UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
IWI HOLDING LIMITED
(Name of Issuer)
COMMON STOCK
-------------------------
(Title of Class of Securities)
G49864104
-----------------
(CUSIP Number)
Peter S. Yau
358 Tarrington Way, Bolingbrook, Illinois 60440
(630) 739-7574
----------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 24, 1998
--------------------------------------------------
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of section 13d-1(e), 240.13d-1(f) or 240.13d(g), check the
following box: [ ]
Note schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See section 240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMB control number
<PAGE>
SCHEDULE 13D
CUSIP NO. G49864104 Page 2 of 4
Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION OF ABOVE PERSON
Bamberg Company Limited
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS OR ACTIONS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 918,750 shares of Common Stock and 3,644,880 of
OWNED BY Preferred Stock
EACH
REPORTING 8 SHARED VOTING POWER
PERSON
WITH -0-
9 SOLE DISPOSITIVE POWER
918,750 shares of Common Stock and 3,644,880 of
Preferred Stock
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
918,750 shares of Common Stock and 3,644,880 of Preferred Stock
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES
(See instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.96% of the Common Stock and 100% of the Preferred Stock
14 TYPE OF REPORTING PERSON (See Instructions)
CO
<PAGE>
SCHEDULE 13D(continued) Page 3 of 4 Pages
This Schedule 13D is filed on behalf of Bamberg Company Limited (the
"Reporting Person").
Item 1. Security and Issuer
This Schedule 13D relates to 918,750 shares of common stock, no par value
(the "Common Stock") and 3,644,880 shares of preferred stock, no par value (the
"Preferred Stock") of IWI Holding Limited (the "Issuer"). The principal
executive office and mailing address of the Issuer is 1010 Executive Court,
Suite 300, Westmont, Illinois 60559.
Item 2. Identity and Background
Bamberg Company Limited is a corporation organized under the laws of the
British Vrigin Islands engaged in the business of investments, whose principal
office address is 358 Tarrington Way, Bolingbrook, Illinois, 60440.
The Reporting Person, has not, during the past five years, been convicted
of any criminal proceeding (excluding traffic violations or similar
misdemeanors), nor has it been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
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 Compensation
On or about July 1, 1998, Rhine Investment Holdings Company Limited ("Rhine
Investment"), a wholly owned subsidiary of Rhine Holdings Limited ("Rhine
Holdings"), executed a promissory note (the "Note") in the principal amount of
$230,000, in favor of Chan Mau Hing ("Chan"). The Note was secured by a security
agreement ("Pledge Agreement") pledging collateral consisting of 918,750 shares
of the Issuer's common stock owned by Rhine Investment and 3,644,880 shares of
the Issuer's preferred stock owned by Rhine Holdings, together constituting more
than a majority of the voting power of the Issuer.
Upon failure to pay the Note and in accordance with the terms of the Pledge
Agreement, Chan foreclosed upon the Common and Preferred Stock, and sold the
collateral to Bamberg Company Limited for 85% of the value of the stock based
upon a September 22, 1998 NASDAQ stock quote of .0625. The source of the
$145,000 was working capital of the Reporting Person.
Item 4. Purpose of the Transaction
The Reporting Person acquired the shares of Common Stock and Preferred
Stock as a result of the purchase at foreclosure as described in Item 3. The
Reporting Person has no specific plans or proposals which relate to or would
result in:
(a) the acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
(d) any change in the present board of directors or management of the
Issuer, 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 Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person;
<PAGE>
SCHEDULE 13D(continued) Page 4 of 4 Pages
(h) causing a class of securities of the Issuer 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 Issuer becoming eligible for
termination of registration pursuant to section 12(g)(4) of the Act; or
(j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
(a) According to the information furnished to the Reporting Person by the
Issuer, there were 2,554,700 shares of Common Stock and 3,644,880 shares of
Preferred Stock issued and outstanding as of November 6, 1998.
(b) Based upon such information, the Reporting Person directly owns and has
the sole power to vote or dispose of 918,750 shares of Common Stock and
3,644,880 of Preferred Stock, representing 35.96% of the Common Stock and
100% of the Preferred Stock, which together give the Reporting Person
62.63% of the voting power of the Issuer.
