<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
The Banker's Note, Inc.
-----------------------
(Name of Issuer)
Common Shares, Par Value $.01 Per Share
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(Title of Class of Securities)
066279100
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(CUSIP Number)
Bonaventure Holdings Limited
c/o G.C.K. Tam
KPMG Peat Marwick
Prince's Building, 8th Floor
G.P.O. Box 50
Hong Kong
(011-852-2522-6022)
____________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copy to:
Jonathan H. Lemberg, Esq.
Morrison & Foerster LLP
23rd Floor, Entertainment Building
30 Queen's Road Central
Hong Kong
(011-852-2585-0888)
______________________________
February 1, 1997
----------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ].
Page 1 of 6
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CUSIP NO. 066279100
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NAME OF REPORTING PERSON: Bonaventure Holdings Limited
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: None
- ---------- --------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
2 -------------------------------------------------------- (B) [X]
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3 SEC USE ONLY
- ---------- ------------
4 CHECK SOURCE OF FUNDS: NOT APPLICABLE
- ---------- --------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO [ ]
5 ITEMS 2(D) OR 2(E)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: Bermuda
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NUMBER OF 7 SOLE VOTING POWER: 450,000
SHARES BENEFICIALLY ------------------------ ---------------------------
OWNED BY
EACH 8 SHARED VOTING POWER: None
REPORTING ------------------------ --------------------------
PERSON
WITH 9 SOLE DISPOSITIVE POWER: 450,000
------------------------ --------------------------------
10 SHARED DISPOSITIVE POWER: None
- ------------------------------------ ------------------------ -------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 450,000
- ---------- ----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 3.7%
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14 TYPE OF REPORTING PERSON: CO
- ---------- -----------------------------
</TABLE>
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This Amendment No. 3 amends and restates the Statement on Schedule 13D dated
November 20, 1985, as heretofore supplemented by the Statement on Schedule 13D
dated December 31, 1985, and as heretofore amended and supplemented by
Amendment No. 1 dated May 3, 1991, each filed by Bonaventure Holdings Limited
("Bonaventure") and Mr. S.K. Chow, and Amendment No. 2 dated May 10, 1991,
filed by Bonaventure, Mr. S.K. Chow and Yerington Limited ("Yerington")
(collectively, the "Schedule 13D"). The Schedule 13D is hereby amended and
restated in its entirety to read as follows:
Item 1. Security and Issuer.
This statement relates to the Common Stock, $.01 par value (the "Common
Stock"), of The Banker's Note, Inc. (the "Company"), a Texas corporation with
principal executive offices at 4900 Highlands Parkway, Smyrna, Georgia. To the
best of filer's knowledge, the principal executive officers of the Company are
Martin S. Suchik, Chairman of the Board of Directors, President and Chief
Executive Officer, and Harold D. Cannon, Director, Secretary, Senior Vice
President, Chief Operating Officer and Chief Accounting and Financial Officer.
Item 2. Identity and Background.
(a)-(c), (f). This statement is filed by Bonaventure Holdings Ltd., a
Bermuda corporation ("Bonaventure"). Bonaventure's principal business is
holding equity shares of an international group of companies engaged in garment
manufacturing and sales. Bonaventure may also engage in financing activities.
The principal office and business address of Bonaventure is c/o G.C.K. Tam,
KPMG Peak Marwick, Prince's Building, 8th Floor, G.P.O. Box 50, Hong Kong.
G.C.K. Tam, a citizen of Australia, and N.P. Etches, a citizen of the United
Kingdom (collectively, the "Receivers"), were appointed joint receivers and
managers of Bonaventure by The Hongkong and Shanghai Banking Corporation
Limited (the "Bank") under the terms of a Debenture dated February 22, 1994,
attached as Exhibit A hereto. Bonaventure disclaims membership in any group
with Mr. S.K. Chow and/or Yerington.
(d)-(e). During the last five years, neither Bonaventure nor, to the best
of Bonaventure's knowledge, any person named above, has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
has been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Considerations.
This statement relates to the ownership of 450,000 shares (the "Shares")
of Common Stock of the Company. 300,000 of such Shares were acquired by
exercise of an option on December 30, 1985. The purchase price of the Shares
so acquired was $4
Page 3 of 6
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per share, for an aggregate purchase price of $1,200,010. The purchase price
for such Shares was financed by borrowings from Bonaventure Textiles Ltd.,
which was, at the time, an affiliate of Bonaventure, and from the Bank. The
remaining 150,000 of the Shares were acquired in a 50% stock split which was
declared by the Board of Directors of the Company on March 24, 1986 and
distributed to holders of record, including Bonaventure, on May 30, 1986.
Item 4. Purpose of Transaction.
The Shares were acquired for the purpose of investment. The Receivers
have been informed that on February 1, 1997, the Company completed the
acquisition of Advanced Animations, Inc., and that as part of such acquisition,
the Company has issued 7.563,077 new shares of Common Stock. As a result of
such transaction, the percentage of the total outstanding Common Stock
represented by the Shares fell to approximately 3.7%. The Receivers intend to
dispose of the Shares owned by Bonaventure in an orderly fashion when and as
opportunities for the sale of such Shares arise. Except as set forth above,
neither the Bank nor Bonaventure has any plan or has made any proposal which
relates to or would result in (a) the acquisition by any person of additional
securities of the Company or the disposition of securities of the Company, (b)
an extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present board of directors or management of
the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of the Company; (f) any
other material change in the Company's business or corporate structure; (g)
changes in the Company's charter, bylaws or instruments corresponding thereto
or other actions which may impede the acquisition of control of the Company by
any person; (h) causing a class of securities of the Company to be delisted
from a national securities exchange or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national securities
association; (i) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or (j) any action similar to any of those enumerated
above.
Item 5. Interest in Securities of the Issuer.
The 450,000 shares of Common Stock owned by Bonaventure constitute
approximately 3.7% of the outstanding Common Stock. Bonaventure ceased to be a
beneficial owner of five percent or more of the outstanding Common Stock on
February 1, 1997 as a result of the transaction set forth in Item 4 above.
Page 4 of 6
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Neither the Receivers nor Bonventure are party to any contracts,
arrangements, understandings or relationships (legal or otherwise) with respect
to any securities of the Company other than the Share Mortgage dated December
20, 1985 attached as Exhibit B hereto.
Item 7. Material to be Filed as Exhibits.
Exhibit A. Debenture dated February 22, 1994 of Bonaventure in favor of
the Bank.
Exhibit B. Share Mortgage dated December 20, 1985 from Bonaventure to
the Bank.
Page 5 of 6
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SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Date: February 1, 1997
BONAVENTURE HOLDINGS LIMITED
By: /s/G.C.K. Tam
---------------------------------
Name: G.C.K. Tam
Title: Joint Receiver and Manager
By: /s/N.P. Etches
---------------------------------
Name: N.P. Etches
Title: Joint Receiver and Manager
Page 6 of 6
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Execution Copy
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Dated 28th February 1994
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BONAVENTURE HOLDINGS LIMITED
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in favour of
THE HONGKONG AND SHANGHAI
-------------------------
BANKING CORPORATION LIMITED
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DEBENTURE
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JOHNSON STOKES & MASTER,
------------------------
Solicitors & Notaries,
16th Floor,
Prince's Building,
10 Chater Road,
HONG KONG.
---------
(MJB/761662/6/D3541/ml)
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<TABLE>
<CAPTION>
INDEX
CLAUSE NO. PAGE NO.
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<S> <C>
l. DEFINITIONS AND INTERPRETATION 1 - 3
2. COVENANT FOR PAYMENT 3
3. CHARGES BY WAY OF SECURITY 4 - 7
4. FURTHER ASSURANCES 7 - 8
5. COVENANTS 8 - 11
6. ENFORCEMENT OF SECURITY 11
7. RECEIVERSHIP 11 - 13
8. SALE OF CHARGED ASSETS 14
9. COSTS AND EXPENSES, INDEMNITY 15
l0. APPLICATION OF PROCEEDS 15 - 16
ll. POWER OF ATTORNEY 17
l2. TRUSTEESHIP 17
l3. CONTINUING SECURITY 17 - 19
l4. NO WAIVER AND REMEDIES CUMULATIVE 19
l5. WARRANTIES 19
l6. NOTICES 19
l7. SEVERABILITY 20
l8. GOVERNING LAW AND JURISDICTION 20 - 21
</TABLE>
<PAGE> 9
THIS DEBENTURE is made on 28th February, 1994
BY:-
BONAVENTURE HOLDINGS LIMITED a company incorporated in Bermuda
with registration no.11029 (the "Company");
IN FAVOUR OF:-
THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED of No.1
Queen's Road Central, Hong Kong (the "Debenture-holder").
