DATED THE DAY OF 2000
BETWEEN
1. INTERNATIONAL DISPLAYWORKS
(HONG KONG) LTD
2. INTERNATIONAL DISPLAYWORKS, INC.
(as Chargors)
AND
3. VIKAY INDUSTRIAL LTD
( in Judicial Management)
4. VIKAY INDUSTRIAL (HONG KONG) LTD
(as Chargees)
SUPPLEMENTAL DEED
AND CHARGE
RAJAH & XXXX
0 XXXXXXX XXXX
#00-00 XXXX XX XXXXX XXXXXXXX
XXXXXXXXX 000000
C O N T E N T S
NO. CLAUSE PAGE
--- ------ ----
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2. COMPLETION AND COVENANT TO PAY. . . . . . . . . . . . . . . . . . . . . .6
3. CHARGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
4. CONVERSION OF FLOATING SECURITY INTO FIXED CHARGE . . . . . . . . . . . 11
5. OTHER SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6. DEPOSIT OF DEEDS AND PERFECTION OF SECURITY . . . . . . . . . . . . . . 13
7. POSITION OF OTHER SECURITY. . . . . . . . . . . . . . . . . . . . . . . 13
8. CONTINUING SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . 14
10. COVENANTS AND UNDERTAKINGS. . . . . . . . . . . . . . . . . . . . . . . 18
11. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12. POWERS OF THE CHARGEES ON DEFAULT BY THE CHARGORS . . . . . . . . . . . 28
13. APPOINTMENT OF RECEIVER . . . . . . . . . . . . . . . . . . . . . . . . 29
14. RECEIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
15. APPLICATION OF MONIES BY RECEIVER . . . . . . . . . . . . . . . . . . . 31
16. APPOINTMENT OF RECEIVER NOT AFFECTING OTHER POWERS. . . . . . . . . . . 32
17. POWER OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
18. NO ENQUIRY BY THIRD PARTY . . . . . . . . . . . . . . . . . . . . . . . 33
19. THE CHARGEES NOT ANSWERABLE FOR LOSS. . . . . . . . . . . . . . . . . . 33
20. WAIVER NOT TO PREJUDICE RIGHT OF THE CHARGEES . . . . . . . . . . . . . 33
21. INDULGENCE, REMEDIES AND WAIVERS. . . . . . . . . . . . . . . . . . . . 34
22. SET-OFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
23. DISCRETION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
24. EXPENSES AND STAMP DUTY . . . . . . . . . . . . . . . . . . . . . . . . 35
C O N T E N T S
NO. CLAUSE PAGE
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25. ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
26. COMMUNICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
27. PARTIAL INVALIDITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
28. JUDICIAL MANAGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
29. GOVERNING LAW AND JURISDICTION. . . . . . . . . . . . . . . . . . . . . 37
30. PROCESS AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
31. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SCHEDULE 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SCHEDULE 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
THIS SUPPLEMENTAL DEED AND CHARGE is made the day of
February 2000 between:-
(1) VIKAY INDUSTRIAL LTD (In Judicial Management) care of 00 Xxxxxxx Xxxx,
#00-00 Xxxx Xxxxx Xxxxxxxx Xxxxxxxxx 000000 ("VKS");
(2) VIKAY INDUSTRIAL (HONG KONG) LTD care of 00 Xxxxxxx Xxxx, #00-00 Xxxx
Xxxxx Xxxxxxxx Xxxxxxxxx 000000 ("VKHK");
(3) INTERNATIONAL DISPLAYWORKS, INC., a company incorporated in the State of
Delaware, United States of America and having its place of business at
0000 Xxxxxxxxxxxx Xxxxx, Xxxxx X, Xxxxxxxxx, XX 00000 ("IDWI"); and
(4) INTERNATIONAL DISPLAYWORKS (HONG KONG) LTD, a company incorporated in the
Hong Kong Special Administrative Region and having its place of business
at 0/X Xxxxxx Xxxxx, 000 Xxxxx'x Xxxx Xxxx, Xxxx Xxxx ("IDWHK").
(collectively the "Parties", and each of them a "Party").
WHEREAS:-
(A) VKS, VKHK and IDWI had on the 22nd day of July 1999 entered into a Sale
and Purchase Agreement ("Sale Agreement") in respect of the sale and
purchase of equity interests ("Equity Interests") in Vikay Science &
Technology Development (Shenzhen) Co., Ltd. and MULCD Microelectronics
(Shenzhen) Co., Ltd.
(B) IDWI is the beneficial owner of all the ordinary shares ("Shares") in the
capital of IDWHK and will, on Completion (as hereinafter defined), be
holding the Equity Interests through IDWHK.
(C) VKS and VKHK have agreed to permit IDWI and IDWHK to pay the Agreed Total
(as hereinafter defined) by instalments on inter alia the conditions
that:-
(i) IDWI creates in favour of both VKS and VKHK a first fixed charge
over its Shares;
(ii) IDWHK creates in favour of both VKS and VKHK a first fixed and
floating charge over its assets and undertakings,
as security for the payment and repayment of the aforesaid Agreed Total.
(D) The Parties hereby agree to enter into this Deed to set out inter alia
the terms and conditions of the aforesaid charges and their mutual
agreement to amend certain terms and their mutual understanding on
certain other matters relating to the Sale Agreement.
NOW THIS DEED WITNESSETH AS FOLLOWS:-
1. DEFINITIONS
1.1 INTERPRETATION : In this Deed, unless the context otherwise requires, all
capitalised terms shall have the meanings as defined below:-
"ACCOUNT" means the current account or such other account designated by
the Chargees and maintained in the name of IDWHK with the Hongkong and
Shanghai Banking Corporation in Hong Kong.
"AGREED TOTAL" has the meaning ascribed to it in Schedule 1.
"BUSINESS DAY" means a day, other than Saturday, Sunday and public
holidays, when banks are open for business in Singapore, Hong Kong and
USA.
"CHARGED PROPERTY" means the property and assets of the Chargors charged
or assigned pursuant to Clause 3 hereof.
"CHARGEES" means VKS and VKHK, including their successors and assigns,
and shall where the context so admits, include the Judicial Managers
acting for and on behalf of VKS and VKHK and "CHARGEE" shall mean each or
any of them.
"CHARGORS" means IDWI and IDWHK, includes their successors, and "CHARGOR"
shall mean each or any of them.
"COLLECTED RECEIVABLES" means the Receivables in respect of goods
supplied by VKSTD and/or MULCD for which the Chargees have received
actual payments from the Chargees' customers in connection with the
sub-sale of the said goods by the Chargees.
"COMPLETION" means the completion of the sale and purchase of the Equity
Interests pursuant to the Sale Agreement, subject to the terms and
conditions set out in this Deed.
"COMPLETION DATE" means 1 February 2000 or such other date as the Parties
may agree in writing.
"COMPLETION STATEMENT" means the Statement of Account set out in Schedule
1 hereto.
"DEED" means this Supplemental Deed and Charge, as it may be amended,
modified or supplemented from time to time, and includes references to
any deed, debenture, agreement or other document executed in order to
perfect the security constituted by this Deed or in pursuance of any of
the provisions contained or incorporated herein.
"EQUITY INTERESTS" means VKS's and VKHK's respective interests in the
registered capital of VKSTD and MULCD.
"EVENTS OF DEFAULT" means the events mentioned in Clause 11 or any event
or circumstance which, with the giving of any notice, and/or the lapse of
any period of time, and/or the fulfillment of any other requirement could
become in the view of the Chargees one of the events mentioned in that
Clause; and "EVENT OF DEFAULT" means each and any one of them.
"FUNDED AMOUNT" means the aggregate amount advanced by the Chargees to
VKSTD and/or MULCD for the period from 1 August 1999 to the date of this
Deed, as set out in Schedule 2 hereto, together with interests payable on
such amount which shall accrue at the rate of 6% per annum from the
respective dates of advance up to and excluding the date of actual
payment.
"HONG KONG" means the Hong Kong Special Administrative Region.
"IDWHK RECEIVABLES" means
(1) All present and future book and other debts, invoice debts,
notes, bills, acceptances and other forms of obligation owned by
or owing to IDWHK (including all rights to receive payments under
presently existing or hereafter acquired or created letters of
credit), or by virtue of merchandise or goods sold or leased,
services rendered whether or not evidenced by any writing, and
other monies and receivables due, owing, payable or incurred or
which may become due, owing, payable or become incurred by any
person to IDWHK including, without prejudice to the generality of
the foregoing, any amounts from time to time standing to the
credit of any bank or other accounts of IDWHK;
(2) the benefit of any guarantees, indemnities or other assurances
against financial loss, the benefit of any present or future
insurance policies and all proceeds thereof;
(3) all things in action which may give rise to any debt, revenue or
claim and any other rights relating thereto including without
limitation, reservations of proprietary rights, rights of
tracing, unpaid vendor's liens and associated rights; and
(4) all rights now owned or hereafter acquired or created, to payment
under any contract not yet earned by performance including the
right to receive lease and hire charges due to IDWHK under any
lease or hire purchase agreements.
"JUDICIAL MANAGERS" means the judicial managers of VKS appointed pursuant
to the order of court made on 6 December 1997 and such other judicial
managers or officers of VKS as may be appointed pursuant to an order of
court in addition to or replacement or substitution of the Judicial
Managers.
"MULCD" means MULCD Microelectronics (Shenzhen) Co., Ltd.
"RECEIVABLES" means the invoiced amounts due from the Chargees to VKSTD
or MULCD (as the case may be) in respect of goods sold and delivered by
VKSTD or MULCD (as the case may be) to the Chargees after 31 July 1999.
"SALE AGREEMENT" means the Sale and Purchase Agreement dated the 22nd day
of July 1999 entered into between the Chargors and the Chargees in
respect of the sale and purchase of the Equity Interests.
"SECURED INDEBTEDNESS" means all monies and liabilities (whether
contingent or otherwise and including, without limitation, the Agreed
Total and all amounts for which the Chargors have agreed to indemnify the
Chargees) at any time and from time to time owing or payable by the
Chargors under the Transaction Documents (including all fees, charges,
costs and expenses arising out of, in connection with or in enforcement
of, the provisions of the Transaction Documents).
"SHARES" means all the 5,000,002 ordinary shares of HK$1.00 each in the
capital of IDWHK, including without limitation, any stocks, shares or any
other securities of any kind whatsoever acceptable to the Chargees, which
are given by the Chargors in substitution therefor, or in addition
thereto, and shall, for the avoidance of doubt, include the 2 ordinary
shares in IDWHK held by the Trustees for and on behalf of IDWI.
"SINGAPORE" means the Republic of Singapore.
"SINGAPORE DOLLARS" or "S$" means the lawful currency of Singapore.
"TRANSACTION DOCUMENTS" means this Deed, the Sale Agreement and any other
agreement, deed, undertaking or arrangement whatsoever now or from time
to time and at any time hereafter made in respect of the sale and
purchase of the Equity Interests and/or the Secured Indebtedness.
"TRUSTEES" means Xx Xxxxxxx Xxxxxxx Xxxxxxx and Xx Xxxxxxx Xxxxxx
Xxxxxxxx.
"UNCOLLECTED RECEIVABLES" means the Receivables in respect of goods
supplied by VKSTD and/or MULCD for which the Chargees have not received
actual payments from the Chargees' customers in connection with the
sub-sale of the said goods by the Chargees.
"USA" means the United States of America.
"VKA" means Vikay America, Inc.
"VKA RECEIVABLES" means such of VKA's receivables relating to goods
supplied by VKSTD and/or MULCD that gave rise to the Uncollected
Receivables.
"VKD" means Vikay Distribution Europe Limited.
"VKD RECEIVABLES" means such of VKD's receivables relating to goods
supplied by VKSTD and/or MULCD that gave rise to the Uncollected
Receivables.
"VKHK RECEIVABLES" means such of VKHK's receivables relating to goods
supplied by VKSTD and/or MULCD that gave rise to the Uncollected
Receivables.
"VKS RECEIVABLES" means such of VKS's receivables relating to goods
supplied by VKSTD and/or MULCD that gave rise to the Uncollected
Receivables.
"VKSTD" means Vikay Science & Technology Development (Shenzhen) Co., Ltd.