(c) For the past 60 days or since the most recent filing of Schedule 13D,
whichever is less, the Reporting Person has had no transactions in either
the Preferred or Common shares of securities of the Issuer.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
Not applicable.
Item 7. Material to be filed as Exhibits.
10.1 Purchase Agreement
10.2 Promissory Note for $230,000
10.3 Pledge Agreement securing note for $230,000
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this Schedule 13D is
true, complete and correct.
BAMBERG COMPANY LIMITED
Dated: January 21, 1999
/s/ Peter S. Yau
--------------------------
By:Peter S. Yau
President
PURCHASE AGREEMENT
AGREEMENT made this 24th day of September 1998 by and between CHAN MAU HING, a
New York resident ("Seller") and BAMBERG COMPANY LTD., a British Vrigin Islands
corporation ("Purchaser").
WHEREAS:
FOR GOOD AND VALUABLE consideration in hand paid, the receipt and sufficiency of
which are hereby ackowledged, Seller and Purchaser herein hereby agree as
follows:
1. Seller hereby agrees to sell and Purchaser hereby agrees to purchase all of
the Collateral, as such term is defined in that certain Security
Agreement-Pledge dated July 1, 1998 between Rhine Investment Holdings
Company Limited and Seller.
2. The purchase price of the Collateral ("Purchase Price") shall be the amount
of $U.S.145,000 (ONE HUNDRED FORTY FIVE THOUSAND UNITED STATES DOLLARS)
3. The Purchase Price shall be paid to Seller by Purchaser in cash in its
entirety on or before a date that is 30 days from the date of this
Agreement.
4. This Agreement shall be governed by the laws of the state of New York,
without regard to the choice of laws principles that might otherwise be
applied in such jurisdiction.
IN WITNESS WHEREOF, the parties hereto hereby enter into this Agreement as of
the date first above written.
/s/ Chan Mau Hing
________________________________
Chan Mau Hing
Bamberg Company Ltd.
/s/ Peter Yau
________________________________
Name: Peter Yau
Title: left blank
PROMISSORY NOTE
Date: July 1, 1998 $230,000
FOR VALUE RECEIVED, the undersigned, RHINE INVESTMENT HOLDINGS COMPANY
LIMITED, a British Virgin Island corporation (herein called "Maker"), promises
to pay to the order of CHAN MAU HING, (herein "Payee" and which term refers to
any owner or holder of this Note) the principal sum of TWO HUNDRED THIRTY
THOUSAND AND NO/100 DOLLARS ($230,000.00), together with interest on the
principal hereof, on or before August 1, 1998, at the per annum rate and in
accordance with the terms hereinafter stated.
I. INTEREST AND PENALTIES
1.01 Subject to Section 1.03, the principal balance hereof advanced and
from time to time remaining unpaid shall bear interest during each day of the
term of the loan evidenced hereby at the rate of 8.5% per annum.
1.02 Computations of interest on the unpaid principal amount of this Note,
from time to time outstanding, at the rates provided in this Note shall be made
on the basis of actual number of days elapsed. To the extent permitted by
applicable law, such interest shall be computed as if each year consisted of
three hundred sixty (365) days.
1.03 All past due principal and interest of this Note, whether due as the
result of acceleration of maturity or otherwise, shall bear interest at the per
annum rate equal to the lesser of (a) eighteen percent (18%) per annum, and (b)
the maximum rate allowed by applicable law, from the date the payment thereof
shall have become due until the same shall have been fully discharged by
payment.
II. PAYMENTS
2.01 This Note is payable in accordance with its terms on or before
September 1, 1998 (the "Maturity Date").
2.02 All payments shall be applied first to interest and the balance to
principal, and will be paid to the Payee as provided herein.
2.03 The principal of, and interest on, this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, at 150 East Broadway Apt 2, New
York, New York, 10002 USA, or at such other place as Payee may hereinafter
designate in writing.
