Document:

<PAGE>
                                                                   Exhibit 10.12

[HSBC LOGO]

Corporate & Institutional Banking - International Division L9

Ref:

CONFIDENTIAL

Novel Denim (HK) Ltd
I/F Novel Industrial Building
850-870 Lai Chi Kok Road
Cheung Sha Wan
Kowloon

                                                                   27 March 2002

Attention: Mr Peter Leung / Mr Vincent Chan

Dear Sirs

BANKING FACILITIES
A/C NO 580-046001

With reference to our recent discussion, we are pleased to advise that we have
reviewed your banking facilities and offer a renewal within the following
limits which will be made available on the specific terms and conditions
outlined below and subject to the satisfactory completion of the security below.
These facilities are also subject to review at any time and, in any event by 15
March 2003, and subject to our overriding right of suspension, withdrawal and
repayment on demand, including the right to call for cash cover on demand for
prospective and contingent liabilities.

                                                                           Limit
                                                                           -----
REVOLVING LIBOR LOAN FACILITIES                                  USD10,000,000.-

Interest on the loan will continue to be charged at 0.75% over 1, 2 or 3 months
LIBOR (London Interbank Money Market Offer Rate) payable at the end of each
interest period to the debit of your current account. Interest shall be
calculated on actual days elapsed in a year of 360 days for USD loan.

The applicable LIBOR will be that quoted by us at or about 11:00 a.m. on the
date of drawdown / rollover.

General conditions for the utilisation of the LIBOR Loan facilities:-

a)  2 working days advance notice of drawdown / rollover is to be given to us
    for LIBOR facilities respectively. Once a quotation has been given and
    accepted by you, we will thereupon be bound to make, and you will thereupon
    be bound to accept, any advance on the terms so agreed.

b)  Each drawdown / rollover to be for periods of 1, 2 or 3 months.

c)  Each initial drawdown must be for USD300,000.- and thereafter in multiples
    of USD100,000.-.

                                                                           .../2

The Hongkong and Shanghai Banking Corporation Limited
Hong Kong Main Office: 1 Queen's Road Central, Hong Kong
Tel: 2822 1111 Fax:
Telex: 73205 HSBC HX Telegrams: Hongbank Hongkong                   Page ___/___

<PAGE>
Novel Denim (HK) Ltd                                               27 March 2002
                                       -2-

d)  At the end of an interest period the amount of the drawing may be rolled
    over either in one or two or more amounts (providing such amounts are in
    multiples of USD 100,000.- with a minimum drawdown of USD300,000.-) for
    further periods of 1, 2 or 3 months.

e)  With our prior approval, which will not be withheld, provided we are
    satisfied that the funds utilised are generated from your internal
    resources, out of cash flow rather than from external re-financing during an
    interest period any amount of outstanding loan may, with 48 hours advance
    notice to us, be repaid subject to the usual charges (i.e. the differential
    between the return we would have received had such amount run to maturity
    and the return we are able to obtain by the placing of the funds repaid for
    the remainder of the period in the market).

f)  We reserve the right to renegotiate the LIBOR interest spreads should any
    event occur which changes the basis on which LIBOR interest margins are
    presently calculated.

Please note that Loans Section in our Mongkok District Commercial Banking Centre
is responsible for the administration of LIBOR facilities. For rate quotations
and other day to day administrative matters, please contact our Mrs Johanna Lam
on telephone number 2390-1575.

                                                                           Limit
COMBINED IMPORT/EXPORT FACILITIES                                HKD50,000,000.-
Documentary Credit to your suppliers and Loan Facilities
in either HK dollars or foreign currency (from time to time
published by the Bank on the board rates) for up to 90 days,
less any usance/credit periods granted by your suppliers
and/or D/P bills purchased.

Within which                                                   (HKD50,000,000.-)
Goods under your control and/or Trust Receipt
Receipts and/or D/A bills purchased up to 90 days.

Interest on your HK Dollar Import Loans will continue to be charged on a daily
basis at our best lending rate (currently 5.125% per annum, but subject to
fluctuation at our discretion) and payable monthly in arrears to the debit of
your current account.

