EXHIBIT 3
EXECUTION COPY
Dated 27 November 2003
(1) Xxxxx X. Xxxxxxx (As Chargor)
(2) Xxxx Xxx Si Co Limited (As the Secured Party)
(3) Hill Street Trustees Limited
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SECURITY AGREEMENT
In respect of
Over the 17,675,353 common shares
of Global Sources Ltd.
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[XXXXXXX XXXXXXXX & XXXXX LOGO]
[BARRISTERS & ATTORNEYS]
THIS CHARGE OVER SHARES is entered into this 27th day of November 2003
BETWEEN:
(1) Xxxxx X. Xxxxxxx of 00/X Xxxx Xxxxx X, 00 Xxxx Xxxx Xxxx Road,
Aberdeen, Hong Kong, ( the "Chargor"); and
(2) Xxxx Xxx Si Co Limited whose registered office is at X.X. Xxx 000XX
Xxxxxxxxxx Xxxxx, Xxxxx Church Street, Xxxxxx Town, Grand Cayman, Cayman
Islands, British West Indies (the "Secured Party"); and
(3) Hill Street Trustees Limited of 00 Xxxxxxxxx Xxxxxx, Xx Xxxxxx Xxxxxx XX0
0XX Channel Islands in its capacity as trustee of The Quan Gung '86 Trust
(the "QG Trustee")
BACKGROUND:
(A) Pursuant to the Share Purchase Agreement dated on or about the date of this
Deed, the Secured Party has agreed to sell and the Chargor has agreed to
purchase 13,667,132 common shares of Global Sources Ltd.
(B) In addition to the shares purchased by the Chargor pursuant to the Share
Purchase Agreement, the Chargor is the legal and beneficial owner of
4,008,221 common shares of the Company being registered in the name of the
Chargor and fully paid up.
(C) In order to secure his obligations under the Share Purchase Agreement the
Chargor has agreed to execute and deliver this Deed in favour of the
Secured Party, for the benefit of the Secured Party.
NOW THEREFORE THE PARTIES HAVE AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Deed, including the Background:
"Act" means the Conveyancing Xxx 0000 of Bermuda;
"Business Day" means any day normally treated as a business day in
Bermuda and New York;
"Charged Property" means the all Security Shares and the Related
Rights;
"Company" means Global Sources Ltd. being the company that has
issued the Security Shares which comprise the Charged Property;
"Default Rate" has the meaning as set out in Clause 1.1.1 of the
Share Purchase Agreement;
1
"Event of Default" means the failure of the Chargor to comply with
any obligation, representation or warranty expressed to be assumed
by it in the Share Purchase Agreement and/or this Deed ;
"Global Sources Ltd." means Global Sources Ltd., an exempted company
incorporated in Bermuda with registration number 27310;
"Personal Shares" means all the 4,008,221 common shares of U.S. $.01
each in the share capital of Global Sources Ltd which are not Sale
Shares and which are on or prior to the date hereof held by, or to
the order or on behalf of the Chargor and in the event of any
reconstruction or re-organisation of the Company's share capital
(whether by consolidation, subdivision or otherwise) all the shares
of the Company from time to time representing the same;
"Related Rights" means all dividends, interest and other monies
payable in respect of the Security Shares and all other rights,
benefits and proceeds in respect of or derived from the Security
Shares (whether by way of redemption, bonus, preference, option,
allotments, substitution, reconstruction, conversion or otherwise);
"Sale Shares" means all the 13,667,132 common shares of U.S. $.01
each in the share capital of Global Sources Ltd. purchased by the
Chargor from the Secured Party on or about the date hereof and held
by, or to the order or on behalf of the Chargor at any time and in
the event of any reconstruction or re-organisation of the Company's
share capital (whether by consolidation, subdivision or otherwise)
all the shares of the Company from time to time representing the
same;
"Secured Obligations" means the all obligations owing to the Secured
Party and/or the QG Trustee by the Chargor under or pursuant to the
Share Purchase Agreement, whether present or future, actual or
contingent (and whether incurred by the Chargor alone or jointly,
and whether as principal or surety or in some other capacity);
"Security Period" means the period beginning on the date of this
Deed and ending on the date upon which the Secured Party is
satisfied that all of the Secured Obligations have been
unconditionally and irrevocably paid and discharged in full or all
of the security hereby created has been unconditionally released and
discharged;
"Security Shares" means all the Personal Shares and the Sale Shares
being 17,675,353 common shares of US$.01 each in the share capital
of Global Sources Ltd. as described in Schedule 1 and held by, to
the order or on behalf of the Chargor at any time;
"Share Purchase Agreement" means the agreement dated on or about the
date hereof, between the Chargor, the QG Trustee and the Secured
Party whereby, the Secured Party agreed to sell and the Chargor
agreed to buy the Sale Shares (hereinafter as the same may from time
to time be amended, varied, supplemented, novated or replaced); and
1.2 In this Deed:
(a)capitalised terms defined in the Share Purchase Agreement have,
unless expressly defined in this Deed, the same meaning in this
Deed;
(b)references to statutory provisions shall be construed as
references to those provisions as amended or re-enacted or as
their application is modified by other provisions from time to
time and shall include references to any provisions of which they
are re-enactments (whether with or without modification);
(c)references to clauses and schedules are references to clauses and
schedules of this Deed; references to sub-clauses or paragraphs
are, unless otherwise stated, references to sub-clauses of the
clause or paragraphs of the schedule in which the reference
appears;
(d)references to the singular shall include the plural and vice
versa and references to the masculine shall include the feminine
and/or neuter and vice versa;
(e)references to persons shall include companies, partnerships,
associations and bodies of persons, whether incorporated or
unincorporated;
(f)references to assets include property, rights and assets of every
description;
(g)references to any document are to be construed as references to
such document as amended, varied, modified, replaced or
supplemented from time to time;
(h)headings to clauses are for convenience only and have no legal
effect whatsoever;
(i)references to the Secured Party includes its successors or
assigns; and
(j)an Event of Default is 'continuing' or 'subsisting' if it has not
been waived or remedied.