1.2 MISCELLANEOUS :
1.2.1 Any reference in this Deed to:-
(a) any statute or other legislation, subsidiary legislation or
rules shall be read as referring to such statute or other
legislation, subsidiary legislation or rules as amended or
re-enacted from time to time;
(b) a "certified copy" means a copy certified by an authorised
signatory as being a true, complete and up to date copy of
an original then currently in full force and effect;
(c) an "encumbrance" includes any mortgage, charge (whether
fixed or floating), pledge, lien, hypothecation, trust,
assignment, attachment, security interest or any other type
of preferential agreement or arrangement having
substantially the same economic effect (including sale and
repurchase agreements, title retention or flawed asset
arrangements);
(d) a "person" shall be construed as a reference to any person,
firm, company, corporation, government, state or agency of
a state or any association or partnership (whether or not
having separate legal personality) or two or more of the
foregoing;
(e) "tax" shall be construed so as to include any present or
future tax, levy, impost, duty, goods and service tax or
other charge of a similar nature (including, without
limitation, any penalty or interest payable in connection
with any failure to pay or any delay in paying any of the
same) imposed, levied, collected, withheld or assessed by
any authority;
(f) the "winding-up", "dissolution" or "judicial management" of
a company, the appointment of a receiver and/or manager,
liquidator, administrator, judicial manager or trustee
shall be construed so as to include any equivalent or
analogous proceedings or appointment under the law of the
jurisdiction in which such company is incorporated or any
jurisdiction in which such company carries on business or
has assets;
(g) a "Receiver" includes a reference to a "Receiver and
Manager" or "Manager";
(h) a "year", "month" or "day" shall be construed as a
reference to a calendar year, a calendar month or a
calendar day; and
(i) a time of day is a reference to Hong Kong time.
1.2.2 The headings in this Deed are inserted for convenience only and
shall be ignored in construing this Deed.
1.2.3 Unless the context otherwise requires, words (including words
defined in this Deed) denoting the singular number only shall
include the plural and vice versa.
References to Clauses in this Deed shall, unless the context
otherwise provides, be construed as references to clauses of
this Deed.
1.2.4 In the event any translation of this Deed into Chinese or any
other language is required for the purpose of any approval,
registration, filing, legal proceedings or any other purpose
whatsoever, that translation shall be ignored in constructing
this Deed and in the event of any inconsistency between this Deed
and any such translation, this Deed shall prevail.
2. COMPLETION AND COVENANT TO PAY
2.1 COMPLETION : The Parties hereby agree that Completion shall take place on
the Completion Date at the office of the Judicial Managers at 00 Xxxxxxx
Xxxx, #00-00 Xxxx Xxxxx Xxxxxxxx Xxxxxxxxx 000000 in accordance with the
Completion Statement, which statement shall be conclusive and binding on
the Parties.
2.2 PAYMENT OF AGREED TOTAL : The Chargors hereby irrevocably and
unconditionally, jointly and severally undertake and covenant to pay to
the Chargees the Agreed Total by the following instalments and in such
manner as the Parties may agree in writing:-
2.2.1 The first instalment of S$7,200,000 shall be paid by the Chargors
to the Judicial Managers on the Completion Date.
2.2.2 The second instalment of S$6,028,405 shall be paid by the
Chargors to the Judicial Managers within 90 days after the
Completion Date ("Second Instalment Payment Date"), together with
interests on the aforesaid sum of S$6,041,417 accruing at the
rate of 6% per annum from the Completion Date up to and including
the date of actual payment.
2.2.3 The third instalment of S$1,618,740 shall be paid by the Chargors
to the Judicial Managers on or before 31 May 2000, together with
interests on the aforesaid sum of S$1,618,740 accruing at the
rate of 6% per annum from the Completion Date up to and including
the date of actual payment.
All interests payable hereunder shall be calculated on the basis of a
360-day year. For the avoidance of doubt, the Parties hereby confirm
that the Chargors may prepay any of the aforesaid sums before their
respective due dates.
2.3 RECEIVABLES : In respect of goods sold and delivered by VKSTD and/or
MULCD to the Chargees after 31 July 1999, the Parties hereby agree that
subject to the Chargors complying with Clauses 2.2 and 2.4:-
2.3.1 the Chargees shall set-off the Collected Receivables against the
Funded Amount as and when such Collected Receivables are received
by the Chargees;
2.3.2 the Chargees shall upon their receipt of the payment for the
aforesaid second instalment:-
(a) pay to VKSTD and MULCD (as the case may be) the Collected
Receivables (if any) less the Funded Amount (including all
accrued interest);
(b) assign and procure VKA and VKD to assign to IDWHK the VKA
Receivables, VKD Receivables, VKHK Receivables and VKS
Receivables provided that, for each amount collected by
IDWHK (whether by way of cash, deduction, set-off or
otherwise) in respect of any of the aforesaid VKA
Receivables, VKD Receivables, VKHK Receivables and VKS
Receivables, IDWHK shall forthwith pay to the Chargees the
difference between that collected VKA Receivable, VKD
Receivable, VKHK Receivable or VKS Receivable (as the case
may be) and the corresponding Uncollected Receivables
relating to the same goods supplied by VKSTD and/or MULCD
that gave rise to that collected VKA Receivable, VKD
Receivable, VKHK Receivable or VKS Receivable (as the case
may be);
2.3.3 in the event that the Collected Receivables are not sufficient to
repay the Funded Amount (including all accrued interests thereto)
on the Second Instalment Payment Date, the Chargors shall
forthwith pay to the Judicial Managers the difference between the
Funded Amount (including all accrued interests thereto) and the
Collected Receivables; and
2.3.4 the Collected Receivables shall carry interest at the rate of 6%
per annum from the first day of the month immediately following
the date such Collected Receivables are received by the Chargees
up to and excluding the date of set-off pursuant to Clause 2.3.1
above or date of payment pursuant to Clause 2.3.2(a) above (as
the case may be).
2.4 ASSIGNMENT AND RELEASE: The Chargors shall procure VKSTD and MULCD to
enter into a Deed of Assignment and Release (in such form and substance
satisfactory to the Chargees) with the Chargees, VKD and VKA to effect
the assignment referred to in Clause 2.3.2(b) above and to discharge and
release the Chargees from all actions, proceedings, claims, demands,
liabilities, obligations, costs and expenses in respect of the
Receivables and the aforesaid duly executed Deeds shall be delivered to
the Chargees on or before the Second Instalment Payment Date.
2.5 UPDATE ON RECEIVABLES: The Chargees shall provide IDWHK a fortnightly
written update on the Collected Receivables and Uncollected Receivables.
2.6 COSTS AND EXPENSES: Without prejudice to the generality of the
aforesaid, the Chargors hereby irrevocably and unconditionally, jointly
and severally undertake and covenant to pay to the Chargees all legal and
other costs, charges and expenses which the Chargees may incur in
relation to this Deed or the Charged Property on a full indemnity basis
or which the Chargees may incur in connection with enforcing this Deed
and their rights over the Charged Property, such legal and other costs to
be payable by the Chargors to the Chargees on demand.
2.7 CURRENCY INDEMNITY: All payments to be made by the Chargors under this
Deed shall be made in Singapore Dollars without any set-off, deduction or
withholding whatsoever. Any amount received or recovered in a currency
other than Singapore Dollars (whether as a result of, or of the
enforcement of, a judgment or order of a court of any jurisdiction, in
the dissolution of any of the Chargors or otherwise) by the Chargees in
respect of any sum expressed to be due to them from the Chargors under
this Deed shall only constitute a discharge to the Chargors to the extent
of the amount of Singapore Dollars which the Chargees are able, in
accordance with their usual practice, to purchase with the amount so
received or recovered in that currency on the date of that receipt or
recovery (or, if it is not practicable to make that purchase on that
date, on the first date on which it is practicable to do so). If that
amount in Singapore Dollars is less than the amount of Singapore Dollars
expressed to be due to the Chargees under this Deed, the Chargors shall
indemnify the Chargees against any loss sustained by them as a result
thereof. In any event, the Chargors shall indemnify the Chargees upon
demand against the cost of making any such purchase.
2.8 ORDER OF PAYMENT: For the avoidance of doubt, the Parties hereby agree
that any amount paid to the Chargees under this Deed shall be applied in
the following order:-
2.8.1 in the payment of all fees, costs, charges and expenses which the
Chargors are obliged to pay or indemnify the Chargees under the
Transaction Documents;
2.8.2 in or towards the satisfaction of all interests remaining unpaid
on the Secured Indebtedness owing to the Chargees; and
2.8.3 in or towards the satisfaction of all of the Secured Indebtedness
owing to the Chargees.
3. CHARGE
3.1 FIXED AND FLOATING CHARGES: In consideration of the Chargees agreeing to
permit the Chargors to pay the Agreed Total by instalments, the Chargors
as legal and beneficial owners of their respective assets mentioned
below, and as a continuing security for the payment and discharge of the
Secured Indebtedness and for the observance and performance by the
Chargors of all their obligations to the Chargees including those under
or in connection with the Transaction Documents, hereby CHARGE AND ASSIGN
in favour of the Chargees as follows:-
3.1.1 IDWI hereby charges and assigns in favour of the Chargees by way
of FIRST FIXED CHARGE all its rights, title, benefit and interest
in and to the Shares together with all interest, benefits, rights
and entitlements of any nature attaching to or relating to or
arising out of the Shares at any time whether by way of
dividends, interest, rights, money or property accruing, paid,
offered, issued or deriving therefrom or otherwise howsoever at
any time in respect thereof and all proceeds of sale and
realisation of the Shares hereby charged;
3.1.2 IDWHK hereby charges and assigns in favour of the Chargees by way
of FIRST FIXED CHARGE:-
(a) all immovable property, wheresoever situate now or
hereafter belonging to IDWHK and all buildings, trade and
other fixtures, plant and machinery from time to time on
any such immovable property;
(b) all IDWHK Receivables and all rights enabling IDWHK to
enforce or obtain the IDWHK Receivables
(c) all encumbrances;
(d) all Equity Interests, stocks, shares, debentures, loan
capital, bonds and securities of any kind whatsoever and
all other interests, including without limitation, rights
of IDWHK to subscribe for, convert other securities into or
otherwise acquire any stocks, shares, debentures, loan
capital, bonds and securities of any kind whatsoever,
together with all dividends, interest and other income and
all other rights, benefits and advantages of whatsoever
kind deriving from or incidental to any of the foregoing;
(e) the goodwill of IDWHK and its uncalled capital now or at
any time hereafter in existence and future calls (whether
made by the directors of IDWHK or by a Receiver or a
liquidator or any other person);
(f) all copyright, trade marks, patents, inventions, fees and
royalties, all intellectual and technology property rights
of whatsoever name and description, together with all other
rights of every kind deriving from the aforesaid, now or at
any time hereafter belonging to IDWHK;
(g) all moveable properties, assets, plants, machinery and
equipment now or at any time hereafter belonging to IDWHK
(other than those charged in Clause 3.1.2(a)), whether
affixed to any land forming part of the Charged Property or
not so affixed;
(h) all chattels now at any time hereafter hired, leased or
rented by IDWHK to any other person, together in each case
subject to and with the benefit of the related hiring,
leasing or rental contract, and any guarantee, indemnity or
other security for the performance of the obligations of
any person under or in respect of such contract; and
(i) all leases, tenancies, licences and other contracts of
whatsoever kind which are or at any time may be entered
into by or on behalf of IDWHK for the occupation,
possession or use of any immovable property, together with
all rental and other monies of whatsoever kind which are or
at any time may be or become due or payable to or for the
account of IDWHK arising therefrom;
3.1.3 IDWHK further charges and assigns in favour of the Chargees by
way of FIRST FLOATING CHARGE the whole of IDWHK's undertaking and
all its present and future estate, right, title and interest in
and to all benefits accrued and to accrue to IDWHK in relation to
its property and assets, including all property and assets which
may be acquired by IDWHK after the conversion referred to in
Clause 4.1 hereof or any crystallisation of the floating charge
hereby created, whatsoever and wheresoever present other than any
property or asset from time to time or for the time being
effectively charged by way of fixed charge by Clause 3.1.2 above
or otherwise under or pursuant to this Deed.
