DATED AS OF 1 NOVEMBER 1997
(1) DURABLE ELECTRICAL METAL FACTORY LIMITED
(2) DURABLE ELECTRONICS INDUSTRIES LIMITED
(3) NEW M-TECH CORPORATION
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US$6,219,512 LOAN AGREEMENT
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INDEX
Clause Page
1. DEFINITIONS...........................................................2
2. THE LOAN..............................................................2
3. INTEREST..............................................................2
4. REPAYMENT.............................................................2
5. PAYMENT...............................................................3
6. CONDITION PRECEDENT...................................................3
7. BORROWER'S REPRESENTATIONS, WARRANTIES AND UNDERTAKING................3
8. EVENTS OF DEFAULT.....................................................5
9. GUARANTEE AND INDEMNITY...............................................7
10. NOTICES..............................................................12
11. GENERAL..............................................................13
12. GOVERNING LAW........................................................14
THIS AGREEMENT is made as of 1 November 1997
BETWEEN:
(1) DURABLE ELECTRICAL METAL FACTORY LIMITED a company incorporated in Hong
Kong (company number: 35273) whose registered office is at 1st Floor,
Efficiency House, 35 ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
(the "Lender");
(2) DURABLE ELECTRONICS INDUSTRIES LIMITED a company incorporated in Hong
Kong (company number: 579568) whose registered office is at 1st Floor,
Efficiency House, 35 ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
(the "Borrower"); and
(3) NEW M-TECH CORPORATION a corporation incorporated in the State of
Florida in the United States of America whose main office is at ▇▇▇▇▇
▇.▇., ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. (the "Guarantor").
WHEREAS:
(A) The Borrower is indebted to the Lender in the aggregate sum of
US$8,197,125 (the "Indebtedness").
(B) The Lender and the Borrower have agreed:
(i) to formalise part of the Indebtedness, in the form of a loan
in the principal sum of US$6,219,512 (the "Loan") due from the
Borrower to the Lender on the terms and conditions hereinafter
appearing; and
(ii) that the balance of the Indebtedness in the sum of
US$1,977,613 be set-off by way of an assignment of the benefit
of a loan of the equivalent amount pursuant to a deed of
assignment made between the Borrower as assignor, the Lender
as assignee and Pomillo Limited as borrower as of 1 November
1997.
(C) The Lender and Pomillo Limited have agreed to enter into an agreement
relating to the sale and purchase of all the issued shares of the
Borrower (the "S&P Agreement"). Upon completion of the S&P Agreement,
the Borrower will become an indirect wholly-owned subsidiary of the
Guarantor.
(D) The Guarantor has agreed to guarantee the payment by the Borrower of
the Loan and all interest accrued thereon on the terms and conditions
set out herein.
IT IS AGREED as follows:
1. DEFINITIONS
In this Agreement:
"BUSINESS DAY" means a day on which banks are open for business in Hong
Kong;
"CHARGE" means the fixed charge of certain fixed assets and inventory
to be given by the Borrower in favour of the Lender;
"EVENT OF DEFAULT" means any of the events of default set out in Clause
8;
"GUARANTEE" means the guarantee given by the Guarantor and referred to
in Clause 9.1(a);
"INTEREST PAYMENT DATE" means the last day of March, June, September
and December of each year commencing from 1 November 1997 save for the
first of such interest payment date which shall fall on 3 March 1998
and the last of such interest payment date which shall fall on the
Repayment Date;
"REPAYMENT DATE" means 31 October 2003.
2. THE LOAN
The Lender shall make the Loan available to the Borrower forthwith upon
fulfilment of the condition precedent referred to in Clause 6.
3. INTEREST
Interest shall be payable on the Loan from and including 1 November
1997 at the rate of 1% above the prime rate per annum as prescribed by
Nationsbank, National Association (South) of the United States of
America from time to time, on each Interest Payment Date.