Interest on Foreign Currency Import Loans and Export financed bills will
continue to be charged on a daily basis at the prevailing interest rates,
published by us as Trade Finance Rates, subject to fluctuation at our discretion
and payable monthly in arrears to the debit of your current account.

We, may at our sole and absolute discretion, refuse to follow drawings under the
facilities if the drawee is considered by us to be unacceptable and/or if the
transaction in question does not meet our operational requirements in respect of
these facilities.

                                                                           .../3

<PAGE>
Novel Denim (HK) Ltd                                               27 March 2002
                                       -3-

We also confirm the following concessionary rates will continue applicable to
your facilities; -

DC Opening Commission and Commission in Lieu of Exchange

<TABLE>
<S>                          <C>    <C>
On 1st USD50,000             --      1/4%
USD50,001- USD100,000        --     1/16%
Balance in excess            --     1/32%
</TABLE>

                                                                           Limit
OVERDRAFT                                                        HKD30,000,000.-
Interest on the overdraft facility will be charged on daily
balances at our best lending rate, (currently 5.125% per
annum, but subject to fluctuation at our discretion) and
payable monthly in arrears to the debit of your current account.

A commitment fee of 0.25% per annum will continue to be charged daily on the
undrawn balance of your overdraft facility and will be payable monthly in
arrears to the debit of your current account.

                                                                           Limit
FOREIGN EXCHANGE LINE                                           HKD100,000,000.-
Total Forward Contract Limits

Unless by prior arrangement with us, options entered into under this facility
are not to exceed twelve months in duration.

Terms and Condition
Contracts may only be entered into to cover trade-related exchange exposure
incurred in the normal course of business.

Foreign Exchange facilities remain subject to our overriding right to call for
cash cover on demand if in the Bank's view a negative foreign exchange position
requires such cover. Further, the Bank may, after having discussed the position
with yourselves, close out any or all of your outstanding foreign exchange
contracts and demand settlement of the balance due.

Foreign exchange contracts continue to be governed by the conditions appearing
on the reverse of the standard contract form. These contract forms should be
checked upon receipt and the copy signed and returned to the Bank to confrm your
acceptance.

                                                                           .../4

<PAGE>
Novel Denim (HK) Ltd                                               27 March 2002

                                       -4-

                                                                           Limit
COMPANY CARD FACILITY                                               HKD200,000.-
The terms and conditions governing the Company Card Facility
are detailed in our HSBC Company Credit Card Application Forms
duly signed by you.

SECURITY
As security, we continue to hold the following securities:

1.  A Corporate Guarantee in our favour for HKD100,000,000.- from Novel Denim
    Holdings Ltd, together with a certified copy of a Board Resolution dated
    29June2001.

2.  A Corporate Guarantee in our favour for USD3,000,000.- from Novel Denim
    Holdings Ltd, together with a certified copy of a Board Resolution dated
    26September2001.

3.  A Corporate Guarantee in our favour for USD7,000,000.- from Novel Denim
    Holdings Ltd, together with a certified copy of a Board Resolution dated
    7March2002.

4.  ISDA Master Agreement & IDS Schedule together with minutes of meeting both
    dated 29 June 2002.

ACCRUAL OF INTEREST AND OTHER SUMS
Please note that interest and other sums expressed to be chargeable or payable
on a periodic basis will nonetheless accrue from day to day and amounts so
accrued may be demanded at any time.

DISCLOSURE OF INFORMATION
Unless expressed in writing from you to the contrary, we may provide any
information relating to any of your accounts with us and any facilities we may
provide to you from time to time or their conduct or any other information
concerning your relationship with us to any other company or office which at the
relevant time belongs to or is part of the HSBC Group.

SECTION 83 OF THE BANKING ORDINANCE
Please note that Section 83 of the Banking Ordinance has imposed on us as a bank
certain limitations on advances to persons related to our directors or
employees. In acknowledging this Facility Letter you should advise us whether
you are in any way related to any of our directors or employees within the
meaning of Section 83 and in the absence of such advice we will assume that you
are not so related. We would also ask, should you become so related subsequent
to acknowledging this Facility Letter, that you immediately advise us in
writing.