1. DEFINITIONS AND INTERPRETATION
1.01 In this Debenture, in addition to the above definitions:-
"Charged Assets" shall have the meaning ascribed to it in Clause 3.01;
"Debtor(s)" means both or either of Canasal Limited and Bonaventure Textiles
Limited, both being companies incorporated in Hong Kong with their respective
registered offices each at 13th Floor, Lippo Sun Plaza, 28 Canton Road, Tsim
Sha Tsui, Kowloon, Hong Kong;
"Default Interest" means interest at such rate per annum charged by the
Debenture-holder from time to time on unauthorised overdrafts in the relevant
currency compounded monthly in arrears;
"Exchange Rate" means the rate for converting one currency into another currency
which the Debenture-holder determines to be prevailing in the relevant foreign
exchange market at the relevant time, such determination to be conclusive
(except in the case of manifest error);
"Enforcement Date" means the date on which the Debenture-holder makes
demand for the payment of the Secured Obligations (or any part
thereof);
"Secured Obligations" means all present and future, actual or
contingent obligations of the Debtor(s) to the Debenture-holder and
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includes all fees and remuneration of, and all other costs, charges, expenses
and liabilities incurred by the Debenture-holder and/or any Receiver appointed
under this Debenture; and
"Shares" shall have the meaning ascribed to it in Clause 3.01 (a) (ii).
l.02 Any references in this Debenture to:-
a "Clause" shall, subject to any contrary indication, be construed as
a reference to a clause of this Debenture;
the "Debenture-holder" shall be construed so as to include its successors and
permitted assigns, whether immediate or derivative and, in particular, any
appointment or removal of a Receiver under this Debenture may be made by writing
signed or executed as a deed by or on behalf of any such successor as
Debenture-holder; and
a "Receiver" appointed under this Debenture shall be construed so as to include
each of the receivers and/or receivers and managers at any time or from time to
time appointed under this Debenture or under the powers conferred upon the
Debenture-holder by any Ordinance whether appointed simultaneously or to act
jointly and/or severally or to act in place of any one or more receivers and/or
receivers and managers previously appointed under this Debenture or otherwise.
1.03 When used in this Debenture, "subsidiary" shall have the meaning specified
in Section 2 of the Companies Ordinance, Chapter 32 of the Laws of Hong Kong.
1.04 Save where the contrary is indicated, any reference in this
Debenture to:-
(i) this Debenture or any other agreement or document shall be
construed as a reference to this Debenture or, as the case may
be, such other agreement or document as the same may have been
or may have from time to time be, varied, amended,
supplemented or novated; and
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(ii) a time of day shall be construed as a reference to Hong
Kong time.
1.05 Clause, Schedule and paragraph headings are for ease of
reference only.
1.06 Any reference in this Debenture to "Company" and "Debtor(s)" shall be
construed so as to include their respective successors and assigns; words
importing the plural shall include the singular and vice versa and references to
the masculine, feminine or neuter shall include the others of them and 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 above.
2. COVENANT FOR PAYMENT
2.01 The Company covenants to pay and discharge in full the
Secured Obligations on demand made by the Debenture-holder at any time.
2.02 The Company shall pay Default Interest (to the extent that
it is not paid by the Debtor(s)) on the Secured Obligations from the Enforcement
Date until payment and discharge in full of the Secured Obligations.
2.03 Payments by the Company shall be made to the Debenture-holder
as specified by the Debenture-holder without any set-off, counterclaim,
withholding or condition of any kind except that, if the Company is compelled by
law to make such withholding, the sum payable by the Company shall be increased
so that the amount actually received by the Debenture-holder is the amount it
would have received if there had been no withholding.
2.04 A certificate of balance signed by any duly authorised
officer of the Debenture-holder shall be conclusive evidence against the Company
of the amount of the Secured Obligations owing at any time.
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3. CHARGES BY WAY OF SECURITY
3.0l The Company, as beneficial owner, charges to the
Debenture-holder, as a continuing security for the payment and discharge in full
of the Secured Obligations, the Charged Assets, namely, both present and
future:-
(a) by way of first fixed charge:-
(i) all book and other debts, receivables, monies,
revenues, claims and things in action due or owing to
or purchased or otherwise acquired by the Company
(including all credit balances and deposits of the
Company with the Debenture-holder or any other bank
or financial institution and any surplus arising on
a realisation of any legal and/or equitable
assignment and/or charge whether in favour of the
Debenture-holder or any other person) and the full
benefit of all guarantees, indemnities, debentures,
charges, pledges, liens, rights of set off, security
reservations of proprietary rights, rights of tracing
and all other rights and remedies in respect of the
same;
(ii) the Shares, namely all right, title and interest of
the Company in and to all stocks, shares, bonds or
other securities and investments (including, without
limitation, all right title and interest of the
Company in the shares of Tonfolio Limited) and all
other interests of the Company in any person and all
rights, benefits and advantages arising in respect of
or incidental to the same;
(iii) the uncalled capital, goodwill and all patents,
patent applications, inventions, trade marks and
service marks and applications therefor, trade names,
registered designs, copyrights, know-how and other
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intellectual property rights of the Company and all
licences and all rights, benefits and advantages
arising in respect of or incidental to the same;
(iv) all real property and all rights and interests in or
affecting land of the Company and all buildings,
structures, fixtures (including trade fixtures) and
all fixed plant, machinery and equipment belonging to
the Company and its interest in any plant, machinery
or equipment in its possession, including the benefit
of all contracts and warrants relating to the same of
the Company; and
(v) all of the Company's rights and benefits under any
sale or purchase agreements, and distributorship or
any similar agreements entered into by it, any
letters of credit issued in its favour and all bills
of exchange and other negotiable instruments held by
it;
(vi) the benefit of all licences, quota, consents and
authorities (statutory or otherwise) held in
connection with its business or the use of any asset
charged by any other sub-paragraph in this clause and
the right to recover and receive all proceeds and/or
compensation which may be payable to it in respect of
them; and
(vii) all benefits in respect of all contracts and policies
of insurance of whatever nature which are from time
to time taken out by or on behalf of the Company or
(to the extent of such interest) in which the Company
has an interest.
(b) by way of first floating charge:-
(i) the undertaking and all the property, assets and
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rights of the Company, whatsoever and wheresoever;
and
(ii) the premises described in Clause 3.01(a) if and in so
far as the charges contained in this Debenture on the
same shall for any reason be ineffective as fixed
charges.
3.02 It is a term of this Debenture, and the Company covenants,
that it will not, save as the Debenture-holder may otherwise agree in
writing:-
(a) create or permit to subsist any security affecting all or any
of its present or future revenues or assets other than any
lien arising by operation of law which is discharged as soon
as practicable after the Company has received a demand for
payment of the debt in respect of which such lien has arisen;
or
(b) except in the ordinary course of business sell, lease,
transfer or otherwise dispose of, by one or more transactions
or series of transactions (whether related or not), the whole
or any material part of its revenues or its assets other than
assets or revenues which are immaterial in the aggregate or
which are obsolete or worn out.
3.03 For the avoidance of doubt, it is declared that the premises
in Clause 3.01 (a) (i) shall be collected and realised by the Company in the
ordinary course for payment in accordance with Clause 5.01(c) but, otherwise,
the Company shall have no power to, and the Company covenants that it will not
without the prior written consent of the Debenture-holder, charge, factor,
pledge, assign or otherwise dispose of or deal with any of the same.
3.04 The Debenture-holder may, at any time and from time to time,
by notice in writing to the Company, convert the floating charge referred to in
Clause 3.0l(b) into a specific charge as regards all of
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the premises described in Clause 3.01 (b) and/or only those premises specified
in such notice.
3.05 If the Debenture-holder receives notice (actual or otherwise)
of any subsequent debenture, mortgage, charge, assignment or other disposition
affecting all or any part of the Charged Assets or any interest therein to which
the Debenture-holder has not given its prior written consent, the
Debenture-holder shall be deemed to have opened a new account when such notice
was received and as from that time all payments in respect of or on account of
the Secured Obligations shall be deemed to have been credited to the new account
and shall not, as between the Company and the Debenture-holder, operate to
reduce the amount of the Secured Obligations outstanding when such notice was
received.
3.06 The Debenture-holder may at any time without notice apply
any credit balance to which the Company is entitled on any account with the
Debenture-holder in or towards satisfaction of the Secured Obligations. For this
purpose, the Debenture-holder is authorised to purchase, at the Exchange Rate,
such other currencies as may be necessary to effect such application with the
monies standing to the credit of such account.
3.07 The Debenture-holder shall have and shall be authorised to
exercise a lien over all property of the Company coming into the possession or
control of the Debenture-holder, for custody or any other reason and whether or
not in the ordinary course of banking business, with power for the
Debenture-holder to sell such property to satisfy the Secured Obligations.
4. FURTHER ASSURANCES
The Company covenants at any time, if and when required by the
Debenture-holder, to execute or do at the cost and expense of the Company such
deeds, assurances, agreements, instruments, acts and things as the
Debenture-holder shall require in respect of the Charged Assets to secure the
Secured Obligations or perfect or improve any
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security created or intended to be created by this Debenture or to facilitate
the realisation of any of the Charged Assets or the exercise or proposed
exercise by the Debenture-holder or a Receiver appointed under this Debenture of
any of their powers under this Debenture. All mortgages, charges, pledges,
assignments or other securities which the Debenture-holder may require the
Company so to execute pursuant to the provisions of this Clause 4 shall contain:
(i) an immediate and unrestricted power of sale without notice, (ii) a clause
excluding any other restrictions imposed by any applicable law on the power of
sale, (iii) a clause excluding any restrictions imposed by any applicable law on
the consolidation of mortgages or charges or other securities and (iv) such
other clauses and provisions for the benefit of the Debenture-holder as the
Debenture-holder may require.