2.04 Any check, draft, money order or other instrument given in payment of
all or any portion hereof may be accepted by Payee and handled in the collection
in the customary manner, but the same shall not constitute payment hereunder or
diminish any rights of Payee except to the extent that actual cash proceeds of
such instrument are unconditionally received by Payee, or as otherwise provided
herein.
<PAGE>
III. WAIVER
3.01 Maker waives grace, demand, presentment for payment, protest, notice
of any kind (including, but not limited to, notice of dishonor, notice of
protest, notice of intention to accelerate and notice of acceleration) and
diligence in collecting and bringing suit against any party hereto.
IV. USURY LAWS
4.01 It is the intention of the parties hereto to comply strictly with
applicable usury laws; accordingly, notwithstanding any provision to the
contrary in this Note or in any of the Security Documents, in no event, shall
this Note or any of the other Security Documents require or permit the payment,
charging, taking, reserving, or receiving of any sums constituting interest
under applicable laws which exceed the maximum amount permitted by such laws. If
any such excess interest is contracted for, charged, taken, reserved, or
received in connection with the loan evidenced by this Note or in any of the
other Security Documents or otherwise relating hereto, or in any communication
by Payee or any other person to Maker or any responsible party liable for
payment of this Note, or in the event all or part of the principal or interest
hereof shall be prepaid, so that under any of such circumstances or under any
other circumstance whatsoever the amount of interest contracted for, charged,
taken, reserved, or received on the amount of principal actually outstanding
from time to time under this Note shall exceed the maximum amount of interest
permitted by applicable usury laws, then in any such event it is agreed as
follows: (i) the provisions of this paragraph shall govern and control, (ii) any
such excess shall be canceled automatically to the extent of such excess, and
shall not be collected or collectible, (iii) any such excess which is or has
been received shall be credited against the then unpaid principal balance hereof
or refunded to Maker, at Payee's option, and (iv) the effective rate of interest
shall be automatically reduced to the maximum lawful rate allowed under
applicable laws as construed by courts having jurisdiction hereof or thereof.
V. MISCELLANEOUS
5.01 The Maker covenants and agrees that until all amounts due under this
Note have been paid in full, unless the Payee waives compliance in writing, the
Maker shall:
(a) Give prompt written notice to the Payee of any Event of Default as defined
in this Note or of any other matter which has resulted in, or could
reasonably be expected to result in, a materially adverse change in its
financial condition or operations.
(b) Give prompt written notice to the Payee of any claim, action or proceeding
which, in the event of any unfavorable outcome, would or could reasonably
be expected to have a material adverse effect on the financial condition of
the Maker.
<PAGE>
(c) Upon receipt by the Maker of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Note and (i) in the case of
loss, theft or destruction, of indemnity reasonably satisfactory to it, or
(ii) in the case of mutilation, upon surrender and cancellation of this
Note, the Maker, at its expense, will execute and deliver a new Note, dated
the date of the lost, stolen, destroyed or mutilated Note.
5.02 No recourse shall be had for the payment of the principal of, or the
interest on, this Note, or for any claim based hereon, or otherwise in respect
hereof, against any incorporator, shareholder, officer or director, as such,
past, present or future, of the Maker or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
5.03 No provision of this Note shall alter or impair the obligation of the
Maker, which is absolute and unconditional, to pay the principal of, and
interest on, this Note at the time, place and rate, and in the coin or currency,
herein prescribed.