3.2 PROHIBITIONS : The Chargors hereby irrevocably and unconditionally,
jointly and severally undertake that from the date hereof:-
3.2.1 they shall not create, permit to arise or subsist, any
encumbrance, in respect of the Charged Property or any part
thereof, whether in priority to, PARI PASSU with, or ranking
after the security created in this Deed;
3.2.2 they shall have no power, without the prior written consent of
the Chargees, to factor, discount or assign any part of IDWHK
Receivables or enter into any agreement for such factoring,
discounting or assignment for any purpose whatsoever provided
that the Chargees shall not withhold its consent if the proceeds
arising from such factoring, discounting or assignment are
deposited into the Account; and
3.2.3 they shall not at any time, save in the ordinary course of
business, sell, transfer, lease, lend, rent, let, sub-let, hire
out or part with in any way or otherwise dispose of, whether by
means of one or a number of transactions (whether related or not)
and whether at one time or over a period of time, the whole or
any part of the Charged Property, or enter into an agreement
(other than an agreement conditional upon such consent or
agreement of the Chargees being obtained) for any such sale,
transfer, lease, loan, rental, letting, sub-letting, hiring or
other disposal, or grant any right or licence or permission to
any person to occupy, use or operate the whole or any part of the
Charged Property or any licence to assign or sub-let the whole or
any part of the Charged Property.
3.3 ASSIGNMENT: In furtherance of the charge aforesaid and without prejudice
thereto, IDWHK as legal and beneficial owner HEREBY ASSIGNS ABSOLUTELY to
the Chargees by way of security, all the rights in whatever form
comprised in the IDWHK Receivables, including in particular the benefit
of all contracts and/or agreements whereby IDWHK leases or hires goods to
third parties under any lease agreement or hire-purchase agreement.
IDWHK further agrees to assign to the Chargees by way of security, all
the rights in whatever form comprised in the IDWHK Receivables which may
from time to time and at any time after the date of this Deed come into
existence. Without prejudice to the foregoing, IDWHK undertakes, at its
own expense to execute any further or additional assignment of all or any
of its rights in the IDWHK Receivables in the form required by the
Chargees as and when requested by the Chargees.
3.4 NOTICE OF ASSIGNMENT: Upon the occurrence of an Event of Default, IDWHK
shall immediately send a notice of assignment (in such form specified by
the Chargees) to each of its debtors in relation to current IDWHK
Receivables, and shall also in respect of IDWHK Receivables arising after
the date hereof and in the future, as and when each debt arises,
immediately upon the occurrence of an Event of Default send a notice of
assignment (in such form specified from time to time by the Chargees) to
each debtor in respect of the relevant IDWHK Receivable, failing which
the Chargees may (but shall not be obliged) give such notice of
assignment.
3.5 CONTINUING OBLIGATIONS: Notwithstanding anything in this Deed to the
contrary, all obligations of the Chargors in respect of the Charged
Property shall continue to be the obligations of and shall be promptly
and duly performed and complied with by the Chargors.
3.6 RIGHTS AND PRIVILEGES : The Charged Property shall be charged in favour
of the Chargees together with all rights and privileges connected
therewith.
3.7 GIVING OF NOTICE: The Chargees may from time to time at its discretion,
be at liberty to give any notice which may be deemed necessary by the
Chargees to any person(s) owing monies to the Chargors that all such
monies be paid to the Chargees and the Chargors hereby irrevocably and
unconditionally, jointly and severally appoint the Chargees to be its
attorney in fact to demand, xxx for, recover and take all appropriate
legal proceedings to recover such monies and to give a good receipt for
the same and to give such notices to the debtors of the Chargors and to
take all necessary steps to complete the assignment of such monies to the
Chargees.
3.8 SUBSISTENCE OF THIS DEED: For the avoidance of doubt, the security of
this Deed shall subsist and remain in full force and effect for so long
as the Secured Indebtedness or any part thereof remains unpaid.
3.9 DISCHARGE AND RELEASE: In the event that the Secured Indebtedness and
all other monies and liabilities covenanted to be paid or satisfied under
the Transaction Documents have been duly paid and satisfied to the
Chargees in accordance with the provisions herein and therein, the
Chargees will at any time thereafter and at the request and cost of the
Chargors discharge the security hereby created.
3.10 SUBSTITUTE SECURITY: Without prejudice to the aforesaid, the Chargors
may, at any time after the payment of the first and second instalments as
referred to in Clause 2.2 above, request for a discharge of the security
hereby created by providing substitute security acceptable to the
Chargees.
4. CONVERSION OF FLOATING SECURITY INTO FIXED CHARGE
4.1 CONVERSION: The Chargees, may at any time by notice in writing to the
Chargors forthwith convert any floating security into a specific charge
as regards the Charged Property or any part thereof as specified in the
notice, including any part of the Charged Property which the Chargees
shall reasonably consider to be in danger of being seized or sold under
any form of distress or execution levied or threatened, and may appoint a
Receiver in respect thereof.
4.2 AUTOMATIC CONVERSION: Without prejudice to the rights of the Chargees,
the floating charge created by this Deed shall automatically and without
notice to the Chargors, be converted into a fixed charge in respect of
the relevant part of the Charged Property or any part thereof if:-
4.2.1 the Chargors shall commit a breach of any of its obligations
under Clause 3.2;
4.2.2 an Event of Default shall occur;
4.2.3 any person levies or attempts to levy any distress, execution,
sequestration or other legal process against the relevant part of
the Charged Property or any part thereof;
4.2.4 a receiver shall be appointed for the Chargors' property, assets
or undertaking or any part thereof by any security holder other
than the Chargees under any power contained in any instrument or
statute or by order of appointment of any court of competent
jurisdiction or if any security holder other than the Chargees
take possession or attempt to take possession of the
Chargors' property or assets or undertaking or any part
thereof under and by virtue of any security or otherwise
howsoever;
4.2.5 if any floating charge or other security given in favour of any
security holder other than the Chargees shall in respect of the
Chargors' property or assets or undertaking or any part thereof
automatically attach or become affixed or specific or otherwise
crystallise upon the happening of some event as mentioned
therein; or
4.2.6 if any of the Chargors applies to the court or any other
authority to restrain the Chargees and/or any of its other
creditors or any of them from proceeding in any manner whatsoever
to enforce whether in a court of law or otherwise.
4.3 RECEIVER: If at any time it shall reasonably appear to the Chargees that
any part of the Charged Property shall be in danger of seizure, distress
or other legal process, or that the security therein shall for any other
reason be in jeopardy, the Chargees shall be entitled without notice to
the Chargors to take possession of and hold the same or to appoint a
Receiver thereof. The provisions of Clauses 13, 14 and 15 below shall
govern the appointment, removal and powers of a Receiver appointed under
this Clause as if he were a Receiver appointed under Clause 13.
4.4 DECRYSTALLISATION: At any time after the floating charge shall
crystallise over any of the assets hereby charged (hereinafter called the
"Crystallised Charge") whether pursuant to a notice or by automatic
crystallisation but before the appointment of any Receiver or Receivers
pursuant to the provisions of Clause 14 or otherwise howsoever, the
Crystallised Charge shall, upon the written consent of the Chargees (such
consent to be given at the absolute discretion of the Chargees), cease to
attach to all or any of the aforesaid charged assets and shall refloat as
a floating charge over all or any of the assets subject thereto by notice
in writing to that effect to the Chargors.
5. OTHER SECURITY
The Chargors shall, as a continuing security for the payment and
discharge of the Secured Indebtedness and for the observance and
performance by the Chargors of its obligations under the Transaction
Documents, and in the event that the Chargees in its reasonable
discretion deems that the Transaction Documents are insufficient or
unsatisfactory to secure the payment of the Secured Indebtedness, the
Chargors shall within fourteen (14) days after the first demand by the
Chargees, whether themselves or shall procure another party to forthwith
pay to or deposit or pledge with the Chargees such sums in cash or at the
Chargees' option to deliver to the Chargees such additional stocks,
shares, securities, goods, bills of lading and documents of title as may
be acceptable to the Chargees or execute such further security over any
of the Charged Property in form and substance satisfactory to the
Chargees as additional and/or substituted security to this Deed or any
part thereof.
6. DEPOSIT OF DEEDS AND PERFECTION OF SECURITY
6.1 DEPOSIT OF DEEDS : The Chargors shall deposit with the Chargees, and the
Chargees during the continuance of this security shall be entitled to
hold and retain, all deeds,
shipping documents, documents of title and any other documents
relating to the Charged Property (including, without limitation, all
certificates or other documents of title to the Shares, together with
duly executed transfers and sold notes in respect thereof).
6.2 PERFECTION OF SECURITY: The Chargors shall from time to time, upon
request by the Chargees and at the Chargors' cost, execute in favour of
the Chargees, such further or other legal assignments, transfers,
mortgages, legal or other charges or securities as in each such case the
Chargees shall stipulate over the Chargors' estate or interest in any
property or asset of whatsoever nature or tenure and wheresoever situate
(being part of the Charged Property) for the purpose of more effectively
providing security for the payment or discharge of the Secured
Indebtedness. Without prejudice to the generality of the foregoing, such
assignments, transfers, mortgages, legal or other charges or securities
shall be prepared by and on behalf of the Chargees at the cost of the
Chargors and shall be in such form as shall be determined by the Chargees
and may contain provisions such as are herein contained or provisions to
the like effect and/or such other provisions of whatsoever kind as the
Chargees shall consider requisite for the improvement, protection,
maintenance or perfection of the security constituted by or pursuant to
this Deed.
7. POSITION OF OTHER SECURITY
7.1 DEED NOT TO PREJUDICE OTHER SECURITIES: This Deed is in addition and
without prejudice to nor shall it affect any other charge, mortgage,
guarantees, security interest or other instruments or letters of set-off
which the Chargees may now or hereafter hold from time to time from or on
account of the Chargors, nor shall such collateral or other security or
any encumbrance to which the Chargees may otherwise be entitled
(including any security, charge or encumbrance prior to the date of this
Deed), or the liability of any person(s) not parties hereto for all or
any part of the Secured Indebtedness, be in any way prejudiced or
affected by this Deed. The Chargees shall have full powers and absolute
discretion to deal with, exchange, release, vary, modify, omit, neglect
or abstain from perfecting or enforcing any such collateral, other
securities, guarantees or rights which the Chargees may now or hereafter
have from or against such person(s) or to give time for payment or any
indulgence to any such other person(s) without discharging or in any way
affecting the Chargors' liabilities or the Secured Indebtedness or the
security created hereunder.
7.2 OTHER SECURITIES NOT TO PREJUDICE DEED: Nothing contained in any other
charge, mortgage, encumbrance or security which the Chargees hold or may
at any time hold from any of the Chargors alone or jointly with any other
person on any account whatsoever anywhere whether in or outside
Singapore, shall prejudice or affect this Deed.
8. CONTINUING SECURITY
8.1 NO DISCHARGE BY PART PAYMENT: This security shall not be considered as
satisfied by any intermediate payment or satisfaction of the whole or any
part of the Secured Indebtedness but shall constitute and be a continuing
security to the Chargees and extend to cover all or any of the Secured
Indebtedness.
8.2 AVOIDANCE OF SECURITY: No assurance, security or payment which may be
avoided under the provisions of any relevant laws in any jurisdiction
relating to undue or fraudulent preference, and no release, settlement or
discharge which may have been given or made on the faith of any such
assurance, security or payment, shall prejudice or affect the right of
the Chargees, or any of them, to recover from the Chargors to the full
extent of all moneys payable by the Chargors in connection with the
Transaction Documents, as if such assurance, security, payment, release,
settlement, or discharge (as the case may be) had never been granted
given or made.
8.3 SECURITY TO CONTINUE TO BE VALID AND BINDING: This security shall
continue to be valid and binding on the Chargors for all purposes
notwithstanding:-
8.3.1 any change by amalgamation, consolidation, reconstruction or
otherwise which may be made in the constitution of the company by
which the business of the Chargees may for the time being be
carried on and shall be available to the company carrying on the
business of the Chargees for the time being; or
8.3.2 the insolvency, liquidation or winding-up of any of the Chargors
or the commencement of any of the foregoing; or
8.3.3 any change in constitution, amalgamation, consolidation,
reconstruction or reorganisation of or affecting any of the
Chargors; or
8.3.4 the illegality, invalidity or unenforceability of or any defect
in any provision of any of the Transaction Documents or any other
security, guarantee or indemnity or any of the obligations of any
of the parties thereunder.