5. COVENANTS
5.0l The Company covenants that, during the continuance of this
security, it will:-
(a) conduct and carry on its business in a proper and efficient
manner and not make any substantial alteration in the
nature or mode of conduct of its business;
(b) keep or cause to be kept proper books of accounts relating to
its business and from time to time within a reasonable time
after being requested by the Debenture-holder, furnish the
Debenture-holder with such information about the assets,
business and financial condition of the Company as the
Debenture-holder may require;
(c) pay into an account maintained with the Debenture-holder or,
if any, such other account(s) as the Debenture-holder may from
time to time specify, all monies which the Company may receive
in respect of the premises described in Clause 3.01 (a) (i)
forthwith on receipt (and not withdraw from such account(s)
any such monies except with the consent of the
Debenture-holder) and, pending such payment, hold such
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monies on trust for the Debenture-holder;
(d) take all steps to maintain, preserve and protect its
revenues and assets (tangible and intangible) and maintain
and (where applicable) take out insurances in respect of
its business, undertaking, property and assets and against
such risks and contingencies as is prudent (given the
industry practice in relation to the business, undertaking,
property or asset concerned) with the interest of the
Debenture-holder noted on the policies and with the
policies containing such provisions for the benefit of the
Debenture-holder as the Debenture-holder may require; on
demand produce to the Debenture-holder the policies of such
insurances and proof of payment of all premiums and other
monies necessary for effecting and keeping such insurances;
and forthwith upon receipt pay to the Debenture-holder and
pending such payment hold on trust for the Debenture-holder
all monies received by the Company by virtue of any
insurances maintained or effected by it (whether or not
effected pursuant to the above) for application in making
good the loss or damage in respect of which such monies are
received or, at the option of the Debenture-holder, for
payment to such account(s) as the Debenture-holder may
specify;
(e) if so required by the Debenture-holder, give notice (in such
form as the Debenture-holder may require) to any person
requiring payment into such account(s) as the Debenture-holder
may specify of all monies due or to become due to the Company
from that person;
(f) deposit with the Debenture-holder all certificates and
documents of title, duly executed transfers and any other
documents relating to the Charged Assets as the
Debenture-holder may from time to time require;
(g) observe and perform all covenants and stipulations from
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time to time affecting any of the Charged Assets, take such
action as may from time to time be necessary or desirable to
preserve and maintain the Charged Assets and not do or suffer
or omit to be done any act, matter or thing whereby any
provision of any enactment, decree, order or regulation from
time to time affecting any of the Charged Assets is infringed;
(h) not (without the prior written consent of the Debenture-
holder) declare any dividends or pay any similar
distribution to shareholders or redeem or purchase its own
shares;
(i) inform the Debenture-holder immediately on contracting to
purchase any estate or interest in real property and provide
to the Debenture-holder such information in relation to the
same as the Debenture-holder may from time to time require;
(j) punctually pay and indemnify the Debenture-holder and a
Receiver appointed under this Debenture against all existing
and future taxes, duties, rates and outgoings assessed upon or
payable by in respect of any of the Charged Assets; and
(k) generally not to do or cause or permit to be done anything
which may in any way jeopardise or otherwise prejudice the
value of the Charged Assets or this security and not (without
the prior written consent of the Debenture-holder) incur any
expenditure or liabilities of an exceptional or unusual
nature.
5.02 If the Company fails to observe or perform any of its
obligations under this Debenture, the Debenture-holder shall be entitled (but
not obliged) to take such action as it shall in its absolute discretion
consider appropriate on behalf of or in the name of the Company or otherwise
with a view to remedying or mitigating the
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consequences of any such failure and any monies expended by the Debenture-holder
in such regard shall be repayable by the Company to the Debenture-holder on
demand together with Default Interest on the sums demanded.
6. ENFORCEMENT OF SECURITY
On or at any time after the Enforcement Date, the
Debenture-holder and any nominee of the Debenture-holder may exercise, without
further notice, legal process or any other action with respect to the Company
and without first appointing a Receiver under this Debenture, all the powers and
discretions conferred by this Debenture on a Receiver appointed under this
Debenture.
7. RECEIVERSHIP
7.0l On or at any time after the Enforcement Date, the
Debenture-holder may, without further notice, legal process or any other action
with respect to the Company appoint one or more persons to be a Receiver under
this Debenture of all or any part of the Charged Assets and may from time to
time fix his remuneration (which shall be of such amount as may be agreed from
time to time between the Debenture-holder and such Receiver) and may remove any
Receiver so appointed and appoint another in his place.
7.02 A Receiver so appointed shall be the agent of the Company,
and the Company shall be solely responsible for his acts or defaults and for his
remuneration.
7.03 A Receiver so appointed shall have power:-
(a) to take possession of, collect and get in all or any of the
Charged Assets, exercise in respect of the Shares all voting
or other powers or rights available to a registered and/or
beneficial (as appropriate) owner of the same in such manner
as he may think fit and to take, defend or abandon any
proceedings in the name of the Company or
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otherwise as may seem expedient;
(b) to carry on or authorise or concur in carrying on the business
or any part of the business of the Company and to manage,
conduct, reconstruct, amalgamate or diversify the business of
the Company or any part thereof (including power to acquire,
develop or improve properties or other assets) without being
responsible for loss or damage;
(c) to raise or borrow money from or incur any other liability to
the Debenture-holder or others on such terms with or without
security as he may think fit and so that any such security may
be or include a charge on all or any part of the Charged
Assets ranking in priority to this security or otherwise;
(d) to sell by public auction or private contract, let,
surrender or accept surrenders, grant leases, tenancies or
licences or otherwise dispose of or deal with all or any of
the Charged Assets in such manner, for such consideration
and generally on such terms and conditions as he may think
fit, with full power to convey or otherwise transfer such
Charged Assets in the name of the Company or other the
estate owner. Any such consideration may be cash,
debentures or other obligations, shares, stock or other
consideration and may be payable immediately or by
instalments spread over such period or periods as he shall
think fit and so that any consideration received or
receivable shall ipso facto forthwith be and become charged
with the payment and discharge of the Secured Obligations.
Plant, machinery, equipment, accessories and other fixtures
and fittings may be severed and sold separately from any
premises of the Company containing them and the Receiver
appointed under this Debenture may apportion any rent and
the performance of any obligations affecting the premises
sold without the consent of the Company;
<PAGE> 21
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(e) to promote the formation of companies with a view to the
same purchasing all or any of the Charged Assets or
otherwise;
(f) to make any arrangement, settlement or compromise or enter
into or cancel, abandon or disregard any contracts which he
shall think expedient in the interests of the
Debenture-holder;
(g) to make and effect all repairs, renewals and improvements
and to maintain, renew, take out or increase insurances;
(h) to appoint and remunerate any person for any of the above
purposes and/or to guard or protect the Charged Assets for
such periods as he may determine and to dismiss the same;
(i) to make calls conditionally or unconditionally on the members
of the Company in respect of uncalled capital with the same
powers of enforcing payment of any calls so made as are by the
constitutional documents of the Company conferred upon its
directors thereof and to the exclusion of the directors'
powers in that behalf;
(j) to sign any document, execute any deed and do all such other
acts and things as may be considered to be incidental or
conducive to any of the above matters or powers or to the
realisation of this security and to use the name of the
Company for all the above purposes; and
(k) generally on behalf and at the cost of the Company
(notwithstanding liquidation of the Company or any event
analogous thereto) to do or omit to do anything which the
Company could do or omit to do in relation to all or any part
of the Charged Assets.
<PAGE> 22
- 14 -
8. SALE OF CHARGED ASSETS
8.0l No restrictions imposed by any applicable law on any
immediate or other power of sale or on the consolidation of mortgages or charges
or other securities shall apply to this Debenture or to any security given to
the Debenture-holder pursuant to this Debenture.
8.02 Any sale or other disposition by or on behalf of the
Debenture-holder or any of its nominees or a Receiver appointed under this
Debenture may be made upon such terms as to indemnity as the Debenture-holder or
such Receiver may think fit.
8.03 Upon any such sale or other disposition and upon any other
dealing or transaction under the provisions of this Debenture, the receipt of
the Debenture-holder or a Receiver appointed under this Debenture for the
purchase money of the property or asset sold or for any other moneys paid to or
other consideration received by it or him shall effectually discharge the
purchaser or person paying or giving the same therefrom and from being concerned
to see to the application or being answerable for the loss, non-application or
mis-application thereof.
8.04 No purchaser or other person shall be bound or concerned to
see or enquire whether the right of the Debenture-holder or any of its nominees
or any Receiver appointed under this Debenture to exercise any of the powers
conferred by this Debenture has arisen or not or be concerned with notice to the
contrary or with the propriety of the exercise or purported exercise of such
powers.
8.05 Neither the Debenture-holder nor a Receiver appointed under
this Debenture shall be answerable for any losses which may arise in the
exercise or non-exercise of any of their powers nor shall they be liable by
reason of any entry into possession of all or any part of the Charged Assets to
account as mortgagee in possession or be liable for any loss on realisation or
for any default or omission for which a mortgagee in possession may be liable.
