SUPPLY CHAIN SERVICES, INC.
EXHIBIT 10-A
Dated 24th June 2002
-------------------------------------------------------------------
SUPPLY CHAIN SERVICES LIMITED
As Borrower
and
DIGITAL WORLD FINANCE LIMITED
As Lender
-------------------------------------------------------------------
DEED OF DEBTS RESCHEDULING
incorporating
a float charge over Undertaking
-------------------------------------------------------------------
J. CHAN, YIP, SO & PARTNERS
Solicitors & Notaries
31 New Xxxxx House Tel: 0000 0000
00 Xxx Xxxxx Xxxxxx Fax: 0000-0000
Central Ref: L4757/2002/JWLY
Hong Kong Email: xxxx@xxxxxxx.xxx
INDEX
*****
Clause Page No.
1 Interpretation 2
2 Rescheduling of Debts 2
3 Conditions Precedent 2
4 Repayment 2
5 Prepayment 2
6 Interest 3
7 Default Interest 3
8 Deductions/Taxes 4
9 Change in Circumstances 5
10 Payment 6
11 Charging Provisions 7
12 Warranties 7
13 Undertakings 11
14 Default in compliance with Undertakings 15
15 Security Enforceable 15
16 Appointment of and Powers of Receiver 16
17 Provisions affecting Receiver 18
18 Lender's Powers 19
19 Application of Receipts 19
20 Possession 19
21 Further Assurance 20
22 Power of Attorney 20
23 Third Parties dealing with the Lender of 21
Receiver
24 Release and Reassignment 21
25 Nature of Security 21
26 New Account 00
00 Xxxxxxxxxx 00
00 Settlement 23
29 Default 23
30 Indemnities 27
31 Fees, Costs and Expenses 29
32 Calculations and Evidence 29
33 Assignment 30
34 Remedies, etc. 30
35 Communications 31
36 Partial Invalidity 31
37 Governing Law 32
Schedule Interpretation (Clause 1) 33
1
Schedule Conditions Precedent 40
2
Exhibit Corporate Guarantee
"A"
Exhibit Personal Guarantee
"B"
Exhibit Share Charge
"C"
THIS DEED is made on 24th June, 2002
BETWEEN
1. SUPPLY CHAIN SERVICES LIMITED ( ), a
company incorporated and registered in Hong Kong having its registered
office at 13th floor, Sing Ho Finance Xxxxxxxx, 000-000 Xxxxxxxxxx Xxxx,
Xxxxxxx, Xxxx Xxxx (the "Borrower"); and
2. DIGITAL WORLD FINANCE LIMITED ( ), a
company incorporated and registered in Hong Kong having its registered
office at Xxxx 0000, 00xx Xxxxx, Xxxx Xxxx Diamond Exchange Building, 8-
10 Duddell Street, Central, Hong Kong (the "Lender").
WHEREAS
(A) By loan agreement dated 28th June, 2001 made between the
Borrower and the Lender (the "Loan Agreement") the Lender advanced
to the Borrower a principal amount of HK$2,000,000.00 subject to
and upon the terms and conditions therein mentioned.
(B) Immediately prior to the execution of the Assignment the
Borrower was indebted to:
(a) the Lender in the sum of HK$2,047,500.00 representing the
principal amount and interest thereon due and payable by the
Borrower under the Loan Agreement; and
(b) Best Victory in the sum of HK$7,550,658.61 representing
(01) the amounts of a series of documentary credit opened by
Best Victory at the request of the Borrower in favour of the
Borrower's suppliers (02) bank charges and interest paid by Best
Victory under such documentary credit for the benefit of the
Borrower and (03) commissions to which Best Victory was entitles
to receive from the Borrower for making available its own trade
facilities for the benefit of the Borrower.
(C) The Lender and Best Victory are members of the same group of
companies as, and wholly-owned subsidiaries of, Digital World
Holdings Limited ( ), whose shares are listed on The Stock
Exchange of Hong Kong Limited.
(D) By the Assignment Best Victory as beneficial owner assigned to
the Lender absolutely all its interest in and right to the sum of
HK$7,550,658.61 due and owing by the Borrower to Best Victory as
aforesaid and the full benefit and advantage thereof and all the
powers and remedies in enforcing payment thereof.
(E) At the request of the Borrower the Lender has agreed to
reschedule the Debts subject to and upon the terms and conditions
hereinafter appearing.
NOW THIS DEED WITNESSES as follows:
1. Interpretation
Words and phrases appearing in this Deed shall be read and
construed in accordance with the definitions and provisions in
Schedule 1.
2. Rescheduling of Debts
Subject to the terms and conditions of this Deed, the Lender
agrees at the request of the Borrower to reschedule the Debts by
giving the Borrower further time until the Final Repayment Date to
repay the Debts together with interest thereon.
3. Conditions Precedent
The obligation of the Lender to reschedule the Debts is
conditional upon, and the Borrower shall not request that the Debts
be made rescheduled until, the Lender confirms that it has received
and found to be satisfactory each of the items and evidence (as the
case may be) listed in Schedule 2.
4. Availability
Subject as otherwise provided in this Deed, the Borrower shall
repay the Debts and every part thereof, so far as not otherwise
repaid or prepaid under the provisions of this Deed together with
any other monies then outstanding in one lump sum on the Final
Repayment Date.
5. Prepayment
5.1 Subject as otherwise provided in this Deed, the Borrower may,
subject to having given to the Lender not less than one (1)
Business Days' prior notice of its
intention to make prepayment specifying the amount to be prepaid
and the date of such repayment, prepay the Debts or any part
thereof, subject to a minimum amount of HK$500,000.00 or a higher
integral multiple thereof (other than the last prepayment of the
final balance of the Debts where such final balance is less than
HK$500,000.00).
5.2 Any prepayment made under this Deed shall be made together
with accrued interest on the amount prepaid and any other sum then
due to the Lender under the Loan Documents.
5.3 Any notice of prepayment, once given, shall be irrevocable and
shall oblige the Borrower to prepay in accordance with that notice.
The Borrower may not reborrow any amount prepaid or repaid.
6. Interest
Interest on the Debts shall accrue from 18th March, 2002 at
the rate of two per cent. (2%) per annum above the best lending
rate for HK Dollars from time to time announced by The Hongkong and
Shanghai Banking Corporation Limited and shall be paid by the
Borrower on:
(a) if applicable, the date(s) of prepayment where the
Borrower makes a prepayment
in accordance with Clauses 5, 9.1 and 9.2 (ii); and
(b) the Final Repayment Date where the Borrower makes a
repayment in accordance
with Clause 4.
7. Default Interest
7.1 If the Borrower defaults in payment when due of any amount,
whether principal, interest or otherwise, payable in accordance
with the provisions of this Deed, it shall pay to the Lender
interest on such overdue amount from the due date of payment until
actual payment (as well after as before judgment) at the rate of
two per cent. (2%) per annum above the rate of interest applicable
to the Debts from time to time, or which would have been applicable
to the sum in default had it constituted part of the Debts.
7.2 Interest accrued on any overdue amount shall be payable on
demand by the Lender made at any time.
8. Deductions/Taxes
8.1 All amounts payable by the Borrower under this Deed shall be
paid (except to the extent required by law):
(a) free of any restriction or condition;
(b) free and clear of and without any deduction or
withholding on account
of any taxes; and
(c) without deduction or withholding on account of any other
amount,
whether by way of set-off, counterclaim or otherwise.
8.2 If (i) the Borrower is required by law or by any taxing
authority to make any deduction, withholding or payment on account
of any present or future tax or other amount from or in respect of,
as the case may be, any sum paid or payable by the Borrower to the
Lender under this Deed or on or with regard to any aspect of the
transactions contemplated in this Deed or the execution and
delivery of the Loan Documents or (ii) the Lender (or any person on
its behalf) is required by law or by any taxing authority to make
(01) any deduction or withholding from, or (02) (except on account
of tax on the overall net income of the Lender) any payment on or
calculated by reference to the amount of, any sum received or
receivable by the Lender under this Deed, then:
(a) if the deduction, withholding or payment in question is
required to be made by the Borrower, the Borrower shall notify the
Lender of the requirement or any change in any such requirement as soon
as the Borrower becomes aware of it;
(b) the Borrower shall pay such tax or other amount before
the date on which penalties attach thereto, such payment to be made
(if the liability to pay is imposed on the Borrower) for its own
account or (if that liability is imposed on the Lender) on behalf of
and in the name of the Lender;
(c) save and except where the deduction, withholding or
payment is in respect or on account of tax on the Lender's overall net
income, the sum payable, in respect of which the relevant deduction,
withholding or payment is required, shall be increased to the extent
necessary to ensure that, after the making of that deduction,
withholding or payment, the Lender receives on the due date (free from
any liability in respect of any such deduction, withholding or
payment) a net sum equal to what it would have received
had no such deduction, withholding or payment been required or made;
and
(d) within thirty (30) days after payment of any legally
required deduction or withholding, and within thirty (30) days
after the due date of payment of any tax or other amount required to be
paid pursuant to Paragraph (b) above, the Borrower shall deliver to the
Lender evidence, satisfactory to the Lender, of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority.
