Attached files
Exhibit
10.4
Contract
No.: 2008, Shishi (Di) Zi, No. 0170
Maximum
Mortgage Contract
Important Notes: This Contract
is entered into by and between the parties on the basis of equal footing and
willingness in accordance with applicable laws and regulations. All terms hereof
reflect true intents of the parties hereto. In order to secure legal rights of
the Mortgagor, the Mortgagee hereby reminds the Mortgagor of reading the terms
in boldface in a careful manner, and of paying close attention to the meanings
of such terms.
This
Maximum Mortgage Contract (“Contract”) is entered into by
and between:
Mortgagee:
Industrial and
Commercial Bank of China, (Shishi City
Branch)
(“Party A”)
Responsible
Officer: Cai
Wufeng
Business
Address: ICBC
Building, 87 Road, Shishi
City
Tel and
Fax: 0595-88953264
And
Mortgagor:
Shishi Changsheng
Shoes Industry Co., Ltd.
(“Party B”)
Legal
Representative: Hong
Jianghan
Business
Address or Residence: Longshan Development Area,
Hanjiang Town, Shishi City
Tel and
Fax:
For
ensuring Party A's claims, Party B is willing to provide Party A with mortgage
guarantee (counter guarantee).
This
Contract is entered into by and between Party A and Party B in order to define
their respective rights and obligations, through negotiation based on equal
footing, in accordance with the Contract Law, the Guarantee Law, the Property Law and other
applicable laws and regulations.
Article
1 Guaranteed Principal Claims
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1.1
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Principal
claims guaranteed by Party B shall be the claims against the Debtor under
borrowing contract, bank acceptance agreement, L/C opening contract,
guarantee agreement and other financing documents (“Principal Contracts”)
between Party A and Shishi Feiying Plastic
Co., Ltd. (“Debtor”), for the
maximum balance to the extent of RMB 7,000,000.00
(RMB Seven
Million, in words) (the amount in words shall prevail in the event
of any difference between the amount in words and number), from January 4, 2008
to December 27,
2009 (including commencement date and expiry date) (“Effective Term”),
irrespective of whether such claims become due during the above period, or
of whether such claims have occurred before the maximum mortgage is
created.
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1.2
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The
above “Maximum
Balance” shall mean the total balances of the claims in RMB
converted from different foreign exchanges at the middle price of foreign
exchange published by Party A on the date when the Principal Claims under
Party A's guarantee liability are
determined.
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Article
2 Guaranteed Scope
Party B's
Maximum Mortgage covers principals of Principal Claims, interest accruals
thereon, penalties, compound interests, liquidated damages, damages and fees
used for realization of the mortgages (including but not limited to court fees,
attorney's fees, and appraisal fees). However, the fees used for realization of
the mortgages shall be firstly taken out from revenues of sale of the
collaterals, not included in the Maximum Balance under Article 1.1
hereof.
Article
3 Collaterals
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3.1
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Please
refer to the Collaterals List for details of the Collaterals. Such list
attached to this Contract shall have the same force and effect with this
Contract.
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3.2
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Party
A's mortgages shall be extended to accessory things, accessory rights,
attachments, additions, natural and legal fruits, substitutes of and
arising from the Collaterals, and insurance proceeds, damages and
compensations arising from loss, destruction or forfeiture of the
Collaterals.
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3.3
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If
the Collaterals are seized by the People's Court according to law due to
any failure to perform its due obligations by the Debtor or realization of
mortgages hereunder, Party A shall be entitled to collect natural and
legal fruits from the Collaterals from the date of such seizure. And such
fruits shall be firstly used for paying for collection of the
same.
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3.4
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The
agreed values of Collaterals on the Collaterals List shall not be deemed
as the appraisal grounds for disposal of such Collaterals by Party A, nor
limit Party A's rights to exercise the
mortgages.
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3.5
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Unless
otherwise as provided in the laws, title certificates and relevant
information of Collaterals shall be kept by Party A after they are jointly
confirmed by Party A and Party B.
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3.6
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During
the mortgage, Party B shall keep the Collaterals in good conditions
without reducing their values by using such Collaterals in an unreasonable
manner. Meanwhile, Party A shall be entitled to have access to the use of
Collaterals from time to time.