VI. DEFAULT
6.01 The following shall constitute "Events of Default" under this Note:
(a) Any default in the payment of principal or interest on this Note;
(b) If the Maker shall fail to perform or observe any other covenant,
term, provision, condition, agreement or obligation of the Maker under
this Note;
(c) If the Maker shall (i) become insolvent, (ii) admit in writing its
inability to pay this debt when it matures, (iii) make an assignment
for the benefit of creditors or commence proceedings for its
dissolution, or (iv) apply for or consent to the appointment of a
trustee, liquidator or receiver for it or for a substantial part of
its property or business;
(d) If a trustee, liquidator or receiver shall be appointed for the Maker
or for a substantial part of its property or business without its
consent;
(e) If any governmental agency or any court of competent jurisdiction at
the instance of any governmental agency shall assume custody or
control of the whole or any substantial portion of the properties or
assets of the Maker;
(f) If bankruptcy, reorganization, insolvency or liquidation proceedings
or other proceedings for relief under bankruptcy or any law for the
relief of debtors shall be instituted by or against the Maker; or
6.02 Upon the occurence of Event of Default Payee shall give Maker written
notice of the Default and ten (10) days' opportunity to cure such Default. If
after such time, Maker fails to cure the Default then Payee may, without further
notice or authority, sell or dispose of all or any part of the Collateral and
may apply the proceeds of any such sale or disposition in or towards discharge
of the costs thereby incurred and of the amount then due under this promissory
note in such manner as it in its absolute discretion thinks. The Maker shall be
entitled to exercise such power of sale in such manner and at such time or times
as it shall think fit (whether by private sale or otherwise) so that the
Collateral may be sold to any person and at any price which the Maker considers
to be the best obtainable in the circumstances.
<PAGE>
VII. COLLATERAL
7.01 The payment of this Note is secured by the certain Pledge Agreement
(the "Security Document") of even date herewith from RHINE INVESTMENT HOLDINGS
COMPANY LIMITED to Payee.
VIII. MISCELLANEOUS
8.01 In case any provision of this Note is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or
impaired thereby.
8.02 This Note constitutes the full and entire understanding and agreement
between the Maker and the Payee with respect to the subject hereof. Neither this
Note nor any term hereof may be amended, waived, discharged or terminated other
than by a written instrument signed by the Maker and the Payee.
8.03 The parties agree and contract that any and all claims, disputes, or
controversies arising out of or in any way relating to this Note or the claimed
breach of termination of any provision of any of same, whether based on the
Constitution, statutes, Code(s) or at common law of the United States or of any
State, including the arbitrability of any claim, dispute or controversy, shall
be exclusively resolved by the parties first trying to settle the dispute in
mediation.
8.04 This Agreement shall be governed by, enforced, and construed under and
in accordance with the laws of the United States of America and, with respect to
the matters of state law, with the laws of the State of New York, without giving
effect to principles of conflicts of law thereunder.
<PAGE>
NOTICE: THIS DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THE INDEBTEDNESS
EVIDENCED BY THIS NOTE CONSTITUTE A WRITTEN AGREEMENT WHICH REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THE INDEBTEDNESS
EVIDENCED BY THIS NOTE.
RHINE INVESTMENT HOLDINGS COMPANY LIMITED
/s/ KS Ng
----------------------------
By: KS Ng
Finance Director
SECURITY AGREEMENT - PLEDGE
RHINE INVESTMENT HOLDINGS COMPANY LIMITED, Room 1016 North Tower, Concordia
Plaza, 1 Science Museum Road, Tsimshatsui East, Kowloon, Hong Kong, hereinafter
called "Debtor", and CHAN MAU HING, 150 East Broadway, Apt. 2, New York, New
York, 10002, hereinafter called "Secured Party", agree as follows:
Section I. Creation of Security Interest.
Debtor hereby pledges, grants a security interest in, mortgages, assigns,
transfers, delivers, sets over and confirms unto Secured Party the Collateral
described in Section II of this Agreement to secure performance and payment of
that certain promissory note of even date in the principal amount of $230,000
payable to Secured Party hereinafter sometimes called the "Secured
Indebtedness".
Section II. Collateral.
The Collateral of this Security Agreement consists of Nine Hundred Eighteen
Thousand Seven Hundred Fifty (918,750) shares of common stock of IWI Holding
Limited (the "Company") represented by Share Certificate No. 1454 (the "Common
Share Certificate") and Three Million, Six Hundred Forty Four Thousand, Eight
Hundred Eighty (3,644,880) shares of Series A Preferred Stock of the Company
represented by share certificate No. P-1 (the "Preferred Share Certificate").