8.3 Without prejudice to the provisions of Clause 8.2, if any sum
paid or payable by the Borrower under this Deed is or would when
paid be subject to any deduction or withholding on account of any
tax or other amounts imposed by or within any jurisdiction in or
from which the payment is or is to be made, the Borrower will, at
the request of the Lender, agree to such change as the Lender may
request and the Borrower shall approve (such approval not to be
unreasonably withheld) in the manner or place of payment by the
Borrower hereunder in order to avoid the requirement of such
deduction or withholding.
9. Change In Circumstances
9.1 If at any time the Lender determines that it is or will become
unlawful or contrary to any law or directive of any agency or state
for it to allow to be outstanding all or part of the Debts, to
carry out all or any of its other obligations under this Deed
and/or to charge or receive interest at the rate(s) payable
pursuant to this Deed, upon the Lender so notifying the Borrower,
the Borrower shall repay all (but not part only) of the Debts on
such date as the Lender shall certify to be necessary to comply
with the relevant law or directive, without premium or penalty
(other than any amounts payable under Clause 5.2) but together with
all accrued interest thereon and any other sum then due to the
Lender under this Deed.
9.2 If any change in applicable law or in the interpretation or
application thereof or if compliance by the Lender with any
applicable direction, request or requirement (whether or not having
the force of law) of any competent governmental or other authority
introduced or imposed after the date of this Deed shall, in the
opinion of the Lender :
(a) subject the Lender to any taxes or increase the Lender's
liability to taxes with respect to the Debts or any part thereof
(other than tax on its overall net income);or
(b) change the basis of taxation to the Lender in respect of
payments of principal, interest or any other payment due or to become
due to its pursuant to this Deed (other than where the tax in effect
after such change in basis is still a tax on its overall net
income);or
(c) impose on the Lender any other condition affecting the
Debts or any part thereof,
and the result of any of the foregoing is either directly or
indirectly (I) to increase the cost to the Lender of maintaining or
funding all or part of the Debts, (II) to reduce the amount of any
payment received or receivable by the Lender under this Deed, (III)
to oblige he Lender to make any payment on or calculated by
reference to the amount of any sum received or receivable by it
under this Deed, (IV) to cause the Lender to forgo any interest or
other sum received or receivable by it or (V) to render the Lender
otherwise unable to obtain the rate of return on its overall
capital which it would have been able to achieve but for its
entering into and/or performing its obligations under this Deed, in
any such case by an amount which the Lender considers to be
material, then in any such case:
(i) the Lender shall notify the Borrower of the occurrence of
such event as soon as reasonably practicable after the Lender
becomes aware of such event; and
(ii) the Borrower shall indemnify the Lender against that
increased cost, reduction, payment or forgone interest or other sum and,
accordingly, shall from time to time on demand (whenever made) pay to
the Lender such additional amounts as the Lender may certify to be
necessary so to indemnify it. Any such demand may be made at any time
before or after the end of any period to which such demand relates
and at any time before or after any prepayment, repayment or
transfer of all or part of the Debts or any part thereof. In such
circumstances the Borrower shall be at liberty at any time after a demand
has been made of it, but without prejudice to its obligation to
indemnify the Lender under this Clause, to serve notice of its intention to
prepay all (but not part only) of the Debts on any date prior to the
Maturity Date.
10. Payment
10.1 On the date on which any sum is due from the Borrower
hereunder or in connection herewith, it shall make such sum
available to the Lender before 1:00p.m. on the due date by delivery
to the Lender's office (or such other place in Hong Kong as the
Lender may from time to time notify the Borrower for the purpose)
of a cashier order or a HK Dollar cheque drawn on a licensed bank
in Hong Kong for the amount of the Facility or in such manner as
the parties hereto may from time to time agree.
10.2 Any payment to be made by the Borrower on a day which is not
a Business Day and which would otherwise be due on a non-Business
Day shall instead be due on the next Business Day in the same
calendar month and, if none, on the
immediately preceding Business Day.
11. Charging Provisions
11.1 The Borrower as beneficial owner and as continuing security
for the discharge of the Obligations charges to the Lender by way
of first floating charge the Undertaking but so that the Borrower
shall not without prior consent in writing of the Lender:
(a) create or permit to exist any Encumbrance (otherwise than
a lien arising by statute or operation of law) on or affecting any of
the Undertaking ranking in priority to or pari passu with such floating
charge; or
(b) sell or otherwise Dispose of any of the Undertaking other
than at market value for the purpose of carrying on its business or as
permitted by the Loan Documents.
11.2 The Lender may at any time by notice to the Borrower convert
the floating charge into a specific or fixed charge as regards any
assets specified in the notice which the Lender shall consider to
be in danger of being seized or sold under any form of distress or
execution levied or threatened or to be otherwise in jeopardy and
may appoint a Receiver thereof.
11.3 Notwithstanding anything to the contrary contained in Clause
11.2, if the Borrower shall without the prior written consent of
the Lender so create or permit to exist any Encumbrance on or
affecting, or so sell or otherwise Dispose of, any of the
Undertaking contrary to Clause 11.1, or attempts to do so without
the prior consent in writing of the Lender, or if any creditor or
other person attempts to bring any distress, execution,
sequestration or other process against any of the Undertaking, the
floating charge hereby created shall automatically without notice
operate as a fixed charge upon all parts of the Undertakings
instantly upon occurrence of such event.
12. Warranties
12.1 The Borrower represents and warrants to and for the benefit
of the Lender that:
(a) each of the corporate Covenantors is a limited liability
company incorporated, registered and existing under the laws of jurisdiction
of its incorporation and, where applicable, and has the power, authority and
legal right to own its assets and to carry on and conduct the business and
operations which it now conducts or proposes to conduct and has compiled
with and will comply with all requirements (legal or otherwise) relative to it
or its business;
(b) each of the Covenantors has the necessary corporate power
and/or full legal capacity, to enter into, exercise its rights and
perform and comply with its obligations under the Loan Documents to
which each of them is or will be a party;
(c) the entry into by each of the Covenantors, the exercise
by each of them of its rights and/or performance of or compliance
with its obligations under the Loan Documents to which it is or
will be a party do not and will not violate (as the case may be):
(i) any law, regulation, directive, judgment or order
to which it is subject; or
(ii) where appropriate, its memorandum and articles of
association or other equivalent constitutional documents; or
(iii) any agreement to which it is a party or which is
binding on it or its assets, and, except for Encumbrances created
pursuant to or under the Loan Documents, do not and will not result
in the existence of, or oblige it to create, any Encumbrance over
its assets and will not constitute a default or an event that with
the giving of notice or lapse of time or both would constitute a
default under any agreement to which it is a party;
(d) all corporate, shareholders and other action, conditions,
approvals, including, but without limitation, all governmental and
other official consents, licences, approvals and authorizations, and
things required under the laws of Hong Kong to be taken, fulfilled and
done in order:
(i) to enable each of the Covenantors lawfully to enter
into, exercise its rights and perform and comply with its
obligations under the Loan Documents to which it is or will be
a party;
(ii) to ensure that those obligations are legal, valid
and enforceable in accordance with heir terms; and
(iii) to make such Loan Documents admissible in evidence,
have been or, as the case may be, will immediately prior to
the execution of this Deed be done, fulfilled and performed properly
and truthfully in strict compliance with any applicable laws;
(e) it is not necessary in order to ensure the legality,
validity, enforceability, admissibility in evidence or priority of
the Loan Documents (save for delivery of this Deed for
registration at the Hong Kong Companies Registry) that any of them
be filed, recorded or enrolled with any court or authority anywhere
or (save for the prescribed filing fees payable for the registration
of this Deed at the Hong Kong Companies Registry) that any
stamp duty, registration or similar tax be paid on or in
relation to any of them (if any);
(f) the Loan Documents constitute (or, as and when each of
them is executed, will constitute) legal, valid and binding
obligations of each of the Covenantors enforceable in accordance with
their respective terms and there are no approvals required in
respect of any of the Loan Documents which have not been or will not be
obtained by the date of the drawdown of the Facility and are not or,
as the case may be, will not as of that date be in full force and
effect;
(g) except for claims made by Xx Xxxx Navigation, inc. and
the Inland Revenue Department of the Government of Hong Kong against Chu in
Hong Kong, no litigation, arbitration or administrative proceeding is
current, pending or threatened:
(i) to restrain the entry into by any Covenantor of, the
exercise by any Covenantor of its rights and/or performance or
enforcement of or compliance with its obligations under, the Loan
Documents to which it is or will be a party; or
(ii) which has or could have a material adverse effect on
or on the financial condition of any of the Covenantors or the
ability of any of the Covenantors to make any payment when due
or to perform any of its other obligations in accordance with the
Loan Documents to which it is or will be a party; or
(iii) which has or could have a material adverse effect
on the security constituted by the Loan Documents;
(h) the obligations of each of the Covenantors under the Loan
Documents to which it is or will be a party are or will be its direct,
general and unconditional obligations and, subject to the
Encumbrances created or to be created pursuant to or under such
Loan Documents, rank or will rank at least pari passu in all respects
with all its other present and future unsecured and unsubordinated
Indebtedness and obligations (including contingent obligations), with
the exception of Indebtedness and obligations, mandatorily
preferred by law and not by contract;
(j) there is no withholding, income or other tax or charge of
Hong Kong or any other jurisdiction applicable to any payment to be
made by each of the Covenantors pursuant to the terms of the Loan
Documents to which it is or will be party or to be imposed on or by virtue
of the execution and delivery, performance or enforcement of the
Loan Documents;
(k) without prejudice to Paragraph c), none of the
Covenantors is in default or breach of any of its obligations under any
agreement to which it is a party which default or breach has or could
have a material adverse effect on its ability to make any
payment when due or to perform any of its other obligations in accordance
with the Loan Documents to which it is or will be a party;
(l) no event or circumstance has occurred or arisen which is
or may constitute or become (with the giving of notice and/or
lapse of time and/or fulfillment of any condition) an Event of Default
or will occur or arise as a result of the entry by any of the
Covenantors into the Loan Documents to which it is or will be a party.
