13th Floor,  Lladro
         Centre, 72-80 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong ("TARRANT");

(2)      MARBLE LIMITED a company incorporated in Hong Kong under company number
         399753 with its registered office at 13th Floor,  Lladro Centre,  72-80
         Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong ("MARBLE");

(3)      TRADE LINK HOLDINGS  LIMITED a company  incorporated in Hong Kong under
         company number 592076 with its registered office at 13th Floor,  Lladro
         Centre,  72-80 Hoi Yuen Road,  Kwun Tong,  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 and 17th  March,  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
         Facility Agreement as hereinafter set out.

(D)      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 Variation
         and the Facility  Agreement,  the terms of this Deed of Variation shall
         prevail.


                                       1
<PAGE>


         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 insertion of the words "AND/OR"  after the  punctuation
                  mark ";" in Sub-Clause12.1.17 of the Facility Agreement.

         2.1.2    By the  deletion  of the  punctuation  mark ";" and the  words
                  "AND/OR" in Sub-Clause 12.1.18 of the Facility Agreement,  and
                  the substitution therefor with the punctuation mark ".".

         2.1.3    By the deletion in its entirety of  Sub-Clause  12.1.19 of the
                  Facility Agreement.

         2.1.4    By the  deletion in its entirety of  Sub-Clause  12.3.2 of the
                  Facility  Agreement,  and the  substitution  therefor with the
                  following:

                  "12.3.2  WITHOUT  PREJUDICE TO SUB-CLAUSE 12.3.1 AND ALL OTHER
                           RIGHTS  AND  REMEDIES  OF THE  AGENT  OR ANY  FINANCE
                           PARTY,  IF ANY  BORROWER  OR THE  PARENT  FAILS ON OR
                           BEFORE  31ST  MAY,  2004 TO  OBTAIN  LOAN  AND  OTHER
                           FINANCE  FACILITIES IN  SUBSTITUTION  OF THE LOAN AND
                           OTHER  FINANCE  FACILITIES  PROVIDED  TO THE GROUP BY
                           GMAC   (NOTWITHSTANDING   THE   PROVISIONS   OF   THE
                           INTERCREDITOR AGREEMENT, OR THE CONSENT OR ABSENCE OF
                           CONSENT BY THE AGENT UNDER  SUB-CLAUSE  11.3.3),  THE
                           BORROWERS  AGREE TO IMMEDIATELY  PAY TO THE AGENT FOR
                           THE  ACCOUNT OF THE ISSUER A FEE OF  US$100,000  (AND
                           THE BORROWERS HEREBY IRREVOCABLY  AUTHORISE THE AGENT
                           (ON BEHALF OF THE ISSUER) TO PROCURE THE  DEBITING OF
                           SUCH   ACCOUNTS   IN  THE  NAMES  OF  THE   BORROWERS
                           MAINTAINED  BY THE ISSUER AS THE AGENT MAY  DETERMINE
                           IN THE AGGREGATE  AMOUNT OF US$100,000  UPON THE SAME
                           BECOMING DUE AND PAYABLE)."

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.


                                       2
<PAGE>


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.


                                       3
<PAGE>


THE BORROWERS


THE COMMON SEAL of         )
TARRANT COMPANY LIMITED    )
was hereunto affixed       )
in the presence of:        )


 /S/ HENRY CHU
---------------------------
HENRY CHU, DIRECTOR

 /S/ CHARLES LAI
---------------------------
CHARLES LAI, DIRECTOR/SECRETARY




THE COMMON SEAL of         )
MARBLE LIMITED             )
was hereunto affixed       )
in the presence of:        )


/S/ HENRY CHU
---------------------------
HENRY CHU, DIRECTOR

/S/ GRACE TAM
--------------------------
GRACE TAM, DIRECTOR/SECRETARY




THE COMMON SEAL of         )
TRADE LINK HOLDINGS LIMITED)
was hereunto affixed       )
in the presence of:        )


/S/ HENRY CHU
---------------------------
HENRY CHU, DIRECTOR

/S/ GRACE TAM
--------------------------
GRACE TAM, DIRECTOR/SECRETARY


                                       4
<PAGE>


THE AGENT


SIGNED for and on behalf of)
UPS CAPITAL GLOBAL         )
TRADE FINANCE CORPORATION  )
by:                        )
in the presence of:        )             /S/ ROBIN C. NIX
                                         -----------------------------------
                                         ROBIN C. NIX


--------------------------
WITNESS


                                       5

</TEXT>
</DOCUMENT>