1.3 In this Deed, any reference to "person" is a reference to an
individual, partnership, corporation, joint venture, association,
joint stock company, trust, business trust or unincorporated
organisation, limited liability company, or a government agency or
political subdivision thereof.
1.4 If the Secured Party considers that an amount paid by the Chargor is
capable of being avoided or otherwise set aside then that amount
shall not be considered to have been irrevocably paid for the
purposes of this Deed.
2. SECURITY
2.1 This Deed is given for good consideration and the Chargor shall
discharge and pay (when due and payable) each of the Secured
Obligations at the times and in the manner specified in the Share
Purchase Agreement and this Deed.
2.2 The Chargor, as the legal and beneficial owner of the Security
Shares hereby:
(a) charges by way of first equitable mortgage, in favour of the
Secured Party as a continuing security for the due and
punctual performance of the Secured Obligations all of its
right, title and interest in, to and under the Charged
Property; and
(b) subject to the terms of this Deed, hereby assigns and agrees
to assign to the Secured Party by way of security all benefits
present and future, actual and contingent accruing in respect
of the Charged Property and all the Chargor's rights, title
and interest to and in the Charged Property including (without
limitation) all voting and other consensual powers pertaining
to the Charged Property.
3. COVENANTS BY THE CHARGOR
The Chargor hereby covenants with the Secured Party that (unless otherwise
indicated) from the date hereof until all of the Secured Obligations have
been paid and discharged in full:
3.1 there shall be deposited with the Secured Party by way of security:
(a) the original share certificates in respect of the Personal Shares
and any other instruments evidencing the right, title and interest
of the Chargor in, to and under the Charged Property;
(b) no later than the last Business Day of December 2003, the original
share certificates in respect of the Sale Shares and any other
instruments evidencing the right, title and interest of the Chargor
in, to and under the Charged Property;
(c) an irrevocable proxy from the Chargor in respect of the Security
Shares substantially in the form contained in Schedule 2 (such proxy
may not be exercised by the Secured Party until on or after such
time as the security hereby constituted becomes enforceable in
accordance with the terms of this Deed);
(d) the original blank share transfer forms appearing on the reverse
side of the original share certificates delivered in Clause 3.1 (a)
above in respect of the Charged Property, executed in blank by the
Chargor;
(e) no later than the last Business Day of December 2003, the original
blank share transfer forms appearing on the reverse side of the
original share certificates delivered in Clause 3.1 (b) above in
respect of the Charged Property, executed in blank by the Chargor;
and
(f) if the Secured Party requests, the blank share transfer forms in
respect of the Charged Property executed by the Chargor in blank
substantially in the form of the share transfer forms appearing on
the reverse of the Security Shares; and
(g) such other documents, duly executed by the Chargor, as the Secured
Party may from time to time require for perfecting its title to the
Charged Property.
3.2 that upon the Chargor becoming the registered or beneficial owner of
and receiving share certificates (or other documents of title) in
respect of any Security Shares or Related Rights, deliver items (a),
(b), (c), (d), (e), (f) and (g) to the Secured Party as appropriate,
in respect of such Related Rights and Security Shares;
3.3 the Chargor shall remain liable to perform all the obligations
assumed by it in relation to the Charged Property and the Secured
Party shall be under no obligation of any kind whatsoever in respect
thereof or be under any liability whatsoever in the event of any
failure by the Chargor to perform its obligations in respect
thereof;
3.4 the Chargor shall duly and promptly pay all calls, instalments or
other payments which may be made or become payable in respect of the
Charged Property as and when the same from time to time become due
and upon the occurrence, and during the continuation, of an Event of
Default the Secured Party may, if it thinks fit, make such payments
or discharge such obligations on behalf of the Chargor, but where
the Secured Party does make such payment that amount shall be
repayable by the Chargor and pending the repayment shall constitute
part of the Secured Obligations notwithstanding that demand for
repayment has not been made by the Secured Party;
3.5 the Chargor shall promptly comply with any valid notice duly served
on it pursuant to the Companies Xxx 0000 or under the Bye-Laws of
the Company;
3.6 that upon receiving any material communication in respect of the
Charged Property the Chargor shall immediately notify the Secured
Party of the nature and content of that communication and where such
communication is in writing the Chargor shall immediately provide a
copy to the Secured Party;
3.7 that he/she shall not without the prior written consent of the
Secured Party:
(a)permit any other person other than the Chargor to be registered
as holder of the Charged Property or any part thereof;
(b)except pursuant to Clause 2 (Security), create or agree or
attempt to create or permit to exist (in favour of any person
other than the Secured Party), any assignment, charge or other
interest over the whole or any part of the Charged Property, or
agree to do so;
(c)sell, transfer, assign, lease, hire out, lend or otherwise
dispose of any of the Charged Property or permit any person to
sell, transfer, assign, lease, hire out, lend or otherwise
dispose of any of the Charged Property; or
(d)dispose of the equity of redemption in respect of all or any
part of the Charged Property.