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3.7
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Party
B shall promptly inform Party A of any destruction, loss or forfeiture of
the Collaterals, as well as submit to Party A the certifications
specifying any such destruction, loss or forfeiture issued by relevant
competent authorities or department in a timely
manner.
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3.8
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If
the Collaterals are destroyed, lost or forfeited, the insurance proceeds,
damages or compensations obtained by Party B shall be applied to clear the
Debtor's obligations under the Principal Contracts in advance, or to
recover values of Collaterals upon consents of Party A, or shall be
deposited into an account as designated by Party A, so as to guarantee
performance of obligations under the Principal Contracts. The values of
Collaterals that have not been reduced shall be applied to guarantee the
Principal Claims.
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3.9
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Party
B shall cease any of its activities that is enough to reduce values of the
Collaterals; if values of the Collaterals are reduced due to any such
activities, it shall be obligated to recover values of the Collaterals, or
provide other collaterals whose values equal to the reduced
values.
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Article
4 Registration of Mortgage
The
parties shall complete the mortgage registration with relevant mortgage
registrar within ten days after this Contract is signed. Party A and Party B
shall complete the changes in registration in a timely manner if the registered
particulars are changed and it is required to complete the changes in
registration according to law.
Article
5 Insurance
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5.1
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Party
B shall insure the Collaterals at the request of Party A within fifteen
days after this Contract is signed. If the insurance for Collaterals
cannot be completed once off due to reasons attributable to the insurer,
Party B shall promptly complete insurance formalities to ensure continuous
property insurance for the Collaterals during the Effective
Term.
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5.2
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It
is required to name Party A as the preferred beneficiary (the first
beneficiary) in the policies at the time of occurrence of insured
accidents. The insurer shall directly pay insurance proceeds to Party A.
No provisions limiting Party A's benefits shall be contained in such
policies.
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5.3
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Party
B shall not cease or cancel the insurance during the Effective Term. If
Party B ceases the insurance, Party A shall be entitled to insure the
Collaterals at sole costs of Party
B.
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5.4
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If
the Collaterals meet any insured accidents during the Effective Term, the
insurance proceeds shall be disposed subject to Article 3.8
hereof.
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Article
6 Determination of Principal Claims
The
claims under the Maximum Mortgage shall be determined under any of the following
circumstances:
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A.
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Effective
Term under Article 1.1 expires;
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B.
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It
is impossible for new claims to
occur;
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C.
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Mortgaged
properties have been sealed and/or
seized;
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D.
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The
Debtor and/or Party B has been declared as bankrupt or has been
cancelled;
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E.
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Other
circumstances as provided for determination of claims by the
laws.
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Article
7 Floating Mortgage
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7.1
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Party
B shall create the mortgages on its existing and future production
equipment, raw materials, semi-finished products and products. The
mortgaged properties shall be determined under any of the following
circumstances:
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A.
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Party
A's claims are not satisfied when the period for performance of
obligations becomes expiry;
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B.
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Party
B has been declared as bankrupt or has been
cancelled;
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C.
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Circumstances
under Article 8.1 hereof, causing Party A to exercise its mortgage rights,
have occurred;
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D.
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Other
circumstances, materially impacting Party A's claims, have
occurred.
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7.2
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If
Party B creates the Maximum Mortgage on the above properties, other
provisions hereof shall be applied as well, unless otherwise provided in
this Article.
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Article
8 Realization of Mortgage
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8.1
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Party
A has the right to realize the mortgages under any of the following
circumstances:
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A.
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The
Debtor fails to discharge its obligations when Party A's Principal Claims
become due (including becoming due
earlier);
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B.
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Party
B fails to recover values of the Collaterals or provide other collaterals
whose values equal to reduced values in the event of occurrence of
circumstances as specified in Article 3.9
hereof;
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C.
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Party
B or the Debtor is petitioned for bankruptcy or out-of-business,
dissolution, liquidation, or suspended for reorganization, or its business
license is cancelled or withdrawn;
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D.
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Party
B disposes the Collaterals under the floating mortgages by going beyond
the arm's length transaction in its production and
operation;
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E.
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Other
circumstances as provided by the laws and regulations, according to which
Party A may realize the mortgages.
