Mortgage Contract of Maximum Amount
EXHIBIT
10.16
Mortgagee
(Party A): Winner Medical & Textile Ltd. Jingmen
Address:
Legal
Representative: ▇▇▇▇▇▇▇▇ ▇▇
Mortgagor
(Party B): Jingmen Branch of Industrial and Commercial Bank of
China
Address:
Legal
Representative(Person in Charge): ▇▇▇ ▇▇▇▇▇
Whereas:
Winner
Medical & Textiles Ltd. Jingmen (hereinafter also referred to as “Debtor”)
and the Mortgagee have entered into a serial of Loan Agreements (hereinafter
referred to as “Loan Agreements”) with the loan period from June 11th
2004 to
June 10th
2007 and
under the maximum amount of RMB Four Million Nine Hundred Thousand Yuan Only.
The Mortgagor undertakes to provide security to secure the indebtedness of
the
Debtor under the Loan Agreements. In accordance with relevant PRC laws and
regulations and through friendly negotiation, the Parties agree to enter into
this Contract:
Article
1 Undertakings And Presentations By Party A
| 1.1 |
Party
A is the full, effective and lawful owner or the State-authorized
administrator of the collateral under this Contract; there is no
dispute
regarding the ownership or right of administration for the
collateral;
|
| 1.2 |
Party
A fully understands the purpose of the loan under the Loan Agreements
and
has provided the security under this Contract of its own will;
|
| 1.3 |
Party
A has disclosed and explained all defect of rights of the
collateral;
|
| 1.4 |
The
collateral under this Contract is allowed by law to be mortgaged
freely;
|
| 1.5 |
There
is no restriction against the establishment of the
mortgage;
|
| 1.6 |
There
is no seizure, attachment or supervision existing over the
collateral;
|
| 1.7 |
In
case that Party A leases the collateral to other party, Party A shall
notify the Lessee of the mortgage and notify Party B of the lease
in
writing.
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Article 2 Indebtedness To Be Secured and Amount
The
mortgage under this Contract is to secure the indebtedness owed by the Debtor
to
the Mortgagee derived from all the bank loans in RMB granted by Party B under
the Loan Agreements for the period and within the maximal amount as stipulated
in this Contract.
Article
3 Term of Loan
The
term
of the loan shall be determined by the Loan Agreements.
Article
4 Scope of Guarantee
The
security under this Contract shall be to secure all of the loan principal,
interest, penalty interest, breach of contract compensation and all the expenses
incurred in realizing the Mortgagee’s right and other fees payable.
Article
5 Collateral
| 5.1 |
The
collateral under this Contract is described in detail in the List
of
Collateral.
|
| 5.2 |
The
estimated value of the collateral contained in the abovementioned
List of
Collateral is not final and shall impose no restriction on the disposal
of
the collateral by Party B in accordance with Article 9 of this
Contract.
|
| 5.3 |
The
relevant certificate and materials of the collateral shall be kept
by
Party B unless otherwise stipulated by laws.
|
Article
6 Registration
| 6.1 |
The
Parties shall register the mortgage within 15 days after execution
of this
Contract as required by laws or agreed by both
Parties.
|
| 6.2 |
The
Parties shall alter the registration within 15 days in case of alteration
of the mortgage as required by
laws.
|
Article
7 Possession and Management of the Collateral
| 7.1 |
The
collateral shall be possessed and managed by Party A. Party A shall
maintain the integrity of the collateral and shall not impair the
value of
the collateral through improper utilization. Party B is entitled
to
supervise the possession and management of the
collateral.
|
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| 7.2 |
In
case of loss or damage to the collateral, Party A shall notify Party
B
timely and take necessary efforts to minimize the loss. Party A shall
also
provide Party B with necessary proof of the loss or damage issued
by the
relevant authorities.
|
Article
8 Insurance
| 8.1 |
Party
A shall purchase property insurance for the collateral within 15
days
after execution of this Contract. The insured period shall be no
shorter
than the loan term under the Loan Agreements and the insured value
shall
be no less than the principal and interest of the
loan.
|
| 8.2 |
Party
B shall be the first beneficiary under such insurance. There shall
be no
restriction of Party B’s interest and right under such insurance.
|
| 8.3 |
Party
B should not terminate or cancel the insurance for any reason during
the
valid period of this Contract. Party B is entitled to renew the insurance
at the cost of Party A in case of termination of the
insurance.
|
| 8.4 |
The
insurance compensation shall be used to repay the bank loan under
the Loan
Agreements or to restore the value of the collateral as agreed by
Party
B.
|
Article
9 Realization of Security
| 9.1 |
In
realizing the Mortgagee’s right in accordance with laws, Party B is
entitled to use the collateral to make up for the indebtedness as
agreed
by both Parties or settle the outstanding indebtedness by the proceeds
derived from the sale or auction of the
collateral.
|
| 9.2 |
Party
A shall assist Party B to realize its right and shall not cause any
hindrance.