3.8 shall not do or cause or permit to be done anything which may in
some way depreciate, jeopardise or otherwise prejudice the value to
the Secured Party of the Charged Property; and
3.9 agrees that:
(a) the Secured Party and its nominees at its own discretion may,
after an Event of Default has occurred, exercise in the name
of the Chargor or otherwise at any time whether before or
after demand for payment and without any further consent or
authority on the part of the Chargor in respect of the Charged
Property any voting rights and any powers or rights which may
be exercisable by the Chargor but such power shall be
exercisable subject to the provisions of Clause 4; and
(b) the Chargor will, if so requested by the Secured Party,
subject to the approval of the Bermuda Monetary Authority (if
required), transfer all or any part of the Charged Property to
such nominees or agents wheresoever situate as the Secured
Party may select and that the Secured Party may hold all or
any part of the Charged Property in any branch of the Secured
Party or with any correspondents or agents whether in Bermuda
or overseas and that all the Charged Property shall be held at
the expense risk and responsibility of the Chargor.
4. DIVIDENDS AND VOTING RIGHTS
The Chargor hereby agrees with the Secured Party that (i) except following
the occurrence of an Event of Default, and (ii) unless written notice
thereof has been given by the Secured Party to the Chargor, the Chargor
shall be entitled to:
(a)subject to the terms of the Share Purchase Agreement, receive all
dividends, distributions and other amounts arising from the Security
Shares; and
(b)exercise all voting and any other consensual rights in relation to the
Security Shares provided that the Chargor shall not exercise such
voting rights in any manner, or otherwise act or omit to act in any
manner which could reasonably be expected to violate any of the terms
of the Share Purchase Agreement or this Deed or which could reasonably
be expected to have the effect of impairing the security created by
this Deed or the rights and remedies of the Secured Party.
5. REPRESENTATIONS AND WARRANTIES BY CHARGOR
The Chargor represents and hereby warrants to the Secured Party as at the
date hereof and on each date during the period for which the security over
the Charged Property subsists with reference to the facts and
circumstances then existing:
5.1 the Chargor is the sole, absolute and beneficial owner and
registered holder of the Charged Property as described in Schedule 1
(or, in respect of the Sale Shares only, will be the absolute and
beneficial owner and registered holder of the Sale Shares on or
about the date of the Share Purchase Agreement) free from any
security interest (other than those created by this Deed), that no
other person save the Secured Party has any right or interest of any
sort whatsoever in or to the Charged Property and that there are no
agreements or arrangements (including any restrictions on transfer
or rights of pre-emption) affecting the Charged Property in any way
which would or might in any way xxxxxx or otherwise prejudice the
rights of the Secured Party or any chargee of the Charged Property;
5.2 save as otherwise permitted in the Share Purchase Agreement, the
Chargor has not sold or otherwise disposed of or agreed to sell or
otherwise dispose of or grant or agreed to grant any option in
respect of all or any of its rights, title and interest in and to
the Charged Property;
5.3 the Security Shares comprising the Charged Property are duly
authorised, validly issued and fully paid and there are no moneys or
liabilities outstanding in respect of any of the Security Shares;
5.4 the Chargor is solvent and able to pay its debts as they fall due;
5.5 the transfer of the Security Shares or the charge over the Security
Shares or the assignment each as contemplated by this Deed is not
prohibited by the Memorandum of Association or the Bye-Laws of the
Company;
5.6 this Deed constitutes the legal, valid, binding obligations of the
Chargor, enforceable against the Chargor in accordance with its
terms;
5.7 the Chargor has the power to own all its property and assets;
5.8 the Chargor has full power and authority to execute and deliver this
Charge and comply with the provisions of and perform its obligations
under this Charge;
5.9 this Deed does not and will not conflict with or result in any
breach or constitute a default under any law or regulation of any
governmental or judicial authority or document, agreement,
instrument or obligation to which the Chargor is a party or by which
the Chargor is bound;
5.10 all necessary authorisations, licences, approvals and consents to
enable or entitle the Chargor to enter into and perform its
obligations under this Deed have been obtained and will remain in
force and effect at all times during the subsistence of the security
constituted by this Deed;
5.11 in executing, delivering, performing and complying with this Deed
the Chargor will not contravene any existing applicable law,
statute, decree, rule, order or regulation in any jurisdiction to
which it or any of its assets or revenues is subject nor will
contravene any order, judgment, injunction, decree, resolution,
determination or award of any court or any judicial, administrative
or government authority in any jurisdiction applicable to the
Chargor or its assets and revenues;
5.12 save as otherwise disclosed to the Secured Party in writing before
the signing of the Share Purchase Agreement, there is no litigation,
arbitration or administrative procedure taking place, pending or, to
the actual knowledge of the Chargor (after having made due enquiry)
threatened against the Chargor which in any way whatsoever could
affect the Charged Property or the rights of the Chargor in respect
of the Charged Property;
5.13 the Company is validly incorporated and registered as a exempted
limited liability company in and under the laws of Bermuda and, if
so reasonably required by the Secured Party and at the expense of
the Chargor, the Chargor shall, at any time apply to the appropriate
authorities for the official form of certificate of compliance
relating to the continued corporate existence of the Company and
shall if the same is issued from the relevant authority deliver the
same to the Secured Party;
5.14 until notified in writing to the contrary by the Chargor to the
Secured Party, the Company is a public company being listed on
NASDAQ; and
5.15 any proceedings taken in Hong Kong in relation to this Deed, the
choice of Bermuda law as the governing law of this Deed and any
judgment obtained in Bermuda will be recognised and enforced.