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8.2
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When
realizing the mortgages, Party A may be indemnified with priority from the
proceeds arising out of auction of the Collaterals, or offset obligations
owed by the Debtor by appraised prices of the Collaterals, based on its
negotiation with Party B. If the parties fail to agree on realization of
mortgages, Party A may directly apply to the People's Court for disposing
the Collaterals by auction or
sales.
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8.3
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If
currency of the proceeds from disposal of the Collaterals is different
from such currency as set forth in the Principal Contracts, it is required
to satisfy Party A's claims after such proceeds are converted into the
money in currency of the Principal Contracts at applicable exchange rate
published by Party A.
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Article
9 Representations and Warranties by Party B
Party B
hereby represents and warrants to Party A as follows:
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9.1
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Party
B is the owner, or the manager authorized by the State, of the Collaterals
hereunder, and it has full rights to dispose the Collaterals. No dispute
in respect of ownership, right to use, or right to operate and manage on
the Collaterals is existing. Party B has obtained authorization or
approvals necessary to the mortgages pursuant to procedures and authority
as set forth in its articles of association, without any violation of
laws, regulations and other
provisions.
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9.2
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If
it is a listed company or a subsidiary controlled by a listed company, it
shall disclose the guarantees in a timely manner as required by the Securities Law, the
Listing Rules of Stock
Exchange, and other applicable laws, regulations and
rules.
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9.3
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It
is willing to create the mortgages in favor of the Debtor, and all of its
intents hereunder is its true
intends.
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9.4
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The
Collaterals can be created with mortgages according to law without any
limitations.
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9.5
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If
there are defects on the Collaterals, such defects have been reasonably
stated in any respect.
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9.6
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The
Collaterals have not been sealed, seized or
monitored.
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9.7
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If
the Collaterals have been leased in part or whole, the mortgages have been
well notified to the Lessee, and such lease has been notified to Party A
in writing.
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9.8
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No
mortgage has been created on the Collaterals in favor of other creditors;
or such mortgage has been well notified to Party A in writing if any such
mortgage was created.
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9.9
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The
Collaterals are not co-owned, or the mortgages have been agreed on in
writing by other co-owners if such Collaterals are
co-owned.
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Article
10 Undertakings
by Party B
Party B
hereby undertakes to Party A as follows:
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10.1
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Party
B shall continue to perform its guarantee liability hereunder without its
further consents under any of the following
circumstances:
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A.
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Party
B's guarantee liability has not been increased if Party A and the
principal Debtor change the Principal Contracts through
negotiation;
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B.
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Party
A transfers the Principal Claims and the Maximum
Mortgage.
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10.2
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Without
prior written consents of Party A, it shall not re-create any mortgage or
charge on the Collaterals in any way, nor lease, transfer or present the
Collaterals to any third party; however, the Collaterals shall be
prevented from any damage.
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10.3
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Party
B shall bear all fees, including but not limited to insurance fees,
appraisal fees, estimation fees, registration charges and other relevant
fees, arising out of conclusion and performance of this
Contract.
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10.4
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If
the mortgages granted to Party A are being or may be damaged by any third
party, Party B shall send a timely notice to Party A and assist to hold
Party A harmless.
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10.5
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When
Party A realizes the mortgages, Party B shall cooperate in an active
manner without giving any limitations against such
realization.
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10.6
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Party
B shall inform Party A in a timely manner under any of the following
circumstances:
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A.
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It
changes or replaces its articles of association, scope of business, legal
representative or equity;
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B.
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It
is out of business, or it is dissolved or comes into liquidation, or it is
suspended for reorganization, or its business license is canceled or
withdrawn, or it is petitioned for
bankruptcy;
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C.
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It
is being or may be involved in material economic disputes, suits and
arbitrations, or its properties have been sealed, seized or
monitored;
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D.
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If
Party B is a natural individual, its address, employer and contact methods
are changed.
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10.7
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Party
B shall accept and sign written notices from Party A in a timely
manner.
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10.8
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If
other guarantees are created in favor of Party A's Principal Claims,
irrespective of whether such other guarantees are granted by the Debtor or
a third party, Party A shall be entitled to determine the orders for
realizing the guarantees at its own discretions, and Party B hereby
undertakes not to bring any defense against any such determination. If
Party A waives, changes or loses its benefits in other guarantees, Party
B's guarantee liability shall not become null and void, nor reduced, but
remain effective.