(m) the Borrower has not provided and will not provide the
other Covenantors with any form of security in respect of their
respective obligations under the Guarantees and the Share Charge.
12.2 The Borrower further represents and warrants to and for the
benefit of the
Lender that:
(a) the capital structure of SCSI as set out in the Share
Charge is complete and accurate;
(b) the Share Charge will, as and when executed, constitute a
first fixed legal charge over 25,299,999 shares of Common Stock having a
par value of US$0.0001 per share now held by Chu in the capital of SCSI
and such additional shares in the capital of SCSI of whatever class as
may at any time hereafter be subscribed or acquired by Chu; a first
assignment of all further shares, warrants, securities, rights,
benefits, dividends, interest, distribution and other money or property
accruing, paid, offered or deriving therefrom or in
respect thereof; a first assignment of Chu's right to and
interest in all moneys, amounts and payment owing to him by SCSI and a
subordination by way of trust of all moneys, amounts and payment to
which Chu may become entitled to receive from SCSI or may receive or
recover for whatever reason from SCSI;
(c) except for liens and title retention arrangements arising
in the ordinary course of business, no Encumbrance exists over all or any
of the undertaking or the present or future revenues or assets of the Borrower
other than (01) those as previously disclosed in writing to the Lender and
(02) those created or to be created pursuant to this Deed; and
(d) all information, data and materials supplied to the
Lender by or on behalf of each of the Covenantors concerning itself or in
connection with the Debts are to the best of its knowledge and
belief true, complete and accurate in all materials respects and not
misleading and do not omit material facts and all reasonable enquiries
have been made to verify the facts contained therein and there are no
other facts the omission of which would make any fact or statement
therein misleading and all forecasts and projections contained therein were
made after due and careful consideration on its part, are based on
the best information available to it and on fair and reasonable
assumptions and are, in its considered opinion, fair and reasonable in
the circumstances prevailing at the time such forecasts and
projections were made and in the light of the assumptions made, and
it is not aware at the date of this Deed of any fact which might
have a material effect on any such assumptions or which might
necessitate a material revision to any of the said forecasts or
projections.
13. Undertakings
13.1 General The Borrower undertakes to and in favour of the
Lender that:
(a) it will conduct its business in a proper and efficient
manner and will comply with and duly and diligently perform all its
duties and obligations under the Loan Documents to which it is or
will be a party;
(b) it will obtain or cause to be obtained and will maintain
and cause to be maintained in full force and effect and will comply
with the conditions and restrictions (if any) imposed in, or in
connection with all consents, permits and approvals (whether governmental
or otherwise) in respect of the Loan Documents and do, or
cause to be done, all other acts and things, which from time to time
may be necessary to ensure that each of the Loan Documents and
its obligations thereunder remain in full force and effect
and continue to be legal, valid, binding and enforceable in accordance
with their respective terms and admissible in evidence;
(c) it will keep and prepare its books of account and all
financial statements to be delivered to the Lender under this Deed
in accordance with generally accepted accounting principles
and practices in Hong Kong consistently applied;
(d) it will permit the Lender and its representatives to
inspect its books of account and other relevant accounting records at all
reasonable times on reasonable notice and shall cause its employees
and accountants to give their full cooperation and assistance
in connection with any such visits of inspection or any
financial conferences called by the Lender;
(e) it will promptly advise the Lender upon becoming aware
of:
(i) any Event of Default;
(ii) any litigation, arbitration or administrative
proceeding which, if it had been current or pending or
threatened as at the date of this Deed, would have rendered the warranty
in Clause 12.1 (g) incorrect;
(iii) any other factor which the Borrower reasonably
considers may inhibit , impair or delay any of the Covenantors in
the performance of its obligations under any of the
Loan Documents to which it is or will be a party; or
(iv) any change in the taxes applicable to any respect
of the transactions contemplated by the Loan Documents;
(f) it will pay all of its Indebtedness (except for Indebtedness
specifically subordinated or to be subordinated pursuant to the Loan
Documents) and shall perform all its other contractual obligations not
specifically herein referred to duly and promptly in accordance with the
particular agreements to which it is a party or by which its property or
assets are bound;
(g) it will procure that its obligations under this Agreement
at all times rank at least pari passu with all its unsecured
obligations, except for Indebtedness and obligations mandatorily preferred
by law and not by contract;
(h) it will pay and discharge all taxes for which it is
liable (whether in Hong Kong or elsewhere), including without limitation any
taxes assessed against any of its assets, prior to the date
after which penalties attach for failure to pay, except, to the
extent that such taxes are being contested in good faith, adequate
reserves have been set aside for the payments thereof and will make timely
filings of all tax returns and governmental reports required to be filed or
submitted under any applicable laws or regulations;
(i) it will provide, and will procure that each of the other
Covenantors will provide, such information and assistance as the Lender
may reasonably require to enable it to review the business activities
of the Covenantors.
(j) get in collect and realize all book and other debts as
and when they fall due;
(k) notify the Lender of any proposal or contract made by the
Borrower for the acquisition of any real or immovable property or any
estate or interest therein;
(l) deposit with the Lender the deeds and documents of title
relating to any such property as is referred to in the foregoing Paragraph
upon acquisition of the same by the Borrower and shall at any time if called
upon to do so by the Lender execute over all or any part of any real or
immovable property acquired by the Borrower in legal charge in favour of the
Lender in such form as the Lender may require and in the case of any leasehold
property shall use its best endeavours to obtain any requisite consent from
the lessor;
(m) keep all its properties and assets and all other plant,
machinery, fixtures,fittings, vehicles and other effects and every part
thereof in good and substantial repair and in good working order and
condition and not pull down or remove any of the same without prior written
consent of the Lender except in the ordinary course of use, repair,
maintenance or improvement;
(n) at its own expense, insure and keep insured all its properties,
assets and rights whatsoever of an insurable nature with a reputable
insurance company or underwriters against all usual risks and contingencies,
including such risks and contingencies as the Lender may require from time to
time to a minimum of the full replacement value thereof from time to time with
the interest of the Lender noted on the policies and maintain such other
insurances as are normally maintained by prudent companies carrying on similar
businesses and duly pay all premiums and other moneys necessary for effecting
and keeping such insurances and on demand produce to the lender the policies
or, as the case may be, certificates of such insurances and sufficient
evidence of such payments;
(o) punctually pay all rents, rates, taxes, duties, fees,
impositions and other outgoings whatsoever which may be payable in respect of
the
Undertakings or any part thereof and observe and perform
all the covenants, terms and conditions contained in any title deeds, leases
or other documents of title applicable to the Undertaking;
(p) punctually pay and discharge all debts and obligations
which by law may have priority over the security constituted by this Deed;
(q) not commit or suffer or permit any waste upon or injure
or in any manner or by any means lessen the value of any part of the
Undertaking;
(r) in relation to the Undertaking and its use or enjoyment comply
with all obligations under any present or future statute, regulation,
order or instrument or under any by-laws, regulations or requirements of
any competent authority or planning permissions or other approvals, licenses
or consents and shall produce to the Lender within fourteen (14) days of
receipt every notice, order or proposal given or made by any competent
authority and either comply with the same or make such objections and
representations against the same as the Lender may reasonably require
or approve;
(s) promptly inform the Lender of any event or of the receipt
of any notice which may affect the title of the Borrower to any
party of the Undertaking or its rights or interest therein or any
fixtures or fulfilment by the Borrower of any of its covenants or
obligations hereunder, or may affect the security constituted by
any of the Loan Documents.
13.2 Negative The Borrower further undertakes to and in favour of
the Lender that without the prior written consent of the Lender
(which consent may be subject to such conditions as the Lender sees
fit to impose) it will not :
(a) take any step with a view to dissolution, liquidation or
winding-up;
(b) except for Indebtedness incurred pursuant to this Deed or
Indebtedness incurred in the ordinary course of business
and not material in amount, incur or create any Indebtedness
or give any guarantee or indemnity or act as surety in respect of any
Indebtedness of any other person;
(c) except as permitted in the Loan Documents, create or
permit to arise or exist any Encumbrance over or Dispose of all or any of
its present or future undertaking or property or its present or future
revenues or assets including its uncalled capital (if any) for the time
being;
(d) lend any money or extend any credit other than in the
ordinary course of business or as permitted in the Loan Documents;
(e) make any payment to its shareholders, whether by way of
dividend, interest, return of capital, loan repayment or otherwise
howsoever;
(f) repay or redeem its issued share capital or reduce its
share capital;
(g) alter its financial year end;
(h) change the nature and scope of its current business in
any material respect;
(i) pay any Indebtedness owed to its shareholders until such
time as the Obligations shall have been paid and discharged in full;
and / or
(j) enter into any agreement or incur any obligation which
may materially or adversely affect its financial and other conditions.