<PAGE> 23
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9. COSTS AND EXPENSES, INDEMNITY
9.0l The Company covenants with the Debenture-holder, on demand,
to pay all costs and expenses incurred in connection with the preparation of
this Debenture and by the Debenture-holder or by any Receiver appointed under
this Debenture in the exercise or purported exercise of any powers, rights or
remedies conferred by this Debenture or which the Debenture-holder or such
Receiver shall incur in or about the preservation or attempted preservation of
this security or the preservation, recovery or realisation or attempted
preservation, recovery or realisation of all or any part of the Charged Assets,
together with Default Interest on the sums demanded.
9.02 The Company covenants to indemnify the Debenture-holder and
the Receiver appointed under this Debenture against all losses, actions, claims,
expenses, demands and liabilities whether in contract, tort or otherwise now or
hereafter incurred by it or him or by any manager, agent, officer or employee
for whose liability, act or omission it or he may be answerable for anything
done or omitted in the exercise or purported exercise or non-exercise of the
powers contained in this Debenture or occasioned by any breach by the Company of
any of its covenants or other obligations to the Debenture-holder. The Company
shall so indemnify the Debenture-holder and such Receiver on demand and shall
pay Default Interest on the sums demanded.
10. APPLICATION OF PROCEEDS
10.0l All monies received or recovered by a Receiver appointed
under this Debenture and/or by the Debenture-holder pursuant to this Debenture
shall, subject to any claims ranking in priority to the Secured Obligations to
the extent of such priority, be applied:-
(a) first, in or towards the payment, satisfying or providing for,
the fees and remuneration of, and all other costs, charges,
expenses and liabilities incurred by, the Debenture-holder
and/or any Receiver appointed under this Debenture;
<PAGE> 24
- 16 -
(b) secondly, in payment to the Debenture-holder for
application in or towards the payment and discharge in full
of all other Secured Obligations; and
(c) thirdly, as to the surplus (if any) to the person or
persons entitled thereto,
and so that any application of monies under (a) or (b) above shall be made on
such basis and in such order as the Debenture-holder may in its absolute
discretion from time to time determine (and shall override any purported
appropriation by any person to the contrary) and provided that all or any such
monies may in the absolute discretion of the Debenture-holder be credited to any
suspense account and may be held in such account for so long and in such manner
as the Debenture-holder may think fit and a Receiver appointed under this
Debenture may retain the same for such period as he may consider expedient.
10.02 The Debenture-holder and/or a Receiver appointed under this
Debenture may convert any monies received, recovered or realised under this
Debenture (including the proceeds of any previous conversion under this Clause
10.02) from their existing currency of denomination into such other currency of
denomination as the Debenture-holder and/or such Receiver may think fit and any
such conversion shall be effected at the Exchange Rate.
10.03 No payment to the Debenture-holder under this Debenture
pursuant to any judgment or order of any court or otherwise shall discharge the
obligation or liability in respect of which it was made unless and until payment
in full has been received in the currency in which such obligation or liability
was incurred and to the extent that the amount of any such payment shall, on
actual conversion into such currency at the Exchange Rate, fall short of the
amount of the obligation expressed in that currency, the Company shall be liable
to the Debenture-holder for the shortfall.
<PAGE> 25
- 17 -
11. POWER OF ATTORNEY
The Company, by way of security, irrevocably appoints the
Debenture-holder and separately a Receiver appointed under this Debenture
severally to be its attorney (with full power to appoint substitutes and to
sub-delegate) and on behalf of and in the name of the Company and as its act and
deed or otherwise, to execute, seal and deliver and otherwise perfect and do all
such deeds, assurances, agreements, instruments, acts and things referred to in
Clause 4 or which otherwise may be required for or deemed proper on or in
connection with the full exercise of the powers conferred by this Debenture by
the Debenture-holder or by a Receiver appointed under this Debenture or to give
full force and effect to the covenants, undertakings, terms and conditions
contained in this Debenture. The Company ratifies and confirms and agrees to
ratify and confirm any deed, document, act or thing which any such attorney may
lawfully execute or do.
12. TRUSTEESHIP
The Company declares that, as and when the security created by
this Debenture shall become enforceable, it will hold all the Charged Assets
(subject to the Company's right of redemption) upon trust to convey, assign,
transfer or otherwise dispose of or deal with the same in such manner and to
such person as the Debenture-holder shall direct, and declares that it shall be
lawful for the Debenture-holder to appoint new trustees of the Charged Assets,
or any part thereof, from time to time in place of the Company or in place of
any trustee appointed under this power.
13. CONTINUING SECURITY
13.01 This Debenture is a continuing security and shall secure the
whole of the Secured Obligations and is in addition to, shall not be affected by
and may be enforced despite the existence of and without demand, notice, legal
process or any other action under, any other guarantee or security held by or
available to the Debenture-holder.
<PAGE> 26
- 18 -
The Company agrees to be bound by this Debenture notwithstanding that any other
person intended to execute or to be bound by any other security or guarantee may
not do so or may not effectually be bound and notwithstanding that such other
security or guarantee may be determined or be or become invalid or
unenforceable, whether or not the deficiency is known to the Debenture-holder.
13.02 The liability of the Company under the security constituted
by this Debenture shall not be discharged or otherwise affected by reason of the
Debenture-holder entering into any agreement or arrangement with the Debtor(s)
or any other person or by reason of any legal limitation, disability or
incapacity or any other act, omission or circumstance which, but for this
provision, would discharge the Company or this security to any extent. Any
Secured Obligation which may not be recoverable from the Debtor(s) for any such
reason shall nevertheless as between the Company and the Debenture-holder
continue to be secured under this Debenture as if the same were recoverable from
such Debtor(s).
13.03 The Company shall not, until the whole of the Secured
Obligations have been received by the Debenture-holder, exercise its rights of
subrogation, indemnity, set-off or counterclaim against the Debtor(s) or its
rights to participate in any security held by or available to the
Debenture-holder in respect of the Secured Obligations or, unless required by
the Debenture-holder to do so, to prove in the bankruptcy or liquidation of the
Debtor(s). The Company shall hold any amount recovered, as a result of the
exercise of any of such rights, on trust for the Debenture-holder and shall pay
the same to the Debenture-holder forthwith upon receipt.
13.04 The Company has not taken any security from the Debtor(s) and
agrees not to do so until the Debenture-holder has received the whole of the
Secured Obligations. Any security taken by the Company in breach of this
provision shall be held on trust for the Debenture-holder as security for the
Secured Obligations and all monies at any time received by the Company in
respect thereof shall be paid to the Debenture-holder forthwith upon receipt.
<PAGE> 27
- 19 -
13.05 Any release, discharge or settlement under this Debenture
shall be conditional upon no payment of the Secured Obligations by the Company,
the Debtor(s) or any other person being avoided, reduced or repaid for any
reason and the Debenture-holder shall be entitled to enforce this Debenture if
such condition is not fulfilled as if such release, discharge or settlement had
not occurred.
14. NO WAIVER AND REMEDIES CUMULATIVE
No failure to exercise, nor delay in exercising, on the part
of the Debenture-holder or a Receiver appointed under this Debenture, any power,
right or remedy under this Debenture shall operate as a waiver thereof nor shall
any single or partial exercise or waiver by the Debenture-holder or any such
Receiver of any power, right or remedy preclude its further exercise or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Debenture are cumulative and are not exclusive of any rights or remedies
provided by law.
15. WARRANTIES
It is certified, and the Company represents and warrants to
the Debenture-holder that neither the execution of this Debenture nor the
creation of any of the charges contained in this Debenture contravenes, or is
inconsistent or in conflict with, any provision of its constitutional documents
or any applicable enactment, law, decree, order, regulation, license, franchise,
consent, permit, security, instrument, agreement or document binding upon or
affecting the Company or any of its undertaking, property, assets or rights.
16. NOTICES
16.01 Any notice or demand under this Debenture shall without
prejudice to any other effective mode of giving or making the same, be deemed to
have been properly served on the Company if served on any one of the directors
or officers or on the secretary of the Company or if delivered or sent by
prepaid mail or telex to the Company at its
<PAGE> 28
- 20 -
registered office, any one of its principal place of business for the time being
or the last address registered with the Debenture-holder.
16.02 Any notice or demand to the Company shall be deemed effective
when delivered (if by personal delivery), on the fifth day after posting (if by
mail) and at the time of despatch and receipt of answerback (if by telex).
17. SEVERABILITY
Any provision of this Debenture prohibited by or unlawful or
unenforceable under any applicable law actually applied by any court of
competent jurisdiction shall, to the extent required by such law, be severed
from this Debenture and rendered ineffective so far as is possible without
modifying the remaining provisions of this Debenture. Where, however, the
provisions of any such applicable law may be waived, they are waived by the
Company to the full extent permitted by such law.
18. GOVERNING LAW AND JURISDICTION
18.0l This Debenture shall be governed by and construed in
accordance with the laws of Hong Kong.