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Article
11 Undertakings by Party A
Party A
hereby undertakes to Party B as follows:
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11.1
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Unless
otherwise as provided in laws, regulations and rules, Party A shall keep
confidential relevant documents, financial information, and other
undisclosed information in relevant materials, submitted by Party B in
performance of its obligations
hereunder.
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11.2
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The
balance shall be returned to Party B in a timely manner if there is any
such balance after all obligations under the Maximum Mortgage are paid
from the proceeds generated from disposal of the
Collaterals.
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Article
12 Breach
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12.1
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Any
party shall be deemed to breach this Contract if it fails to perform any
of its obligations hereunder or breaches any of its representations,
warranties and undertakings hereunder after this Contract comes into
effect. In such case, it shall indemnify the losses caused to the other
party.
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12.2
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Unless
otherwise as provided in this Contract, the other party shall be entitled
to take any other measures as specified in laws, regulations and rules of
the PRC if any party breaches this
Contract.
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Article
13 Effectiveness, Modification and
Termination
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13.1
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This
Contract comes into effect from the date of the signing of it, and ends on
the date when all of Party A's Principal Claims has been
satisfied.
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13.2
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Any
modification to this Contract shall be negotiated, made in writing, and
agreed on by the parties. Any such modification terms or agreements shall
be integral to this Contract, and shall have the same force and effect
with this Contract. Except for those terms as modified, the remaining
provisions hereof shall remain effective. However, original terms hereof
shall remain effective before those modified terms come into
effect.
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13.3
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If
any provision of this Contract becomes void or unenforceable, the validity
or enforcement of the remaining provisions hereof, or the validity of the
whole Contract shall not be affected in any
way.
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13.4
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Any
modification to and/or any termination of this Contract shall not affect
either party's rights to claim indemnification. And any termination of
this Contract shall not affect the validity of the terms in relation to
the dispute resolutions.
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Article
14 Dispute Resolutions
Conclusion,
validity, interpretation, performance of, and dispute resolutions arising out
of, this Contract shall be governed by the laws of the PRC. Any controversy or
dispute arising out of or in relation to this Contract shall be resolved through
negotiation by the parties hereto; if not reached, any such dispute shall be
resolved according to the method as set forth in B below:
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A.
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To
be arbitrated by / arbitration
commission; and the arbitration will be conducted in / (place
of arbitration) in accordance with the arbitration rules in force and
effect at the time of applying for such arbitration. The awards shall be
final and binding upon the parties.
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B.
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To
be judged and resolved by the court at the location of Party
A.
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Article
15 Miscellaneous
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15.1
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Without
prior written consents of Party A, Party B shall not transfer the whole or
part of its rights or obligations
hereunder.
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15.2
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Any
failure to exercise in whole or part, or any delay to exercise any of its
rights hereunder by Party A, shall not constitute a waiver or change of
such rights or any other rights, nor affect further exercise of such
rights or any other rights by it.
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15.3
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Party
A shall be entitled, in accordance with relevant laws, regulations or
other regulatory documents or requirements of finance regulatory
institutes, to provide information in relation to this Contract and other
relevant information to the basic credit information database of People's
Bank of China or other credit database established according to law for
search and use by eligible institutes or individuals. Meanwhile, Party A
shall be entitled to search relevant information of Party B through basic
credit information database of People's Bank of China or other credit
database established according to law for purpose of conclusion and
performance of this Contract.
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15.4
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This
Contract is made in three
originals with Party A, Party B and the registration
department holding one original respectively, and each original
shall have the same force and effect with the other
originals.
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Article
16 Other
Provisions
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16.1
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If the re-evaluated
values on the Collaterals multiplying the mortgage rate as specified in
the mortgage contract are less than the balance of the loan during the
loan, the borrower shall repay the loans in advance or add other
collaterals; otherwise, we shall be entitled to dispose the Collaterals
according to law.
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16.2
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Protective terms in
relation to the reminding of related risks shall be applicable to this
Contract.