                                                                           .../5
<PAGE>
Novel Denim (HK) Ltd                                               27 March 2002

                                      -5-

ACCEPTANCE

Please arrange for the authorised signatories of YOUR COMPANY AND THE JOINT
USERS, in accordance with the terms of the mandates given to the Bank, to sign
and return to us before 17April2002 the duplicate copy of this letter to signify
your understanding and acceptance of the terms and conditions under which these
facilities are granted. As agreed, an arrangement fee of HKD 135,000.- will be
charged to the debit of your current account upon receipt of your acceptance to
these facilities.

We are pleased to be of continued assistance.

Yours faithfully                                For and on behalf of
                                                NOVEL DENIM (HK) LIMITED
/s/ Roddy K W Lau                               /s/ Lester Ma
---------------------------                     --------------------------------
Roddy K W Lau                                   Authorized Signature(s)
Global Relationship Manager

Encl<PAGE>
                                                                   EXHIBIT 10.13

[HSBC LOGO]

CONFIDENTIAL

Novel Garments International Ltd
12/F Novel Industrial Building
850-870 Lai Chi Kok Road
Cheung Sha Wan
Kowloon

                                                                   28 March 2002

Attention: Mr Peter Leung/Mr Vincent Chan

Dear Sirs

BANKING FACILITIES
Joint Borrowers:
- Nomacotex Ltd
- Novel Garments International Ltd

With reference to our recent discussion, we are pleased to advise that we have
reviewed your banking facilities and offer a renewal within the following
revised limits which will be made available on the specific terms and conditions
outlined below and subject to the satisfactory completion of the security
below. These facilities are also subject to review at any time and, in any event
by 15 MARCH 2043, and subject to our overriding right of suspension, withdrawal
and repayment on demand, including the right to call for cash cover on demand
for prospective and contingent liabilities.

<TABLE>
<CAPTION>
                                                            Existing                    New
                                                            --------                    ---
<S>                                                     <C>                     <C>
Combined Import/Export Facilities Limit                  HKD75.000.000.-*        HKD100.000.000.-*
Documentary Credit to your suppliers and
Loan Facilities in either HK dollars or
foreign currency (from time to time published
by the Bank on the board rates) for up to 90
days less any usance/credit periods granted
by your suppliers and/or D/P bills purchased.

Within which
Goods under your control and/or Trust                   (HKD75.000.000.-*)      (HKD100.000.000.-*)
Receipts and/or D/A bills purchased up to
90 days.
</TABLE>

We may at our sole and absolute discretion, refuse to allow drawings under the
facilities if the transaction in question does not meet our operational
requirements in respect of these facilities.

                                                                            ...2

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
PO Box 476. 639 Avenida da Praia Grande. Macau
Tel: (853) 553669 Fax: (853) 322831 Tlx: 88205 HSBCM 0M

Incorporated in the Hong Kong SAR with limited liability
<PAGE>
[HSBC LOGO]

Novel Garments International Ltd                                   28 March 2002

                                     - 2 -

Interest on your HK Dollar Import Loans will continue to be charged on a daily
basis at Hong Kong best lending rate (currently 5.125% per annum, but subject to
fluctuation at our discretion) and payable monthly in arrears to the debit of
your current account.

Interest on your Foreign Currency Import Loans and Export financed bills will
continue to be charged on a daily basis at the prevailing interest rates,
published by us as Trade Finance Rates, subject to fluctuation at our
discretion and payable monthly in arrears to the debit of your current account.

We also confirm the following concessionary rates will continue applicable to
your facilities:

DC Opening Commission and Commission in Lieu of Exchange

<TABLE>
<S>                              <C>      <C>
- On 1st USD50,000               :         1/4%
- USD50,001 - USD 100,000        :        1/16%
- Balance in excess              :        1/32%
</TABLE>

-   UTILIZATION UNDER THE ABOVE FACILITIES MAY BE MADE BY THE JOINT BORROWERS.
    THE JOINT BORROWERS SHALL BE JOINTLY AND SEVERALLY LIABLE.

Please note that all costs and expenses (including legal fees) incurred by us in
connection with the extension of these facilities and any matters arising are to
be reimbursed by you on demand.

Security

As security for the abovementioned facilities, we shall hold a Corporate
Guarantee in our favour for HKD 100.000.000.- from Novel Denim Holdings Limited
together with a certified copy of a Board Resolution in substantially the form
of that enclosed with the facilities letter. This guarantee is to secure the
general banking facilities granted to the Joint Borrowers. We enclose our
standard form for your completion and return.

