Exhibit
28
Contract
No.: Year 2005 Shang Zi No. 0000000000
Grantor:
Shenzhen Xxxxxxxx Xxxxxx of China Merchants Bank ("Party
A")
Address:
Ground floor of Honggang Building, Honggang Road, Shenzhen City
Legal
Representative/Person-in-charge: Xxx Xxx Position: President
Applicant:
Winner Industries (Shenzhen) Co., Ltd. ("Party B")
Address:
Xxxxxx Xxxxxxxxxx Xxxx, Xxxxxx Xxxx Xxxxxxx Xxxx
Legal
Representative: Xxxxxxxx Xx Position: Chairman of the board
In
consideration of Party B’s application, Party A has agreed to grant to Party B a
facility of up to the aggregate amount of RMB 25,000,000 yuan (or the equivalent
amount of foreign currencies). Party A and Party B, after thorough negotiations,
hereby enter into this Agreement subject to the following terms and in
accordance with the relevant laws and regulations.
Party
A
shall make available to Party B the facility of up to RMB 25,000,000 yuan
only
(or the equivalent amount of foreign currencies).
The
facility shall mean the maximum extent of facility which Party A will grant
to
Party B in respect of on-balance-sheet transactions such as loans, trade
financing (including packing loans and inward and outward documentary bills)
and
discount (collectively referred to as the “Loans”) and off-balance-sheet
transactions such as acceptance of trade bills, opening of letters of credit
and
issue of confirmations.
The
specific types and scope of facility to be granted by Party A to Party B
shall
be subject to Clause 3 hereof.
The
facility shall be available for a term of one year, commencing from July
12th
2005
to
July 12th
2006,
during which period Party B shall apply to Party A for utilization of the
facility. Party A shall not accept any application for the same made by Party
B
after the expiry of the facility.
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3.1 |
Types
and Scope of the Facility
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The
said
facility shall be comprehensive facilities:
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3.1.1 |
Comprehensive
facilities.
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Party
B
can make the following business transactions within the comprehensive
facilities:
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3.1.1.1 |
Working
capital loans;
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3.1.1.3 |
Discount of draft accepted by
bank; |
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3.1.1.4 |
Discount of commercial draft
; |
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3.1.1.5 |
Acceptance of commercial draft
; |
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3.1.1.6 |
Opening of letters of
credit; |
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3.1.1.7 |
Issue of
confirmations. |
The
allocation of the above facilities is to be confirmed by Party A.
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3.2 |
The
said facilities are revolving facilities available to Party B during
the
term of facility. However, Party B shall apply to Party A for its
approval
for each drawdown. For application for trade financing and opening
of
letter of credit, Party B shall sign the relevant application form
without
signing specific contract. For application for other facilities,
specific
contract shall be entered into by both
Parties.
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3.3
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The
respective availability periods of each loan or other facilities
under the
said facility shall be determined in accordance with the business
need of
Party B and the requirements for banking operation administration.
The
specific facility may expire later than the abovementioned facility
term.
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Relevant
Interest or fees shall be determined by the specific contracts or application
forms.
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5.1 |
All
the debts owed to Party A by Party B hereunder shall be guaranteed
by
Winner Medical & Textile Ltd. Yichang, Winner Medical & Textile
Ltd. Tianmen and Winner Medical & Textile Ltd. Jingmen who shall be
the guarantors of joint and several liabilities. The relevant irrevocable
letter of guarantee in favor of Party A shall be signed by the
guarantors;
and/or
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5.2 |
All
the debts owed to Party A by Party B hereunder shall be secured
(or
pledged) by real property of Winner Industries (Shenzhen) Co.,
Ltd. which
has the title of or is rightfully entitled to dispose of such properties.
The specific security contract shall be entered into by both
Parties.
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5.3 |
Other
means of guarantee: Xxxxxxxx Xx provides personal guarantee with
limitless
liability.
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5.4 |
Party
A may demand Party B to provide other supplementary security or
deposit
for any specific operation.