9. REPRESENTATIONS AND WARRANTIES
The Chargors hereby irrevocably and unconditionally, jointly and
severally represent and warrant to and for the benefit of the Chargees
(including any assignee or transferee of the Chargees) as follows:-
9.1 STATUS: IDWHK is a limited liability company and IDWI is a company duly
incorporated, organised and validly existing under the laws of Hong Kong
or USA (as the case may be) and each of the Chargors will, until all the
Secured Indebtedness have been fully paid by the Chargors to the
Chargees, maintain its corporate existence as a company with limited
liability under the laws of Hong Kong or USA (as the case may be);
9.2 BUSINESS: each of the Chargors has full power and authority to carry on
the business currently carried on by it and to own assets, to carry on
the business currently carried on by it;
9.3 POWERS AND AUTHORISATION: each of the Chargors has full corporate power
and authority and the legal right and title to enter into, exercise its
rights and perform and comply with its obligations under the Transaction
Documents, including, without limitation, the charge of the Charged
Property on the terms and conditions herein contained;
9.4 CORPORATE ACTION: each of the Chargors has taken or obtained all
necessary corporate and other action to authorise the execution and
delivery of the Transaction Documents and all other documents to be
executed and delivered by it in connection herewith, and the consummation
and performance of the transactions contemplated by this Deed and such
aforesaid documents and no limitation on its powers will be exceeded as a
result of the transactions to be undertaken pursuant to the Transaction
Documents;
9.5 VALID AND BINDING OBLIGATIONS: each of the Transaction Documents
constitutes legal, valid and binding obligations on the Chargors
enforceable in accordance with their respective terms. The execution,
delivery and performance of the Transaction Documents and the payment by
each of the Chargors of all amounts due on the dates and in the currency
provided for herein and therein (a) will not contravene any provision of
law or other governmental directive, whether or not having the force of
law, which is applicable to it; (b) will not conflict with its Articles
of Association (or other constitutive documents); (c) will not conflict
with or result in the breach of any provision of, or in the imposition of
any mortgage, trust, lien, pledge, security interest, charge or
encumbrance or other preferential arrangement under, any agreement or
instrument to which it is a party or by which it or its assets is bound;
and (d) will not constitute an Event of Default or a default under any
such agreement or instrument;
9.6 NO MATERIAL ADVERSE EFFECT: the financial condition and operations of
each of the Chargors is such that it is able to fully and effectively
perform all its obligations under the Transaction Documents, and there
has been no material adverse change in its financial condition and
operations since the date of the latest available audited financial
statements. No litigation, arbitration, mediation or administrative
proceedings before or of any court or governmental authority is current,
presently pending or, to the best of the knowledge and belief of each of
the Chargors, threatened against any of the Chargors or its assets to
restrain the entry into, exercise of any of the Chargors' rights under
and/or performance or enforcement of or compliance with its obligations
under the Transaction Documents or which might have a material adverse
effect on the business, assets or condition of any of the Chargors or
which would impair the rights of any of the Chargors to carry on its
business substantially as now conducted, or which would adversely affect
the ability of any of the Chargors to perform its obligations under any
Transaction Document to which it is a party, and to the best of the
knowledge and belief of the Chargors, each of the Chargors has complied
with all applicable laws statutes and regulations and with the
requirements of all government authorities having jurisdiction over it;
9.7 REGISTRATIONS AND APPROVALS: all consents, authorisations, approvals and
waivers from and resolutions of the holders of any class of shares in or
from any of the creditors of the Chargors or from any other party to any
relevant deed or document or from any governmental or other authority
required in order for the Chargors to execute, deliver and perform the
Transaction Documents have been duly obtained, passed and delivered to
the Chargees and are in full force and effect. All declarations, filings
and registrations have been made, as may be necessary, for the valid
execution, delivery, performance and enforceability of the Transaction
Documents;
9.8 COMPLIANCE WITH LAW AND OTHER AGREEMENTS: the execution and delivery of
this Deed will not or would not:-
9.8.1 conflict with, or result in any breach of or default under, any
provision of any law, government directive (whether or not having
the force of law), order,
agreement, instrument, franchise, concession, licence, permit,
liability, obligation or duty applicable to any of the
Chargors or by which it is bound; or
9.8.2 cause any limit on any of the borrowing, guaranteeing, charging
or other powers of the Chargors (whether imposed by the
Memorandum or Articles of Association (or other constituent
documents), or by agreement, instrument or others) or on any of
the powers of the board of directors of the Chargors to exercise
any of such powers, or any other limit affecting the Chargors to
be exceeded; or
9.8.3 conflict with, result in the breach of, create or result in, or
(except for the Transaction Documents) oblige the Chargors to
create any encumbrance; or
9.8.4 constitute an Event of Default or a default under any agreement
or document binding upon the Chargors or any of them;
9.9 NO DEFAULT: each of the Chargors and/or its related companies are not in
breach of or in default under any agreement relating to borrowed money to
an extent or in a manner which has or could have a material adverse
effect on it; and each of the Chargors and/or its related companies are
not in default under any agreement or document to which they are a party
to or by which they are legally bound;
9.10 ACCOUNTS: the most recent annual consolidated audited financial
statements of each of the Chargors, as delivered to the Chargees:-
9.10.1 include a balance sheet and profit and loss account and such
other financial statements (if any) as are required by the laws
of Hong Kong or USA (as the case may be);
9.10.2 save as stated in the notes thereto, were prepared in accordance
with accounting principles and practices generally accepted in
Hong Kong or USA (as the case may be) and consistently applied
and have been prepared, examined, reported on and approved in
accordance with all procedures required by its constitutive
documents and/or the laws of Hong Kong or USA (as the case may
be);
9.10.3 together with those notes, give a true and fair view of its
financial condition and operations as at that date and for the
financial year then ended; and
9.10.4 together with those notes, disclose (to the extent required by
accounting principles and practices generally accepted in Hong
Kong or USA (as the case may be) and consistently applied) or
reserve against all its liabilities (contingent or otherwise) as
at that date and all unrealised or anticipated losses from any
commitment entered into by it and which existed on that date;
The financial condition and operations of each of the Chargors and its
related corporations are such that the Chargors are able to fully and
effectively perform their obligations under the Transaction Documents;
9.11 NO IMMUNITY: neither the Chargors nor any of their assets are entitled
to immunity from suit, execution, attachment or other legal process and
each of the Chargors' entry into the Transaction Documents constitutes,
and the exercise of its rights and
performance of and compliance with its obligations under the Transaction
Documents will constitute private and commercial acts done and performed
for private and commercial purposes;
9.12 TAXES: each of the Chargors has filed or caused to be filed all
requisite tax returns required to be filed in all jurisdictions in which
it is situated or carry on business or is otherwise subject to taxation
and it has paid all taxes shown to be due and payable in such returns or
on any assessments made against them (other than those being contested in
good faith and against which adequate reserves are being maintained) and,
to its knowledge, no claims are being asserted with respect to such taxes
which, if adversely determined, would have a material adverse effect on
it or upon its ability to fulfil its obligations hereunder;
9.13 NO DISSOLUTION: no steps have been taken by the Chargors or their
respective shareholders nor have any legal proceedings been started or
threatened for the dissolution of any of the Chargors or for the
appointment of a receiver, trustee, judicial manager or similar officer
of it, its assets or any of them;
9.14 NO MISSTATEMENT: each of the Chargors has fully disclosed in writing to
the Chargees all facts relating to it which it knows or should reasonably
know and which are material for disclosure to the Chargees in the context
of the Transaction Documents; and no information, exhibit or report
furnished in writing by it to the Chargees in connection with the
negotiation of the Transaction Documents contains any misstatement of
fact as at the date of such exhibit or report or as at the date when such
information was given which is material in the context of the Transaction
Documents, or omits to state a fact as at such date which in any such
case would be materially adverse to the interests of the Chargees under
the Transaction Documents;
9.15 FULL TITLE: the full legal and beneficial ownership of the Charged
Property is, at the date of the execution of this Deed vested in the
Chargors, absolutely free from all and any mortgages, charges, pledges,
encumbrances, liabilities, claims or other security interests whatsoever
over or in respect thereof, and that the full legal and beneficial
ownership of the Charged Property shall so remain and continue to so
remain during the continuance of this Deed;
9.16 SHARES: IDWI is and will remain the only beneficial owner of the Shares
and that all the Shares are validly issued and fully paid, and there are
no monies or liabilities outstanding or payable in respect of the same;
9.17 FIRST PRIORITY: the security created by this Deed is legal, valid,
binding and enforceable as a first priority security of the Charged
Property;
9.18 NO KNOWLEDGE: none of the Chargors has any knowledge of any fact which
would impair the validity or enforceability of the security herein
created;
9.19 NO FURTHER ENCUMBRANCE: except with the prior written consent of the
Chargees, the Chargors shall not make or suffer to exist any assignment,
charge, sale, transfer or encumbrance of the Charged Property or any part
thereof, other than the security created by this Deed;
9.20 NO SET-OFF: the Chargors has not subjected and will not subject the
Charged Property, or any part thereof, to any defence, set-off or
counterclaim;
9.21 NO LOANS OR DEBTS: there are no loans or debts owing by IDWHK to any
party whatsoever (including, without limitation, IDWI or any director or
shareholder of IDWI) save for those approved by the Chargees in writing
or trading debts incurred by IDWHK in the ordinary course of its
business;
9.22 NO BANKRUPTCY: no bankruptcy or insolvency proceedings has been started
or threatened or are pending against any of the Chargors; and
9.23 REPETITION: each of the above representations and warranties shall
survive and continue to have full force and effect after the execution of
this Deed, and will be true and correct and fully observed at all times
with reference to the facts and circumstances existing at all such times
until the Secured Indebtedness shall have been paid in full.
10. COVENANTS AND UNDERTAKINGS
10.1 AFFIRMATIVE COVENANTS AND UNDERTAKINGS: The Chargors hereby irrevocably
and unconditionally, jointly and severally covenant and undertake with
the Chargees that, so long as any part of the Secured Indebtedness is
outstanding, each of the Chargors shall:-
10.1.1 PUNCTUAL PAYMENT: punctually pay all amounts due owing or
remaining unpaid under the Transaction Documents on the due dates
thereof and in accordance with the provisions of the Transaction
Documents. Each of the Chargors shall also duly observe, perform
and comply with all the terms, conditions, obligations,
undertakings, stipulations and covenants to be observed and
performed and complied with by it in accordance with the
Transaction Documents or any other documents called for by the
terms of the Transaction Documents;
10.1.2 BUSINESS: carry on and conduct its business and affairs with due
diligence and efficiency in accordance with sound technical,
financial and managerial standards and practices, with qualified
personnel and in accordance with its Memorandum and Articles of
Association or other constitutive documents;
10.1.3 INFORMATION: furnish and provide the Chargees, their employees
and agents with and permit the Chargees to obtain all such
statements, information, explanation and data (except those of a
proprietary nature), as the Chargees may reasonably require,
regarding the affairs, operations, administration, financial,
corporate or other whatsoever state or condition of the Chargors;
10.1.4 ADVERSE CHANGE: promptly advise the Chargees of any material
adverse change in the condition (financial or otherwise) of the
Chargors, and notify the Chargees immediately of the institution
of any litigation, arbitration or administrative proceedings
against the Chargors before any court or administrative agency
which might materially affect the continued operations or
financial condition of the Chargors;
10.1.5 EVENT OF DEFAULT: immediately notify the Chargees upon becoming
aware of any of the following events:-
(a) any Event of Default; or
(b) the giving of notice by it to convene any meeting for
passing a resolution to wind up any of the Chargors; or
(c) the filing of any application for placing itself under any
scheme with a view to readjustment, reschedule or defer its
indebtedness generally, or under a judicial manager, or any
analogous or equivalent process in any jurisdiction in
which it has assets or carries on business;
10.1.6 PREPARATION OF ACCOUNTS: (a) keep its books of accounts and
prepare all financial statements to be delivered by it under this
Deed so as to comply with Clause 10.1.7 where applicable; and (b)
permit the Chargees and any person authorised by the Chargees to
have access to and inspect its books of account at any time
during office hours, with not less than 7 days' notice in
writing;
10.1.7 ACCOUNTS: maintain an accounting system in accordance with
generally accepted accounting principles in Hong Kong or USA (as
the case may be) consistently applied and shall deliver to the
Chargees sufficient copies of the following:-
(a) certified copies of its most recent annual consolidated
audited financial statements within four (4) months after
the date hereof and thereafter, within 90 days after the
end of each of its financial years, its annual consolidated
audited financial statements in respect of that financial
year;
(b) at the same time as is sent to its shareholders, any other
documents or information sent to its shareholders as such.