|
Article
10 Rights and Obligations of Party A
| 10.1 |
After
effectiveness of this Contract, Party A shall not create any mortgage,
pledge on the collateral or lease, transfer or donate the collateral
to
any third party without getting written consent from Party
B.
|
| 10.2 |
The
amendment to the Loan Agreement by Party B and the Debtor shall not
affect
the security under this Contract.
|
| 10.3 |
In
case of devaluation of the collateral due to Party A’s conduct, Party A
shall cease such conduct and restore the value of the collateral
or
provide extra security.
|
| 10.4 |
In
case of devaluation of the collateral due to reasons other than Party
A’s
fault, Party A will bear the obligation of security only within the
limitation of the compensation received by Party A. The remaining
collateral shall also be mortgaged to secure the indebtedness of
the
Debtor.
|
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| 10.5 |
In
case of expropriation of the collateral by the State, the relevant
compensation shall be used to settle the indebtedness of the Debtor
before
maturity or be deposited in a third party designated by both
Parties.
|
| 10.6 |
Party
A shall bear all the expense and cost under this Contract such as
lawyer’s
fee, insurance, authentication, notary, evaluation, registration,
transfer
and litigation etc.
|
| 10.7 |
Party
A shall make proper arrangement about the security in case of division,
merger, and share transfer of Party
A.
|
| 10.8 |
In
case of damage or possible damage by third party to the collateral,
Party
A shall notify Party B in time and assist Party B to prevent further
damage.
|
| 10.9 |
Party
A shall notify Party B in writing in case
of:
|
| § |
major
change of its management system;
|
| § |
change
of its business scope, registered capital and shareholding
structure;
|
| § |
involvement
of major economic dispute;
|
| § |
dispute
over ownership of the collateral;
|
| § |
bankruptcy,
cessation of operation, dissolution, revoking of business license
etc.;
|
| § |
change
of its address, contact number or legal
representative.
|
| 10.10 |
Under
the circumstances stated in 10.9.1 or 10.9.2, Part A shall give 30-day
prior written notification to Party B. Under other circumstances
stated in
10.9, Party A shall give written notification to Party B within 5
days
after the occurrence of such event.
|
| 10.11 |
Party
A is entitled to cancell the mortgage once all indebtedness under
the Loan
Agreement has been paid.
|
Article
11 Rights and Obligations of Party B
| 11.1 |
Party
B is entitled to dispose collateral in case of failure by the Debtor
to
pay the loan principal, interest or other fees upon due
date;
|
| 11.2 |
Party
B is entitled to dispose the collateral in case
that:
|
| § |
The
Loan Agreement is terminated in accordance with laws or as stipulated
in
the Loan Agreement;
|
| § |
The
loan becomes mature before expiry of term in accordance with the
Loan
Agreement and the indebtedness under the Loan Agreement has not been
settled.
|
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| 11.3 |
Party
B is entitled to ask for Party A’s assistance in its effort toprevent
damage of the collateral by any third
party.
|
| 11.4 |
After
the realization of the security, Party B shall assist Party A’s execution
of recourse against the Debtor.
|
| 11.5 |
Party
B shall repay the residual proceeds of the collateral to Party A
once all
secured indebtedness has been paid.
|
Article
12 Breach of Contract
| 12.1 |
Party
A shall compensate Party B for any loss due to false statements or
undertakings by Party A;
|
| 12.2 |
Both
Parties shall perform their obligations under this Contract strictly
after
the effectiveness of this Contract. The breaching party shall compensate
the other party any loss suffered due to its breach of
contract.
|
| 12.3. |
In
case that this Contract becomes invalid due to fault of Party A,
Party A
shall compensate Party B for all loss within the limitation of the
security amount.
|
Article
13 Effectiveness, Amendment and Termination
| 13.1 |
This
Contract shall come into effect once it is signed and stamped by
both
Parties and registered with competent authorities as required by
laws.
|
| 13.2 |
This
Contract is independent from the Loan Agreement. The invalidity of
the
Loan Agreement shall not affect the validity of this Contract. Party
A
shall perform its obligations of guarantee under this Contract regardless
of the invalidity of the Loan
Agreement.
|
| 13.3 |
This
Contract may be amended or terminated by both Parties in writing.
|
Article
14 Dispute Settlement
Any
dispute arising from this Contract shall be settled by litigation in the
People’s Court located in the region of Party B.
Article
15 Other Issues
N/A
Article
16 Attachment
| 16.1 |
The
attachment is an integral part of this Contract and has the same
legal
effect as this Contract.
|
| 16.2 |
The
attachment to this Contract includes the List of
Collateral.
|
Article
17 Originals
This
Contract has 3 originals, Party A, Party B and the registration authority shall
retain 1 original each, and they are of the same legal effect.
Party
A: Winner Medical & Textiles Ltd. Jingmen
Legal
representative: ▇▇▇▇▇▇▇▇ ▇▇
Party
B: Jingmen Branch Of Industrial and Commercial Bank of
China
Authorized
representative: ▇▇▇ ▇▇▇▇▇
Date:
June 11th,
2004
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