14. Default in compliance with Undertakings
The Borrower hereby convenants with the Lender that if the
Borrower shall make default in complying with its obligations under
this Deed including but not limited to its obligations in respect
of insurance or (where applicable) in keeping the Undertaking in
good and substantial condition and state of repair as aforesaid, or
in duly complying with all such requirements and notices as
aforesaid then and in any such case and so often as the same shall
happen the Lender shall be at liberty to perform the covenants in
respect of which such default has been made, to effect such
insurances and to comply with all such requirements and notices as
aforesaid and the Borrower will forthwith repay on demand all
moneys expended by the Lender therefore and until such repayment
the same shall form part of the Obligations, shall have the benefit
of the security contained in Clause 11 and shall bear interest at
the rate as provided in Clause 7.1 with effect from the date of
payment until repayment in full by the Borrower (both before and
after judgement).
15. Security Enforceable
The Lender shall be entitled to declare all or any part of the
security constituted by Clause 11 immediately enforceable following
the making of a declaration pursuant to Clause 29.1.
16. Appointment of an Powers of Receiver
upon or at any time after the security constituted by Clause
11 has become enforceable, or if so requested by the Borrower, the
Lender may be writing under the hand of any director, officer or
manager of the Lender appoint any person (or persons) to be a
Receiver of the Undertaking or any part thereof an may similarly
remove any Receiver and appoint another in his stead. Any
appointment of more than one person to be receivers may be joint
and several and in such case reference in this Deed to a Receiver
shall be to all and/or each person so appointed. Any receiver so
appointed shall have power either in his own name or in the name of
the Borrower:
(a) to take possession of, collect and get in the Undertaking
or any part thereof;
(b) to manage or carry on or concur in managing or carrying
on the business of the Borrower as he may think fir;
(c) to Dispose of the Undertaking or any part thereof on such
terms and conditions as he may think fit and so that (without prejudice to the
generality of the foregoing) he may so Dispose for a consideration
consisting of cash, debentures or other obligations, shares,
securities or other valuable consideration and any such consideration
may be payable in a lump sum or by instalments spread over such period
as he may think fit;
(d) to promote the formation of a subsidiary company and/or
companies of the Borrower with a view to such subsidiary company and/or
companies purchasing, leasing, licensing or otherwise acquiring interests in
all or any of the assets of the Borrower;
(e) for the purpose of exercising any of the powers, authorities
and discretions conferred on him by or pursuant to this Deed and/or of
defraying any costs, charges, losses or expenses (including his remuneration)
which shall be incurred by him in the exercise thereof or for any other
purpose, to raise and borrow money either unsecured or on the security of the
Undertaking or any part thereof either in priority to the security
constituted by Clause 11 of this Deed or otherwise and generally on such
terms and conditions as he may think fit, Provided that:
(i) no Receiver shall exercise such power without first
obtaining the written consent of the Lender and the Lender shall not incur
responsibility to the Borrower or any other person by reason of its giving
or refusing such consent whether absolutely or subject to any
limitation or condition; and
(ii) no person lending such money shall be concerned to
enquire as to the existence of such consent or the terms thereof or as
to the proprietary or purpose of the exercise of such power or to see to
the application of any money so raised or borrowed;
(f) to exercise or permit the Borrower or any nominees of the
Borrower to exercise any powers or rights incidental to the ownership of the
Undertaking or any part thereof in such manner as he may think fit and in
particular any voting rights conferred by any shares, warrants or securities
and any rights of enforcing securities by sale, foreclosure or otherwise and
to call up all or any portion of the uncalled capital of the Borrower;
(g) to make and effect all such repairs, alterations, improvements
and developments to and insurances of the Undertaking or any part
thereof as he may consider fit;
(h) to exercise any of the powers fiven to the Lender by Clause
14;
(i) to commence, carry out and complete any building works,
repairs, reconstruction, furnishing or equipment of the Undertaking
or any part thereof at the cost of the Borrower;
(j) to appoint, hire and employ contractors, builders, workmen,
managers, agents, officers, servants, solicitors, architects,
surveyors, quantity surveyors and estate agents for any purpose on
such terms and generally in such manner as he may consider fit and
to discharge any such persons and any such persons appointed, hired
or employed by the Borrower and/or any other Receiver;
(k) to purchase all materials as he may think fit;
(l) to require the Borrower, its mangers, agents, officers,
servants, solicitors, architects, surveyors, quantity surveyors and
estate agents to deliver to the lender all deeds, documents, plans,
drawings, specifications, papers and information whatsoever in
their possession which the Receiver may require to complete any of
the contracts to which the Borrower is a party of manage or Dispose
of any of the properties of the Borrower and generally to give
instructions to any of them;
(m) to obtain all approvals, permissions, consents or licenses for
any of the contracts to which the Borrower is a party or otherwise
as he shall in his absolute discretion think fit;
(n)
to settle, adjust, refer to arbitration, compromise and arrange
any claims, accounts, disputes, questions and demands with
any person who is or claims to be a creditor of the
Borrower or relating in any way to the Undertaking or any
part thereof;
(o) to bring, prosecute, enforce, defend, compromise and abandon
all claims, actions, suits and proceedings in relation to the
Undertaking or any part thereof as may seem to him to be expedient;
and
(p) to do all such other acts and things as he may consider
necessary or desirable for completing any of the contracts to which
the Borrower is a party of realizing any of the Undertaking or any
part thereof or incidental or conducive to any of the matters,
powers or authorities conferred on a Receiver under or by virtue of
this Deed and generally to exercise in relation to the Undertaking
or any part thereof all such powers, authorities and things as he
would be capable of exercising and doing as if he were the absolute
beneficial owner of the same.
17. Provisions affecting Receiver
The following provisions shall apply with regard to any
Receiver appointed pursuant to this Deed:
(a) any such appointment may be made either before or after the
Lender shall have entered into or taken possession of the
Undertaking or any part thereof;
(b) any Receiver may (at the absolute discretion of the Lender) be
appointed either Receiver of all of the Undertaking or Receiver of
such part or parts thereof as may be specified in the appointment
and in such latter event the powers conferred by this Deed on a
Receiver shall have effect as though every reference to the
Undertaking were a reference to the part or parts of the
Undertaking so specified;
(c) any Receiver shall in the exercise of his powers, authorities
and discretions conform to any regulations and directions from time
to time made and given by the Lender Provided that no person
dealing with the Lender or any Receiver shall be concerned to
enquire whether the Receiver has so conformed to any such
regulations and directions;
(d) any Receiver shall be the agent of the Borrower for all
purposes and the Borrower alone shall be responsible for his
contracts, engagements, acts, omissions, defaults, losses and
misconduct and for liabilities incurred by him
and for his remuneration and the Lender shall not incur any
liability in respect of any of them (either to the Borrower
or to any other person whatsoever) by reason of its
appointing such Receiver or of its having made or given any
requisition or direction pursuant to Paragraph (c) or for
any other reason whatsoever;
(e) the Lender may from time to time fix the remuneration of any
Receiver and direct payment of that remuneration out of moneys
accruing to him in the exercise of his powers as Receiver but the
Borrower alone shall be liable for the payment of that
remuneration; and
(f) the Lender may from time to time and at any time require any
Receiver to give security for the due performance of his duties as
Receiver and may fix the nature and amount of the security to be so
given but the Lender shall not be bound in any case to require any
such security.
18. Lender's Powers
All or any of the powers, authorities and discretions which
are conferred either expressly or impliedly upon a Receiver of the
whole or any part of the Undertaking by this Deed may be exercised
by the lender in relation to the whole or any part of the
Undertaking without first appointing a Receiver of the Undertaking
or notwithstanding the appointment of a Receiver of the
Undertaking.
19. Application of Receipts
All monies receiver by the Lender or any Receiver appointed by
the Lender arising from any Disposal under the powers conferred
upon the Lender or upon any Receiver after the security constituted
by Clause 11 has become enforceable shall be applied in accordance
with the provisions of Clause 29.2.
20. Possession
20.1 If the Lender or any Receiver enters into possession of the
Undertaking, it or he may from time to time at pleasure go out of
such possession.
20.2 The Lender shall not in any circumstances by reason of its
entry into or taking possession of the Undertaking and whether as
mortgagee in possession or under any other right conferred
hereunder or under any other legal or equitable right whatsoever,
by liable to account to the Borrower for anything except the
Lender's own actual receipts or be liable to the Borrower for any
loss or damage arising from
any realization of the Undertaking or from any act, default or
omission of the Lender in relation to the Undertaking or from any
exercise or non-exercise by the Lender of any power, authority or
discretion conferred upon it in relation to the Undertaking by or
pursuant to this Deed.
20.3 All the provisions of Clause 20.2 shall apply in relation to
the liability of any Receive of the Undertaking in all respects as
though every reference therein to the Lender were instead a
reference to the such Receiver.