Upon the execution of this Agreement, the Common and Preferred Share
Certificates have been delivered to Secured Party. A true and correct copy of
these certificates are attached hereto as Exhibit "A". The Collateral includes
also, without limitation, rights to receive dividends, stock dividends,
dividends paid in stock, distributions upon redemption or liquidation,
distributions as a result of split-ups, recapitalizations or rearrangements, all
stock rights, rights to subscribed, voting rights, rights to receive securities,
and all new securities; and all other property which Debtor may hereafter become
entitled to receive on account of such securities, and in the event Debtor
receives any such property, Debtor will immediately deliver same to Secured
Party to be held by Secured Party in the same manner as the property originally
deposited as Collateral. The Collateral of this Agreement also includes (i) the
proceeds of any and all property described above and (ii) any and all cash
dividends of and from any and all property described above.
Section III. Payment Obligations of Debtor.
3.1 Debtor shall pay to Secured Party any sum or sums due or which may
become due pursuant to the Secured Indebtedness.
3.2 Debtor shall pay the entire unpaid indebtedness of Debtor to Secured
Party, due pursuant to the Note upon Debtor's default under this Agreement.
Section IV. Representations and Warranties.
Debtor represents and warrants that:
<PAGE>
4.1 All information, reports, statements and other data furnished by Debtor
to Secured Party prior to, contemporaneously with or subsequent to the execution
of this Security Agreement or in connection with the Indebtedness Secured hereby
are and shall be true, correct and complete and do not and shall not omit to
state any fact or circumstance necessary to make the information contained
therein not misleading.
4.2 All investment securities and any like property delivered to Secured
Party as Collateral are genuine, duly and validly authorized and issued, fully
paid and nonassessable, free of all liens, claims, demands, equities or other
security interests, and are hereby duly and validly pledged and hypothecated to
Secured Party in accordance with law.
4.3 Debtor owns the Collateral and has the right to pledge the same and to
transfer any interest therein; all consents required for the pledge of the
Collateral herein provided have been obtained; the Collateral is free and clear
from all security interests and encumbrances except the security interest
evidenced hereby; there is no financing statement covering the Collateral or its
proceeds on file in any public office; and so long as the indebtedness secured
hereby remains unpaid the Debtor will warrant and defend the title to the
Collateral and its proceeds against the claims and demands of all persons
whomsoever claiming or to claim the same or any part thereof.
4.4 The execution, delivery and performance by Debtor of this Agreement do
not and will not contravene or violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect and applicable to Debtor or the corporate papers of Debtor,
or result in a breach of or constitute a default (with or without the giving of
notice or the lapse of time or both) under any indenture or loan, credit or
other agreement to which Debtor is a party or by which Debtor or any of Debtor's
property may be bound or affected.
4.5 This Agreement constitutes the legal, valid and binding obligation of
Debtor enforceable against Debtor in accordance with its terms.
4.6 No authorization, consent, approval, license, order or exemption of, or
filing or registration with, any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, is or will be
necessary to the valid execution, delivery or performance by Debtor of this
Agreement or to the enforcement hereof by Secured Party.
4.7 No representation or warranty contained herein or made in connection
with the indebtedness secured hereby, and no certificate, schedule or other
document furnished in connection herewith, contains or will contain, at the time
so made or furnished, a misstatement of material fact or omits or will omit to
state a material fact required to be stated therein in order to make the
statements contained therein not misleading.
4.8 Debtor is now in a solvent condition, and no bankruptcy or insolvency
proceedings are pending or contemplated by or against Debtor.
Section V. Covenants.
<PAGE>
5.1 Debtor covenants and agrees during the term of this Agreement with
Secured Party as follows:
(a) Debtor shall furnish to Secured Party such stock powers and other
instruments as may be required by Secured Party to assure the
transferability of the Collateral when and as often as may be
requested by Secured Party.
(b) Debtor will continuously maintain the corporate existence of Debtor.
(c) Debtor will cause to be paid prior to delinquency all taxes and
assessments heretofore or hereafter levied or assessed against the
Collateral, or any part thereof, or against the Secured Party for or
on account of the indebtedness secured hereby or the interest created
by this Agreement, and will furnish Secured Party with receipts or
other satisfactory evidence showing payment of such taxes and
assessments at least ten (10) days prior to the applicable default
date therefor.