4. REPAYMENT
Upon the occurrence of any Event of Default, the Lender may require the
Loan to be repaid in whole or in part together with all interest
accrued thereon and other sums payable hereunder provided that the
Borrower has received from the Lender not less than 14 days' written
notice to repay. The Borrower may repay all or part of the Loan
together with all interest accrued thereon at any time. Save as
aforesaid or as otherwise agreed by the Lender, the Borrower shall
repay the Loan in full together with all interest accrued thereon on
the Repayment Date.
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5. PAYMENT
5.1 Each payment by the Borrower under this Agreement shall be made in US
Dollars so as to be received by the Lender in same day funds, free and
clear of any restriction or condition, on the due date. Each payment
shall be made without any deduction or withholding of any kind (whether
on account of tax, by way of set-off or otherwise) except to the extent
required by law.
5.2 All payments shall be made to such bank account as the Lender may from
time to time specify by notice in writing.
5.3 Any payment which would otherwise be due on a day which is not a
Business Day shall be paid on the immediately preceding Business Day.
5.4 Any sum payable in respect of the Loan which is not paid when due shall
bear interest payable on demand at a rate of 5% above the prime rate
per annum as prescribed by Nationsbank, National Association (South) of
the United States of America from time to time. Such interest shall
accrue from the date such sum was due until its final payment in full.
6. CONDITION PRECEDENT
The liability of the Lender to make available the Loan to the Borrower
is subject to the Lender having received the S&P Agreement duly
executed by all parties thereto (other than the Lender) and all
documents and instruments to be delivered to the Lender pursuant
thereto.
7. BORROWER'S REPRESENTATIONS, WARRANTIES AND UNDERTAKING
7.1 The Borrower represents and warrants that:
(a) it is a limited liability company duly incorporated and
validly existing under the laws of Hong Kong;
(b) the memorandum and articles of association of the Borrower
include provisions which give the Borrower all necessary
corporate power and authority to enter into and perform this
Agreement; and the Borrower has taken all corporate and other
action to authorise the execution, delivery and performance of
this Agreement and the performance of its obligations
hereunder;
(c) the obligations expressed to be assumed by the Borrower herein
constitute legal, valid and binding obligations of the
Borrower;
(d) all consents, authorisations, approvals, licences, exemptions,
filings, registrations, notarisations and other requirements
of governmental, judicial and public bodies and authorities
required or advisable in connection with the execution,
delivery,
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performance, validity, admissibility in evidence and
enforceability of this Agreement have been obtained or
effected (or, in the case of registrations, will be effected
within any applicable requested period) and (if obtained or
effected) are in full force and effect; all fees and stamp,
registration and similar tax (if any) payable in connection
with them have been paid if due; there has been no default in
the performance of any of their terms or conditions and the
Borrower has full authority to make all payments under this
Agreement in accordance with the terms hereof;
(e) the execution, delivery and performance of this Agreement do
not and will not violate in any respect any provision of (i)
any law, or (ii) the memorandum and articles of association of
the Borrower, or (iii) any agreement or other instrument to
which the Borrower is a party or which is binding on it or any
of its assets, and do not and will not result in the creation
or imposition of any encumbrance over all or any of its
present or future assets or revenues, except for the Credit
Agreement entered into among the Guarantor, Newtech (Hong
Kong) Limited ("NewTech Hong Kong"), Bank Leumi, Comerica
Bank, and National Bank of Canada, dated as of 23 July 1997,
as amended, ("Leumi Credit Agreement"), and the
Indemnification and Guaranty Agreement entered into among
Windmere-Durable Holdings, Inc., the Guarantor and NewTech
Hong Kong, dated as of 18 September 1997 ("Windmere Security
Agreement"), both of which create charges against certain
assets of the Guarantor and for which the Leumi Credit
Agreement requires consents for any new indebtedness to be
incurred by or assets to be transferred to the Guarantor or
the Borrower, or guarantees to be made by the Guarantor, which
consents shall be obtained on or before 3 March 1998;
(f) it is not in breach of or default under any agreement to which
it is a party or which is binding on it or any of its assets
or revenues to an extent or in a manner which might have a
material adverse effect on its ability to perform its
obligations under this Agreement;
(g) no litigation, arbitration or administrative or other