10.1.8 CERTIFICATE: together with each of the financial statements
aforesaid deliver to the Chargees a certificate of a director or
authorised officer of the respective Chargors certifying that (i)
no Event of Default has occurred or (ii) such an Event of Default
has occurred, accompanied by a reasonably detailed description
thereof and of the action contemplated by the Chargors to remedy
such Event of Default;
10.1.9 CHANGE IN OWNERSHIP: ensure and procure that there shall be no
change in the legal and beneficial ownership of the share capital
of the Chargors without the prior written consent of the Chargees
being obtained;
10.1.10 RESOLUTIONS: furnish the Chargees with certified copies of all
resolutions passed at shareholders' meetings and/or directors'
meetings of IDWHK as soon as practicable thereafter, but in any
event within 14 days from the date of the passing of such
resolutions;
10.1.11 PAYMENTS: duly pay or cause to be paid, all rents, rates,
assessments, duties, taxes and all outgoings and government
charges upon the Chargors or against the Chargors' properties or
any land and/or premises at which it carries
on business prior to the date on which penalties attach
thereto, unless and to the extent only that the same shall be
contested in good faith and by appropriate proceedings of the
Chargors, and produce to the Chargees on demand all receipts
for such payments (and in default of payment or production as
aforesaid it shall be lawful but not obligatory for the
Chargees to pay all or any of such aforesaid monies on behalf
of the Chargors, and thereupon the sums so paid by the
Chargees shall on demand be repaid to the Chargees and until
so repaid shall be secured by this Deed) and make timely
filings of all tax returns and governmental reports required
to be filed or submitted under any applicable laws or
regulations, and obtain all necessary licences and comply with
all laws regulations rules and orders relating to the carrying
on of its business;
10.1.12 AUTHORISATIONS: at its own cost and expense, maintain in full
force and effect all governmental consents, licences,
authorisations, approvals, declarations, filings and
registrations (collectively "Authorisations") obtained or made in
connection with the Transaction Documents and every document, the
execution and delivery of which is contemplated hereby and take
all such additional action as may be proper or advisable in
connection therewith, and obtain or effect any new or additional
Authorisations as may become necessary for the performance of any
of the terms and conditions of the Transaction Documents or for
maintaining, perfecting and/or protecting the security hereby
created over the Charged Property and the interest of the
Chargees hereunder, or for facilitating the enforcement and
realisation of such security and/or interest of for the exercise
of all powers, authorities and discretions vested in the
Chargees;
10.1.13 MAINTENANCE: maintain its corporate existence and right to carry
on operations and acquire, maintain and renew all rights,
contracts, powers, privileges, leases, lands, sanctions and
franchises which it deems necessary or prudent for the conduct of
its operations and promptly provide the Chargees with evidence
thereof upon request;
10.1.14 INSPECTION OF CHARGED PROPERTY: unconditionally grant to the
Chargees, their officers, employees and agents any right which it
has with respect to the inspection of the Charged Property or any
part thereof, and provide every assistance reasonably required by
the Chargees, their employees and agents to exercise such right
of inspection and render to the Chargees, their employees and
agents at such times as the Chargees may require, statements
giving descriptions and quantities of any of the Charged Property
with particulars of their situation and of insurance thereon, and
permit any employees and agents of the Chargees at any time,
after giving prior notice to the Chargors, to enter into and upon
any land or premises where the Chargors carries on its business
or the Charged Property is situate and to inspect such Charged
Property, or any part thereof, and all records, manuals and
documents pertaining thereto and all accounts records and
statements, wherever the same may be situated and to make
inventories and records thereof, Provided Always That in the
event that upon carrying out such inspection it is discovered
that any of the Chargors has committed an Event of Default, the
costs of carrying out such inspection shall be borne by the
Chargors and in all other cases the cost of inspection shall be
borne by the Chargees;
10.1.15 PRESERVATION: except in the usual course of business, not pull
down, remove or alter any part of the Charged Property without
the prior written consent of the Chargees, and shall forthwith
replace or make good the same in the event of such pulling down,
removal or alteration, and shall keep the Charged Property in
good and substantial repair and proper working condition and take
all such measures for the maintenance, preservation, protection
and security of the Charged Property as the Chargees may from
time to time require, and permit the Chargees, their employees
and agents free access at all the times to view the site and
condition of the Charged Property without becoming liable to
account as mortgagee in possession. If any of the Chargors fails
to comply with the provisions of this Clause, the Chargees may at
their discretion (but without any obligation on their part to do
so) take all such measures for the maintenance, preservation,
protection and security of the Charged Property as the Chargees
may require, and all monies so expended by the Chargees shall be
repaid by the Chargors with interest calculated from the date of
payment thereof by the Chargees up to the date of repayment by
the Chargors and until so repaid shall be secured by the security
herein created;
10.1.16 RESTRICTIVE COVENANTS: observe and perform all restrictive and
other covenants and stipulations for the time being affecting any
part of the Charged Property or the use or enjoyment of the same
or any part thereof;
10.1.17 ENDORSEMENT, ASSIGNMENT: upon the request of the Chargees,
endorse and assign to the Chargees all leases, documents of
title, negotiable instruments, policies and other documents
evidencing, representing or securing any of the Charged Property;
10.1.18 NO COMPROMISE: not, without the prior written consent of the
Chargees, extend the time for payment of or settle or compromise
the amount of any Charged Property or any contract in connection
therewith, nor take or omit to take any action which act or
omission could materially and adversely affect or diminish the
value of any of the Charged Property, and shall, at its own
expense, promptly take all action which is at any time necessary
and desirable to protect the value of its and the Chargees'
interest in and rights to the Charged Property;
10.1.19 NOTIFICATION: forthwith upon becoming aware of the same, inform
the Chargees of any event which may affect the right, interest or
title of the Chargors and/or the Chargees to any of the Charged
Property;
10.1.20 INSURANCE: at its own expense, effect and maintain or cause to
be effected and maintained adequate insurance over Charged
Property;
10.1.21 REPLACEMENT PARTS: renew and replace to the satisfaction of the
Chargees all such parts machinery appurtenances accessories
equipment and effects of the Charged Property as and when they
shall be worn out damaged lost or destroyed with others of a
similar nature and of at least equal value;
10.1.22 PAYMENT OF IDWHK RECEIVABLES: forthwith pay all moneys it
receives in connection with the IDWHK Receivables into the
Account, and until such moneys are so paid, hold all such moneys
on trust for the Chargees;
10.1.23 CHANGES OR CESSATION OF BUSINESS: forthwith notify the Chargees
of any intention it has of changing the nature of its business,
or ceasing its business;
10.1.24 PROOF OF DEBT: any right or proof of IDWI in the bankruptcy or
insolvency of IDWHK in respect of any indebtedness whatsoever
shall be exercised and enforced by IDWI only in such manner and
on such terms as the Chargees may stipulate and to the extent
permitted by applicable law, and any amount received or recovered
by IDWI as a result of any exercise by IDWI of any of its rights
herein shall be immediately paid to the Chargees, and until so
paid, shall be held in trust for the Chargees to the extent
permitted by applicable law;
10.1.25 SHARES: IDWI shall and shall procure the Trustees to duly and
promptly perform and comply with their obligations under, in
respect of or arising out of the Shares, as the legal
shareholders of IDWHK and shall duly and promptly pay all calls,
instalments, subscription monies or other payments which may be
due or become due in respect of any of the Shares and/or take up
any right or option when directed by the Chargees or their
nominees to do so, and to pay for such right or option, provided
that in default of IDWI doing so, the Chargees may (but shall not
be obliged to) make such payment, and any sums so paid by the
Chargees for that purpose shall be repayable by IDWI on demand;
10.1.26 VOTING RIGHTS: upon the occurrence of an Event of Default, IDWI
shall and shall procure the Trustees to exercise all voting
rights and all other rights in respect of or arising out of the
Shares in such manner as directed by the Chargees;
10.1.27 INCOME FROM SHARES: IDWI shall at all times ensure and procure
that all monies accruing on or payable in respect of the Shares
shall be paid forthwith to the Chargees, and until such moneys
are so paid, IDWI shall hold such money on trust for the
Chargees;
10.1.28 INDEMNITY: indemnify and keep the Chargees harmless against any
claim or demand which may be made against the Chargees by any
purchaser or other person(s), and against any liability, loss,
costs or expense (including legal costs on a full indemnity
basis) which the Chargees may suffer or incur by reason of:-
(i) any defect in any of the Chargors' title to the Charged
Property; and
(ii) all actions, proceedings, losses, costs, claims and demands
suffered or incurred in respect of anything done or omitted
in any way relating to the Charged Property or in the
exercise or purported exercise of the powers contained in
this Deed;
10.1.29 FURTHER ACTS: do or permit to be done such further acts and
shall execute such additional documents which the Chargees may
from time to time request to be done or executed for the purpose
of enforcing the rights of the Chargees under the Transaction
Documents and under the Charged Property and for obtaining the
full benefits of this Deed and of the rights and powers hereby
granted to the Chargees; and
10.2 NEGATIVE COVENANTS AND UNDERTAKINGS: Each of the Chargors hereby
irrevocably and unconditionally, jointly and severally covenants and
undertakes with the
Chargees that so long as any amount is or may be outstanding under the
Transaction Documents, it shall not without the prior written consent
of the Chargees:-
10.2.1 undertake or permit any reorganisation, amalgamation,
reconstruction, take-over, substantial change of shareholders or
any other schemes of compromise or arrangement affecting its
present constitution or the Charged Property; or
10.2.2 effect or permit any change in the management (including the
board of directors) of any of the Chargors or any change (whether
in the number of shares, types of shares or the percentages held)
in the registered or beneficial shareholdings of the Chargors but
this prohibition shall not apply to changes or increases in the
registered or beneficial shareholdings of IDWI's preferential
shareholders; or
10.2.3 declare, make or pay any dividends or other distribution (whether
out of capital or otherwise) nor will it make any capital or
asset distribution to its shareholders; or
10.2.4 incur any additional loan, advance or other credit facility from
any person, corporation, banks or financial institutions except
from its shareholders and in the latter case, subject to Clause
10.3 below; or
10.2.5 repay any debts to directors, shareholders and associated,
affiliated or subsidiary companies of the Chargors; or
10.2.6 effect any substantial alteration to the nature of its business
or amend or alter any of the provisions in its Memorandum and
Articles of Association or other constitutive documents relating
to its borrowing powers or principal business activities; or
10.2.7 make advances or loans to any person including but not limited to
shareholders, directors, employees, associated, affiliated or
subsidiary companies of the Chargors; or
10.2.8 either in a single transaction or in a series of transactions
(whether related or not) sell, convey, transfer or otherwise
dispose of all or any part of the Charged Property; or
10.2.9 incur any liability or issue or give guarantees or indemnities
for the account or on behalf of any person or otherwise become
contingently liable for or in connection with any obligation or
indebtedness of any person (save for things done in its ordinary
course of business); or
10.2.10 omit to do or permit or suffer to be done or omitted anything by
reason whereof any of the insurances referred to in Clause
10.1.20 or any other policy of insurance effected on the assets
of the Chargors may be rendered void or voidable; or
10.2.11 fail to keep on foot any insurance against any risk in respect of
the assets of the Chargors where any insurance referred to in
Clause 10.1.20 has been
effected or kept on foot except with the prior written consent
of the Chargees; or
10.2.12 use its assets or suffer the same to be used for purposes other
than those for which the same is built nor do or omit to do or
permit or suffer to be done or omitted anything by reason whereof
any policy of insurance effected on its assets may be rendered
void or voidable except with the prior consent in writing of the
Chargees; or
10.2.13 sell or attempt to sell, transfer, mortgage, pledge create, grant
or suffer to exist any encumbrances or any security interest
whatsoever over or in any way dispose of the Equity Interests,
the assets and property of VKSTD and MULCD (save in the ordinary
course of business), or any part thereof or agree to do any of
the same; or
10.2.14 do or suffer to be done or omitted any act matter or thing in or
on or in respect of any of its assets, which shall contravene the
provisions of any law, interest or agreement affecting the same,
and it will at all times hereafter indemnify and keep indemnified
the Chargees in full against all actions, proceedings, costs,
expenses, claims and demands in respect of any such act matter or
thing done or omitted to be done in contravention of the said
provisions; or
10.2.15 exercise any right or power in any manner which may have a
material adverse effect on the Charged Property, its financial
position or on the interests of the Chargees under the
Transaction Documents; or
10.2.16 take or omit to take any action, the taking or omission of which
might result in any alteration, waiver, release or impairment of
or any of the rights created by this Deed;
10.2.17 do or cause or permit to be done anything which may in any way
depreciate, jeopardise or otherwise prejudice the value of any of
the Charged Property;
10.2.18 do anything which may result in an injunction or other court
order or administrative order being made or issued, which would
have the effect of restraining the transfer or dealing in any of
the Charged Property, and to forthwith notify the Chargees if any
such order is made or issued;
10.2.19 hold the Chargees and/or their nominees liable for any failure to
communicate any notice or information affecting the Charged
Property, and for any failure to exercise or any delay in
exercising any right or benefit pertaining to the Charged
Property;
10.2.20 hold the Chargees liable for any loss arising from or
attributable to any brokers or others employed or engaged in or
in connection with the sale or disposal of the Charged Property,
or for any loss or depreciation in value of any of such Charged
Property, arising from or through any cause whatsoever, save for
any loss or depreciation caused directly by the intentional
actions or gross negligence of the Chargees;
10.2.21 withdraw or utilise the monies in the Account except for the
purposes as specified below:-
(a) in or towards payment of the Secured Indebtedness and all
monies and liabilities covenanted to be paid or satisfied
by the Chargors under the Transaction Documents;
(b) in or towards payment of the working capital (including
operating expenses) of IDWHK, VKSTD and MULCD;
(c) in or towards any other payments as may be approved by the
Chargees.