21. Further Assurance
The Borrower shall execute and do all such assurances, acts,
deeds and things as the Lender may reasonable require, and procure
other interested parties so to do, for protecting or perfecting the
security over the Undertaking and every part thereof and the
exercise of all powers, authorities and discretions vested in the
Lender or in any Receiver and shall in particular execute all
transfers, conveyances, assignments, assurances and registration of
the Undertaking and every part thereof, whether to the Lender or to
its nominees or purchasers or sub-purchasers, and give all notices,
orders and directions which the Lender may think expedient and, for
the purposes of this Clause, a certificate in writing by the lender
to the effect that any assurance or thing required by it is
reasonable shall be conclusive evidence of such fact, in the
absence of manifest error.
22. Power of Attorney
22.1 The Borrower hereby by way of security irrevocably appoints
the Lender and every Receiver of the Undertaking, each with full
power of substitution and delegation and each with full power to
act alone, to be its attorney and in its name and on its behalf to
execute and as its act and deed or otherwise to take all action and
do all such assurances, acts or things which it ought to do under
the covenants and provisions contained in this Deed and generally
in its name or in the name of the attorney and on its behalf to
exercise all or any of the powers, authorities and discretions
conferred by or pursuant to this Deed on the Lender or any such
Receiver and (without prejudice to the generality of the foregoing)
to execute, seal and deliver and otherwise perfect any deed,
assignment, transfer, assurance, agreement, instrument, notice or
act which may in the opinion of such attorney be required or deemed
proper, necessary or desirable for any of the purposes of this Deed
or the Loan Documents.
22.2 The Borrower ratifies and confirms and agrees to ratify and
confirm whatever any such attorney is mentioned in Clause 22.1
shall do or purport to do in the exercise of purported exercise of
all or any of the powers, authorities and
discretions referred to therein.
23. Third Parties Dealing with the Lender or Receiver
No person dealing with the Lender or with any Receiver of the
Undertaking appointed by the Lender shall be concerned to enquire
whether any event has happened upon which any of the powers,
authorities and discretions conferred by or pursuant to this Deed
in relation to the Undertaking are or may be exercisable by the
Lender or by any such Receiver, delegate or sub-delegate thereof or
otherwise as to the propriety or regularity of acts purporting or
intended to be in exercise of any such powers, authorities and
discretions and as regards any such person dealing with the Lender
or any such Receiver, delegate or sub-delegate, notwithstanding
that the requisite power, authority or discretion has not become
exercisable or any impropriety or irregularity whatsoever, such
powers, authorities and discretions shall be deemed to be duly and
validly exercised.
24. Release and Reassignment
24.1 Subject always to the provisions of Clause 28, as soon as
reasonable practicable after the discharge of the Obligations
(including provision for such contingent liabilities as may
reasonable be foreseen by the Lender in such manner and of such
amounts as may be determined in writing by the lender in its
absolute discretion), but subject to the rights of any other person
which have arisen as a result of the exercise by the Lender of any
of its powers hereunder and the rights of any third party, the
Lender shall at the request and at the cost and expense of the
Borrower take all steps that may be necessary to reassign,
discharge and release the Undertaking to the Borrower or as it may
direct.
24.2 Any reassignment, discharge and/or release of any of the
Undertaking shall be in such form as the Lender shall approve and
shall be made at the cost and expense of the Borrower.
25. Nature of Security
25.1 The security constituted by Clause 11 is in addition to and
shall not merge with or otherwise prejudice or affect or be
prejudiced or affected by any other security, guarantee, indemnity,
lien, power, right or remedy which the Lender may now or at any
time hold or take or be entitled to in respect of the Obligations
or the liabilities of the Guarantors under the Guarantees.
25.2 The security constituted by Clause 11 shall not be considered
satisfied or discharged by any intermediate payment or satisfaction
of the whole or part of the Obligations but shall be a continuing
security and shall extend to cover any sum which shall for the time
being constitute the balance due or expressed to be due to the
Lender in respect of the Obligations including all sums which may
be advanced by the Lender to or on account of the Borrower although
the obligation to make or continue any facilities or advances may
have ceased.
26. New Account
The Borrower covenants that:
(a) if the Lender receives actual or constructive notice of any
subsequent Encumbrance of Disposal of or affecting all or any part
of the Undertaking otherwise than as permitted under the Loan
Documents, the Lender may open a new account or accounts with the
Borrower; and
(b) if the Lender does not open such new account or accounts it
shall, for the purposes of the amounts secured on the Undertaking,
be treated as if it has done so at the time when it received notice
and for such purpose and as from that time all payments made by the
Borrower to the Lender shall be treated as having been credited to
the new account(s) and shall not operate to reduce the amount due
from the Borrower to the Lender at the time when the Lender
received such notice.
27. Indulgence
Save as otherwise provided in this Deed, the security
constituted by Clause 11 and the rights of the Lender shall not be
discharged or in any way affected by:
(a) any time, indulgence, waiver or consent at any time given to
or any compromise made with the Borrower or any other person;
(b) any amendment, variation or supplement in or to the Loan
Documents or any other security, guarantee, indemnity, lien, power,
right or remedy held in respect of the Obligations or any other
liabilities of the Borrower or any other person;
(c) the making or the absence of any demand on the Borrower or any
other person for payment in respect of the Obligations;
(d) the enforcement or absence of enforcement of or release of the
Loan
Documents or any of them or of any other security, guarantee,
indemnity, lien, power, right or remedy;
(e) the insolvency, bankruptcy, dissolution, liquidation, winding-
up, amalgamation, reconstruction, reorganization, change in the
constitution, death or incapacity of the Borrower or any other
person;
(f) any defect of deficiency in any provision of the Loan
Documents or any of the Loan Documents or the obligations of any
party (other than the Lender) thereunder being or becoming invalid,
illegal or unenforceable at any time (whether or not now known to
the Lender) or for any other reason whatsoever;
(g) any person named as a party to any of the Loan Documents not
being bound by the terms of any of them whether as a result of any
failure to execute, or any deficiency in the execution of, the same
or as a result of any defect in or insufficiency or want of the
necessary powers or any irregular or improper exercise thereof
(whether or not now known to the Lender) or for any other reason
whatsoever; or
(h) any other act, omission, event or thing whatsoever which but
for this provision would or might operate to discharge, impair or
otherwise affect the obligations or liabilities of the Borrower or
any other person under any of the Loan Documents.
28. Settlement
Any release, settlement, assignment, payment or discharge
between the Lender, the Borrower and any of the parties to the Loan
Documents shall be conditional upon no security or payment in
respect of the Obligations being avoided or reduced by virtue of
any provisions or enactments relating to bankruptcy, insolvency,
liquidation, winding-up, composition or arrangement for the time
being in force or for any other reason whatsoever and, in that
event, the Lender shall be entitled to the extent that it may have
been affected by such avoidance or reduction to recover the value
or amount of any such security or payment from the Borrower
subsequently as if such release, settlement, assignment, payment or
discharge had not occurred.