proceeding is at present current or pending or threatened
which, if adversely determined, either would have a material
adverse effect on the assets, financial condition, prospects
or operations of the Borrower or would materially and
adversely affect the Borrower's ability to observe or perform
its obligations under this Agreement;
(h) it has made no arrangements or composition with, and no
assignment for the benefit of its creditors; it has not
commenced any negotiations with a view to the general
re-adjustment or re-scheduling of all or any part of its
liabilities; no petition has been presented and no meeting has
been convened and no step has been taken for the purpose of
its winding-up or dissolution or for the appointment of a
receiver, trustee or similar or equivalent officer in relation
to it or to any or all of its property or assets; and it is
able to pay its debts as they fall due, and has not suspended
or threatened to suspend making payments with respect to all
or any class of its debts;
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(i) the Borrower has fully disclosed in writing to the Lender all
facts relating to the Borrower which the Borrower knows or
reasonably ought to know and which are material for disclosure
to the Lender in the context of this Agreement;
(j) all information furnished by the Borrower or any person on its
behalf to the Lender in connection with this Agreement was and
remains true and complete in all respects and there is no
other fact or circumstance relating to the affairs of the
Borrower which has not been disclosed to the Lender, which
non-disclosure renders any of that information misleading, and
all expressions of expectation, intention, belief and opinion
contained in any of that information were honestly made on
reasonable grounds after due and careful consideration;
(k) the choice of English law to govern this Agreement and the
submission by the Borrower to the non-exclusive jurisdiction
of the courts of England are valid and binding.
7.2 The representations and warranties in Clause 7.1 will be deemed to be
repeated by the Borrower on each Interest Payment Date with reference
to the facts and circumstances then subsisting.
7.3 The Borrower hereby undertakes with the Lender that it shall, on or
before 31 March 1998, deliver to the Lender the Charge, in form and
substance satisfactory to the Lender, duly executed by the Borrower and
all documents and instruments to be delivered to the Lender pursuant
thereto.
8. EVENTS OF DEFAULT
The Lender shall be entitled to require the Loan to become immediately
due and repayable in full together with all accrued interest thereon
and other sums payable hereunder upon the occurrence of any of the
following events or any event which with the lapse of time or the
giving of notice or the fulfilment of any condition might become or
give rise to such an event:
(a) the Borrower makes default in the payment on the due date of
any principal, interest or other moneys and as the same ought
to be paid in accordance with this Agreement and/or the
Charge; or
(b) the Borrower shall fail to comply with any other applicable
provision of this Agreement and/or the Charge and, if such
default is capable of prompt remedy, within fourteen days
after the Borrower shall have received notice in writing of
such default from the Lender and the Borrower shall have
failed to cure such default; or
(c) the Guarantor shall fail to comply with any applicable
provision of this Agreement and if such default is capable of
prompt remedy, within fourteen days after the
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Guarantor shall have received notice in writing of such
default from the Lender and the Guarantor shall have failed to
cure such default; or
(d) any other indebtedness of the Borrower or Guarantor shall
become due and payable or capable of being declared due and
payable prior to the stated maturity thereof as a result of a
default thereunder or any such indebtedness shall not be paid
at the maturity thereof or any guarantee of indebtedness given
by the Borrower or Guarantor is not honoured when due and
called upon or any security, interest, charge or other
encumbrance, present or future and created or assumed by the
Borrower or Guarantor shall become enforceable; or
(e) any representation, warranty or undertaking in this Agreement
and/or the Charge or in any certificate or statement delivered
hereunder or in writing in connection herewith shall prove to
be untrue in any material respect of the date as of which it
was made or would, if made at any time with reference to the
facts and circumstances then subsisting, be untrue in any
material respect at that time; or
(f) any meeting of creditors of the Borrower and/or the Guarantor
being held or any arrangement, compromise or composition with
or for the benefit of its creditors being proposed or entered
into by or in relation to the Borrower and/or the Guarantor;
or
(g) a supervisor, receiver, administrator, administrative receiver
or other encumbrancer taking possession of or being appointed