6. FURTHER ASSURANCE
The Chargor shall, at his or her own expense, execute and do all such
assurances, acts and things as the Secured Party may require or consider
desirable under the laws of Bermuda (and the laws of any other
jurisdiction where the Security Shares are listed and/or the listing rules
and regulations of the exchange on which the Security Shares are listed)
to enable the Secured Party to create, perfect or protect the security
intended to be created hereby over the Charged Property or any part
thereof or to facilitate the realisation of any parts of the Charged
Property or the exercise of any powers, authorities and discretions vested
in the Secured Party in relation to any part of the Charged Property, or
in any delegate or sub-delegate thereof. To that intent, and without
prejudice to the generality of the foregoing, the Chargor shall at any
time if and when required by the Secured Party execute such further
proxies, legal and other charges or assignments in favour of the Secured
Party as the Secured Party shall from time to time require over all or any
of the Charged Property and all rights relating thereto both present and
future (including any bonus or substituted securities and any vendor's
lien) and any other proxies, transfers and documents the Secured Party may
from time to time require for perfecting its title to the same or for
vesting or enabling it to vest the same in itself or its nominees or in
any purchaser to secure the Secured Obligations or to facilitate the
realisation of the Charged Property or the exercise of the powers
conferred on the Secured Party. Such further charges or assignments to be
prepared by or on behalf of Secured Party at the cost of the Chargor and
shall contain an immediate power of sale whilst an Event of Default is
subsisting without notice, a clause excluding section 29 of the Act, a
clause excluding the restrictions contained in section 31 of the Act and
such other clauses for the benefit of the Secured Party as the Secured
Party may reasonably require.
7. POWERS OF THE SECURED PARTY
7.1 Upon the occurrence of an Event of Default or the death insolvency
or bankruptcy of the Chargor or a demand being made for the payment
of all or any of the Secured
Obligations the security hereby constituted shall become immediately
enforceable and the power of sale and other powers specified in
Section 30 of the Act (applied in respect of personal property as
well as real property) as varied or amended by this Charge shall be
immediately exercisable upon and at any time thereafter and without
prejudice to the generality of the foregoing the Secured Party
without further notice to the Chargor:
(a) may solely and exclusively exercise all voting and/or
consensual powers pertaining to the Charged Property or any
part thereof and may exercise such powers in such manner as
the Secured Party may think fit; and/or
(b) may (without prejudice to the obligations of the Chargor pay
to the Secured Party the Dividend Payments as set out in the
Share Purchase Agreement) receive and retain all dividends,
interest or other moneys or assets accruing on or in respect
of the Charged Property or any part thereof, such dividends,
interest or other moneys or assets to be held by the Secured
Party, until applied in the manner described in Clause 7.5, as
additional security charged under and subject to the terms of
this Charge and any such dividends, interest or other moneys
or assets received by the Chargor after such time shall be
held in trust by the Chargor for the Secured Party and paid or
transferred to the Secured Party on demand; and/or
(c) may sell, transfer, grant options over or otherwise dispose of
the Charged Property or any part thereof at such place and in
such manner and at such price or prices as the Secured Party
may deem fit, and thereupon the Secured Party shall have the
right to deliver, assign and transfer in accordance therewith
the Charged Property so sold, transferred, granted options
over or otherwise disposed of.
7.2 Section 29 and Section 31 of the Act shall not apply to this Deed or
to any other security given to the Secured Party pursuant hereto.
7.3 For the avoidance of doubt, the powers of the Secured Party by
virtue of this Deed shall not be limited to those specified in
Section 30 of the Act. For the purpose of all powers conferred by
statute, the Secured Obligations shall be deemed to have become due
and payable on the date hereof.