(d) If the validity or priority of this Agreement or of any rights,
titles, security interests or other interests created or evidenced
hereby shall be attacked, endangered or questioned, or if any legal
proceedings are instituted with respect thereto, Debtor will give
prompt written notice thereof to Secured Party and, at Debtor's own
cost and expense, will diligently endeavor to cure any legitimate
defect that may be developed or claimed, and will take all necessary
and proper steps for the defense of such legal proceedings
(e) Debtor will, on request of Secured Party, (i) promptly correct any
obvious clerical defect, error or omission which may be discovered in
the contents of this Agreement or in any other instrument executed in
connection herewith or in the execution or acknowledgment thereof;
(ii) execute, acknowledge and deliver to Secured Party such further
instruments (including without limitation further security agreements,
financing statements and continuation statements) and do such further
acts as may be necessary, desirable or proper to carry out more
effectively the purposes of this Agreement and such other instruments
and to subject to the security interests hereof and thereof any
property intended by the terms hereof and thereof to be covered hereby
and thereby, including specifically, but without limitation, any
renewals, additions, substitutions, replacements or appurtenances to
the then Collateral; and (iii) execute, acknowledge and deliver to
Secured Party any document or instrument (including specifically any
financing statement) deemed advisable by Secured Party to protect the
security interest hereunder against the rights or interests of third
persons, and Debtor will pay all costs connected with any of the
foregoing.
(f) Notwithstanding the security interest in proceeds granted herein,
Debtor will not sell, exchange, lend, assign, transfer or otherwise
dispose of all or any part of the Collateral or any interest therein,
or permit any of the foregoing, without the prior written consent of
Secured Party.
<PAGE>
(g) Debtor will not change its address, name or identity or corporate
structure without notifying Secured Party of such change in writing at
least ten (10) days prior to the effective date of such change.
(h) Debtor shall furnish Secured Party all such information as Secured
Party may reasonably request with respect to the Collateral.
Section VI. Voting Rights and Dividends.
6.01 So long as the Debtor is not in default under the terms of the Note or
this Agreement, Debtor shall be entitled to exercise all voting and consensual
powers and rights pertaining to the Collateral or any part thereof for all
purposes not inconsistent with the terms of this Agreement and shall be entitled
to receive and retain all dividends on the Collateral or any part thereof.
Section VII. Events of Default.
7.1 Debtor shall be in default under this Agreement upon the occurrence or
the happening of any of the following events or conditions (hereinafter called
"Event of Default"):
(a) Upon the occurrence of an event of default as such term is defined in the
Note, including but not limited to the failure to pay any principal of or
interest on the Note as and when due in accordance with the terms of the
Note; or
(b) Debtor shall fail to perform any covenant contained in the Note, this
Agreement or in any other instrument now or hereafter securing or
guaranteeing the Secured Indebtedness, and which has not been cured by the
Debtor after ten (10) days written notice.
Section VIII. Remedies in Event of Default.
8.1 Upon the occurrence of an Event of Default, Secured Party may give
Maker written notice of the default and ten (10) days opportunity to cure such
default. If after such time, Maker fails to cure the default then Secured Party
may, without further notice or authority, sell or dispose of all or any part of
the Collateral and may apply the proceeds of any such sale or disposition in or
towards discharge of the Secured Indebtedness in such manner as it in its
absolute discretion thinks fit. The Secured Party shall be entitled to exercise
such power of sale in such manner and at such time or times as it shall think
fit (whether by private sale or otherwise) so that the Collateral may be sold to
any person and at any price which the Secured Party considers to be the best
obtainable in the circumstances.
8.2 The Secured party's remedies herein expressly provided shall be in
substitution for those rights and remedies provided under the Uniform Commercial
Code of New York and in lieu of any and all other remedies existing at law or in
equity.
Section IX. Additional Agreements.