In accordance with our policy, we would release a Corporate Guarantee in our
favour for HKD80.000.000.- from Novel Denim Holdings Limited together with a
certified copy of a Board Resolution both dated 29 June 2001 after six months
from the date of our receipt of the replacement security.

Accrual of Interest and Other Sums

Please note that interest and other sums expressed to be chargeable or payable
on a periodic basis will nonetheless accrue from day to day and amounts so
accrued may be demanded at any tine.

                                                                           .../3

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
PO Box 476. 639 Avenida da Praia Grande. Macau
Tel: (853) 553669 Fax: (853) 322831 Tlx: 88205 HSBCM 0M

Incorporated in the Hong Kong SAR with limited liability
<PAGE>
[HSBC LOGO]

Novel Garments International Ltd                                   28 March 2002

                                     - 3 -

Disclosure of Information

Unless expressed in writing from you to the contrary, we may provide any
information relating to any of your accounts with us and any facilities we may
provide to you from time to time or their conduct or any other information
concerning your relationship with us to any other company or office which at the
relevant time belongs to or is part of the HSBC Group.

Acceptance

Please arrange for the authorised signatories of the Joint Borrowers, in
accordance with the terms of the mandates given to the Bank, to sign and
return to us before 18 April 2002 the duplicate copy of this letter to signify
your understanding and acceptance of the terms and conditions under which these
facilities are granted. As agreed, arrangement fees aggregating HKD400.000 will
be charged to the debit of the accounts of the Joint Borrowers upon receipt of
your acceptance to these facilities.

Article 66 of the Financial System Act of Macau
Section 83 of the Hong Kong Banking Ordinance

Please note that Article 66 of the Financial System Act of Macau and Section 83
of the Hong Kong Banking Ordinance have imposed on us as a bank certain
limitations on advances to persons related to our directors or employees. In
acknowledging this Facility Letter you should advise us whether you are in any
way related to any of our directors or employees within the meaning of Article
66 and Section 83 and in the absence of such advice we will assume that you
are not so related. We would also ask, should you become so related subsequent
to acknowledging this Facility Letter, that you immediately advise us in
writing.

We are pleased to be of continued assistance.

Yours faithfully

/s/ Yam Wing Lok

Yam Wing Lok
Chief Executive Officer Macau

Encl

For and on behalf of
NOMACOTEX LIMITED

/s/ Lester Ma
--------------------------------
     Authorized Signature(s)

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
PO Box 476. 639 Avenida da Praia Grande. Macau
Tel: (853) 553669 Fax: (853) 322831 Tlx: 88205 HSBCM OM

Incorporated in the Hong Kong SAR with limited liability

We hereby declare that we acknowledge all terms and conditions of the present
"facility letter", with all its pages initialled by us, and we hereby declare
that the same are expressly accepted and this constitutes our formal agreement
for the banking facilities to be granted by "The Hongkong and Shanghai Banking
Corporation Limited", in accordance with the abovesaid terms and conditions.

Macau, on 16th April 2002

For and on behalf of
NOVEL GARMENTS INTERNATIONAL LIMITED

/s/ Lester Ma
--------------------------------
     Authorized Signature(s)

<PAGE>
To: The Manager
    THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED

GUARANTEE BY LIMITED COMPANY (LIMITED AMOUNT - UNDER COMMON/CORPORATE SEAL)

1.       DEFINITIONS

         1.01     "BANK" means The Hongkong and Shanghai Banking Corporation
                  Limited and its successors and assigns;

                  "BANKING FACILITIES" means such facilities as the Bank may
                  make or continue to make available to the Customer or to any
                  other person at the request of the Customer;

                  "CUSTOMER" means the person/s whose name/s and address/es are
                  specified in the Schedule;

                  "DEFAULT INTEREST" means interest at such rate as the Bank may
                  specify, compounded monthly if not paid on the dates specified
                  by the Bank;

                  "EXCHANGE RATE" means the rate for converting one currency
                  into another currency which the Bank determines to be
                  prevailing in the relevant foreign exchange market at the
                  relevant time, such determination to be conclusive and binding
                  on the Guarantor;