7.4 In exercising the powers referred to in Clause 7.1, the Charged
Property or any part thereof may be sold or disposed of at such
times and in such manner and generally on such terms and conditions
and for such consideration as the Secured Party may think fit. Any
such sale or disposition may be for cash, debentures or other
obligations, shares, stock, securities or other valuable
consideration and be payable immediately or by instalments spread
over such period as the Secured Party may think fit. No purchaser or
other person shall be bound or concerned to see or enquire whether
the right of the Secured Party to exercise any of the powers hereby
conferred has arisen or not or be concerned with notice to the
contrary or with the propriety of the exercise or purported exercise
of such powers.
7.5 All money received by the Secured Party in the exercise of any
powers conferred by this Deed shall be applied after the discharge
of all liabilities having priority thereto in or towards
satisfaction of the Secured Obligations in the following order of
priority (save that the Secured Party may credit the same to a
suspense account for so long and in such manner as the Secured Party
may from time to time determine):
first, in satisfaction of or provision for all costs, charges and
expenses incurred and payments made by the Secured Party and of all
remuneration due hereunder in each case, together with interest (as
well after as before judgment and payable on demand) at the Default
Rate from the date the same becomes due and payable until the date
the same are unconditionally and irrevocably paid and discharged in
full;
second, in payment to the Secured Party to be first applied in or
towards the discharge of the Secured Obligations;
third, in retention of an amount equal to any part or parts of the
Secured Obligations as are or are not then due and payable but which
(in the sole and absolute opinion of the Secured Party) will or may
become due and payable in the future and, upon the same becoming due
and payable, in or towards satisfaction thereof in accordance with
the foregoing provisions of this Clause 7.5; and
fourth, after the end of the Security Period, in payment of the
surplus (if any) to the relevant Chargor or other person entitled
thereto.
7.6 the Secured Party shall not be liable to account as mortgagee in
possession in respect of all or any part of the Charged Property and
shall not be liable for any loss upon realisation or for any neglect
or default to present any interest coupon or any bond or stock drawn
for repayment or for any failure to pay any call instalment or to
accept any offer or to notify the Chargor of any such matter or for
any negligence or default by its nominees, correspondents or agents
or for any other loss of any nature whatesoever in connection with
the Charged Property.
8. DELEGATION
The Secured Party may delegate by power of attorney or in any other
manner to any person any right, power or discretion exercisable by
them under this Deed. Any such delegation may be made upon the terms
(including power to sub-delegate) and subject to any regulations
which the Secured Party may think fit. The Secured Party will not be
in any way liable or responsible to the Chargor for any loss or
liability arising from any act, default, omission or misconduct on
the part of any such delegate or sub-delegate, except to the extent
that the Secured Party, delegate or sub-delegate is grossly
negligent or guilty of willful misconduct.
9. CONTINUING SECURITY
9.1 The security constituted by this Deed shall be held by the Secured
Party as a continuing security for the payment and discharge of the
Secured Obligations and the security so created shall not be
satisfied by any intermediate payment or satisfaction of any part of
the Secured Obligations including wheresoever such payment or
satisfaction is made pursuant to the insolvency or bankruptcy of the
Chargor and shall be binding until all the Secured Obligations have
been unconditionally and irrevocably paid and discharged in full.
9.2 The Chargor waives any right he or she may have of requiring the
Secured Party (or any Receiver, or trustee or agent on its behalf)
to proceed against or enforce any other rights or security or claim
payment from any other person before claiming under or enforcing the
security granted or taken under this Deed.
9.3 No failure, delay or omission by the Secured Party or any receiver
in exercising any right, power or remedy under this Deed shall
impair such right, power or remedy or be construed as a waiver
thereof nor shall any single or partial exercise of any such right,
power or remedy preclude any further exercise thereof or the
exercise of any other right, power or remedy.
9.4 Any waiver by the Secured Party of any of the terms of this Deed or
any consent or approval given by the Secured Party shall only be
effective if given in writing and then only for the purpose and upon
the terms and conditions for which it is given.
9.5 Any settlement, release or discharge under this Deed or the Share
Purchase Agreement shall be conditional upon no security or payment
to the Secured Party being avoided or set aside or ordered to be
refunded or reduced by virtue of any provision or enactment relating
to insolvency, administration or liquidation for the time being in
force or for any other reason and, if such condition is not
satisfied, the Secured Party shall be entitled to receive from the
Chargor on demand the value of such security or the amount of any
such payment as if such settlement, release or discharge had not
occurred.
9.6 The Secured Party shall not be concerned to see or investigate the
powers or authorities of the Chargor and moneys obtained or Secured
Obligations incurred in the purported exercise of such powers or
authorities or by any person purporting to be acting for or on
behalf of the Chargor shall be deemed to form a part of the Secured
Obligations, and "Secured Obligations" shall be construed
accordingly.
9.7 The Chargor agrees that, upon the occurrence of an Event of Default,
the Secured Party shall be free to pursue all available remedies as
the Secured Party in its absolute discretion considers appropriate
in relation to the Charged Property without objection, opposition or
interference from the Chargor, and that any rights to stay, enjoin,
or which could otherwise delay or impede the remedies of the Secured
Party against the Charged Property are hereby waived and released by
the Chargor.