18.02 The Company agrees that any legal action or proceedings in
connection with this Debenture may be brought in the Courts of Hong Kong,
irrevocably submits to the non-exclusive jurisdiction of such Courts but the
submission by the Company to the non-exclusive jurisdiction of the Hong Kong
Courts shall not (and shall not be construed so as to) limit the right of
Debenture-holder to take proceedings against the Company in whatsoever
jurisdictions shall to it seem fit nor shall the taking of proceedings in any
one or more jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
18.03 The Company irrevocably appoints Bonaventure Textiles
Limited (a company registered in Hong Kong with registered no.21693) as
<PAGE> 29
- 21 -
its agent in Hong Kong to accept service of any legal process in Hong Kong on
its behalf such legal process being sufficiently served on Bonaventure Textiles
Limited if delivered to its registered office or principal place of business for
the time being in Hong Kong.
18.04 To the extent that the Company may in any jurisdiction be
entitled to claim for itself or its assets immunity from suit, execution,
attachment (whether in aid of execution, before judgement or otherwise) or other
legal process and to the extent that in any such jurisdiction there may be
attributed to itself or its assets such immunity (whether or not claimed), the
Company irrevocably agrees not to claim and irrevocably waives such immunity to
the full extent permitted by the laws of such jurisdiction.
IN WITNESS whereof this Debenture has been duly executed as a deed by
the Company the date first above written.
The COMMON SEAL of BONAVENTURE )
)
HOLDINGS LIMITED was hereunto ) /s/ S.K. Chow
) ------------------------
affixed by authority of its Board ) Director
)
of Directors,:- )
/s/
------------------------
Director
<PAGE> 30
Dated as of the 20th day of December, 1985
------------------------------------------
BONAVENTURE HOLDINGS LIMITED
(as Shareholder)
and
BONAVENTURE TEXTILES LIMITED
(as Borrower)
in favour of
THE HONGKONG AND SHANGHAI
BANKING CORPORATION
(as Lender)
- --------------------------------------------------------------------------------
S H A R E M O R T G A G E
(of 450,000 shares in The Banker's Note Inc.
to secure general banking
facilities to the extent of
U.S.$5,200,000.00 and interest thereon.)
- --------------------------------------------------------------------------------
JOHNSON, STOKES & MASTER
Solicitors & Notaries
18th Floor
Prince's Building
10 Chater Road
Hong Kong
<PAGE> 31
- 1 -
THIS SHARE MORTGAGE is dated as of the 20th day of December 1985 and is made
AMONG:-
(1) BONAVENTURE HOLDINGS LIMITED, a Bermuda corporation, having its
registered office situate at c/o Bank of Bermuda, Bank of Bermuda
Building, Front Street, Hamilton, Bermuda; (hereinafter called the
"Shareholder");
(2) BONAVENTURE TEXTILES LIMITED, a Hong Kong corporation, having its
registered office situate at 18th Floor, Wheelock House, 20 Pedder Street,
Hong Kong (hereinafter called the "Borrower"); and
(3) THE HONGKONG AND SHANGHAI BANKING CORPORATION whose Head Office is
situate at No. 1 Queen's Road Central, Hong Kong (hereinafter called the
"Lender").
WHEREAS:-
(1) The Borrower has applied to the Lender to grant to the Borrower general
banking facilities and the Lender has agreed to grant the same under
certain terms and conditions ("the Facilities") and upon the Shareholder
entering into the covenants and obligations hereinafter contained and
charging the Shares (as hereinafter defined) as security for the due
payment of all moneys payable or which may at any time hereafter or from
time to time become payable by the Borrower to the Lender or which may be
or become payable by the Borrower under any of the agreements, covenants
and conditions contained in this Share Mortgage to the extent of FIVE
MILLION AND TWO HUNDRED THOUSAND DOLLARS UNITED STATES CURRENCY
(U.S.$5,200,000.00) and interest thereon as hereinafter provided.
(2) (a) In this Share Mortgage the expression "Secured Indebtedness" shall
mean and include:
(i) all sums from time to time advanced by the Lender to the
Borrower and outstanding up to a maximum aggregate amount of
UNITED STATES DOLLARS FIVE MILLION TWO HUNDRED THOUSAND
(US$5,200,000.00); and
(ii) interest on the amount referred to in (a) above pursuant
to the terms of the Facilities under which such sums were
advanced plus
(iii) all other moneys due or to become due (i) for fees,
expenses and reimbursements (but not principal or interest) under
the Facilities and under all other facilities made available by
the Lender to the Borrower to the extent attributable to the
amount stated in (a) above, or (ii) under this Share Mortgage.
<PAGE> 32
- 2 -
(b) In this Share Mortgage the expression "Event of Default" shall mean
and include the Events of Default referred to in Clause 13 hereof.
(3) The Shareholder and The Banker's Note, Inc., a Texas corporation
(hereinafter, together with its successors and assigns, called the
"Issuer") have entered into a Stock Option and Purchase Agreement dated
the 20th day of November 1985 (hereinafter called the "Purchase
Agreement").
(4) The Shareholder as purchaser under the Purchase Agreement has agreed to
assign as security for the performance of its obligations under this Share
Mortgage and under the Facilities certain registration rights under the
Purchase Agreement (the "Registration Rights") to the Lender in
consideration of the Borrower lending the Shareholder certain funds to
purchase the Shares and the Lender has agreed that its rights to sell the
Shares are limited to those rights to sell the Shares set forth under the
Purchase Agreement.
(5) The Shareholder is the registered owner of Four Hundred Fifty Thousand
(450,000) shares in the Issuer (including 300,000 shares purchased by the
Shareholder pursuant to the Purchase Agreement and 150,000 issued to the
Shareholder pursuant to a 3 for 2 stock split on May 30, 1986), and has
agreed to assign such shares to the Lender (such shares to be held in
Securities Account No. with the Lender) in consideration of the
Borrower lending the Shareholder certain funds to purchase the Shares.
(6) The expression "Shares" means the Common Stock of the Issuer referred to
in Clause (5) hereof above and any further shares referred to in Clause 8
hereof below.
(7) Each and every covenant, agreement and undertaking contained in this
Share Mortgage to be observed and performed by the Shareholder and the
Borrower shall be joint and several.
<PAGE> 33
- 3 -
NOW THIS SHARE MORTGAGE WITNESSETH AND IT IS HEREBY AGREED AND DECLARED as
follows:-
1 (a) In consideration of the Lender agreeing to make the Facilities
available upon and subject to the terms and conditions contained herein
and for other valuable consideration (the sufficiency of which the
Shareholder hereby acknowledges), and as a continuing security for the
payment of the Secured Indebtedness, the Shareholder hereby assigns
to the Lender all of its right, title, benefit and interest in and to
the Shares.
(b) In further consideration of the Lender agreeing to make the Facilities
available as aforesaid, and as a continuing security for the payment
of the Secured Indebtedness, the Shareholder hereby assigns to the
Lender all the Shareholder's right, title, benefit and interest of and
in the registration rights set forth in section 7 and Exhibit C to the
Purchase Agreement.
2. The Shareholder shall deposit with the Lender, on the date hereof, Share
Certificates numbered DS4076 and DS4331 representing the Shareholder's
holding of Four Hundred Fifty Thousand (450,000) fully paid up shares in
the capital of the Issuer, all of which are hereby warranted by the
Shareholder to be within its disposition and control and free from any
prior charge or encumbrance of any kind, together with the related Stock
Powers and a copy certified by one of the Directors of the Shareholder of
the Board Resolution authorizing the execution of the said Stock Power in
blank duly signed by the Shareholder, and the Shareholder hereby charges,
by way of first fixed charge, the Shares to the Lender.
3. Upon discharge in full of all of the Borrower's and Shareholder's
obligations hereunder, the Lender shall, at the request and cost of the
Shareholder, reassign the subject matter of this Share Mortgage to the
Shareholder or as it shall direct in accordance with Clause 33 hereof.
4. The Shareholder hereby warrants and covenants with the Lender:-
(a) that the Purchase Agreement is valid and subsisting;
(b) that the Shareholder has not and will not waive any registration
rights under the Purchase Agreement, without the written consent of
the Lender;
(c) that the Shareholder has duly authorized the assignment of the Shares;
(d) that the Shareholder shall:-
(i) upon the occurrence of an Event of Default and the request of the
Lender, take all necessary steps to procure the due by the Issuer
of any obligation under the Purchase Agreement to register the
Shares;
<PAGE> 34
- 4 -
(ii) not amend the Purchase Agreement in a way that would materially
adversely affect the rights of the Lender hereunder without the
consent of the Lender;
(iii) promptly and diligently institute and maintain all such
proceedings as may be necessary or expedient to preserve or
protect the interest of the Shareholder pertaining to the
Registration Rights;
(iv) forthwith upon the written request of the Lender, promptly and
duly execute and deliver any and all such further instruments
and documents as the Lender may reasonably require for the
purpose of obtaining the full benefit of the assignment
contained herein and of the rights and powers hereby granted.
5. The Shareholder hereby irrevocably appoints the Lender, with full power
of substitution, to be its attorney and in its name and on its behalf to
execute, sign and do all deeds, instruments, acts and things whatsoever
which shall, in the reasonable opinion of the Lender, be necessary that
the Shareholder should execute, sign or do for the purpose of carrying out
any obligation hereby declared or imposed upon the Shareholder or for
giving to the Lender on its behalf the full benefit of any of the
provisions hereof and generally to use the Shareholder's name in the
exercise of all or any of the powers hereby conferred on the Lender
hereunder. The Shareholder covenants with the Lender that it will ratify
and confirm all that the attorney shall lawfully do or cause to be done by
virtue of these presents.