over or in relation to any distress, execution or other
process being levied or enforced (and not being discharged
within twenty one days) upon the whole or any substantial part
of the assets of the Borrower and/or the Guarantor; or
(h) the Borrower and/or the Guarantor ceasing or threatening to
cease to carry on business or being or becoming unable to pay
its debts; or
(i) a petition being presented, or a meeting being convened for
the purpose of considering a resolution, for the making of an
administration order, the winding-up or dissolution of the
Borrower and/or the Guarantor; or
(i) ▇▇▇▇ ▇▇▇▇▇▇ becomes the beneficial owner of a smaller
percentage of the issued share capital of the Guarantor than
that held by Windmere-Durable Holdings, Inc. except that it
shall not be an event of default hereunder where,
(i) immediately after the Guarantor makes any initial
public offering for the sale of stock to the
public, ▇▇▇▇ ▇▇▇▇▇▇'▇ ownership percentage of the
issued share capital of the Guarantor is equal to
or greater than that of Windmere-Durable Holdings,
Inc.; or
(ii) in the circumstances where Windmere-Durable
Holdings, Inc. is offered the opportunity to sell a
specified number of shares in the Guarantor but
does not do so within 14 days of such offer, and
▇▇▇▇ ▇▇▇▇▇▇ sells a
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corresponding number of shares in the Guarantor thus
resulting in him becoming the beneficial owner of a
smaller percentage of the issued share capital of the
Guarantor than that held by Windmere-Durable
Holdings, Inc.
9. GUARANTEE AND INDEMNITY
9.1 In consideration of the Lender acting under or in connection with this
Agreement, the Guarantor hereby irrevocably and unconditionally:
(a) guarantees to the Lender the due and punctual payment of each
and every sum which from time to time falls due from the
Borrower under this Agreement and/or the Charge and which is
not paid on the due date therefor and undertakes to pay to the
Lender forthwith upon first written demand by the Lender all
sums from time to time due and payable (but unpaid) by the
Borrower under this Agreement and/or the Charge and the
Guarantor undertakes to pay any such sum on demand, together
with interest on such sum demanded from the date of demand to
the date of payment at the interest rate specified in this
Agreement, all such payments to be made in US Dollars and in
such place and in such manner as the Lender may by notice in
writing to the Guarantor require; and
(b) indemnify the Lender on demand (and this shall constitute an
independent primary obligation) against all damages, loss,
costs and expenses sustained or incurred by the Lender as a
result of any failure of the Borrower to carry out its
obligation or liability under this Agreement and/or the
Charge, provided that the Guarantor shall not be responsible
for all indirect or consequential damages so sustained or
incurred by the Lender.
9.2 The obligations of the Guarantor hereunder shall be in addition to and
not in derogation of any security or other surety cover in favour of
the Lender from time to time for the obligations of the Borrower under
this Agreement and/or the Charge.
9.3 The obligations of the Guarantor hereunder shall be continuing and
accordingly shall not be satisfied by any intermediate payment of any
sum outstanding under this Agreement and/or the Charge but shall remain
in full force and effect until all sums which may at any time be
outstanding under this Agreement and/or the Charge have been paid in
full.
9.4 The Lender shall not be obliged before making any demand of the
Guarantor hereunder (i) to make any demand of the Borrower, (ii) to
take any legal proceedings against the Borrower, (iii) to make or file
any claim in a winding-up of the Borrower or (iv) to exercise any right
which the Lender may have under any security or against any other
surety for the obligations of the Borrower under this Agreement and/or
the Charge.
9.5 (a) The obligations of the Guarantor hereunder shall not be
discharged or affected by (i) any time (whether as to payment
or otherwise) or other indulgence given by the Lender to the
Borrower in respect of any obligation of the Borrower under
this
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Agreement and/or the Charge, (ii) any renewal, termination,
variation or increase of any of the terms and conditions of,
or any facility granted under, this Agreement and/or the
Charge (whether or not the Guarantor is a party to or
cognisant of the same), (iii) any dissolution, winding-up,
corporate reorganisation or any change in the constitution of
the Borrower and/or the Guarantor, (iv) any transfer or
extinction of any of the liabilities of the Borrower by any
law, regulation, decree, judgment, order or similar instrument
or any other discharge, release or variation of the liability
of the Borrower other than through payment of the Indebtedness
or (v) any other act, omission or thing which, but for this
provision, would or might constitute a legal or equitable
discharge or defence of a surety.