9.8 The collateral constituted by this Deed shall be cumulative, in
addition to and independent of every other security which the
Secured Party may at any time hold for the Secured Obligations or
any rights, powers and remedies provided by law. No prior
security held by the Secured Party over the whole or any part of the
Charged Property shall merge into the collateral constituted by this
Deed.
9.9 Until the Secured Obligations have been unconditionally and
irrevocably satisfied and discharged in full to the satisfaction of
the Secured Party, the Chargor shall not by virtue of any payment
made hereunder on account of the Secured Obligations or by virtue of
any enforcement by the Secured Party of its rights under, or the
security constituted by, this Charge or by virtue of any
relationship between or transaction involving, the Chargor and the
Company (whether such relationship or transaction shall constitute
the Chargor a creditor of the Company, a guarantor of the
obligations of the Company or a party subrogated to the rights of
others against the Company or otherwise howsoever and whether or not
such relationship or transaction shall be related to, or in
connection with, the subject matter of this Charge):
(a) exercise any rights of subrogation in relation to any rights,
security or moneys held or received or receivable by the
Secured Party or any person;
(b) exercise any right of contribution from any co-surety liable
in respect of such moneys and liabilities under any other
guarantee, security or agreement;
(c) exercise any right of set-off or counterclaim against the
Company or any such co-surety;
(d) receive, claim or have the benefit of any payment,
distribution, security or indemnity from the Company or any
such co-surety; or
(e) unless so directed by the Secured Party (when the Chargor will
prove in accordance with such directions), claim as creditor
of the Company or any such co-surety in competition with the
Secured Party.
The Chargor shall hold in trust for the Secured Party and forthwith
pay or transfer (as appropriate) to the Secured Party any such
payment (including an amount equal to any such set-off),
distribution or benefit of such security, indemnity or claim in fact
received by the Chargor.
9.10 Until the Secured Obligations have been unconditionally and
irrevocably satisfied and discharged in full to the satisfaction of
the Secured Party, the Secured Party may at any time keep in a
separate interest bearing account or accounts in the name of the
Secured Party for as long as it may think fit, any moneys received,
recovered or realised under this Charge or under any other
guarantee, security or agreement relating in whole or in part to the
Secured Obligations without being under any intermediate obligation
to apply the same or any part thereof in or towards the discharge of
such amount.
9.11 The Chargor confirms that he is a sophisticated business man and
that prior to entering into this Deed, he has taken such advice
(including without limitation, legal advice) as to his liabilities
and obligations hereunder as he considers necessary.
10. DISCHARGE OF SECURITY
Subject to the provisions of Clause 9, upon the expiry of the
Security Period (but not otherwise), the Secured Party will, or will
procure that at the request and cost of the Chargor, transfer to the
same all of the Secured Party's right, title and interest in or to
the Charged Property free from this Deed.
11. POWER OF ATTORNEY
11.1 The Chargor, by way of security, irrevocably appoints (so as to bind
both himself and his estate representatives) the Secured Party to be
its attorney and in its name, on its behalf and as its act and deed
to execute, deliver, complete and perfect all documents (including,
but not limited to, any transfer forms and other instruments of
transfer and any proxy) and do all things that the Secured Party may
consider necessary for (a) carrying out any obligation imposed on
the Chargor under this Agreement or (b) exercising any of the rights
conferred on the Secured Party by this Deed or by law (including,
after the security constituted by this Deed has become enforceable,
the exercise of any right of a legal or a beneficial owner of the
Charged Property). The Chargor shall ratify and confirm all things
done and all documents executed by the Secured Party in the exercise
of that power of attorney.
11.2 The Secured Party shall have full power, with regard to all or any
part of the Charged Property and either jointly and severally or
otherwise as the Secured Party thinks fit, to appoint substitutes
and to delegate all or any of these powers to such persons on such
terms as it thinks fit, including power to authorise the person so
appointed to make further appointments, and may vary or revoke such
delegation at any time.
11.3 The Chargor hereby agrees to ratify and confirm any deed, document,
act or thing and all transactions which the Secured Party or any
substitute or any delegatee may lawfully do or execute under this
Clause or has done or executed under this Clause.
12. INDEMNITY
The Chargor hereby agrees fully to indemnify and hold harmless the Secured
Party from and against all losses, actions, claims, expenses, taxes,
demands and liabilities whether in contract, tort or otherwise and in
respect of calls or other payments relating to the Charged Property now or
hereafter incurred by it or by any nominee, correspondent, agent, officer
or employee for whose liability, act or omission it may be answerable for
anything done or omitted in the exercise or purported exercise of the
powers herein contained or occasioned by any breach by the Chargor of any
of its covenants or other obligations to the Secured Party, except to the
extent that the Secured Party, nominee, correspondent, agent, officer or
employee is grossly negligent or guilty of willful misconduct. The Chargor
shall indemnify the Secured Party on demand and shall pay interest on the
sums demanded at the Default Rate.