6. (a) The Lender shall obtain the consent of the Borrower and the
Shareholder before disclosing to any person for any purpose whatsoever
any information provided to the Lender hereunder and the Shareholder
and the Borrower hereby jointly and severally agree that they shall not
unreasonably refuse to provide such consent to the Lender to make
whatever disclosures to any party whatsoever that shall be necessary,
in the reasonable opinion of the Lender to:
(i) complete the registration of the Shares in the name of the Lender
or of such other party as the Lender shall require;
(ii) protect its rights in respect of the Shares
(b) The Lender may upon notice to the Shareholder and Borrower, make
whatever disclosures to any party whatsoever that shall be necessary,
in the reasonable opinion of the Lender, to comply with the
requirements of any governmental agency, regulatory or supervisory
authority or court to the extent legally required of the Lender.
<PAGE> 35
- 5 -
7. The Shareholder hereby represents and warrants to the Lender that it is
now and will during the continuance of this security be the registered
(save as hereinafter provided) owner of the Shares, free from any lien,
mortgage, charge or encumbrance, save and except for this Share Mortgage
and the first fixed charge hereby created, provided that the Lender may at
any time have any of the Shares registered in its name or in the name of
the nominee or nominees, and the Shareholder agrees to cooperate in making
such registration.
8. The Shareholder hereby undertakes with the Lender that any bonus stock or
shares or other new securities of a similar nature which may at any time
prior to or during the continuance of this security be issued in respect
of the Shares for the benefit of the Shareholder as a result of or in
connection with any redistribution of shares of the Issuer or any stock
dividends, any increase or reduction of capital, recapitalization, merger,
consolidation, sale of assets, consolidation of shares, stock split,
spinoff or split off shall be deposited with the Lender immediately upon
issuance together with (i) the related Stock Powers in blank duly signed
by the Shareholder, and (ii) the relevant Board Resolutions authorizing
the same, and shall thereupon become part of the security hereby effected,
and all dividends and interest and all rights, moneys or property accruing
or offered at any time by way of conversion, redemption, bonus,
preference, option or otherwise in respect of the Shares shall be included
in the first fixed charge hereby created.
9. (a) The Shareholder hereby undertakes with the Lender that it will at any
time, whether before or after the security hereby constituted shall
have become enforceable, if and when required by the Lender, and to
the extent permitted by applicable law, execute, do and pass, or cause
or procure to be executed, done or passed such legal or other
mortgages, charges, pledges, assignments, transfers, assurances,
powers of attorney, letters, resolutions, acts and things in favour or
for the benefit of the Lender as the Lender shall reasonably require
over or in respect of the Shares as further security for the Secured
Indebtedness or (as the Lender may require) for perfecting the
security hereby constituted.
(b) Any mortgages, charges, pledges, assignments, transfers, assurances,
powers of attorney, letters or resolutions to be executed by the
Shareholder or any other person pursuant to Clause 9(a) shall be
prepared by or on behalf of the Lender at the cost and expense of the
Borrower and shall, in the case of any mortgages, charges or pledges,
contain an immediate power of sale without notice upon the security
thereby constituted becoming enforceable.
10. (a) The Shareholder hereby undertakes with the Lender, on request by the
Lender, to execute and sign from time to time hereafter all Stock
Powers, transfers, powers of attorney and other documents which the
Lender may reasonably require for perfecting the Lender's interest in
the Shares or vesting the same, or any of them, in a purchaser or in
any trustee for or nominee(s) of the Lender.
<PAGE> 36
- 6 -
(b) In respect of any transfer(s) of the Shares the Shareholder hereby
irrevocably authorizes the Lender at any time hereafter, after the
occurrence of an Event of Default to date any such transfer(s) if the
same be undated, and if the same shall have been theretofore in blank
to fill in any blanks in favour of the Lender, or any trustee for or
nominee of the Lender, or any purchaser.
(c) The Shareholder by way of security hereby irrevocably authorizes
the Lender at any time hereafter, after the occurrence of an Event of
Default to insert the name of the Lender or its nominees or of any
purchaser or to make any alteration or addition in or to any Stock
Power, instrument(s) of transfer or documents which the Lender may
require for perfecting its title to or for vesting the Shares in the
Lender or its nominees or in any purchaser, and to re-deliver the same
thereafter.
(d) The Shareholder hereby ratifies and confirms and agrees to ratify
and confirm any instrument, act or thing which the Lender may execute
or do pursuant to Clause 10(b) or 10(c) hereof.
11. Each of the Shareholder and the Borrower hereby represent and warrant to
the Lender with respect to the Shareholder and the Borrower, respectively,
that:-
(i) the Borrower is a company incorporated with limited liability under
the laws of Hong Kong;
(ii) the Shareholder is a company incorporated with limited liability
under the laws of Bermuda;
(iii) each has the corporate power and authority and the legal capacity to
perform and observe its obligations hereunder;
(iv) the execution, delivery and performance of this Share Mortgage has
been duly authorized by all necessary corporate action of the
Shareholder and the Borrower under all applicable laws and
regulations applicable to each of the Shareholder and the Borrower
and, assuming the due execution by the Lender, this Share Mortgage
constitutes the valid and legally binding obligation of the
Shareholder and the Borrower in accordance with its terms;
(v) each is not in default in the payment of any principal of or
interest on any indebtedness for borrowed money and is not in breach
of or in default in any material respect under any other provision of
any indenture, deed of trust, agreement or other instrument to which
it is a party and under or subject to which any such indebtedness for
borrowed money has been issued and is outstanding and (to the best of
its knowledge and belief) no event, condition or act which with the
giving of notice or lapse of time, or both, would constitute an event
of default under any such indenture, deed of trust, agreement or
other instrument has occurred or is continuing which has not been
properly waived or remedied thereunder;
<PAGE> 37
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(vi) no material litigation, arbitration or administration proceeding
before or of any court, tribunal, arbitrator or governmental
authority is presently taking place, or to its knowledge (having
made all reasonable enquiries) pending or threatened against the
Shareholder and/or the Borrower, or their respective properties and
assets, taken as a whole;
(vii) neither the execution and delivery of this Share Mortgage nor the
performance or observance by the Shareholder or the Borrower of any
of their respective obligations hereunder or thereunder will or
would:-
(a) conflict with, or result in any breach of or default under, any
provision of any law, order, agreement, instrument, franchise,
concession, licence, permit, liability, obligation or duty
applicable to the Shareholder or the Borrower or by which it
is bound; or
(b) cause any limit on any of the borrowing, guaranteeing, charging
or other powers of the Shareholder or the Borrower (whether
imposed by their respective Memoranda or Articles of
Association, or by agreement, instrument or otherwise), or upon
any of the powers of their respective Board of Directors to
exercise any of such powers, or any other limit affecting the
Shareholder or the Borrower, to be exceeded; or
(c) create or result in or (except as may be provided herein)
oblige the Shareholder or the Borrower to create, any lien,
charge, security interest or other encumbrance on the whole or
any part of the Shareholder's or the Borrower's property,
assets or revenues, present or future.
12. The Shareholder and the Borrower hereby further jointly and severally
covenant and undertake with the Lender that for so long as the Secured
Indebtedness remains outstanding the Shareholder and the Borrower will
each provide the Lender promptly with all financial information relating
to the Shareholder and the Borrower respectively as the Lender may from
time to time reasonably require and in particular each of the Borrower and
the Shareholder will within one hundred and eighty (180) days from the
close of its financial year, provide the Lender with copies of their
respective annual financial statement for such year.