(b) In the event that the Lender grants an extension of time to
the Borrower with or without notifying the Guarantor, it is
deemed that the Guarantor unconditionally and automatically
agrees to every extension of time, and shall not take
advantage of this as a reason for the Guarantor to be
exonerated from its liabilities or obligations hereunder.
9.6 So long as any sums are or may become outstanding under this Agreement
and/or the Charge, any right which the Guarantor may have by reason of
the performance of its obligations hereunder (a) to be indemnified by
the Borrower, (b) to prove in a winding-up of the Borrower for any
other surety for the Borrower's obligations under this Agreement, (c)
to take the benefit, in whole or in part, of any security held by the
Lender for the obligations of the Borrower under this Agreement and/or
the Charge, or (d) to be subrogated to any of the Lender's rights under
this Agreement and/or the Charge shall not be exercisable by it without
the prior written consent of the Lender and then only in such manner
and upon such terms as the Lender reasonably requires, and the
Guarantor shall hold any moneys at any time received or recovered by it
as a result of the exercise of any such right on trust for the Lender
for application in or towards payment of sums from time to time falling
due from the Borrower under this Agreement and/or the Charge.
9.7 The Guarantee shall be in addition to and not in substitution for any
other guarantee, indemnity, pledge, assurance, ▇▇▇▇, ▇▇▇▇, note,
mortgage, charge, debenture or other security now or hereafter held by
the Lender.
9.8 (a) Any discharge given to the Guarantor in respect of its
obligations hereunder shall be, and shall be deemed always to
have been, void if any act on the faith of which that
discharge was given is subsequently avoided, or any moneys
paid to the Lender is subsequently reduced or repaid, by or
pursuant to any provision of law. If the Lender becomes liable
to repay any moneys previously paid to the Lender hereunder or
under this Agreement and/or the Charge or any other documents
executed as security for the obligations of the Borrower under
this Agreement and/or the Charge on the grounds of fraudulent
preference or otherwise, the liability of the Guarantor
hereunder shall be computed as if such moneys had never been
paid to the Lender and the Lender shall be entitled to enforce
the Guarantee and any security held for the liability of the
Guarantor hereunder, if any, against the Guarantor as if such
release, discharge or settlement had not occurred.
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(b) The Lender shall be entitled to retain the Guarantee and any
security held by it in respect of the liability of the
Guarantor hereunder for a period of seven months after the
payment, discharge or satisfaction of all moneys payable to
the Lender and all obligations to be performed under this
Agreement and/or the Charge, or in the event of the
commencement of insolvency, winding up or liquidation of the
Borrower or the Guarantor prior to the termination of such
period of seven months, or such further period as the Lender
may determine and to enforce such security subsequently as if
such release, discharge or settlement had not occurred.
(c) The Lender is hereby authorised to exercise a lien over all
the property of the Guarantor coming into its possession or
control for any reason whatsoever, and whether or not in the
ordinary course of business, with power for the Lender to sell
such property, if necessary, to satisfy any liabilities
whatsoever of the Guarantor to the Lender. Such exercise of
lien and/or power to sell are/is subordinate in all respects,
however, to the Leumi Credit Agreement and the Windmere
Security Agreement.