                  "GUARANTEED MONEYS" means (i) all moneys in any currency owing
                  by the Customer to the Bank at any time, actually or
                  contingently, in any capacity, alone or jointly with any other
                  person, (ii) interest on such moneys (both before and after
                  any demand or judgment), to the date on which the Bank
                  receives payment, at the rates payable by the Customer or
                  which would have been payable but for any circumstance which
                  restricts payment and (iii) expenses of the Bank in enforcing
                  this Guarantee on a full indemnity basis;

                  "GUARANTOR" means the person whose name and address are
                  specified in the Schedule;

                  "MAXIMUM LIABILITY" means the sum specified in the Schedule
                  plus Default Interest on that sum or part thereof (to the
                  extent that it is not paid by the Guarantor on demand by the
                  Bank) and expenses of the Bank in enforcing this Guarantee on
                  a full indemnity basis; where a liability for Guaranteed
                  Moneys is incurred in a currency different from the currency
                  in which the Maximum Liability is stated and the equivalent of
                  that liability in the currency in which the Maximum Liability
                  is stated, calculated at the Exchange Rate, has increased
                  since it was incurred, that increase shall be added to the
                  Maximum Liability;

                  "PERSON" includes an individual, firm, company, corporation
                  and an unincorporated body of persons; and

                  "PROCESS AGENT" means the person, if any, whose name and Hong
                  Kong address are specified in the Schedule.

         1.02     Please see attachment

2.       GUARANTEE

         2.01     In consideration of the Banking Facilities, the Guarantor
                  guarantees to pay the Guaranteed Moneys to the Bank -on
                  demand.

         2.02     The liability of the Guarantor shall not exceed the Maximum
                  Liability.

         2.03     The Guarantor shall pay Default Interest (to the extent that
                  it is not paid by the Customer) on the Guaranteed Moneys from
                  the date of demand by the Bank on the Guarantor until the Bank
                  receives payment of the whole of the Guaranteed Moneys (both
                  before and after any demand or judgment or any circumstance
                  which restricts payment by the Customer).

         2.04     A certificate of balance signed by any duly authorised officer
                  of the Bank shall be conclusive evidence against the Guarantor
                  of the amount of the Guaranteed Moneys owing at any time.

         2.05     The Bank shall be entitled to retain this Guarantee and any
                  security it has in respect of the Guaranteed. Moneys for such
                  period as the Bank may certify to the Guarantor to be
                  appropriate in order to protect the interests of the Bank in
                  respect of the Guaranteed Moneys.

3.       CONTINUING AND ADDITIONAL SECURITY

         3.01     This Guarantee is a continuing security and shall secure the
                  whole of the Guaranteed Moneys until one calendar month after
                  receipt by the Bank of notice in writing by the Guarantor or a
                  liquidator or receiver of the Guarantor to terminate it.
                  Nevertheless and despite the giving of such notice, this
                  Guarantee shall continue to apply to the Guaranteed Moneys in
                  respect of which the Customer is or becomes actually or
                  contingently liable up to such termination and the Guarantor
                  guarantees to pay such Guaranteed Moneys to the Bank on demand
                  whether that demand is made before, at the time of or after
                  such termination.

         3.02     This Guarantee is in addition to, shall not be affected by and
                  may be enforced despite the existence of any other guarantee
                  or security held by the Bank.

4.       CUSTOMER'S ACCOUNTS

         The Bank may, at any time and despite the termination of this
         Guarantee, continue any existing account and open any new account in
         the name of the Customer and no subsequent transactions, receipts or
         payments involving such new accounts shall affect the liability of the
         Guarantor.

5.       PAYMENTS

         5.01     Payments by the Guarantor shall be made to the Bank as
                  specified by the Bank without any set-off, counterclaim,
                  withholding or condition of any kind except that, if the
                  Guarantor is compelled by law to make such withholding, the
                  sum payable by the Guarantor shall be increased so that the
                  amount actually received by the Bank is the amount it would
                  have received if there had been no withholding.

         5.02     Payment by the Guarantor to the Bank shall be in the currency
                  of the relevant liability or, if the Bank so agrees in
                  writing, in a different currency, to which case the conversion
                  to that different currency shall be made at the Exchange Rate.