29. Default
29.1 If at any time and for any reason, whether within or beyond
the control of the party or parties concerned:
(a)
the Borrower fails to pay any principal, interest or other
amount payable by it hereunder on the due date or where the
same is payable on demand, on demand; or
(b) any of the Covenantors fails to pay in the manner provided in
the other Loan Documents any sum payable by it thereunder when due
or where the same is payable on demand, on demand; or
(c) any representation, warranty or statement by any of the
Covenantors in any of the Loan Docuemnts or in any information or
document delivered thereunder or otherwise is not complied with or
is or proves to have been incorrect or misleading in any respect
when made or in any respect when repeated or deemed to be repeated
pursuant to any of the Loan Documents, by reference to the
circumstances then existing and such breach is not capable of
remedy or, if in the opinion of the Lender, remediable, has not
been remedied within seven (7) days after notice from the Lender
requiring its remedy; or
(d) any of the Covenantors fails duly to perform any of its
obligations (other than the obligation to pay) or to observe any of
the terms and conditions (other than terms and conditions of
payment) imposed on it by any of the Loan Documents to which it is
or will be a party and such failure is not capable of remedy or, if
in the opinion of the Lender, remediable, has not been remedied
within seven (7) days after notice from the Lender requiring its
remedy; or
(e) all or any material part of the assets, rights or revenues of
any of the Covenantors shall be seized, expropriated, re-entered or
resumed or shall be subject to compulsory purchase or acquisition
(whether subject tot compensation or not) or shall be wholly or
substantially destroyed; or
(f) any consent, authorization, license or approval (whether from
the Government of Hong Kong or any other authority or agency
whether governmental or otherwise) required for or in connection
with any of the Loan Documents is not given or not obtained within
any applicable time limits or is revoked, withdrawn, terminated or
changed or is or becomes subject to conditions unacceptable to the
Lender or otherwise ceases to be in full force and effect or the
Government of Hong Kong or any other such authority or agency
objects to the Loan Documents or any part thereof; or
(g) any government, tax, monetary or other approval required is
not given or not obtained or is revoked or is withdrawn or is
changed or is or becomes subject to conditions unacceptable to any
Lender; or
(h)
(without prejudice to Clauses 29.1(a) or 29.1(j)) any Indebtedness
of any of the Covenantors, other than in respect of this Deed and
the Debts:
(i) is not paid when due or within any applicable grace
period in any agreement or instrument relating to that
Indebtedness; or
(ii) becomes due and payable before its normal or
anticipated maturity by reason of a default or even of
default, however described; or
(iii) which is in respect of a guarantee, becomes actual
Indebtedness and such actual Indebtedness is not paid or
discharged within seven (7) days or in accordance with the
relevant guarantee if such guarantee provides for a longer
grace period; or
(i) any event occurs:
(i) which constitutes or, with the fulfillment of any
condition, would constitute an event of default under any
other agreement or instrument to which any of the
Covenantors is a party; or
(ii) which has a material adverse effect on the ability
of any of the Covenantors to perform its obligations under
any of the Loan Documents to which it is or will be a
party; or
(j) any of the Covenantors becomes or is declared insolvent or
bankrupt, is unable to pay its debts as they fall due, stops,
suspends or threatens to stop or suspend payment of all or a
material part of its debts or begins negotiations or takes any
proceeding or other step with a view to readjustment, rescheduling
or deferral of its Indebtedness (or of any part of its Indebtedness
which it will or might otherwise be unable to pay when due) or
proposes or makes a general assignment or any arrangement,
compromise or composition with or for the benefit of its creditors
or a moratorium is agreed or declared in respect of or affecting
all or any material part of its Indebtedness; or
(k) a distress, attachment, execution or other legal process is
levied, enforced or sued out on or against the assets of any of the
Covenantors and is not discharged within ten (10) days; or
(l) any present or future security on or over the assets of any of
the Covenantors becomes enforceable, or any step (including the
taking of possession or the appointment of a receiver, manager or
similar officer) is taken to enforce that security; or
(m)
a petition is presented or a proceeding is commenced, a
resolution is passes, an order is made or any action is
taken by any person for the dissolution, liquidation,
winding-up or bankruptcy (except for the purpose of and
followed by a reconstruction, amalgamation or
reorganization on terms previously approved by the Lender)
or for the appointment of a liquidator, receiver,
administrator, trustee or similar officer, of any of the
Covenantors or of all or a material part of its business or
assets or if any event analogous thereto occurs or any of
the Covenantors becomes or is declared insolvent,
liquidated, wound-up or bankrupt under applicable laws; or
(n) any of the Covenantors ceases to exist or ceases or threatens
to ceases to carry on its business or any part thereof or changes
or threatens to change the nature or scope of its business to any
extent or in a way unacceptable to the Lender, or any of the
Covenantors Disposes of or threatens to Dispose of all or any
substantial part of its business or assets, except as contemplated
under the Loan Documents; or
(o) any action, condition or thing (including the obtaining of any
necessary consent) required at any time to be taken, fulfilled or
done in order to ensure that each of the Loan Documents is legal,
valid and enforceable in all respects is not taken, fulfilled or
done or any such consent ceases to be in full force and effect
without modification or any condition in or relating to any such
consent is not complied with; or
(p) it is or will become unlawful for any of the Covenantors to
perform or comply with any one or more of its obligations under the
Loan Documents to which it is or will be a party or such obligation
is not or ceases to be enforceable or is claimed by any of the
Covenantors or any other person not to be enforceable; or
(q) any action or proceeding of or before any court or authority
shall be commenced (and not withdrawn or dismissed within a period
of twenty eight (28) days after its commencement) to enjoin or
restrain the performance of and compliance with any obligation
expressed to be assume by any of the Covenators in any of the Loan
Documents or in any manner to question the right and power of any
of the Covenantors to enter into, exercise its rights under and
perform and comply with any obligation expressed to be assumed by
it under the Loan Documents or the legality, validity or
enforceability of the Loan Documents; or
(r) there occurs, in the opinion of the Lender, a material adverse
change in the financial position of any of the Covenantors or there
occurs, in the
opinion of the Lender, any situation which has materially
adversely affected or may materially adversely affect the
ability of any of the Covenantors to perform any or all of
its obligations under the Loan Documents to which it is or
will be a party,
then, and in any such case, the Lender may, whether or not such
Event of Default is continuing, declare:
(i) the Debts and all interest accrued thereon to be
immediately due and payable (whereupon the same shall be
immediately due and payable by the Borrower); and/or
(ii) all other monies payable under the Loan Documents to
be immediately due and payable (whereupon the same shall be
immediately due and payable by the Borrower),
and at the same time as or at any time after the Lender makes any
such declaration it may declare the security constituted by the
Loan Documents to be and to have become immediately enforceable and
duly enforce such security.
29.2 All monies received by the Lender at any time after the Debts
and all other monies payable under any of the Loan Documents have
become immediately due and payable pursuant to Clause 29.1 shall be
paid into an interest bearing recoveries account to be maintained
by the Lender and shall be applied, subject to any prior ranking
claims:
Firtly : in or towards discharging all costs and
expenses incurred by the Lender in perfecting, preserving,
exercising, protecting, enforcing or attempting to so
perfect, preserve, exercise, protect or enforce its rights
under the Loan Documents;
Secondly : in or towards discharging all unpaid accrued
interest payable pursuant to the Loan Documents or any of
them;
Thirdly : in or towards discharging the Debts and other
monies payable hereunder; and
Fourthly : subject to the rights of third parties of
which the Lender has actual notice, any balance in payment
to the Borrower.
30. Indemnities
30.1 The Borrower shall on demand indemnify the Lender against any
funding or
other cost (including administration costs), loss, expense or
liability
sustained or incurred by it as a result of:
(a) any sum payable by the Borrower under this Deed not being
paid
when due; or
(b) delay or failure by the Borrower to pay any taxes or
other monies
contemplated by Clause 8.2 and payment by the Lender of
any such taxes
or monies, whether or not such taxes or monies shall be
correctly or
legally asserted or otherwise contested or contestable,
together with
any interest, penalties and expenses in connection
therewith; or
(c) the occurrence or continuance of any other Event of
Default; or
(d) the accelerated repayment of the Debts pursuant to Clause
29; or
(e) (without prejudice to any other provision hereof) any
untrue or
misleading statement contained in any of the Loan
Documents or in any
information or document delivered pursuant thereto.
30.2 (A) Except (i) where costs and expenses are incurred in a
currency other
than HK Dollars and the Lender requires payment in that other
currency and (ii)
as otherwise provided in this Deed, HK Dollars shall be the
currency of
account and payment for all sums payable by the Borrower under or
in connection
with this Agreement, including damages.
(B) Any amount received or recovered in currency other than
the currency of
account and payment stipulated in Sub-clause (A) ("Account
Currency") (whether
as a result of, or of the enforcement of, a judgment or order of a
court,
tribunal or authority of any jurisdiction, in the dissolution or
bankruptcy of
the Borrower (as the case may be) or otherwise) by the Lender in
respect of any
sum expressed to be due to it from the Borrower under this Deed
shall only
constitute a discharge to the Borrower to the extent of the amount
in the
Account Currency which the Lender is able, in accordance with its
usual
practice, to purchase with the amounts so received or recovered in
that other
currency on the date of that receipt or recovery (or, if it is not
practicable
to make the purchase on that date, on the first date on which it is
practicable to do
so).
(C) If that amount is less than the Account Currency amount
expressed toi
be due to the Lender under the Loan Documents, the Borrower shall
indemnify the
Lender against any loss sustained by it as a result. In any event,
the Borrower
shall indemnify the Lender against the cost of making any such
purchase.
(D) The indemnities in Sub-clause (C) constitute separate and
independent
obligations form the other obligations of the Borrower in the Loan
Documents,
shall give rise to a separate and independent cause of action,
shall apply
irrespective of any indulgence granted by the Lender and shall
continue in full
force and effect despite any judgement, order, claim or proof for a
liquidated
amount in respect of any sum due under the Loan Documents or any
judgement or
order. No proof or evidence of any actual loss may be required.
31. Fees, Costs And Expenses
31.1 The Borrower shall pay:
(a) upon the execution of this Deed, a documentation fee
incurred by the Lender in connection with the preparation
of the Loan
Documents and other documents ancillary thereto;
(b) on demand by the Lender, all costs and expenses
(including legal fees
on a full indemnity basis) incurred by the Lender in
perfecting,
preserving or protecting any rights under the Loan
Documents or in
exercising or enforcing or attempting to exercise or
enforce any
rights under the Loan Documents and including, but
without limitation,
all such costs and expenses incurred by the Lender in
determining
whether an Event of Default has occurred; and
(c) promptly, any stamp, documentary, registration or similar
tax payable
in connection with the entry into, registration,
performance,
enforcement or admissibility in evidence of the Loan
Documents and the
transactions contemplated thereby and/or any amendment or
waiver
referred to in Paragraph (a), and the Borrower shall
indemnify the
Lender against any liability with respect to or resulting
from any
delay in paying or omission to pay any such tax.
32. Calculations And Evidence
32.1 All interest, fees and other payments of an annual nature
under this
Deed shall accrue from day to day and be calculated on the basis of
actual
number of days elapsed over a year of three hundred and sixty five
(365) days
and in the calculation of interest payable by the Borrower
hereunder, inclusive
of the first day of the relevant period but excluding the last.
32.2 The entries made in the accounts maintained by the Lender in
respect of
this Deed in accordance with the usual practice shall, save for
manifest
error, be
conclusive evidence of the existence and amounts of the obligations
of
the Borrower therein recorded.
32.3 A certificate issued by the Lender as to rate of interest
determined to
apply, the amount of the Loan, the amount of any sum, fee or other
payment
payable to it under this Deed or any other Loan Documents and any
other
certificate, determination, notification or opinion of the Lender
provided for
in this Deed or any other Loan Documents shall, in the absence of
manifest
error, be conclusive evidence that such sum is so payable or as to
any other
matter covered thereby.