9.9 The Guarantor represents and warrants that:
(a) it is a limited liability company duly incorporated and
validly existing under the laws of the State of Florida in the
United States of America;
(b) the Articles of Incorporation and By-Laws of the Guarantor
include provisions which give the Guarantor all necessary
corporate power and authority to enter into and perform the
Guarantee; and the Guarantor has taken all necessary corporate
and other action to authorise the execution, delivery and
performance of the Guarantee and the performance of its
obligations hereunder;
(c) the obligations expressed to be assumed by the Guarantor
herein constitutes legal, valid and binding obligations of the
Guarantor;
(d) all consents, authorisations, approvals, licences, exemptions,
filings, registrations, notarisations and other requirements
of governmental, judicial and public bodies and authorities
required or advisable in connection with the execution,
delivery, performance, validity, admissibility in evidence and
enforceability of the Guarantee have been obtained or effected
(or, in the case of registrations, will be effected within any
applicable requested period) and (if obtained or effected) are
in full force and effect; all fees and stamp, registration and
similar tax (if any) payable in connection with them have been
paid if due; there has been no default in the performance of
any of their terms or conditions and the Guarantor has full
authority to make all payments under the Guarantee in
accordance with the terms hereof;
(e) the execution, delivery and performance of the Guarantee do
not and will not violate in any respect any provision of (i)
any law, or (ii) the Articles of Incorporation and By-Laws of
the Guarantor, or (iii) any agreement or other
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instrument to which the Guarantor is a party or which is
binding on it or any of its assets, and do not and will not
result in the creation or imposition of any encumbrance over
all or any of its present or future assets or revenues, except
for the Leumi Credit Agreement and the Windmere Security
Agreement, both of which create charges against certain assets
of the Guarantor and for which the Leumi Credit Agreement
requires consents for any new indebtedness to be incurred by
or assets to be transferred to the Guarantor or the Borrower,
or guarantees to be made by the Guarantor, which consents
shall be obtained on or before 3 March 1998;
(f) it is not in breach of or default under any agreement to which
it is a party or which is binding on it or any of its assets
or revenues to an extent or in a manner which might have a
material adverse effect on its ability to perform its
obligations under the Guarantee;
(g) no litigation, arbitration or administrative or other
proceeding is at present current or pending or threatened
which, if adversely determined, either would have a material
adverse effect on the assets, financial condition, prospects
or operations of the Guarantor or would materially and
adversely affect the Guarantor's ability to observe or perform
its obligations under the Guarantee, with the exception of the
litigation between Westinghouse Corporation and the Guarantor,
et al, concerning the license to the `White-Westinghouse'
trade name;
(h) it has made no arrangements or composition with, and no
assignment for the benefit of its creditors; it has not
commenced any negotiations with a view to the general
re-adjustment or re-scheduling of all or any part of its
liabilities; no petition has been presented and no meeting has
been convened and no steps has been taken for the purpose of
its winding-up or dissolution or for the appointment of a
receiver, trustee or similar or equivalent officer in relation
to it or to any or all of its property or assets; and it is
able to pay its debts as they fall due, and has not suspended
or threatened to suspend making payments with respect to all
or any class of its debts;
(i) the Guarantor has fully disclosed in writing to the Lender all
facts relating to the Guarantor which the Guarantor knows or
reasonably ought to know and which are material for disclosure
to the Lender in the context of the Guarantee, including the
Leumi Credit Agreement and the Windmere Security Agreement;
(j) all information furnished by the Guarantor or any person on
its behalf to the Lender in connection with the Guarantee was
and remains true and complete in all respects and there is no
other fact or circumstance relating to the affairs of the
Guarantor which has not been disclosed to the Lender, which
non-disclosure renders any of that information misleading, and
all expressions of expectation, intention, belief and opinion
contained in any of that information were honestly made on
reasonable grounds after due and careful consideration;
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(k) the choice of English law to govern the Guarantee and the
submission by the Guarantor to the non-exclusive jurisdiction
of the courts of England are valid and binding; and
(l) the Guarantor is the beneficial owner of the entire issued
voting share capital of the Borrower.
9.10 The representations and warranties in Clause 9.9 will be deemed to be
repeated by the Guarantor on each Interest Payment Date with reference
to the facts and circumstances then subsisting.