<PAGE>
9.1 If all of the Secured Indebtedness is paid as the same becomes due and
payable, and if all of the covenants, warranties, undertakings and agreements
made in this Agreement are kept and performed, then and in that event only, all
rights under this Agreement shall terminate and the Collateral shall become
wholly clear of the security interest evidenced hereby, and such security
interest shall be released by Secured Party in due form at Debtor's cost.
9.2 A carbon, photographic or other reproduction of this Agreement of any
financing statement relating to this Agreement shall be sufficient as a
financing statement.
9.3 Debtor will pay all such recording, filing, re-recording and refiling
taxes, fees and other charges.
9.4 In the event the ownership of the Collateral or any part thereof
becomes vested in a person other than Debtor, Secured Party may, without notice
to Debtor, deal with such successor or successors in interest with reference to
this Agreement and to the indebtedness secured hereby in the same manner as with
Debtor, without in any way vitiating or discharging Debtor's liability hereunder
or for the payment of the indebtedness secured hereby.
9.5 If any part of the secured indebtedness cannot be lawfully secured by
this Agreement, or if any part of the Collateral cannot lawfully be subject to
the security interest hereof to the full extent of such indebtedness, then all
payments made shall be applied on said indebtedness first in discharge of that
portion thereof which is not secured by this Agreement.
9.6 Secured Party may assign this Agreement so that the assignee shall be
entitled to the rights and remedies of Secured Party hereunder and in the event
of such assignment, Debtor will assert no claims or defenses relating to the
payment of the Note it may have against the assignee except those granted in
this Agreement.
9.7 Any notice, request, demand or other communication required or
permitted hereunder shall be given in writing by delivering same in person to
the intended addressee, or by United States Postal Service, postage prepaid,
registered or certified mail, return receipt requested, or by prepaid telegram
(provided that such telegram is confirmed by mail in the manner previously
described), sent to the intended addressee at the address shown in this
Agreement, or to such different address as the addressee shall have designated
by written notice sent in accordance herewith and actually received by the other
party at least ten (10) days in advance of the date upon which such change of
address shall be effective.
9.8 This Agreement shall be binding upon Debtor, and the heirs, devisees,
administrators, executors, personal representatives, receivers, trustees,
successors and assigns of Debtor, including all successors in interest of Debtor
in and to all or any part of the Collateral, and shall inure to the benefit of
Secured Party and the successors and assigns of Secured Party. All references in
this Agreement to Debtor or Secured Party shall be deemed to include all such
parties.
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9.9 Whenever possible each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law. A
determination that any provision of this Agreement is unenforceable or invalid
shall not affect the enforceability or validity of any other provision, and any
determination that the application of any provision of this Agreement to any
person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to any other
persons or circumstances.
9.10 Secured Party may, by any employee or employees it designates,
execute, sign, endorse, transfer, or deliver in the name of Debtor, notes,
checks, drafts, or other instruments for the payment of money and receipts or
any other documents necessary to evidence, perfect and realize upon the security
interests and obligations of this Agreement.
9.11 Secured Party's duty with reference to the Collateral shall be solely
to use reasonable care in the custody and preservation of the Collateral in
Secured Party's possession.
9.12 The pronouns used in this Agreement are in the masculine gender but
shall be construed as feminine or neuter as occasion may require.
9.13 The term "Debtor" as used in this Agreement shall be construed as
singular or plural to correspond with the number of persons executing this
Agreement as Debtor. If more than one person executes this Agreement as Debtor,
their obligations under this Agreement shall be joint and several.
9.14 The section headings appearing in this Agreement have been inserted
for convenience only and shall be given no substantive meaning or significance
whatever in construing the terms and provisions of this Agreement.
9.15 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York and the United States of America.
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EXECUTED as of this 1st day of July, 1998.
RHINE INVESTMENT HOLDINGS COMPANY LIMITED
By: /s/ KS Ng
-----------------------
Name: KS Ng
Title: Financial Director
"DEBTOR"
/s/ Chan Mau Hing
--------------------------
CHAN MAU HING
"SECURED PARTY"
ATTACHMENTS:
EXHIBIT "A" - THE SHARE CERTIFICATES