13. CURRENCY
13.1 All moneys received recovered or realised or held by the Secured
Party under this Deed may from time to time be converted into such
other currency as the Secured Party considers
necessary or desirable to cover the Secured Obligations in that
currency at the then prevailing commercial rate of exchange for
purchasing that other currency with the existing currency.
13.2 If and to the extent that the Chargor fails to pay the amount due on
demand the Secured Party may in its absolute discretion without
notice to the Chargor purchase at any time thereafter so much of any
currency as the Secured Party considers necessary or desirable to
cover so much of the Secured Obligations denominated in such
currency at the then prevailing commercial rate of exchange for
purchasing such currency with US$ Dollars or such other currency and
the Chargor hereby agrees to indemnify the Secured Party against the
full cost incurred by the Secured Party for such purpose.
13.3 The Secured Party shall not be liable to the Chargor for any loss
resulting from any fluctuation in exchange rates before or after the
exercise of the foregoing powers.
13.4 No payment to the Secured Party (whether under any judgment or court
order or otherwise) shall discharge the obligation or liability of
the Chargor in respect of which it has been made unless and until
the Secured Party shall have received payment in full in the
currency in which such obligation or liability was incurred and to
the extent that the amount of any such payment shall on actual
conversion into such currency fall short of such obligation or
liability actual or contingent expressed in that currency the
Secured Party shall have a separate cause of action against the
Chargor and shall be entitled to enforce the charge hereby created
to recover the amount of the shortfall.
14. COSTS
14.1 The Chargor shall on demand and on a full indemnity basis pay to the
Secured Party the amount of all costs, fees, expenses and other
liabilities (including legal fees and expenses) and any taxes
thereon which the Secured Party incurs in connection with:
(a)the negotiation, preparation, execution and delivery of this Deed
and any other documents contemplated hereby now or at any time
hereafter;
(b)the granting of or proposal to grant any, discharge, release,
waiver or consent or any variation of this Deed; and
(c)the preserving, registration, perfecting or enforcing of, or
attempting to preserve, perfect or enforce, any of its rights
under this Deed.
14.2 The Chargor shall pay promptly all stamp, documentary, registration
and other like duties or taxes including any penalties, fines,
surcharges or interest relating hereto, which are imposed or
chargeable on or in connection with this Deed provided that the
Secured Party shall be entitled but not obliged to pay such duties
or taxes whereupon the Chargor shall on demand indemnify the Secured
Party against those duties and taxes and against any reasonable
costs and expenses so incurred by the Secured Party in discharging
them.
14.3 The Chargor shall pay interest on all costs, fees, expenses and
other liabilities and all duties and taxes from the date such
obligations or liabilities are due owing or incurred until the date
of the payment (both before and after any demand or relevant
judgment in favour of the Secured Party or insolvency or bankruptcy
of the Chargor) at the Default Rate.
15. NOTICES
15.1 Any notice, request, demand or other communication under or in
respect of this Deed shall be in writing and in the English language
and delivered to such party at the address appearing below (or at
such other address as the party may hereafter specify by notice in
writing):
(a) In the case of the Chargor:
Address: 22/F Vita Tower A, 00 Xxxx Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxx
Xxxx
Fax : 00 000 0000 0000
(b) In the case of the Secured Party:
Address: P.O. Box 219GT Strathvale House, North Church Street,
Xxxxxx Town, Grand Cayman, Cayman Islands, British West Indies
Fax: 0 000 000 0000
Attention: Xxxxxxx X. Xxxxx
15.2 Any notice, request, demand or other communication shall be deemed
to be received:
(a) if sent by post, on receipt by the addressee;
(b) if sent by registered air-mail, on receipt by the addressee;
and
(c) if sent by fax, on successful completion of its
transmission as per transmission report from the
machine from which the fax was sent, save that if such
notice, communication or document is received after
normal working hours (which shall be deemed to be 8.30
a.m. and 5.30 p.m. on any Business Day in the country
of the recipient), such notice, communication or
document shall be deemed to have been received on the
next Business Day.
15.3 Any communication or document to be made or delivered to the Secured
Party shall be effective only when received by the Secured Party and
then only if the same is expressly marked for the attention of the
department or officer identified in Clause 15.1 or such other
department or officer as the Secured Party shall from time to time
specify for this purpose.
15.4 For the avoidance of doubt, notice given under this Deed shall not
be validly served if given by e-mail.
16. ASSIGNMENTS
16.1 This Deed shall be binding on, and inure to the benefit of, the
parties hereto and their successors, heirs, personal
xxxxxxxxxxxxxxx, xxxxxxx, xxxxxx representatives, permitted assigns
and permitted transferees.
16.2 The Secured Party may assign and transfer all of its rights and
obligations hereunder to any assignee or transferee without the
consent of the Chargor. The Secured Party shall notify the Chargor
following any such assignment or transfer.
16.3 The Chargor may not assign or transfer all or any part of its rights
or obligations under this Deed without the prior written consent of
Secured Party, which the Secured Party shall have full power and
discretion to withhold.