9.11 The Guarantor shall:
(a) from time to time on the request of the Lender furnish the
Lender with such information about its business and financial
condition as the Lender may reasonably require;
(b) ensure that the Borrower complies with its obligations under
this Agreement;
(c) not claim any set-off or counterclaim against the Borrower or
to claim or procure in competition with the Lender in the
liquidation or winding-up of, or have the benefit of any share
in any payment or composition from, the Borrower or any other
person;
(d) promptly inform the Lender of the occurrence of any event
which is or may become (with the passage of time, the giving
of notice or the determination of any persons) an Event of
Default and any event which might adversely affect the ability
of the Borrower or the Guarantor to fully perform their
respective obligations under this Agreement, the Guarantee
and/or the Charge, and upon receipt of a written request to
that effect from the Lender, confirm to the Lender that, save
as previously notified to the Lender, no such event has
occurred;
(e) obtain, maintain in full force and effect and promptly renew
from time to time all consents, licences, exemptions, filings,
registrations, notarisations, approvals and other
authorisations of all governmental or other authorities of
which it has the benefit as of 1 November 1997 or as may from
time to time be required to enable it to lawfully enter into
its obligations under the Guarantee, or required for the
validity or enforceability of the obligations hereof and will
on request promptly provide the Lender with evidence thereof;
(f) ensure that at all times its indebtedness hereunder ranks at
least pari passu with all its other unsecured and subordinated
indebtedness (except for any indebtedness which is preferred
by mandatory provisions of law);
(g) promptly inform the Lender in writing of any litigation,
arbitration, administration or other proceedings against the
Guarantor before or of any judicial, administrative,
governmental or other authority or arbitrator; and
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(h) upon its becoming aware of the same, promptly inform the
Lender of the occurrence of any event which results in, or may
reasonably be expected to result in, (i) any of the
representations and warranties contained in Clause 9.10 being
untrue or (ii) any material adverse change in the condition
(financial or otherwise) of the Guarantor and the Borrower.
9.12 With the exception of the Leumi Credit Agreement and the Windmere
Security Agreement, the Guarantor shall not, without the prior written
consent of the Lender:
(a) create or permit to subsist any encumbrance over all or any of
its present or future assets or revenues; nor
(b) other than in connection with normal trade debt, make any
loans, grant any credit or give any guarantee or indemnity
(other than the Guarantee) to or for the benefit of any person
or otherwise voluntarily assume any liability, whether actual
or contingent, in respect of any obligation of any other
person or incur any other types of borrowings or indebtedness.
provided, however, that the Guarantor shall be permitted to incur new
borrowings or indebtedness without such prior consent of the Lender as
long as and to the extent that Bank Leumi, or any new bank which
replaces Bank Leumi under the Leumi Credit Agreement, consents in
writing to such new borrowing or indebtedness, in which case the Lender
may then require security over the Guarantor's assets as collateral for
this Loan Agreement subordinate to the Leumi Credit Agreement or any
substitute therefor, the Windmere Security Agreement and any new
security agreement pursuant to such new borrowing or indebtedness.
9.13 The Guarantor shall indemnify the Lender against any losses, costs,
charges or expenses, including legal fees on a full indemnity basis and
out-of-pocket expenses, which the Lender may sustain or incur in
relation to the Guarantee (including any amendment or extension of or
the granting of any waiver or consent under the Guarantee) or in
connection with the protection, enforcement or preservation of any of
the Lender's rights under the Guarantee, provided that the Guarantor
shall not be responsible for any indirect or consequential losses so
incurred.
10. NOTICES
10.1 Any notice or other communication served, given or made under this
Agreement will be in writing and, without prejudice to the validity of
any other method of service, may be delivered personally or by courier
or sent by facsimile transmission, addressed as follows:
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(a) if to the Lender, to:
Address: ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
San Po Kong
Kowloon
Hong Kong
Facsimile transmission number: (▇▇▇) ▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ So
CC: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(b) if to the Borrower, to:
Address: ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
San Po Kong
Kowloon
Hong Kong
Facsimile transmission number: (▇▇▇) ▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
CC: ▇▇▇ ▇▇▇▇▇▇
(c) If to the Guarantor, to:
Address: ▇▇▇▇▇ ▇.▇., ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇.▇.▇.