10.3 SUBORDINATION: IDWI further undertakes and covenants with the Chargees
that:-
10.3.1 it shall subordinate all loans and advances made to IDWHK and
shall procure all of its shareholders and directors and all of
IDWHK's directors which have made loans and advances to IDWHK to
agree to subordinate such loans and advances and/or any interest,
fees or other amounts payable on such loans and advances
(collectively "Subordinated Indebtedness") to the Secured
Indebtedness and upon such loans and advances being made to
forthwith inform the Chargees, and execute and procure that such
shareholder or director, as the case may be, execute a deed of
subordination (in form and substance satisfactory to the
Chargees) in favour of the Chargees (if required) and deliver it
to the Chargees;
10.3.2 for so long as the Secured Indebtedness is owing by the Chargors
to the Chargees or remains outstanding, the Subordinated
Indebtedness shall not directly or indirectly be repayable or
repaid and that IDWI shall not and shall procure that its
aforesaid shareholders and directors and IDWHK's directors shall
not demand from IDWHK repayment of the Subordinated Indebtedness
or any part thereof or take any steps, actions or proceedings
anywhere, directly or indirectly, to recover or enforce repayment
of the same or any part thereof in any way;
10.3.3 should any payment be received or recovered by IDWI or any of its
aforesaid shareholders and directors or IDWHK's directors from or
on behalf of IDWHK in breach of Clause 10.3.2 hereof, IDWI shall
and shall procure that such of its shareholders and directors and
IDWHK's directors shall hold the proceeds of such payment on
trust for the Chargees and shall pay to the Chargees the whole of
the said payment and in making such payment shall discharge (in
whole or in part, as the case may be) its obligations in respect
of the trust referred to above in respect of the moneys so paid;
10.3.4 IDWI shall not and shall procure that its aforesaid shareholders
and directors and IDWHK's directors shall not prove in
competition with the Chargees for all or any of the Subordinated
Indebtedness but shall give to the Chargees the benefit of any
proof in respect of the Subordinated Indebtedness in the
liquidation of IDWHK or in any arrangement or composition with
creditors until the Chargees shall have received all monies
outstanding and remaining unpaid by the Chargors to the Chargees.
11. EVENTS OF DEFAULT
11.1 The Secured Indebtedness shall immediately become due and payable and the
security hereby created shall immediately become enforceable upon the
occurrence of any of the following events:-
11.1.1 NON-PAYMENT: any of the Chargors fails to punctually pay the
Secured Indebtedness or any part thereof or any other monies due
and payable to the Chargees, at the times, dates and in the
manner provided in the Transaction Documents; or
11.1.2 BREACH OF REPRESENTATION OR WARRANTY: any representation,
warranty or statement made by the Chargors in this Deed or in any
document delivered under it now or at any later date is not
complied with or is incorrect or untrue or ceases to be correct
or true in any respect; or
11.1.3 BREACH OF OBLIGATION OR UNDERTAKING: any of the Chargors commits
or threatens to commit any breach of or fails to observe any of
the obligations, undertakings, stipulations, terms and conditions
or provisions contained herein or in the Transaction Documents or
threatens or is likely to commit any breach of or threatens or is
likely not to observe any of the obligations, undertakings,
stipulations, terms and conditions or provisions contained herein
or in the Transaction Documents; or
11.1.4 CROSS DEFAULT: any other indebtedness or part thereof of the
Chargors, VKSTD or MULCD (to whomsoever owing) (i) is not paid at
its stated maturity, on its original due date, or within any
applicable grace period or (ii) by reason of any default or on
the occurrence of any event, become due, or is declared due prior
to its stated maturity or original due date; or
11.1.5 INSOLVENCY: any of the Chargors, VKSTD or MULCD becomes
insolvent, is unable to pay its debts as they fall due, stops
suspends or threatens to stop or suspend its business or payment
of its debts, begins negotiations or takes any proceedings or
other step with a view to re-adjustment, rescheduling or deferral
of its indebtedness or proposes or makes a general assignment or
any statutory or other arrangement or composition with or for the
benefit of its creditors or a moratorium is agreed or declared in
respect of or affecting the indebtedness of the Chargors, VKSTD
or MULCD; or
11.1.6 ENFORCEMENT PROCEEDINGS: a distress, attachment, encumbrance,
execution or other legal process is levied or enforced upon or
issued against any of the properties or assets of the Chargors,
VKSTD or MULCD and is not discharged within 30 days of being
levied or enforced; or
11.1.7 SECURITY ENFORCEABLE: any present or future security on or over
the assets of the Chargors, VKSTD or MULCD becomes enforceable
and any step (including the taking of possession or the
appointment of a receiver, manager or similar officer) is taken
to enforce that security; or
11.1.8 DISSOLUTION: any step is taken by any person for the dissolution
(including judicial management) of the Chargors, VKSTD or MULCD
(including if a petition is presented, an order is made or a
resolution is passed for such dissolution (including judicial
management)) (except for the purpose of and
followed by a reconstruction, amalgamation or reorganisation
on terms approved by the Chargees before that step is taken);
or for the appointment of a liquidator (including a
provisional liquidator), receiver, judicial manager, trustee,
assignee, administrator, agent or similar officer of the
Chargors, VKSTD or MULCD or over any part of the assets of the
Chargors, VKSTD or MULCD; or
11.1.9 CHANGE IN OWNERSHIP: any change occurs in the ownership or
control of Chargors, VKSTD or MULCD or a significant portion of
their assets, which in the opinion of the Chargees constitutes a
material adverse change affecting the financial condition or
operations of Chargors, VKSTD or MULCD, or a material adverse
change affecting the consolidated financial condition or business
of the Chargors, VKSTD or MULCD; or
11.1.10 ILLEGALITY: it is or will become unlawful for the Chargors or
any party to this Deed to perform or comply with any one or more
of their respective obligations hereunder; or
11.1.11 TRANSACTION DOCUMENTS: the Transaction Documents or any
provisions thereof or hereof ceases for any reason to be in full
force and effect or is terminated or becomes invalid or
unenforceable or if there is any purported termination of the
Transaction Documents or any part thereof or if it becomes
impossible for or any other party to the Transaction Documents to
perform any of its obligations thereunder or hereunder or for the
Chargees to exercise all or any of its rights, powers and
remedies thereunder or hereunder; or
11.1.12 LEGAL PROCEEDINGS: any suit or action of any kind whatsoever
(whether criminal or civil) shall be instituted or threatened
against the Chargors, VKSTD or MULCD which in the opinion of the
Chargees is not frivolous and will materially and adversely
affect the ability of the Chargors to perform or observe any of
its obligations under the Transaction Documents; or
11.1.13 COMPULSORY ACQUISITION: if a notice or proposal for compulsory
acquisition of the assets of the Chargors, VKSTD or MULCD or any
material or substantial part thereof is issued or made under or
by virtue of any law; or
11.1.14 SECURITY IN JEOPARDY: if any other security created or to be
created in accordance with the terms of the Transaction Documents
shall in the opinion of the Chargees be in jeopardy, and notice
thereof has been given to the Chargors and the latter fail to
remedy the same or provide additional securities to the
satisfaction of the Chargees within fourteen (14) days after the
issuance of the aforesaid notice; or
11.1.15 ANALOGOUS EVENTS: any event occurs which under the law of any
relevant jurisdiction, has an analogous or equivalent effect to
any of the events mentioned in this Clause; or
11.1.16 MATERIAL ADVERSE CHANGE: any event occurs or circumstance arises
which gives the Chargees reasonable grounds for believing that
the Chargors will not or will be unable to perform or comply with
any one or more of its obligations under this Deed or any other
documents called for by this Deed.
12. POWERS OF THE CHARGEES ON DEFAULT BY THE CHARGORS
12.1 POWERS: Upon the occurrence of any Event of Default, the Chargees shall,
without prejudice to their rights, powers and remedies under the
Transaction Documents and/or at law, be entitled to exercise all or any
of the following powers, that is to say:-
12.1.1 PAYMENT OF SECURED INDEBTEDNESS: the Secured Indebtedness and
all other moneys secured by this Deed shall immediately become
due and payable without any demand or notice, which is hereby
expressly waived by the Chargors;
12.1.2 ENTRY: the Chargees or any person authorised by them may enter
into the land or premises wheresoever situate where the Charged
Property is located without notice and may take possession and
control of the whole or any part of the Charged Property without
being held liable as a mortgagee in possession;
12.1.3 DISPOSAL OF CHARGED PROPERTY: the Chargees may sell, dispose of
or to the extent permitted by law, appropriate to their own use
and benefit the Charged Property or any part thereof in such
manner as they may think fit, and the Chargees may apply the
proceeds or deemed proceeds of such sale, disposal or
appropriation in or towards the discharge of the Secured
Indebtedness;
12.1.4 SHARES: upon the Chargees' request, the Chargors shall and shall
procure the Trustees to execute, sign and deliver such other
documents as the Chargees may require (including, without
limitation, written resolutions of the directors of IDWHK
approving the transfer of the Shares to the Chargees and/or their
nominees or any purchaser), all in form and substance acceptable
to the Chargees, and do or procure to be done such other acts and
things to enable the Chargees to register, transfer and vest the
Shares in the name of the Chargees and/or their nominees or any
purchaser;
12.1.5 STATUTORY POWERS OF MORTGAGEE: the Chargees shall forthwith be
entitled to exercise all or any of the statutory powers of
mortgagee in respect of the Charged Property, and in particular
and without prejudice to the generality of the foregoing, the
power of sale, without any restriction whatsoever imposed by
Section 25 of the Conveyancing and Law of Property Act (Chapter
61, 1994 Revised Edition) and the provisions of the said Section
25 shall be so varied or extended in their application to this
Deed that the power of sale may be exercised in accordance with
the provisions of this Clause.
12.2 EXERCISABLE AT CHARGEES' DISCRETION: All or any of the rights, powers or
remedies conferred by this Deed shall be exercisable by the Chargees at
its discretion, or at any time and from time to time and in any order as
may be determined by the Chargees.