13. Each of the following events shall be an Event of Default:-
(i) if the Borrower shall fail to pay any principal, interest or any
other sum payable hereunder or under the Facilities on the date on
which the same is due and payable hereunder or thereunder, or in the
case of any sum expressed to be payable on demand, forthwith upon any
such demand for the payment thereof being made;
<PAGE> 38
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(ii) if the Borrower or the Shareholder shall fail to perform or
observe any of its other obligations hereunder or under the
Facilities and such failure shall continue for the period of fifteen
(15) days next following the date of the service by the Lender on
the Borrower of notice requiring the same to be remedied:
(iii) if any certificate or representation or warranty given or made or
deemed to be made by the Borrower or by the Shareholder, whether in
this Share Mortgage or under the Facilities, or in any notice,
certificate, instrument, document or statement contemplated hereby or
made or delivered pursuant hereto or thereto is or proves to have
been, as of the date when given or made by the Borrower or the
Shareholder, untrue or inaccurate in any material respect;
(iv) if in respect of the Borrower or the Shareholder (1) any loan,
guarantee, indemnity or other indebtedness or obligation for borrowed
money shall become or be declared or become capable (all grace
periods, if any, having expired) of being declared due prematurely by
reason of a default in its obligations in respect of the same or (2)
it shall fail to make any payment in respect of such loan, guarantee,
indemnity or other indebtedness or obligation for borrowed money on
the due date for such payment, or (3) the security for any such loan,
guarantee, indemnity or other indebtedness or obligation for borrowed
money shall become enforceable;
(v) if in respect of the Borrower or the Shareholder:-
(a) any order shall be made by a competent court or other
appropriate authority or any resolution shall be passed for
bankruptcy, liquidation, winding up or dissolution or for the
appointment of a liquidator, receiver, trustee or similar
official of it or of all or a substantial part of its assets
otherwise than for the purposes of amalgamation, merger or
re-construction, the terms of which have previously been
approved by the Lender;
(b) a distress or execution shall be levied or enforced upon or
sued out against a material portion of its chattels,
properties, or assets and shall not be discharged or stayed or
in good faith contested by action within thirty (30) days
thereafter;
(c) it shall stop payment to creditors generally or shall be unable
to pay its debts within the meaning of any applicable
legislation relating to insolvency, bankruptcy, liquidation or
winding up, or shall cease or threaten to cease substantially to
carry on business (except for the purposes of amalgamation,
merger or reconstruction the terms of which have been approved
by the Lender);
<PAGE> 39
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(vi) if it shall become impossible or unlawful in Hong Kong for the
Borrower or the Shareholder to fulfil any material undertakings or
obligations of the Borrower or the Shareholder, respectively,
contained herein or in the Facilities or in any other guarantee,
security, instrument, agreement or document held by the Lender as
security for the Borrower's obligations hereunder or for the
Lender to exercise the rights or any of them vested in them under
any of the aforesaid documents or otherwise;
(vii) if anything shall be done or suffered or omitted to be done by
the Borrower or the Shareholder which (in the reasonable opinion of
the Lender) puts in jeopardy the security created by this Share
Mortgage or any other guarantee, security, instrument, agreement or
document held by the Lender as security for the obligations of the
Borrower hereunder and if capable of correction shall not be
corrected within fifteen (15) days after receipt by the Borrower of
notice from the Lender requiring correction;
(viii) if there shall occur a material adverse change in the business,
assets, general condition or prospects of the Borrower, or of the
Shareholder which materially affects the ability of the Borrower
and/or the Shareholder to perform its or their obligations under the
Facilities and/or this Share Mortgage;
(ix) if the registered or the beneficial ownership (whether immediate
or ultimate) of the Borrower at the date hereof or at any time
hereafter changes other than as contemplated herein without the
prior written consent of the Lender.
14. The Borrower or the Shareholder shall notify the Lender forthwith in
writing of any occurrence of an Event of Default or any event which, with
the giving of notice and/or the lapse of time and/or upon the Lender
making any necessary certification and/or determination under Clause 13,
would constitute an Event of Default.
15. The Lender may at any time after the happening of an Event of Default
(whether or not any notice pursuant to Clause 13 shall have been given by
the Borrower or the Shareholder), unless and until that Event of Default
and any others shall have been fully remedied to the satisfaction of the
Lender, by notice in writing to the Borrower, declare that the Secured
Indebtedness has become immediately due and payable, whereupon the same
shall become immediately due and payable.
16. Until the occurrence of an Event of Default, the Shareholder shall retain
legal title to the Shares and be entitled to (a) exercise all voting
and/or consensual rights and powers attaching to the Shares or any part
thereof for any purpose not inconsistent with the terms of this Share
Mortgage and (b) receive and retain dividends (other than stock dividends
or liquidating dividends referred to in Clause 8 hereof).
<PAGE> 40
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The Shareholder covenants that it shall not without the prior written
consent of the Lender use such voting powers in connection with any
extraordinary corporate action, including merger, reorganization,
liquidation, sale of substantially all of the Issuer's assets or
recapitalization.
17. The Lender may at any time after the occurrence of an Event of Default
exercise at its discretion (in the name of the Shareholder or otherwise
and without any further consent or authority on the part of the
Shareholder) any voting rights attaching to the Shares or any of them as
if the Lender were the sole beneficial owner thereof and receive dividends
paid on the Shares, subject always, with respect to the Lender but not
with respect to any transferee of the Lender, to the limitations set forth
in the Purchase Agreement.
After the occurrence of an Event of Default, to the extent not already
provided pursuant to Clause 10 hereof, the Shareholder shall promptly
execute and deliver (or cause to be executed and delivered) to the Lender
all such proxies, powers of attorney, dividend orders, and other
instruments as the Lender may reasonably request for the purpose of
enabling the Lender to exercise the voting and/or consensual rights and
powers which the Shareholder is entitled to exercise pursuant to paragraph
16(a) above and/or to receive the dividends which the Shareholder is
authorized to receive and retain pursuant to paragraph 16(b) above.
18. The Shareholder and the Borrower hereby jointly and severally undertake
with the Lender to pay duly and promptly all calls which may from time to
time be made in respect of any unpaid moneys in respect of the Shares and
any other moneys which the Lender may lawfully be required to pay in
respect of any of the Shares and the Lender may, if it thinks fit, make
such payments on behalf of the Shareholder. Any money expended by the
Lender under this Clause 18 shall be deemed to be properly paid by the
Lender.
19. (a) The Shareholder and the Borrower hereby jointly and severally
undertake with the Lender to pay to the Lender, on demand, all costs,
charges and expenses, including legal costs and disbursements, incurred
hereunder by the Lender and all other moneys paid by the Lender in
perfecting or otherwise in connection with the registration,
preparation, execution, completion and enforcement of this security
or in respect of the Shares or otherwise, including all moneys
expended by the Lender under Clause 18 hereof, and all costs, charges
and expenses incurred by the Lender in respect of all proceedings for
enforcement of the security hereby constituted including (without
prejudice to the foregoing generality) the cost of filing or
registering the Shares in the name of the Lender, the cost of
complying with the disclosure or other requirements of any
governmental agency (including the cost of filing a Schedule 13D with
the United States Securities and Exchange Commission), supervisory
authority or court and any stock transfer tax payable by the Lender as
registered owner of the Shares (whether or not such costs, charges,
expenses and moneys, or part thereof, would be allowable upon a party
and party or solicitor and own client taxation by a court), together
with interest thereon at a rate determined in accordance with the
<PAGE> 41
- 11 -
provisions hereof in respect of overdue sums in United States dollars
(to be computed as provided
in the Facilities and compounded at monthly intervals) for the period
from the date upon which such costs, charges, expenses or moneys were
incurred or expended (as the case may be) until the date of the
reimbursement in full thereof by the Shareholder and/or the Borrower.
(b) All moneys from time to time owing by the Shareholder and the
Borrower under or pursuant to Clause 19(a) hereof shall be charged on
all the Shares, and the charges hereby conferred shall rank in
priority to the charge created hereunder to secure the Secured
Indebtedness and shall be in addition and without prejudice to any and
every other right, power, remedy, lien or security which the Lender
may have or but for the said charge would have had for the moneys
hereby secured, or any part thereof.
20. The Lender may at any time after the occurrence of an Event of Default
sell the Shares, or any of them, in a commercially reasonable manner
subject to the limitations on sale set forth in Section 3 of the Purchase
Agreement and Exhibit C to the Purchase Agreement. The Lender (i) agrees
to comply with the provisions of Section 3 of the Purchase Agreement and
Exhibit C to the Purchase Agreement as if the Lender was the "Purchaser"
under, and as defined in, the Purchase Agreement and (ii) undertakes to
enter into an agreement with the Issuer to this effect before attempting
to sell the Shares.
21. Neither the Shareholder nor the Borrower shall have any right to claim
against the Lender in respect of any loss arising out of any sale pursuant
to this Share Mortgage (saving always gross negligence or wilful default)
whether or not a better price could or might have been obtained on the
sale of any of the Shares by either deferring or advancing the date of
such sale.
22. (a) No person dealing with the Lender, or with its brokers or agents,
shall be concerned to enquire whether the security hereby constituted
has become enforceable, or whether the power exercised or purported to
be exercised has become exercisable, or whether any moneys remain due
upon the security of this Share Mortgage, or as to the necessity or
expediency of the stipulations and conditions subject to which
any sale of any of the Shares shall be made, or otherwise as to the
propriety or regularity of any sale of any of the Shares, or to see to
the application of any money paid to the Lender, or its brokers or
agents, and in the absence of fraud on the part of such person such
dealing shall be deemed so far as regards the safety and protection of
such person to be within the powers hereby conferred and to be valid
and effectual accordingly, and the remedy of the Shareholder in
respect of any irregularity or impropriety whatsoever in the exercise
of such powers shall be in damages only.
(b) The Lender shall incur no liability as a result of the sale of
the Shares, or any part thereof, at any good faith arm's length
private sale. The Shareholder hereby waives any claims against the
Lender arising by reason of the fact that the price at which any
Shares may have been sold at such a private sale was less than the
price which might have been obtained at a public sale or
<PAGE> 42
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was less than the aggregate amount of the Secured Indebtedness, even
if the Lender accepts the first offer received and does not offer such
Shares to more than one offeree.
23. Upon any sale of any of the Shares, the receipt of the Lender for the
purchase money of the Shares sold shall effectually discharge the
purchaser or person paying the same therefrom and from being concerned to
see to the application or being answerable for the loss or misapplication
thereof.
24. All moneys received by the Lender arising from any sale of any of the
Shares under the power hereby conferred shall be applied as follows:-
FIRST: in or towards payment or satisfaction of all costs, charges,
expenses and liabilities incurred and payments made by or on
behalf of the Lender in connection with such sale and as provided
in Clauses 9 and 19 hereof; together with, in every such case,
interest thereon at the rate provided for in Clause 19(a) hereof;
SECOND: in or towards the payment to the Lender of such part of the
Secured Indebtedness as shall then be due and payable, until the
whole of the amounts so due and payable shall have been certified
by the Lender as having been paid in full and discharged.