33. Assignment
33.1 This Deed shall enure to the benefit of the parties hereto and
their
respective permitted successors, assigns and transferees.
33.2 The Borrower shall not assign or transfer any or all of its
rights or
obligations under this Deed without prior written approval of the
Lender.
33.3 (A) The Lender may at any time transfer by assignment or
novation to any
one or more parties all or any part of its rights and benefits
and/or of its
obligations under this Deed and in that event the transferee shall
have the
same rights and/or obligations (as the case may be) hereunder as it
would have
had if it had been a party hereto.
(B) In the case of the transfer of all or part of the Lender's
obligations
hereunder, the Borrower, the transferee and the Lender shall, at no
cost to the
Borrower, execute a novation agreement under which the Lender is
released from
its obligations or the part thereof transferred and the transferee
assumes the
obligations of the Lender or the part thereof transferred.
33.4 The Lender may disclose to a potential transferee or any other
person
proposing to enter into contractual arrangements with the Lender in
relation to
any or all of the Loan Documents such information about the
Covenantors and this
transaction as it may think fit.
34. Remedies, Etc.
34.1 Time shall be of the essence of this Deed, but no failure or
delay on
the part of the Lender to exercise or enforce any right, remedy,
power or
privilege hereunder will operate as a waiver thereof, nor will any
single or
partial or defective exercise of any right, remedy, power or
privilege preclude
any other or further exercise or enforcement thereof or the
exercise of any
other right, remedy, power or
privilege. No act or conduct or negotiation on the
part or on behalf of the Lender shall in any way preclude it from
exercising any
right, remedy, power or privilege hereunder or constitute a
suspension or any
variation of any such right, remedy, power or privilege save the
act conduct or
negotiation is directly expressly made for such purposes(s). Any
consent
required to be given under any provision hereof may be given
subject to such
conditions as the Lender may specify. Any waiver or consent shall
be effective
only in the instance and for the purpose for which it is given. The
rights,
remedies, powers and privileges herein provided are cumulative, may
be exercised
as often as the Lender considers appropriate and are not exclusive
of any
rights, remedies, powers or privileges provided by law.
34.2 Any provision of this Deed may be amended only if the Borrower
and the
Lender so agree in writing and any Event of Default may be waived
before or
after it occurs only if the Lender so agrees in writing.
34.3 This Deed constitutes the entire agreement between the parties
in
relation to the subject matter contained herein and supersedes any
other prior
commitments agreements promises or understandings written or verbal
that the
parties hereto hereinbefore may have had.
35. Communications
35.1 Any notice, consent, approval or other communication
(collectively the
"communication") under this Deed shall be made in writing but,
unless
otherwise stated, may be made by facsimile or letter but, if by
facsimile form the Borrower, shall promptly be confirmed by letter.
35.2 (A) Each communication or document to be made or delivered to
any party
under this Deed shall be sent to that party at the facsimile number
and/or
address from time to time designated by that party to the other
party for the
purpose of this Deed.
(B) Any communication or document form the Borrower pursuant
to this
Deed shall be irrevocable and shall not be effective until
received by the Lender. Any other communication or document shall
be
deemed to have been delivered when dispatched (in the case of any
communication made by facsimile) or (in the case of any
communication
made by letter) when left at that address or (as the case may be)
when
deposited in the post first class postage prepaid in a duly
addressed
envelope.
36. Partial Invalidity
The illegality, invalidity or unenforceability of any
provision of this
Deed or
of any other Loan Documents under the law of any jurisdiction shall
not affect its legality, validity or enforceability under the laws
of any other
jurisdiction nor the legality, validity or enforceability of any
other
provision.
37. Governing Law
37.1 This Deed shall be governed by and construed in accordance
with the
laws of Hong Kong. The parties hereto hereby submit to the non-
exclusive
jurisdiction of the Hong Kong Courts.
37.2 The submission of the parties hereto to the jurisdiction of
the Hong Kong
courts shall not restrict the right of the Lender to take
proceedings in
connection with this Deed in any other courts having, claiming or
accepting
jurisdiction in respect of matters pertaining to this Deed, nor
shall the
taking of proceedings in any one or more jurisdictions preclude the
taking of
proceedings in any other jurisdiction whether concurrently or not.
37.3 To the extent that the Borrower may in any jurisdiction claim
for itself or
its present or future assets any immunity (including immunity from
suit or other
legal process), and to the extent that in any jurisdiction there
may be
attributed such immunity (whether or not claimed), the Borrower
hereby
irrevocably undertakes not to claim and hereby irrevocably waives
all such
immunity.
37.4 The Borrower hereby irrevocably consents to the granting of
any relief
and/or the issue of any process in connection with any legal action
or
proceedings in connection with the Loan Documents, including the
making,
enforcement or execution of any judgment or order against any of
the property,
assets or revenues of the Borrower whatsoever.
IN WITNESS WHEREOF this Deed has been duly executed on the
date first
above written.
SCHEDULE 1
Interpretation (Clause 1)
Section (1)
In this Deed, unless the context otherwise requires:
"Assignment" means the deed of assignment dated 18th March,
2002 and made between Best Victory as assignor and the Lender
as assignee, pursuant to which Best Victory as beneficial
owner assigned to the Lender absolutely all its interest in
and right to the sum of HK $7,550,658.61 in the aggregate due
and owning by the Borrower to Best Victory and the full
benefit and advantage thereof and all the powers and remedies
in enforcing payment thereof;
"Best Victory" mean Best Victory Trading Limited (
), a company incorporated and registered in Hong Kong having
its registered office at Xxxx 0000, 00xx Xxxxx, Xxxx Xxxx
Diamond Xxxxxxxx Xxxxxxxx, 0-00 Xxxxxxx Xxxxxx, Xxxxxxx Xxxx
Xxxx;
"Business Day: means a day (other than Saturday) on which
banks are open for business in Hong Kong;
"Chu" means Xxx Xxxxxx Xxx Xxxxx ( ), holder of Hong Kong
Identity Card No. X000000(0), of Xxxx X, 0xx Xxxxx, Xxxxx XX,
Xxxx Xxxxx, 00 Xxxxx Xxx Xxxx, Xxxx Xxxx;
"Corporate Guarantee" means the guarantee in the form attached
hereto as Exhibit "A" (or such other form and substance as the
Lender may require) to be executed by SCSI in favour of the
Lender as the same may from time to time be amended, modified,
supplemented or varied;
"Covenantors" means the parties to the Loan Documents other
than the Lender and "Covenantor" means any or a specific one
of the Covenantors;
"Debts" means the aggregate of (a) the sum of HK$2,047,500.00
due and payable by the Borrower to the Lender under the Loan
Agreement and (b) the sum of HK$7,550,658.61 due and payable
by the Borrower to the Lender by virtue of the Assignment, as
the same may from time to time be reduced by prepayment and/or
repayment pursuant to the provisions of this Deed;
"Deed" means this deed together with the Schedules hereto as
the same may from time to time be amended, modified,
supplemented or varied in accordance with Clause 34.2;
"Dispose" means to make or to agree to make, and "Disposal"
means any sale, assignment, exchange, transfer, concession,
loan, lease, surrender of lease, direct or indirect
reservation, waiver, compromise, release, dealing with or in
or granting of any option, right of first refusal or other
right or interest whatsoever or any agreement for any of the
same and "Disponee" shall be construed accordingly;
"Encumbrance(s)" means any mortgage, charge, pledge, lien
(other than a lien arising by statute or operation of law) or
other encumbrance, priority or security interest, deferred
purchase, title retention, leasing, sale-and-repurchase or
sale-and -leaseback arrangement whatsoever over or in any
property, assets or rights or interest of whatsoever nature
and includes any agreement for any of the same;
"Event Of Default" means any one of the events or
circumstances specified in Clause 29.1;
"Final Repayment Date" means 23rd September, 2002;
"Guarantees" means the Corporate Guarantee and the Personal
Guarantee;
"Guarantors" means Chu and SCSI and "Guarantor" means either
or a specific one of the Guarantors;
"Hong Kong" means the Hong Kong Special Administrative Region
of the People's Republic of China;
"Hk Dollars" or "HK$" means the lawful currency for the time
being of Hong Kong;
"Indebtedness" means:
(a) any indebtedness or other obligation (actual or
contingent,
present or future, secured or unsecured, as principal ,
surety or otherwise) for or in respect of the payment or
repayment of money borrowed, or raised by whatever mean;
(b) the deferred purchase price of property or assets;
(c) any guarantee or indemnity in respect of Indebtedness
described in sub-paragraphs (a), (b), (d), (e), (f) and (g)
of this definition;
(d) all amounts for the time being outstanding under any
acceptance credit or other xxxx of exchange or
promissory note;
(e) any rental or hire payable in respect of any asset or
property, whether accrued or contingent;
(f) any actual liability incurred in respect of interest
and/or
foreign exchange hedging arrangements; and
(g) any indebtedness incurred under any other commercial
transaction,
and in relation to any person includes any indebtedness in
respect of which it has created an Encumbrance or given a
guarantee or indemnity;
"Loan Document(S)" means this Deed, the Guarantees, the Share
Charge and any further securities, charges, instruments or
documents as any of the same may from time to time be amended,
modified, supplemented or varied which are given or taken as
security for or with respect to the Obligations;
"Obligations" means the Debts and interest thereon and all
other monies due or to become due from, or for the time being
owing by, the Borrower to the Lender under the Loan Documents
(or any part thereof) and all costs, charges and expenses
incurred in connection with the preservation, enforcement or
exercise or intended or attempted exercise of any right, power
or remedy under the Loan Documents or any part thereof.