12.3 CHARGEES TO GIVE GOOD DISCHARGE: The Chargees may give a good discharge
for any monies received in the exercise of their power of sale and
disposal hereunder and for any rights, monies or property received or
receivable in respect of the Charged Property and no purchaser or other
person dealing with the Chargees shall be concerned to enquire whether
the monies and liabilities hereby secured have become
payable or whether any power which it is purporting to exercise has
become exercisable or whether any monies are due under this Deed or as
to the application of any monies paid raised or borrowed or as to the
propriety or regularity of any sale by or other dealing with the
Chargees.
12.4 CONCLUSIVE EVIDENCE: A certificate signed by any of the Judicial
Managers that an Event of Default has occurred and that the power of sale
has become exercisable shall be conclusive evidence of the fact in favour
of any purchaser and/or any person(s) to whom the Charged Property or any
part thereof may be transferred under such sale.
12.5 SHORTFALL: If the proceeds arising from the exercise of the Chargees'
rights hereunder are insufficient to discharge the Secured Indebtedness
in full, the Chargees shall be entitled to claim against the Chargors in
respect of such insufficiency in such manner as may be permitted by law.
13. APPOINTMENT OF RECEIVER
13.1 APPOINTMENT: At any time after any part of the Secured Indebtedness
shall have become payable under Clause 11 hereof; or (ii) the Chargors
shall have requested the Chargees to appoint a Receiver hereunder, the
Chargees may appoint one or more persons to be a Receiver of the Charged
Property.
13.2 REMOVAL: The Chargees may (i) remove any Receiver previously appointed
hereunder; and (ii) appoint another person or other persons as Receiver
or Receivers, either in the place of a Receiver so removed or who has
otherwise ceased to act or to act jointly with a Receiver or Receivers
previously appointed hereunder. If at any time and by virtue of any such
appointments) any two or more persons shall hold office as Receivers of
the Charged Property, each Receiver shall be entitled (unless the
contrary shall be stated in any of the deed(s) or other instruments)
appointing them) to exercise all the powers and discretions hereby
conferred on Receivers individually and to the exclusion of the other or
others of them.
13.3 BY DEED OR IN WRITING: Every such appointment or removal, and every
delegation, appointment or removal by the Chargees in the exercise of any
right to delegate powers or to remove delegates herein contained, may be
made either by deed or by instrument in writing under the hand of any
officer of the Chargees and/or any of the Judicial Managers or by any
person authorised in writing in that behalf by any of such officer or
Judicial Manager.
14. RECEIVER
14.1 POWERS OF RECEIVER: A Receiver so appointed shall be the agent of the
Chargors and the Chargors shall be solely responsible for his acts and
defaults and remuneration. Such Receiver shall have power:-
14.1.1 ENTRY ONTO LAND: to enter into and take possession of or control
any land or premises of the Chargors or any part thereof or
collect and get in any Charged Property and for that purpose to
take any proceedings in the name of the Chargors or otherwise as
may seem expedient;
14.1.2 CARRY ON BUSINESS: to carry on, manage or concur in carrying on
and managing the business of the Chargors or any part thereof,
including the power (where the Chargors has one or more
subsidiaries) of supervising, controlling and financing such
subsidiaries and their businesses and the conduct thereof, and
for any of those purposes, to raise or borrow any money from the
Chargees or any other person, with or with security on assets of
the Chargors;
14.1.3 CALL ON SHARES: where any capital in respect of any such capital
or shares of the Chargors is outstanding and uncalled, to require
the directors of the Chargors forthwith to call up all or so much
of such uncalled capital of the Chargors, and to enforce payment
of calls so made and any previous unpaid calls by taking
proceedings in the name of the Chargors or his own name or
otherwise as may seem expedient and as may be sufficient to pay
to the Chargees all monies then due and owing hereunder;
14.1.4 SELL OR LEASE PROPERTY: forthwith and without restriction to
sell, lease or otherwise dispose of or agree in selling, leasing,
accepting surrenders or otherwise disposing (obtaining only when
and where necessary the leave of the Court) of the whole or any
part of the Charged Property (and for this purpose, to sever, if
necessary, plant, machinery and other fixtures from the land) by
public auction or by private contract on such terms and
conditions as he may think fit, with power to vary any contract
for sale and to resell without being answerable for any loss
occasioned thereby; any such sale may be for cash, shares or
stocks, debenture stock or other valuable consideration to be
paid or satisfied at such time(s) as the Receiver shall think
fit;
14.1.5 LICENSE PROPERTY: to lease, let, hire and license or agree in
leasing, letting, hiring and licensing or accept surrenders of
leases, tenancies or licences of all or any part of the Charged
Property on such terms and for such consideration as he may deem
fit;
14.1.6 ARRANGEMENT OR COMPROMISE: to make any arrangement or enter into
any compromise which he shall think expedient;
14.1.7 REPAIR PROPERTY: to repair and keep in repair and make and
effect all or any improvements of the Charged Property, and for
this purpose, to apply in the name of the Chargors for such
licences or approvals as may be required by any law or
regulation, and to take out maintain and renew all insurances in
respect of the Charged Property against loss or damage by fire or
any other risk as he shall think fit;
14.1.8 EMPLOY PROFESSIONAL ADVISERS: to employ, engage, appoint and
terminate the services of such managers and other employees and
professional advisers or otherwise on such terms and conditions
as to remuneration or otherwise as he shall think fit, including
without limitation, the power to engage his own firm in the
conduct of the receivership;
14.1.9 ACQUIRE SHARE CAPITAL: to promote or otherwise acquire the share
capital of any body corporate with a view to such body corporate
becoming a subsidiary of the Chargors, and purchasing, leasing or
otherwise acquiring an interest in the whole or any part of the
Charged Property, or carrying on any business in succession to
the Chargors or any subsidiary of the Chargors;
14.1.10 TAKE PROCEEDINGS: to take or defend proceedings in the name of
the Chargors, including proceedings for the compulsory winding-up
of the Chargors, and to submit to arbitration, negotiate,
compromise, abandon and settle any claims and proceedings
concerning the Charged Property, and to demand, receive, give
valid receipt for or discharge the same;
14.1.11 INCIDENTAL ACTS: to execute and do all such acts, deeds and
things as to him or the Chargees may appear incidental or
conducive to any of the powers vested in him or to be conducive
to the realisation of the security constituted by or pursuant to
this Deed and which he lawfully may or can do as agent for the
Chargors; and
14.1.12 GENERAL: generally to do or cause to be done such acts or things
which the Chargors may have done in the ordinary conduct of its
business for the protection as well as for the improvement of the
Charged Property.
14.2 CONSIDERATION FOR SALE OR DISPOSAL: In making any sale or other disposal
of any of the Charged Property in the exercise of their respective powers
(including a disposal by the Receiver to any such subsidiary as is
referred to in Clause 14.1), the Receiver or the Chargees may accept, as
and by way of consideration for such sale or other disposal, cash,
shares, loan capital or other obligations, including without limitation,
consideration fluctuating according to or dependent upon profit or
turnover and consideration the amount whereof is to be determined by a
third party. Any such consideration may be receivable in a lump sum or
by instalments and upon receipt by the Receiver shall ipso facto be and
become charged with the payment of the Secured Indebtedness. Any
contract for any such sale or other disposal may contain conditions
excluding or restricting the personal liability of the Receiver or the
Chargees. Plant, machinery and other fixtures may be severed and sold in
the exercise of their respective powers by the Receiver or the Chargees
separately from the premises to which they are attached without any
consent being obtained from the Chargors.
15. APPLICATION OF MONIES BY RECEIVER
15.1 ORDER OF APPLICATION: All monies received by any Receiver appointed
under this Deed shall (subject to the rights and claims of any person
having a security ranking in priority to the security constituted by or
pursuant to this Deed) be applied in the following order:-
15.1.1 in the payment of the fees, costs, charges and expenses of and
incidental to the Receiver's appointment and the payment of his
remuneration;
15.1.2 in the payment and discharge of any liabilities incurred by the
Receiver on the Chargors' behalf in the exercise of any of the
powers of the Receiver;
15.1.3 in or towards payment of any debt or claim which are by statute
payable in preference to the Secured Indebtedness but only to the
extent to which such debt or claim have such preference;
15.1.4 in or towards payment of any other fees or expenses accruing
hereunder;
15.1.5 in or towards the satisfaction of all interest remaining unpaid
on the Secured Indebtedness owing to the Chargees;
15.1.6 in or towards the satisfaction of all of the Secured Indebtedness
owing to the Chargees;
and any surplus shall be paid to the Chargors or other person entitled
thereto.
15.2 REMUNERATION: Every Receiver so appointed shall be entitled to
remuneration for his services at a rate to be fixed by agreement between
him and the Chargees (or, failing such agreement, to be fixed by the
Chargees) appropriate to the work and responsibilities involved upon the
basis of charging from time to time adopted in accordance with his
current practice or the current practice of his firm.
15.3 APPLICATION: Only monies actually paid by the Receiver to the Chargees
in satisfaction or discharge of the Secured Indebtedness shall be capable
of being applied in satisfaction thereof.
15.4 NO LIABILITY: Save as aforesaid the Chargees shall be under no liability
whatsoever to the Receiver for his remuneration, costs, charges, expenses
or otherwise.
15.5 EXCLUSIONS: The provisions of Sections 29(6) and (8) of the Conveyancing
Law of Property Act (Chapter 61, 1 994 Revised Edition) shall not apply
to this Deed.
16. APPOINTMENT OF RECEIVER NOT AFFECTING OTHER POWERS
The powers of appointment of a Receiver hereunder shall be in addition to
and not to the prejudice of any statutory and other powers (whether of
sale, receiving rents, distraining for rents or otherwise) whether
pursuant to any law or equity or otherwise, of the Chargees, so that such
powers shall be and remain exercisable by the Chargees in respect of the
Charged Property or any part thereof.
17. POWER OF ATTORNEY
17.1 APPOINTMENT: The Chargors hereby irrevocably and unconditionally,
jointly and severally appoint the Chargees and any and every Receiver
appointed as aforesaid and his substitutes, together with every delegate
or sub-delegate referred to in Clause 17.2, and each of them jointly and
severally, to be the attorneys in fact of the Chargors (with full powers
of substitution and delegation) for the Chargors and in its name and on
its behalf, and as its acts and deeds to execute, sign, seal and deliver
and otherwise perfect any deed, assurance, agreement, instrument or act,
which the Chargors may or ought to do pursuant to the covenants and
provision of this Deed, and which may be required or may be deemed proper
for any of the purposes set out in the Clause 14, and generally to use
the name of the Chargors and to execute and deliver and otherwise perfect
any deed, assurance, agreement, instrument or act, which the Chargees or
any Receiver may deem proper in the exercise of all or any of the powers,
authorities or discretions conferred on any of them pursuant to this Deed
provided that in the case of IDWI only, the appointment of the attorneys
hereunder shall take effect from the date of occurrence of an Event of
Default.
17.2 DELEGATION : The Chargees may at any time and from time to time delegate
by power of attorney or in any other manner to any person or persons all
or any of the powers, authorities and discretions which are for the time
being exercisable by the Chargees under this Deed, and on such terms and
conditions as the Chargees shall think fit, and the Chargees shall not be
bound to supervise or be in any way liable or responsible for any loss or
damage arising from any act, default, omission or misconduct on the part
of any such delegate or sub-delegate, save for the Chargees' intentional
actions or gross negligence.
17.3 RATIFICATION: The Chargors hereby declares that such power of attorney
has been given for valuable consideration and shall be and remain
irrevocable for as long as the Secured Indebtedness is outstanding. The
Chargors hereby ratify and confirm and agrees to ratify and confirm
whatever any such attorney appointed pursuant to Clauses 17.1 and 17.2
shall do or purport to do in the exercise or purported exercise of all or
any of the powers, authorities and discretions referred to in Clauses
17.1 and 17.2.
18. NO ENQUIRY BY THIRD PARTY
Any person dealing with the Chargees or any of its delegates or the
Receiver appointed hereunder shall not be bound to see or enquire whether
any event has happened upon which any of the powers contained in this
Deed are or may be exercisable by the Chargees or the Receiver or
otherwise as to the propriety or regularity of any exercise thereof, or
any act purporting or intended to be an exercise thereof, or whether any
money remains owing upon this security, or be concerned to see whether
any such delegation shall have lapsed for any reason or been revoked.