THIRD: to the payment of all other sums due and payable under this Share
Mortgage;
FOURTH: any remaining sums shall be paid to the Shareholder.
25. The security hereby constituted is to be a continuing security and
accordingly shall remain in operation until all the Secured Indebtedness
has been paid off or satisfied in full.
26. The security hereby constituted shall not be in any way affected,
diminished or discharged by the taking, holding, varying, non-enforcement,
realization, release or failure to renew or perfect or enforce by the
Lender of any other security for all or any of the Secured Indebtedness,
or by any time, indulgence, concession, dealing or other thing done or
omitted or neglected to be done by the Lender in relation to any such
other security or the Shareholder or the Borrower or any other person, and
is in addition to and not in substitution for any other security which the
Lender may at any time take or hold for the payment of all or any of the
Secured Indebtedness, or of all or any of such moneys, and may be enforced
without first having recourse to such other security, and without taking
any steps against the Borrower, or any other person. As used in this
Clause 26 the word "security" includes (without limitation) any guarantee,
indemnity, assurance, pledge, lien, bill, note, mortgage, charge,
debenture, power of attorney, or other similar instrument, document or
security and any right, power or remedy thereunder or in respect thereof.
<PAGE> 43
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27. (a) Should any purported obligation or liability of the Shareholder
which, if valid or enforceable, would be secured by this Share
Mortgage be or become wholly or in part invalid or unenforceable
against the Shareholder on any ground whatsoever, including any
defect in or insufficiency or want of powers of the Shareholder, or
irregular or improper purported exercise thereof, or breach or want
of authority by any person purporting to act on behalf of the
Shareholder, or any legal limitation (whether under the Limitation
Ordinance, Chapter 347 of the laws of Hong Kong, or otherwise), or
other incapacity, or any other fact or circumstance, whether or not
known to the Lender, or if for any other reason whatsoever the
Shareholder is not or ceases to be legally liable to discharge any
obligation or liability undertaken or purported to be undertaken in
the Facilities, this security shall nevertheless extend to that
obligation or liability or purported obligation or liability as if the
same were wholly valid and enforceable.
(b) The Lender is not to be concerned to see or enquire into the
respective powers of the Shareholder or any of its Directors,
officers, employees or agents purporting to act on its behalf.
28. (a) The Shareholder has not taken nor will take any security from the
Borrower or any security extending to any obligations or liabilities
hereby secured.
(b) If any such security is created while any money, obligation or
liability payment whereof is hereby secured remains undischarged, the
Shareholder, hereby declares that such security and all moneys at any
time received in respect thereof shall be held in trust for the
Lender, or (at the option of the Lender) shall be forthwith pledged or
sub-pledged to the Lender and deposited with the Lender as a
continuing security for the Secured Indebtedness and for the other
sums payment of which is hereby undertaken to be made or which are
otherwise hereby secured.
29. (a) If the Lender receives notice of any subsequent mortgage, debenture,
charge, pledge, lien, assignment, encumbrance or other disposition
affecting the Shares or any interest therein, the Lender may open a new
account or accounts with the Shareholder in respect of the Secured
Indebtedness.
(b) If the Lender does not open a new account or accounts it shall
nevertheless be treated as if it had done so at the time when it
received such notice, and as from that time all payments made to the
Lender by the Shareholder in respect of the Secured Indebtedness shall
be credited or be treated as having been credited to the new
account(s) and shall not operate to reduce the amounts due from the
Shareholder to the Lender at the time when it received notice.
30. Any money received by the Lender by virtue of or in connection with this
security may be placed to the credit of a suspense account with a view to
preserving the rights of the Lender to prove for the whole of its claims
against the Shareholder or any other person liable in the event of any
proceedings in or analogous to bankruptcy, liquidation, winding up,
dissolution, insolvency, composition or arrangement.
<PAGE> 44
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31. This Share Mortgage shall secure the ultimate balance owing in respect of
the Secured Indebtedness.
32. Any waiver by the Lender of any breach of any of the undertakings, terms
or conditions contained herein or other relaxation or indulgence granted
at any time by the Lender to the Shareholder or any other person, shall,
without any express reservation to that effect by the Lender, be deemed to
be without prejudice to and shall not affect the exercise at any time
thereafter by the Lender of all or any of its rights, powers and remedies
hereunder as though no such waiver had been made or relaxation or
indulgence granted. No failure or delay by the Lender in exercising or
enforcing any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise, enforcement or waiver of any
right, power or remedy preclude its further exercise or enforcement, or
the exercise or enforcement of any other right, power or remedy as though
no waiver had been made and no relaxation or indulgence granted. The
rights, powers and remedies herein provided are cumulative and not
exclusive of any rights, powers or remedies provided by law.
33. If all the Secured Indebtedness and all other moneys payment of which is
hereby undertaken to be made or which are intended to be hereby secured
shall have been duly paid and all the agreements, undertakings, terms and
conditions herein contained to be performed and observed by the
Shareholder shall have been duly performed and observed, the Lender shall
at any time thereafter, at the request and cost of the Shareholder,
discharge and release this Share Mortgage and the security hereby created
and, redeliver all the share certificates and other property referred to
in Clauses 2, 3 and 8 hereof to the Shareholder, or (if the Shares shall
then be registered in the name of the Lender or its nominee) release,
re-assign and transfer (or procure the release re-assignment and transfer
of) all the Shares to the Shareholder or as the Shareholder shall direct.
34. Any release, discharge or settlement between the Shareholder and the
Lender shall be conditional upon no security, disposition or payment to
the Lender by the Shareholder, or any other person being avoided or
reduced pursuant to any provisions or enactments relating to bankruptcy,
liquidation, winding up, dissolution or insolvency, and if such condition
shall not be fulfilled the Lender shall be entitled to enforce this
security subsequently as if such release, discharge or settlement had not
occurred.
35. (a) Any notice, demand or other communication to the Shareholder or the
Borrower in connection herewith is to be sent to it at its address
herein mentioned or at such address in Hong Kong as may have been
notified by the Shareholder to the Lender in accordance with this
Clause 35.
(b) Any notice or other communication to the Lender in connection
herewith is to be sent to it at No. 1, Queen's Road Central, Hong Kong
or to such other address as may have been notified by the Lender to
the Shareholder in accordance with this Clause 35.
<PAGE> 45
- 15 -
(c) Any notice, demand or other communication required to be given
hereunder may be made in writing delivered personally or by prepaid
letter, telex, telegram or cable (confirmed, in the case of a telex,
telegram or cable, by letter delivered personally or sent by prepaid
mail within forty-eight (48) hours of the despatch of such telex,
telegram, or cable, provided that no failure to deliver or despatch or
delay in delivering or despatching such letter shall in any way affect
the original notice given) and shall be effective at the time of such
receipt of such letter, telex, telegram or cable.
36. No provision hereof may be amended, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against
whom enforcement of the amendment, waiver, discharge or termination is
sought.
37. Any provision hereof prohibited by or unlawful or unenforceable under any
applicable law actually applied by any court of competent jurisdiction
shall, to the extent required by such law, be severed from this Share
Mortgage and rendered ineffective so far as is possible without modifying
the remaining provisions of this Share Mortgage. Where, however, the
provisions on any such applicable law may be waived, they are hereby
waived by the parties hereto to the full extent permitted by such law to
the end that this Share Mortgage shall be valid and binding and
enforceable in accordance with its terms.
38. This Share Mortgage shall be binding upon and ensure to the benefit of
the parties hereto and their respective successors, estates and permitted
assigns.
39. (a) This Share Mortgage shall be governed by and construed in all
respects in accordance with the laws of Hong Kong, and the Shareholder
hereby irrevocably submits to the jurisdiction of the Hong Kong Courts.
(b) The submission to the jurisdiction of the Hong Kong Courts shall
not limit the right of the Lender to take proceedings in the courts of
any other country having, claiming or accepting jurisdiction, nor
shall the taking of proceedings in any one or more jurisdictions
preclude the taking of proceedings in any other jurisdiction.
<PAGE> 46
- 16 -
IN WITNESS whereof this Share Mortgage has been executed on the 24th of July ,
1986.
<TABLE>
<S> <C>
SEALED with the COMMON SEAL ) Director /s/ S.K. Chow
of BONAVENTURE HOLDINGS LIMITED )
and SIGNED by ) Director /s/ H.W. Leung
(Director(s) thereof) whose )
signature(s) is/are verified by:- )
SEALED with the COMMON SEAL )
of BONAVENTURE TEXTILES LIMITED ) Director /s/ S.K. Chow
and SIGNED by - )
Director /s/s S.G. Ng
(Director(s) thereof) whose )
signature(s) is/are verified by:- )
SIGNED SEALED AND DELIVERED by ) /s/ D.J. Hamilton
Attorney for and on behalf of THE )
HONGKONG AND SHANGHAI BANKING ) (as attoryney and agent
CORPORATION whose signature is ) for and on behalf of The
verified by: - ) Hongkong and Shanghai
Banking Corporation)
</TABLE>