"Personal Guarantee" means the guarantee in the form attached
hereto as Exhibit "B" (or such other form and substance as the
Lender may require) to be executed by Chu in favour of the
Lender as the same may from time to time be amended, modified,
supplemented or varied;
"Receiver" means receiver or a receiver and manager and
includes any permitted delegate or sub-delegate of the same;
"SCSI" means Supply Chain Services, Inc., a company
incorporated and organised under the General Corporation Law
of the State of Delaware of the United States of America
having its registered office at 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, The United States of
America;
"Share Charge" means the deed of charge in the form attached
hereto as
Exhibit "C" (or such other form and substance as the Lender
may require) to be executed by Chu in favour of the Lender, as
the same may from time to time be amended, modified,
supplemented or varied;
"Undertaking" means all the Borrower's undertaking, property,
assets, goodwill, rights and revenues whatsoever and
wheresoever, both present and future, including all book and
other debts now and from time to time due or owing to the
Borrower, the uncalled capital, goodwill and all patents,
patent applications, trade marks, trade names, registered
designs, copyrights, licenses and ancillary and connected
rights both present and future of the Borrower; and
"US$" means the lawful currency for time being of The United
States of America.
Section (2)
Unless the context requires otherwise, any reference in this
Deed to:
an "agreement" also includes a concession, contract, deed,
franchise, licence, treaty or undertaking and any waiver or
release (in each case, whether oral, written, implied or by
operation of law) and includes the same as from time to time
amended, modified, supplemented or varied;
"any collective definition" shall be to the persons or things
comprising it as a whole or to any one or more of them or to
any part of the relevant thing or matter;
"any party" to the Loan Documents or any other agreement shall
be to it and its permitted successors, assigns, and personal
representatives;
the "assets" of any person shall be construed as reference to
the whole or any part of its business, undertaking, property,
assets, rights and revenues (including any right to receive
revenues);
a "consent" also includes an approval, authorization,
exemption, filing, licence, order, permission, recording or
registration (and references to "obtaining consent" shall be
construed accordingly);
one person being "controlled" by another means that (i) that
other (whether directly or indirectly and whether by the
ownership of share capital, the possession of voting power,
contract or otherwise) has the power to appoint and/or remove
the majority of the members of the governing body of that
person, (ii) the person being controlled acts or is accustomed
to act in accordance with the instructions of that other or
(iii) that other otherwise controls or has the power to
control the affairs and policies of that person;
a "directive" includes any present or future directive,
policy, regulation, request, requirement, or credit restraint
programme (in each case, whether or not having the force of
law but, it not having force of law, compliance with which is
in accordance with the general practice of the person to whom
the directive is addressed);
a "guarantee" also includes any other obligation (whatever
called) of any person to pay, purchase, provide funds (whether
by the advance of money, the purchase of or subscription for
shares or other securities, the purchase of assets or
services, or otherwise) for the payment of, indemnify against
the consequences of default in the payment of, or otherwise be
responsible for, any indebtedness of any other person;
a "law" includes common or customary law and any constitution,
decree, judgment, legislation, order, ordinance, regulation,
statute, treaty or other legislative measure, in each case of
any jurisdiction whatever (and "lawful" and "unlawful" shall
be construed accordingly);
something having a "material adverse effect" on a person is a
reference to it having a material adverse effect (a) on that
person's financial condition or business or operations or (b)
on its ability to perform and comply with its obligations
under the Loan Documents;
"materiality" in respect of any matter, thing or circumstance
or to any matter, thing or circumstance being "material" is,
subject as otherwise provided in this schedule, to that
matter, thing or circumstance being considered by the lender
of significance or having or being likely to have in the
reasonable opinion of the lender a consequence or effect in
the context of the relevant situation;
any matter, warranty or obligation being correct, performed or
satisfied in "any material respect" or "in all material
respects" is to that matter, warranty or obligation being
substantially correct, performed or satisfied to the extent
that in the reasonable opinion of the lender there has been no
inaccuracy or omission which, in the relevant circumstances,
is of significance or has or may have any effect or
consequence;
a "month" means a period commencing on a day in a calendar
month and ending on the corresponding day in the next calendar
month or, if there is none, ending on the last day of the next
calendar month;
any "obligation" of any party under the loan documents shall
be construed as a reference to any obligation expressed to be
assumed by or imposed on it under the loan documents (and
"due", "owing", "payable" and "receivable" shall be similarly
construed);
a "person" includes any individual, company, corporation,
firm, partnership, joint venture, association, organization,
trust, state or agency of a state (in each case, whether or
not having a separate legal personality) and reference to any
of the same shall include a reference to the others;
"subsidiary", "holding company" and "group of companies" shall
bear the meanings given by the companies ordinance (chapter 32
of the laws of hong kong) and "associated company" shall mean
any company (not being a subsidiary) of which a person shall,
whether directly or indirectly, beneficially own twenty per
cent. (20%) or more of its issued share capital;
"tax(es)" includes any present or future tax, levy, impost,
stamp and other duty, governmental and other charge or filing
and other fee, (or any deduction or withholding on account of
any of the foregoing) of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld, deducted or assessed;
"tax on the overall net income" of a person shall be construed
as a reference to tax imposed by the jurisdiction in which its
principal office is located on all or part of the net income,
profits or gains of that person (whether worldwide, or only
insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or
otherwise);
"time" is to Hong Kong time unless otherwise stated; and
"words" denoting the singular shall include the plural (and
vice versa) and any reference to the neuter gender shall
include a reference to the masculine and the feminine genders
(and vice versa).
Section (3)
In this Deed clause headings and the index have been inserted
for reference only and shall not affect construction or
interpretation.
Section (4)
In this Deed,
(a) references to Recitals, Clauses and Schedules and
Exhibits are references to recitals to, clauses of, schedules
and exhibits to, this Deed;
(b) references to Sub-clauses and Paragraphs are, unless
otherwise stated, references to sub-clauses and paragraphs of
the Clause or sub-clause in which the reference appears;
(c) references to Sub-paragraphs are, unless otherwise
stated, references to sub-paragraphs of the Paragraph in which
the reference appears;
(d) the words "herein", "hereof", "hereunder" and words of
similar import shall be construed as references to this Deed
as a whole and not to the particular provision in which the
relevant reference appears;
(e) references to (or to any specific provision of) this
Agreement or any other document (including, but not limited
to, any Loan Document) shall be construed as references to
this Deed, that provision or that document as amended,
modified, supplemented or varied from time to time with the
agreement of the relevant parties and the prior written
consent of the Lender and in force at any relevant time.
Section (5)
References in this Deed to any ordinance, enactment, rule,
law, directive or regulation include such ordinance, enactment,
rule, law, directive or regulation as modified, consolidated,
extended or re-enacted and include subsidiary legislation made
thereunder.
SCHEDULE 2
CONDITIONS PRECEDENT
1. A certificate issued by a director of the Borrower
incorporating:
(a) a certified true copy of its Certificate of Incorporation
on Change of Name, Memorandum and articles of Association and
current Business Registration Certificate;
(b) resolution of its board of directors authorizing
execution and performance of the Loan Documents to which it is
or will be a party;
(c) a statement as to its incumbent directors; and
(d) specimen signatures of the persons authorized on its
behalf to execute the Loan Documents to which it is or will be
a party and any documents and communications ancillary
thereto, including where applicable the Notice of Drawdown;
2. The Guarantee duly executed by each of SCSI and Chu;
3. The Share Charge and all ancillary documents duly exercised by
Chu together with all documents required to be delivered pursuant
thereto;
4. Such other documents as the Lender's legal advisers shall
stipulate should properly be provided prior to the drawdown of the
Facility or which the Lender may reasonably require.
SEALED with the Common Seal of
SUPPLY CHAIN SERVICES LIMITED /s/ Xxx Xxxxxx Yan
( ) --------------------
and SIGNED BY Xxx Xxxxxx Yan /s/ Chu Wan Man
and Xxx Xxx Man --------------------
in the presence of:
/s/ Xxxxx X.X. Xxx
---------------------
Witness : Xxxxx X.X. Xxx
Address : 00 Xxx Xxxxx Xxxxx, 00 Xxx Xxxxx Xxxxxx, Xxxxxxx,
Xxxx Xxxx
Occupation : Solicitor, Hong Kong
SEALED with the Common Seal of
DIGITAL WORLD FINANCE LIMITED /s/ Xxxx Xxx Hung
( ) -----------------
and SIGNED BY Xxxx Xxx Hung
in the presence of:
/s/ Xxxxx X.X. Xxx
-----------------------------
Witness : Xxxxx X.X. Xxx
Address : 00 Xxx Xxxxx Xxxxx, 00 Xxx Xxxxx Xxxxxx, Xxxxxxx,
Xxxx Xxxx
Occupation : Solicitor, Hong Kong