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6.1 |
Party
B shall have the following rights:
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6.1.1 |
to
request Party A to make available the Loans or other facilities
under the
facility upon the conditions stated
herein;
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6.1.2 |
to utilize the facility according
to this
Agreement; |
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6.1.3 |
to request Party A to keep the information
provided by Party B in respect of its production, operations, property,
accounts and so forth confidential, unless otherwise required by
law. |
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6.1.4 |
to transfer the debts to a third
party after
obtaining consent from Party A. |
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6.2 |
Party
B shall undertake the following
obligations:
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6.2.1 |
to
honestly provide such documents and materials as Party A requires
and the
names of the banks with which Party B maintains its accounts, the
account
numbers and the balances of its deposits and loans, and to give
cooperation in the investigation, review and examination conducted
by
Party A;
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6.2.2 |
to accept Party A’s supervision of its
utilization of credit facilities and relevant production, operation
and
financial activities of Party B; |
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6.2.3 |
to apply the Loans and/or other facilities
for
the purposes prescribed in the respective certificates of indebtedness
and
the respective specific contracts; |
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6.2.4 |
to pay in full the principal and
interest of
the Loans and/or advances on time as agreed in this Agreement, the
respective certificates of indebtedness and the respective specific
contracts; |
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6.2.5 |
to obtain written consent from Party
A before
transferring the debts hereunder, in whole or in part, to a third
party; |
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6.2.6 |
to forthwith notify Party A of the
occurrence
of any of the following events and cooperate with Party A in carrying
out
measures for securing due payment of the principal and interest of
the
Loans and other facilities and all other relevant expenses
hereunder: |
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6.2.6.1 |
Party
B suffers grave financial loss, asset loss or other financial
distress;
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6.2.6.2 |
Party B offers a loan or guarantee
or put its
property (rights) in mortgage (pledge), for the benefits of a third
party
or to protect that third party from any loss; |
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6.2.6.3 |
Any of the following alterations
of Party B
occurs: amalgamation (merger), division, reorganization, equity
(cooperative) joint venture, transfer of equity (shareholding),
transformation into shareholding company; |
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6.2.6.4 |
Party B winds up its business, has
its
business licence revoked or cancelled, has filed or been presented
the
bankruptcy or dissolution petition and so
forth; |
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6.2.6.5 |
Party B’s controlling shareholder and other
affiliates suffer great difficulty in business or finance which affects
its normal operation; |
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6.2.6.6 |
Party B concludes material related
transactions with its controlling shareholder and other affiliates
which
affect its normal operation; |
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6.2.6.7 |
Party B is involved in any litigation
or
arbitration or given any criminal or administrative penalty which
have
material adverse effects on its business or
property; |
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6.2.6.8 |
other material events have happened
which are
likely to affect the solvency of Party B. |
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7.1 |
Party
A shall have the following rights:
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7.1.1 |
to
require Party B to make payment of the principal and interest of
the Loans
and advances hereunder on time;
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7.1.2 |
to require Party B to provide any
information
about the utilization of the facility; |
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7.1.3 |
to obtain information about the production,
operation and financial activities of Party
B; |
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7.1.4 |
to monitor Party B so as to make
sure that the
Loans and/or other facilities are used for the purpose prescribed
in this
Agreement, the respective certificates of indebtedness and the respective
specific contracts; |
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7.1.5 |
to transfer the principal and interest
of the
Loans and/or advances hereunder directly out of Party B’s
account; |
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7.1.6 |
to stop releasing the unutilized
portion of
the Loans or other facilities under the facility and require Party
B to
prepay the Loans already advanced under the facility if Party B is
in
default of performance of its obligations under this Agreement and/or
the
certificates of indebtedness and the specific
contracts; |
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7.1.7 |
to stop releasing the unutilized
portion of
the Loans or other facilities under the facility and require Party
B to
immediately repay in full the principal and interest of the Loans
and/or
advances and all other relevant expenses hereunder, or to transfer
all the
debts hereunder to an assignee acceptable to Party A, or to provide
security/additional security acceptable to Party A upon occurrence
of any
of the events specified in Clause 6.2.6 on the part of Party
B. |
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7.2 |
Party
A shall undertake the following
obligations:
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7.2.1 |
to
make available to Party B the Loans or other facilities under the
facility
upon the conditions stated in this Agreement and the specific
contract;
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7.2.2 |
to
keep the information concerning the assets, finance, production
and
operational conditions of Party B confidential unless otherwise
required
by law.
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| 8. |
Party
B hereby warrants that:
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8.1 |
it
is an enterprise duly established and lawfully existing in accordance
with
the laws of China with the status of enterprise legal person and
full
capacity of civil disposition to execute and perform this
Agreement;
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8.2 |
it
executes and performs this Agreement with proper authorization
from its
board of directors or any other
authority;
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8.3 |
all
the documents, information and instruments it has provided concerning
itself, the guarantor, the mortgagor (the pledgor) and the security
(the
collateral) are true, accurate, complete and valid, and do not
have any
material error with reference to the facts nor omit any material
facts;
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8.4 |
at
the time of execution of this Agreement, there is no litigation,
arbitration or criminal or administrative penalty which have material
adverse effect on Party B or its major assets, nor the occurrence
of such
litigation, arbitration or criminal or administrative penalty is
expected
during the performance of this Agreement, and Party B shall forthwith
notify Party A of the occurrence of any of such litigation, arbitration
or
criminal or administrative penalty;
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8.5 |
it
will keep its operations in full compliance with the national laws
and
regulations, conduct business within the business scope prescribed
in its
Enterprise Legal Person Business License, and keep the registration
of
enterprise (legal person) valid by going through the annual examination
formalities;
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8.6 |
it
will maintain or enhance its current operation and management,
and ensure
or increase the value of its existing assets; it will not waive
its claim
for the receivables or dispose of its existing major assets for
no
consideration or in other improper
manners;
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8.7 |
at
the time of execution of this Agreement, there occurs no material
event
which will affect Party B's performance of its obligations
hereunder.