                                      -1-                      Member HSBC Group
<PAGE>
Clause 1.02 Interpretation

         (a)      Where there are two or more persons comprised in the
                  expression "the Customer" the Guaranteed Monies shall include
                  all monies and liabilities due owing or incurred to the Bank
                  by such persons whether solely or jointly with one or more of
                  the others or any other person(s) and the expression "the
                  Customer" will be construed accordingly.

         (b)      Where the persons comprised in the expression "the Customer"
                  are carrying on business in partnership under a firm name the
                  Guaranteed Monies (notwithstanding any change in the
                  composition of that partnership) shall include the monies and
                  liabilities which shall at any time be due owing or incurred
                  to the Bank by the person(s) from time to time carrying on the
                  partnership business under that name or under any name in
                  succession thereto and the expression "the Customer" shall be
                  construed accordingly.

         (c)      In this guarantee, references to the singular number include
                  references to the plural and vice versa and references to one
                  gender include every gender.
<PAGE>
         5.03     No payment to the Bank under this Guarantee pursuant to any
                  judgment, court order or otherwise shall discharge the
                  obligation of the Guarantor in respect of which it was made
                  unless and until payment in full has been received in the
                  currency in which it is payable under this Guarantee 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 Guarantor shall be liable for the shortfall.

         5.04     Any moneys paid to the Bank in respect of the Guaranteed
                  Moneys may be applied in or towards satisfaction of the same
                  or placed to the credit of such account as the Bank may
                  determine with a view to preserving its rights to prove for
                  the whole of the Guaranteed Moneys.

         5.05     If any moneys paid to the Bank in respect of the Guaranteed
                  Moneys are required to be repaid by virtue of any law relating
                  to insolvency, bankruptcy or liquidation or for any other
                  reason, the Bank shall be entitled to enforce this Guarantee
                  as if such moneys had not been paid.

6.       SET-OFF

         The Bank may, at any time and without notice, apply any credit balance
         to which the Guarantor is entitled on any account with the Bank in or
         towards satisfaction of the Guaranteed Moneys. For this purpose, the
         Bank is authorised to purchase, at the Exchange Rate, such other
         currencies as may be necessary to effect such application with the
         moneys standing to the credit of such account.

7.       LIEN

         The Bank is authorised to exercise a lien over all property of the
         Guarantor coming into the possession or control of the Bank, for
         custody or any other reason and whether or not in the ordinary course
         of banking business, with power for the Bank to sell such property to
         satisfy the Guaranteed Moneys.

         GUARANTOR AS PRINCIPAL DEBTOR

         The liability of the Guarantor under this Guarantee shall not be
         discharged or otherwise affected by reason of the Bank entering into
         any agreement or arrangement with the Customer 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 Guarantor to any extent. Any Guaranteed Moneys
         which may not be recoverable from the Customer for any such reason
         shall be recoverable by the Bank from the Guarantor as principal debtor
         by way of indemnity, on demand, together with Default Interest thereon
         in accordance with Clause 2.03.

9.       GUARANTOR AS TRUSTEE

         9.01     The Guarantor shall not, until the whole of the Guaranteed
                  Moneys have been received by the Bank, exercise its rights of
                  subrogation, indemnity, set-off or counterclaim against the
                  Customer or its rights to participate in any security the Bank
                  has in respect of the Guaranteed Moneys or, unless required by
                  the Bank to do so, to prove in the bankruptcy or liquidation
                  of the Customer. The Guarantor shall hold any amount
                  recovered, as a result of the exercise of any of such rights,
                  on trust for the Bank and shall pay the same to the Bank
                  immediately on receipt.

         9.02     The Guarantor has not taken any security from the Customer
                  and agrees not to do so until the Bank has received the whole
                  of the Guaranteed Moneys. Any security taken by the Guarantor
                  in breach of this provision shall be held in trust for the
                  Bank as security for the Guaranteed Moneys and all moneys at
                  any time received in respect thereof shall be paid to the Bank
                  immediately on receipt.

10.      NO WAIVER

         No act or omission by the Bank pursuant to this Guarantee shall affect
         its rights, powers and remedies hereunder or any further or other
         exercise of such rights, powers or remedies.