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Appendix:
Collaterals List
Party A:
Industrial and
Commercial Bank of China, (Shishi City
Branch)
(common
seal)
Signed or
sealed by Authorized Signatory: Cai
Wufeng
Party B:
Shishi Changsheng
Shoes Industry Co., Ltd.
Legal
Representative (Authorized Agent): Hong
Jianghan
Signed or
Sealed by Co-owners of Collaterals:
Date:
January 4, 2008
Under the
Maximum Mortgage Contract (2008 Shishi (Di) Zi No.
0170)
Collateral
List
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Unit:
RMB (Ten Thousand)
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||||||||||||
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Name
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Title Certificates
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Location
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Conditions
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Appraised
Values
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Mortgaged
Amount for
Other
Claims
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Others
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||||||
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Shishi
Changsheng Shoes Industry Co., Ltd.
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Shi
Han Guo Yong (2005) No. 0047; Shi Fang Quan Zheng Han Jiang Zi No.
00102;
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Jiulongshan
Development Zone, Hongjue Village, Hanjiang Town, Shishi
City
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Land
use right granted for industry; land areas: 13394.66 m2; framework structure;
building areas: 4903.46m2
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RMB
Eighteen Million Four Hundred and Ten Thousand
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Not
Applicable
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Mortgagor:
Shishi Changsheng
Shoes Industry Co., Ltd. Co-owners (if any):
Legal
Representative (Authorized Agent): Hong
Jianghan
Mortgagee:
Industrial and
Commercial Bank of China, (Shishi City
Branch)
(common
seal)
Signed or
sealed by Authorized Signatory: Cai
Wufeng
Appendix
:
This
Appendix, supplementary to Article 16 “Other Provisions” of the
Maximum Mortgage Contract (2008
Shishi (Di) Zi No. 0170) dated on January 4, 2008, is
specified as follows:
The
Borrower (or other loanees, the same below) shall disclose to the Lender its
relationships and related transactions with its related parties. The Lender
shall be entitled to take remedial measures as provided in this Contract and
laws provided that the Borrower fails to perform its obligations to disclose the
above information, or the Borrower and its related parties meet any of the
following circumstances that may adversely impact its capability to perform its
obligations hereunder.
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I.
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Financial
conditions of the Borrower's related parties become
worse;
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II.
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The
Borrower or any of its related parties are investigated or imposed with
punishment by judicial bodies, administrative law enforcement authorities
and administration departments such as taxation authorities and the
administration for industry and commerce according to
law;
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III.
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The
control or the relationship under control between the Borrower and any of
its related parties is changed;
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IV.
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Any
of its related parties is or may be involved in material economic
disputes, suits and arbitration;
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V.
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Major
investors and key officers of the Borrower are replaced abnormally, or are
suspected of violation and crime, and then they are investigated or their
personal freedom is limited by judicial bodies according to
law;
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VI.
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Related
parties of the Borrower meet other circumstances that may adversely impact
the Borrower.
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In
accordance with the “Accounting Standards for
Enterprises –
Relationship with Related Parties and Disclosure of Related
Transactions”, the “Related Parties” in this Appendix shall
mean:
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I.
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Other
enterprises which are, directly or indirectly, controlled by or control,
or under the common control with, the
Borrower.
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II.
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Joint
venture enterprises of the
Borrower;
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III.
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Joint
operating enterprises of the
Borrower;
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IV.
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Major
investors and key officers of the Borrower or their close family
members;
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V.
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Other
enterprises that are controlled by major investors and key officers of the
Borrower or their close family
members.
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Other
terms, when used in this Appendix, shall have the same meanings ascertained in
the “Accounting Standards for
Enterprises –
Relationship with Related Parties and Disclosure of Related
Transactions”.
Party A:
Industrial and
Commercial Bank of China, (Shishi City
Branch)
(common
seal)
Legal
Representative (or Entrusted Agent): Cai
Wufeng
Date:
January 4, 2008
Party B:
Shishi Changsheng
Shoes Industry Co., Ltd.
Legal
Representative (Responsible Officer or Entrusted Agent): Hong
Jianghan
Date:
January 4, 2008
Registration
Seal of Shishi Property Registration Trade Center for Mortgage-related Borrowing
Contract
Mortgage
Registration Number: 082539