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All
expenses relating to this Agreement, such as investigation of credit status,
examination and notarization, and all expenses paid by Party A in enforcing
its
claims upon Party B’s failure to pay all the debts due to Party A hereunder when
they become due, such as attorney’s fees, costs and travel expenses, shall be
borne by Party B. Party B authorizes Party A to deduct such expenses directly
from its accounts maintained with Party A. In case of deficiency, Party B
guarantees to make up the same in full on receipt of Party A’s notice without
production of any proof by Party A.
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10.1 |
Any
of the following events on the side of Party B shall be deemed
as breach
of contract:
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10.1.1 |
in
violation of its obligations specified in Clause 6.2.1 hereof,
Party B
provides false materials to or withholds important facts from Party
A or
does not give cooperation in the investigation, review and examination
conducted by Party A, and it fails to remedy such default within
the
reasonable period specified by Party A to the detriment of Party
A;
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10.1.2 |
in violation of its obligations specified
in
Clause 6.2.2 hereof, Party B refuses to accept or evades the monitoring
by
Party A of its use of credit facilities, or its production, operation
and
financial activities to the detriment of Party
A; |
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10.1.3 |
in violation of its obligations specified
in
Clause 6.2.3 hereof, Party B fails to use the Loans and/or other
facilities for the purpose prescribed in this Agreement and the respective
certificates of indebtedness and/or the respective specific contract
to
the detriment of Party A; |
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10.1.4 |
in violation of its obligations specified
in
Clause 6.2.4 hereof, Party B fails to pay in full the principal and
interest of the Loans and/or the advances on time as agreed in this
Agreement and the respective certificates of indebtedness and/or
the
respective specific contracts; |
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10.1.5 |
in violation of its obligations specified
in
Clause 6.2.5 hereof, Party B transfers the debts hereunder to a third
party without due authorization to the detriment of Party
A; |
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10.1.6 |
in violation of its obligations specified
in
Clause 6.2.6 hereof, Party B fails to promptly notify Party A of
the
occurrence of any of the events set out therein, or it fails to take
further measures for securing payment of the debts hereunder as required
by Party A after such occurrence has come to the notice of Party
A, or
Party A considers that such occurrence may jeopardize the recovery
of the
principal and interest of the Loans and/or the
advances; |
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10.1.7 |
Party B is in violation of Clauses
8.1, 8.2
and 8.4 hereof and impairs Party A’s interests, or in violation of Clauses
8.3, 8.5, 8.6, and 8.7 hereof, Party B fails to remedy its default
immediately under demand from Party A to the detriment of Party
A; |
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10.1.8 |
the occurrence of any other events
which in
the opinion of Party A may impair Party A’s lawful interests.
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10.2 |
If
any of the following events occurs on the side of the guarantor
which
Party A considers that it is likely to affect the capability of
the
guarantor to perform its obligations under the guarantee and requires
the
guarantor to eliminate such adverse effect, or requires Party B
to expand
or change the terms of guarantee, but the guarantor and Party B
fail to do
so, it shall be deemed as breach of
contract:
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10.2.1 |
any
event similar to those described in Clause 6.2.6 hereof
occurs;
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10.2.2 |
the guarantor has concealed the information
on
its capability to undertake the obligations of the guarantee or has
not
obtained authorization from the authority when executing the irrevocable
letter of guarantee; |
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10.2.3 |
the guarantor fails to pass the corporation
annual examination; |
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10.2.4 |
the guarantor neglects in the manage
and
enforcement of its claim for the receivable, or disposes of its existing
major assets for no consideration or in other improper
manners. |
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10.3 |
If
any of the following events happens on the side of the mortgagor
(or the
pledgor) which Party A considers that the mortgage (or pledge)
placed may
become invalid or the security (or the collateral) may depreciate
in
value, and requires the mortgagor (or the pledgor) to eliminate
such
adverse effect, or requires Party B to expand or change the terms
of
guarantee, but the mortgagor (or the pledgor) and Party B fail
to do so,
it shall be deemed as breach of
contract:
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10.3.1
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the
mortgagor (or the pledgor) has no title to or right to dispose
of the
security (or the collateral), or such title or right is in
dispute;
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10.3.2 |
the security (or the collateral)
has been
leased, attached, distrained or taken over and/or Party B conceals
the
occurrence of such events; |
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10.3.3 |
without prior written consent from
Party A,
the mortgagor transfers, leases out, places a second mortgage on
the
security or disposes of the security in any other improper manner,
or
although the security is disposed of with prior written consent from
Party
A, the proceeds therefrom have not been applied to the repayment
of the
debts owed to Party A by Party B as required by Party