17. THIRD PARTIES
No purchaser from, or other person dealing with the Secured Party
shall be concerned to enquire whether any of the powers which the
Secured Party has exercised or purported to exercise has arisen or
become exercisable, or whether the Secured Obligations remain
outstanding, or whether any event has happened to authorise the
Secured Party to act or as to the propriety or validity of the
exercise or purported exercise of any such power; and the title and
position of such a purchaser or such power shall not be impeachable
by reference to any of those matters.
18. PARTIAL INVALIDITY
If, at any time, any one or more of the provisions of this Deed is
or becomes illegal, invalid or unenforceable in any respect or the
security intended to be created by this Deed is ineffective under
any law of any jurisdiction, neither the legality, validity,
enforceability of the remaining provisions of this Deed nor the
effectiveness of any of the remaining security under the laws of any
other jurisdiction shall be in any way affected or impaired as a
result.
19. COUNTERPARTS
This Deed may be executed in any number of counterparts, each of
which when executed and delivered constitutes an original of this
Deed, but all the counterparts shall together constitute one and the
same Deed. No counterpart shall be effective until each party has
executed at least one counterpart.
20. GOVERNING LAW AND JURISDICTION
20.1 This Deed shall be governed by, and construed in accordance in all
respects with, the laws of Bermuda.
20.2 The Chargor hereby irrevocably and unconditionally agrees for the
exclusive benefit of the Secured Party that the Courts of Bermuda
shall have jurisdiction to hear and determine any suit, action or
proceeding and to settle any dispute arising out of or in connection
with this Deed and for such purposes irrevocably submits to the
jurisdiction of such Courts.
20.3 The Chargor irrevocably waives, now and in the future, any objection
to the Courts of Bermuda having jurisdiction to hear and determine
any proceedings on the grounds that such Courts are inappropriate or
an inconvenient forum.
20.4 Nothing contained in this Deed shall limit the right of the Secured
Party to take proceedings with respect to this Deed in any other
Court of competent jurisdiction nor shall the taking of any such
proceedings in one or more jurisdictions preclude the taking of
proceedings in any other jurisdictions, whether concurrently or not.
IN WITNESS WHEREOF the parties hereto have executed this Deed the day and year
first above written with the intent that it shall constitute a deed in
accordance with the laws of Bermuda and with the intent that it shall be
specifically enforceable.
SCHEDULE 1
----------
--------------------------------------------------------------------------------
SHAREHOLDER NUMBER OF DESCRIPTION
SHARES
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,719 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1146
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 501,028 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1145
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,719 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1148
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,719 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1147
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,719 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1149
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,719 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1150
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,719 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1151
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,719 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1152
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,720 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1153
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,720 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd. represented on the
date hereof by share certificate
number G1154
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 350,720 Common Shares of US$.01 each, in
the share capital of Global
Sources Ltd.
--------------------------------------------------------------------------------
represented on the date hereof by
share certificate number G1155
--------------------------------------------------------------------------------
Xxxx Xxx Si Co. Ltd. 13,667,132 Common Shares of US$.01 each, in
(But following the the share capital of Global
purchase of the Sale Sources Ltd. represented on the
Shares pursuant to the date hereof by share certificate
terms of the Share number G2018 and, following the
Purchase Agreement, the sale and purchase of the Sale
Shareholder shall be Shares pursuant to the terms of
Xxxxx X. Xxxxxxx) the Share Purchase Agreement,
such replacement share
certificate.
--------------------------------------------------------------------------------
SCHEDULE 2
----------
SHAREHOLDER'S PROXY
-------------------
Xxxxx X. Xxxxxxx ("Chargor"), being the legal and beneficial owner of shares
("Security Shares") in Global Sources Ltd. ("Company") as listed at the foot of
this Proxy HEREBY APPOINTS Xxxx Xxx Si Co Limited ("Secured Party") acting with
full power of substitution as the agent and proxy of the Chargor to vote the
Security Shares in the name, place and stead of the Chargor at all or any
meetings of the shareholders of the Company as fully as the Chargor would do if
personally present and to waive notice of any such meeting, hereby revoking with
effect from the date hereof all or any proxies previously given in favour of any
other person or persons in relation to the Security Shares.
The Chargor has granted an assignment and charge over the Security Shares in
favour of the Secured Party by a Deed dated November 2003 ("Charge") and this
proxy is given by way of security and shall remain irrevocable for as long as
the charge and assignment shall remain in force.
Dated:___ November 2003
----------------------------------------------------
The Chargor
in the presence of:
----------------------------------------------------
Witness (Signature):
Witness Name (Print):
Witness Address (Print):
The Shares
17,675,353 Common Shares of US$.01 each in the share capital of Global Sources
Ltd.
SIGNATORIES
-----------
CHARGOR
Executed as a Deed by:
XXXXX X. XXXXXXX
in the presence of:
Witness signature:
Name in Print:
Address:
Occupation:
SECURED PARTY
The Common Seal of: )
XXXX XXX SI CO LIMITED )
was affixed in the presence of )
)
)
-------------------------- )
Authorised Signatory: )
)
THE QG TRUSTEE
The Common Seal of: )
HILL STREET TRUSTEES LIMITED )
Was affixed in the presence of: )
)
)
-------------------------- )
Authorised Signatory: )
)
-------------------------- )
Authorised Signatory: )