Facsimile transmission number: (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
CC: ▇▇▇ ▇▇▇▇▇▇
or to any other address or facsimile transmission number, or person for
whose attention the communication is to be addressed, as the relevant
addressee may substitute by fourteen days' prior notice in writing to
the other parties to this Agreement.
10.2 Any notice or other communication will be deemed to have been duly
served, given or made (i) in the case of courier, two Business Days
after the envelope containing the notice was delivered to the courier;
or (ii) in the case of delivery, when left at the relevant address; or
(iii) in the case of a facsimile transmission, on receipt by the
addressee of the substantially complete text in legible form.
11. GENERAL
11.1 The Guarantee shall be binding upon and enure to the benefit of each of
the Guarantor and the Lender and its successors and assigns.
11.2 The Lender shall pay its own costs and disbursements of and incidental
to this Agreement. The Borrower shall pay its own as well as the
Guarantor's costs and disbursements of and incidental to this
Agreement.
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11.3 No failure to exercise and no delay in exercising on the part of the
Lender any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right,
power or privilege. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
11.4 If any provision of this Agreement is or becomes invalid, illegal or
unenforceable for any reason, such invalidity, illegality or
unenforceability shall not affect the remainder of this Agreement and
the remainder of this Agreement shall be construed and enforced as if
such invalid, illegal or unenforceable portion were not contained
herein, provided and to the extent that such construction would not
materially and adversely frustrate the original intent of the parties
hereto as expressed herein.
11.5 This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
11.6 Time shall be of the essence as regards any date or period mentioned in
this Agreement and any date or period substituted for the same by
agreement of the parties hereto or otherwise.
11.7 Each of the parties hereto shall do and execute or procure to be done
and executed all such further acts, deeds, things and documents as may
be necessary or desirable to give effect to the terms of this
Agreement.
11.8 This Agreement shall be assignable by the Lender.
11.9 The waiver by any party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any other or
subsequent breach by such other party.
11.10 This Agreement shall enure to the benefit of, and be binding upon, each
party hereto and that party's successors and assigns.
12. GOVERNING LAW
12.1 This Agreement shall be governed by and construed in all respects in
accordance with English law and it is irrevocably agreed for the
exclusive benefit of the Chargee that the courts of England are to have
non-exclusive jurisdiction to settle any disputes which may arise out
of or in connection with this Agreement and that accordingly any suit,
action or proceeding arising out of or in connection with this
Agreement (in this Clause referred to as "Proceedings") may be brought
in such courts. Nothing in this Clause shall limit the right of the
Chargee to take the Proceedings against the Company in any other court
of competent jurisdiction, nor shall the taking of Proceedings in one
or more jurisdictions preclude the taking of Proceedings in any other
jurisdiction, whether concurrently or not.
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12.2 The Company hereby appoints__________________________________________of
______________________________________________________________________,
England (marked for the attention of__________________________________)
as its authorised agent for the purpose of accepting service of
process for all purposes in connection with this Agreement.
12.3 To the extent that the Company may be entitled in any jurisdiction to
claim for itself or any of its property or assets immunity in respect
of its obligations under this Agreement from service of process,
jurisdiction, suit, judgment, execution, attachment (whether before
judgment, in aid of execution or otherwise) or legal process or to the
extent that in any jurisdiction there may be attributed to it or all or
any of its property or assets immunity of that kind (whether or not
claimed), the Company irrevocably agrees not to claim and irrevocably
waives that immunity to the fullest extent permitted by the laws of
that jurisdiction.
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IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
1 November 1997.
SIGNED by )
)
for and on behalf of ) /S/ ILLEGIBLE
DURABLE ELECTRICAL METAL )
FACTORY LIMITED )
in the presence of )
SIGNED by )
)
for and on behalf of )
DURABLE ELECTRONICS ) /S/ ILLEGIBLE
INDUSTRIES LIMITED )
in the presence of )
SEALED with the COMMON SEAL of )
NEW M-TECH CORPORATION )
and SIGNED by ) /S/ ILLEGIBLE
)
for and on behalf of )
NEW M-TECH CORPORATION ) /S/ ILLEGIBLE
in the presence of )
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