A; |
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10.3.4 |
the mortgagor fails to keep the security
in
safe custody or to maintain and repair the security properly, leading
to
substantial depreciation of the value of the security; or the mortgagor's
actions jeopardize the security directly, leading to a decrease in
the
value of the security, or the mortgagor fails to keep the security
insured
as required by Party A during the continuance of the
mortgage. |
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10.4 |
Should
any of the breach of contract described in Clauses 10.1, 10.2 and
10.3
occur, Party A shall be entitled to take the following measures
separately
or jointly and Party B shall not raise any objection
thereto:
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10.4.1 |
to
stop releasing the unutilized portion of the Loans offered to Party
B
under the facility or stop giving the unutilized credit limit offered
to
Party B by ways of acceptance, opening of letters of credit and
issue of
confirmations under the facility;
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10.4.2 |
to declare the principal and interest
of the
Loans advanced under the facility and relevant expenses immediately
due
and payable; |
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10.4.3 |
notwithstanding any advances made
by Party A
in respect of the acceptance of drafts or opening of letters of credit
or
issue of confirmations during the availability period of the Facility,
Party A may require Party B to increase the amount of margin, or
to
transfer the deposit of Party B or the amount held in the settlement
account to its margin account for the purpose of securing payment
of the
advances to be made by Party A in future under this Agreement, or
to place
the same in the custody of a third party to facilitate the making
of
advances to Party B by Party A in future; |
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10.4.4 |
to debit the settlement account and/or
other
accounts of Party B by all the debts payable by Party B under this
Agreement directly; |
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10.4.5 |
to make recourse pursuant to Clause
13
hereof. |
This
Agreement may be modified and terminated upon an agreement in writing entered
into between Party A and Party B through negotiation. This Agreement shall
remain in force until the above-mentioned written agreement has been reached.
Neither party shall modify, amend or terminate this Agreement unilaterally.
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12.1 |
During
the continuance of this Agreement, no waive, forbearance or indulgence
of
Party A in enforcing any of its interests or rights hereunder against
any
breach of contract or delay on the side of Party B shall prejudice,
affect
or restrict Party A's interests and rights as a creditor under
the
relevant laws and regulations and this Agreement, nor shall it
be deemed
as Party A's approval for or permission of any acts that are in
breach of
this Agreement, or operate as a waiver of its rights to take actions
against existing or future
defaults.
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12.2 |
Should
this Agreement or any provisions hereof become invalid under the
law for
whatsoever reasons, Party B shall continue to fulfill its obligations
to
repay all the debts owed to Party A hereunder. In such event, Party
A
shall be entitled to terminate this Agreement and forthwith demand
Party B
to settle all its debts hereunder.
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12.3 |
Each
notice and demand to be given by Party A and Party B hereunder
shall be
made in writing. Each telex, telegram or letter sent by Party A
to Party B
shall be deemed to have been served on Party B once the same has
been sent
or has been given to the post
office.
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12.4 |
Any
written supplemental agreement entered into between Party A and
Party B
through negotiations in respect of matters not covered herein and
any
specific contract entered into under this Agreement are schedules
to this
Agreement and constitute the integral parts
hereof.
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13.1 |
The
execution, construction and settlement of disputes of this Agreement
shall
be governed by the laws of the People’s Republic of China. The interests
of Party A and Party B are protected by the laws of the People’s Republic
of China.
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13.2 |
Any
dispute between Party A and Party B in connection with the performance
of
this Agreement may be settled by the two parties through negotiations.
In
case no settlement can be reached through negotiations, any of
the Parties
may submit the dispute to the People’s Court in the region where Party A
is located.
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This
Agreement shall take effect upon affixing the signatures and official seals
by
the authorized signatories of the two parties and completion of the formalities
of guarantee prescribed in Clause 5 hereof. This Agreement shall remain
effective until the date on which all the debts and other relevant expenses
owed
to Party A by Party B hereunder are settled in full.
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This
Agreement is executed in 7 counterparts with each having the same
legal
effect. Party A, Party B, the guarantors and registration authority
each
holds one thereof.
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PARTY
A (OFFICIAL SEAL)
Shenzhen
Xxxxxxxx Xxxxxx of China Merchants Bank
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PARTY
B (OFFICIAL SEAL)
Winner
Industries (Shenzhen) Co., Ltd.
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AUTHORIZED
SIGNATORY
(SIGNATURE):
Lei Li
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AUTHORIZED
SIGNATORY
(SIGNATURE):
Xxxxxxxx Xx
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DATE:
June 27th,
2005
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DATE:
June 27th,
2005
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