11.      ASSIGNMENT

         The Guarantor may not assign or transfer any of its rights or
         obligations hereunder. The Bank may assign any of its rights hereunder
         to a person in whose favour it has made an assignment of all or any of
         the Banking Facilities.

12.      COMMUNICATIONS

         Any notice, demand or other communication under this Guarantee shall be
         in writing addressed to the Guarantor at its registered office address
         or at the last address registered with the Bank and addressed to the
         Bank at its office specified in the Schedule or such other address as
         the Bank may notify to the Guarantor for this purpose and may be
         delivered personally, by leaving it at such address, by post, facsimile
         transmission or telex and shall be deemed to have been delivered to the
         Guarantor at the time of personal delivery or on leaving it at such
         address or on the second day following the day of posting or on the day
         of despatch, if sent by facsimile transmission or telex, and to the
         Bank on the day of actual receipt.

13.      SEVERABILITY

         Each of the provisions of this Guarantee is severable and distinct from
         the others and, if one or more of such provisions is or becomes
         illegal, invalid or unenforceable, the remaining provisions shall not
         be affected in any way.

14.      GOVERNING LAW AND JURISDICTION

         14.01    This Guarantee is governed by and shall be construed in
                  accordance with the laws of Hong Kong.

         14.02    The Guarantor submits to the non-exclusive jurisdiction of the
                  Hong Kong Courts but this Guarantee may be enforced in the
                  Courts of any competent jurisdiction.

                                      -2-
<PAGE>
15.      GOVERNING VERSION

         This Guarantee is executed in an English version and a Chinese version.
         The English version is the governing version and shall prevail whenever
         there is any discrepancy between the English version and the Chinese
         version.

16.      PROCESS AGENT

         If a Process Agent is specified in the Schedule, service of any legal
         process on the Process Agent shall constitute service on the Guarantor.

17.      EXECUTION

         This Guarantee has been entered into by the Guarantor under its common
         or corporate seal, whichever may be affixed below, on 16th April 2002.

SCHEDULE

Address of Bank's Office (for the purpose of Clause 12 only)

639 Avenida da Praia Grande, Macau

Details of Customer

Name
1. Nomacotex Ltd

2. Novel Garments Intl Ltd

*Address
   12/F Novel Indl Bldg,
   No. 850-870 Lai Chi Kok Road,
   Cheung Sha Wan, Kowloon

Details of Guarantor

Name
Novel Denim Holdings Ltd

*Address
   12/F Novel Indl Bldg,
   No. 850-870 Lai Chi Kok Road,
   Cheung Sha Wan, Kowloon

Specified Sum in Respect of Maximum Liability

HKD100,000,000. -

Details of Process Agent

Name

Address

                        , Hong Kong.

EXECUTED UNDER THE SEAL OF THE GUARANTOR IN THE PRESENCE OF THE FOLLOWING
DIRECTOR(S) AND/OR SECRETARY:

Signature of Director/Secretary

FOR AND ON BEHALF OF
NOVEL DENIM HOLDINGS LIMITED

/s/ Kee-Chung Chao
-------------------------------
Authorized Signature(s)

Name: Kee-Chung Chao

Office: Director

Identification Document   H. K. IDENTITY CARD
Type and Number           K443884(1)

Signature of Director/Secretary

FOR AND ON BEHALF OF
NOVEL DENIM HOLDINGS LIMITED

/s/ Mang-Yin Ma
-------------------------------
Authorized Signature(s)

Name: Mang-Yin Ma

Office: Director

Identification Document   H. K. IDENTITY CARD
Type and Number           E249701(1)

WITNESSED BY:

Signature of Witness

/s/ Augustine Kin-Keung Tse

Name  Augustine Kin-Keung Tse

Office  Solicitor, Hong Kong SAR

IDENTIFICATION DOCUMENT TYPE AND NUMBER
H.K. Identity Card No. D678664(0)

*P O Box is not acceptable.

Signature of Witness

/s/ Augustine Kin-Keung Tse

Name  Augustine Kin-Keung Tse

Office  Solicitor, Hong Kong SAR

IDENTIFICATION DOCUMENT TYPE AND NUMBER
H.K. Identity Card No. D678660(0)

*P O Box is not acceptable.

                                      -3-

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