TARRANT APPAREL GROUP
EX-10.16.20
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex10-16_20.txt
<DESCRIPTION>EX-10.16.20
<TEXT>
                                                                EXHIBIT 10.16.20

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                              DATED 29TH JULY 2005

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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 LENDER)

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                            SECOND DEED OF VARIATION
                                       TO
                                 LOAN AGREEMENT
                         RELATING TO A US$5,000,000 LOAN

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                              BARLOW LYDE & GILBERT
                   SUITE 1901, 19TH FLOOR, CHEUNG KONG CENTER
                             2 QUEEN'S ROAD CENTRAL
                                    HONG KONG

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<PAGE>


THIS DEED OF VARIATION is made the 29th day of July 2005

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 "LENDER").


WHEREAS:

(A)      Under the terms of a loan  agreement  relating to a  US$5,000,000  loan
         (the "LOAN  AGREEMENT"  which expression shall include the same as from
         time to time amended,  supplemented  or modified)  entered into on 31st
         December 2004 by and between the  Borrowers and the Lender,  the Lender
         agreed,  inter alia,  to make  available to the  Borrowers a term loan,
         upon the terms and subject to the conditions set out therein.

(B)      Under a Deed of  Variation to the Loan  Agreement  entered into on 27th
         June 2005 by and between the  Borrowers and the Lender (the "PRIOR DEED
         OF  VARIATION"),  the parties  thereto  agreed to vary the terms of the
         Loan Agreement as set out in the Prior Deed of Variation.

(C)      The parties  hereto have  agreed,  pursuant to Clause 13.14 of the Loan
         Agreement,  to vary the terms of the Loan  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 Loan 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 Loan Agreement,  the terms of this Deed of Variation shall prevail.
         References  to  clause  numbers  are  to  those  clauses  in  the  Loan
         Agreement, unless indicated otherwise.

2.       VARIATION

2.1      The parties hereto hereby agree that the Loan Agreement shall be varied
         in the following manner:-


                                       1
<PAGE>


         2.1.1    By the deletion in Sub-clause 10.2.10 of the Loan Agreement of
                  the words "30TH JULY,  2005",  and the  insertion of the words
                  "12TH AUGUST, 2005" in substitution therefor.

3.       NO OTHER AMENDMENTS OR WAIVERS

3.1      The  execution,  delivery and  effectiveness  of this Deed of Variation
         shall  not  operate  as a waiver of any  right,  power or remedy of the
         Lender under the Loan Agreement or any of the other Finance  Documents,
         nor  constitute a waiver of any provision of the Loan  Agreement or any
         of  the  other  Finance  Documents.   Except  for  the  amendments  and
         agreements  set forth  above,  the text of the Loan  Agreement  and all
         other Finance  Documents  shall remain  unchanged and in full force and
         effect and each of the  Borrowers  hereby  ratifies  and  confirms  its
         obligations  thereunder.  This Deed of Variation shall not constitute a
         modification  of  the  Loan  Agreement  or any  of  the  other  Finance
         Documents or a course of dealing  with the Lender at variance  with the
         Loan Agreement or any of the other Finance Documents such as to require
         further  notice by the Lender to  require  strict  compliance  with the
         terms of the Loan  Agreement or any of the other  Finance  Documents in
         the future, except as expressly set forth herein. Each of the Borrowers
         acknowledges  and expressly  agrees that the Lender  reserves the right
         to,  and does in fact,  require  strict  compliance  with all terms and
         provisions of the Loan Agreement and all other Finance  Documents.  The
         Borrowers  have no  knowledge of any  challenge to the Lender's  claims
         arising under the Loan Agreement or any of the other Finance Documents,
         or to the  effectiveness  of the  Loan  Agreement  or any of the  other
         Finance Documents.

3.2      The parties hereby acknowledge and confirm that neither the obligations
         of any  Borrower  nor the rights and  remedies of the Lender  under the
         Loan  Agreement  or any of the other  Finance  Documents  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 Loan Agreement in accordance with this Deed
         of Variation.

4.       GENERAL

4.1      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.

4.2      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.


                                       2
<PAGE>



THE BORROWERS


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


/S/ CHARLES LAI
--------------------------------
Charles Lai, Director


/S/ JOHNNY YUEN
--------------------------------
Johnny Yuen, Director/Secretary




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


/S/ CHARLES LAI
--------------------------------
Charles Lai, Director


/S/ JOHNNY YUEN
--------------------------------
Johnny Yuen, Director/Secretary




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


/S/ CHARLES LAI
--------------------------------
Charles Lai, Director


/S/ JOHNNY YUEN
--------------------------------
Johnny Yuen, Director/Secretary


                                       3
<PAGE>


THE LENDER


SIGNED for and on behalf of     )
UPS CAPITAL GLOBAL              )
TRADE FINANCE CORPORATION       )
by:                             )
in the presence of:             )             /S/ JOHN P. HOLLOWAY
                                              --------------------------------
                                              John P. Holloway,
                                              Director of Portfolio Management
/S/ KETAK SAMPAT
--------------------------
Ketak Sampat, Witness


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