19. THE CHARGEES NOT ANSWERABLE FOR LOSS
The Chargees shall not be answerable for any involuntary loss happening
in or about the exercise or execution of the powers of any trust which
may be vested in the Chargees by virtue of this Deed or by law for the
time being in force, save where such loss is caused by the gross
negligence or wilful default of the Chargees.
20. WAIVER NOT TO PREJUDICE RIGHT OF THE CHARGEES
The Chargees may from time to time and at any time waive either
unconditionally or on such terms and conditions as it may deem fit, any
breach by the Chargors of the covenants, undertakings, stipulations,
terms and conditions herein contained and any modification thereof but
without prejudice to any power, right and remedy for enforcement thereof
Provided that:-
20.1 no neglect or forbearance of the Chargees to require and enforce payment
of any monies under the Transaction Documents, or the performance and
observance of any covenant, undertaking, stipulation, term and condition
contained in the Transaction Documents, nor any time which may be given
to the Chargors or any person shall in any way prejudice or affect any of
the rights powers or remedies of the Chargees at any time afterwards to
act strictly in accordance with the provisions hereof; and
20.2 no such waiver of any breach as aforesaid shall prejudice the rights of
the Chargees in respect of any other or subsequent breach of any of the
covenants undertakings stipulations terms or conditions aforesaid.
21. INDULGENCE, REMEDIES AND WAIVERS
21.1 TIME: The liability of the Chargors hereunder shall not be impaired or
discharged by reason of any time or other indulgence being granted by or
with the consent of the Chargees to any person who may be in any way
liable to pay any of the Secured Indebtedness, or by reason of any
arrangement being entered into, or composition accepted by the Chargees
modifying the operation of law or otherwise its rights and remedies under
the provisions of the Transaction Documents.
21.2 ABSTENTION: The Chargees may at any time, without discharging or in any
way affecting the security created by or pursuant to this Deed or any
remedy in respect of such security, grant to the Chargors time or
indulgence, or abstain from asserting, calling, exercising or enforcing
any remedy, security, guarantee or other rights, which it may now or
hereafter have from or against the Chargors.
22. SET-OFF
In addition to any right of set-off or other right which the Chargees may
have and for so long as the Secured Indebtedness remains outstanding or
owing, each of the Chargees shall be entitled and is hereby authorised at
any time and without prior notice to the Chargors to set-off any sum
owing by the Chargees to the Chargors, VKSTD and/or MULCD against the
Secured Indebtedness. The Chargees shall inform the Chargors of the
aforesaid set-off as soon as practicable thereafter. Where such set-off
requires the conversion of one currency to another, each of the Chargees
is hereby authorised to effect such conversion at the its own rate of
exchange.
23. DISCRETION
Any liability or power which may be exercised or any determination which
may be made hereunder by the Chargees may be exercised or made in the
reasonable discretion of the Chargees which shall not be under any
obligation to give reasons therefor.
24. EXPENSES AND STAMP DUTY
The Chargors shall pay:-
24.1 INITIAL EXPENSES : on demand, all fees costs expenses and disbursements
(including but not limited to legal fees on a full indemnity basis) and
all goods and services, value added or other duties or taxes payable on
such fees, cost, expenses and disbursements, incurred by the Chargees in
connection with the preparation, negotiation, execution and registration
(if any) of the Transaction Documents and any other documentation
contemplated thereby or executed in connection thereto (including any
amendment, waiver or consent required in respect of such documents)
provided
that the costs to be borne by the Chargors in respect of the
preparation of this Deed (excluding any subsequent amendment thereto)
shall not exceed United States Dollar Twenty Thousand (US$20,000);
24.2 ENFORCEMENT EXPENSES: on demand, all fees costs expenses and
disbursements (including but not limited to taxes thereon and legal fees
on a full indemnity basis) and all goods and services, value added or
other duties or taxes payable on such fees, costs, expenses and
disbursements, incurred by the Chargees in protecting or enforcing any
right under the Transaction Documents and/or any such amendment or waiver
and the certificate of the Chargees setting out the amount and basis for
such amount shall, in the absence of manifest error, be conclusive; and
24.3 STAMP DUTY: promptly, and in any event before any penalty becomes
payable, any stamp, documentary, registration, goods and services, value
added or similar duty or tax payable in connection with the entry into,
registration, performance, enforcement or admissibility in evidence of
the Transaction Documents and/or any such amendment or waiver, and
indemnify the Chargees against any liability with respect to or resulting
from any delay in paying or omission to pay any such tax.
25. ASSIGNMENT
25.1 BENEFIT AND BURDEN OF THIS DEED: This Deed shall benefit and be binding
on the parties, their respective successors and any permitted assignee or
transferee of some or all of a party's rights or obligations under this
Deed. Any reference in this Deed to any party shall be construed
accordingly.
25.2 CHARGORS: The Chargors may not assign or transfer all or any part of its
rights or obligations under this Deed.
25.3 CHARGEES:
25.3.1 The Chargees may at any time and from time to time without notice
to the Chargors assign or transfer all or any part of its rights
and/or obligations under the Transaction Documents (including
this Deed) to another party (the "Assignee").
25.3.2 Upon an assignment made pursuant to Clause 25.3.1 taking effect,
the Assignee shall be treated as a party to the Transaction
Documents for purposes herein, and shall be entitled to the full
benefit of each Transaction Document to the same extent as if it
were an original party in respect of the rights and obligations
assigned or transferred to it.
26. COMMUNICATIONS
26.1 Except as otherwise expressly provided herein, any notice, request,
demand or other communication to be given or served under this Deed to or
on any party under this Deed may be delivered at or sent by facsimile
transmission to the address or facsimile number and marked for the
attention of the person or department (if any) from time to time
designated by that party for the purpose of this Deed and shall be deemed
to be duly served:-
26.1.1 if it is delivered, at the time of delivery; or
26.1.2 if it is sent by facsimile transmission, immediately after
transmission thereof.
26.2 Each notice, request, demand or other communication in connection
herewith may be given or served to the relevant party at its address or
facsimile number set out below:-
THE CHARGORS :
Name : International Displayworks, Inc.
Address : c/x Xxxxxxxxxxx and Xxxxxx, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000 XXX
Fax No. : (000) 000-0000
Attn : Xxxxx X. Xxxxxxxxxxx
copy to:
Name : Capitol Bay Securities, Inc.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 XXX
Fax No. : (000) 000-0000
Attn : Xx Xxxxxxx X. Xxxxxxx
Name : International Displayworks (Hong Kong) Ltd
Address : c/x Xxxxxxxxxxx and Xxxxxx, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000 XXX
Fax No. : (000) 000-0000
Attn : Xxxxx X. Xxxxxxxxxxx
COPY TO:
Name : Capitol Bay Securities, Inc.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 XXX
Fax No. : (000) 000-0000
Attn : Xx Xxxxxxx X. Xxxxxxx
THE CHARGEES:
Name : Vikay Industrial Ltd
Address : care of 00 Xxxxxxx Xxxx,
#00-00 Xxxx Xxxxx Xxxxxxxx,
Xxxxxxxxx 000000
Fax No. : (00) 000 0000
Attn : Xx Xxxx Xxx Xxxx
Name : Vikay Industrial (Hong Kong) Ltd
Address : care of 00 Xxxxxxx Xxxx,
#00-00 Xxxx Xxxxx Xxxxxxxx,
Xxxxxxxxx 000000
Fax No. : (00) 000 0000
Attn : Xx Xxxx Xxx Xxxx
27. PARTIAL INVALIDITY
The illegality, invalidity or unenforceability of any provision of this
Deed under the laws 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.
28. JUDICIAL MANAGERS
The Chargors hereby acknowledges and confirms that the Judicial Managers
are acting as agents for and on behalf of the Chargees in relation to
this Deed and all matters in connection therewith and that none of the
Judicial Managers shall assume any personal liability in relation to this
Deed of any other matter in connection therewith.
29. GOVERNING LAW AND JURISDICTION
This Deed shall be governed by, and construed in accordance with, the
laws of Singapore and the Parties hereby irrevocably submit to the
non-exclusive jurisdiction of the courts of Singapore and waive any
to proceedings in any such court on the grounds of venue or on the
grounds that the proceedings have been brought in an inconvenient forum.
30. PROCESS AGENT
Each of the Chargors hereby irrevocably and unconditionally, jointly and
severally, undertake and covenant:-
30.1 to appoint International Displayworks Pte Ltd of Eunos Techpark
#00-00, 00 Xxxx Xxxxx Xxxxx, Xxxxxxxxx 000000 as its agent to
receive service of process in Singapore. In the event of such
process agent ceasing to be able to act as such (whether because
of liquidation, cessation of business or otherwise) or no longer
having an address in Singapore, each of the Chargors hereby
irrevocably and unconditionally, jointly and severally undertake
and covenant that it would within thirty (30) days of such event
appoint a substitute process agent acceptable to the Judicial
Managers; and
30.2 that service of legal process on it may be effected by serving it
on the process agent mentioned above or by posting a copy of the
process by registered or certified prepaid airmail post to its
address stated in Clause 26.2, such service to be effective
fourteen (14) days after such posting, regardless of whether it
has or has not been returned or unclaimed by it, provided nothing
herein shall affect the right to effect service of process in any
other manner permitted by law.
31. COUNTERPARTS
This Deed may be executed and delivered in several counterparts, each of
which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same agreement.
IN WITNESS WHEREOF this Deed has been executed by the parties hereto and is
intended to be and is hereby delivered on the day and year first above
written.
THE CHARGEES:-
The Common Seal of )
VIKAY INDUSTRIAL LTD )
(IN JUDICIAL MANAGEMENT) ) /s/ THAM XXX XXXX
was hereunto affixed ) ---------------------------------
in the presence of :- )
The Common Seal of )
VIKAY INDUSTRIAL (HONG KONG) LTD )
was hereunto affixed )
in the presence of :- )
THE CHARGOR:-
The Common Seal of )
INTERNATIONAL DISPLAYWORKS )
(HONG KONG) LTD ) /s/ XXXXXXX XXXXXXXX
was hereunto affixed ) -----------------------------------
in the presence of :- )
The Common Seal of )
INTERNATIONAL DISPLAYWORKS, INC. )
was hereunto affixed )
in the presence of :- )
SCHEDULE 1
COMPLETION STATEMENT
Singapore Dollars (S$)
----------------------
Sale Price as stipulated in Sale Agreement 18,200,000
Add:
----
Adjustment to VKSTD's and MULCD's Inventory 33,549
Land Premium paid by VKSTD 650,561
Prepaid Inventory 808,808
Redemption of Hire-Purchase Agreement 253,000
Cash Balances in VKSTD and MULCD 252,028
Prepaid expenses and deposits of VKSTD and MULCD 85,721
Sub-total 2,083,667
Less:
-----
Deposit paid under Sale Agreement 1,686,500
Interest on Deposit from 5/8/1999 to 24/1/2000 44,048
Accounts payable in respect of VKSTD and MULCD 3,705,975
(as at 31/7/1999)
Sub-total 5,436,523
Total amount payable by Chargor ("Agreed Total") 14,847,144
SCHEDULE 2
FUNDING STATEMENT
1. SUMS ADVANCED BY THE CHARGEES TO VKSTD AND MULCD:
MONTH S$ EQUIVALENT
August 1999 2,103,147
September 1999 2,551,456
October 1999 2,868,720
November 1999 2,167,779
December 1999 2,226,793
Total amount advanced 11,917,895
Accrued interest as at 31 Jan 2000 212,007
Total funded amount (a) 12,129,902
2. COLLECTED RECEIVABLES RECEIVED BY THE CHARGEES:
MONTH S$ EQUIVALENT
August 1999 444,743
September 1999 171,888
October 1999 1,952,472
November 1999 3,800,643
December 1999 2,022,669
Total receivables collected 8,392,415
Accrued interest as at 31 Jan 2000 112,944
Total (b) 8,505,359
3. BALANCE FUNDED AMOUNT TO BE SET-OFF AGAINST COLLECTED RECEIVABLES:
(a) - (b) = S$3,624,543
NOTE:- The Parties hereby acknowledge and confirm that the above figures on the
sums advanced and the Collected Receivables are correct as at 31 December
1999 and the Parties further agree to finalise the sums advanced by the
Chargees to VKSTD and/or MULCD, as well as the Collected Receivables
received by the Chargees, for the month of January 2000 within thirty
(30) days from the date of signing of this Deed.
