Document:

English
      Translation of Credit Facility Agreement

    

    Contract
      No.: Year 2006 She Zi No. 0006475001

    

    Grantor:
      Shenzhen Anlian Branch of China Merchants Bank ("Party A")

     

    Address:
      1F Anlian Building, No. 2222 Jintian Rd, Shenzhen, Guandong
      Province

    Legal
      Representative/Person-in-charge: Yuxuan Yan Position: President

    

    Applicant:
      Winner Industries (Shenzhen) Co., Ltd. ("Party B")

     

    Address:
      Winner Industrial Park, Bulong Road Longhua Town

    Legal
      Representative: Jianquan Li 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 40,000,000 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.

    

    
      	
              1.

            	
              Extent
                of Facility

            

    

    

    Party
      A
      shall make available to Party B the facility of up to RMB 40,000,000 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. 

    

    
      	
              2.

            	
              Term
                of the Facility

            

    

    

    The
      facility shall be available for a term of one year, commencing from August
      15, 2006
      to
      August 15 2007, 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.

    

    
      	
              3.

            	
              Utilization
                of the Facility

            

    

    

    
      	 	
              3.1

            	
              Types
                and Scope of the Facility

            

    

     

    The
      said
      facility shall be comprehensive facilities:

     

    
      	 	
              3.1.1

            	
              Comprehensive
                facilities. 

            

    

     

    Party
      B
      can make the following business transactions within the comprehensive
      facilities:

     

    
      	 	
              3.1.1.1

            	
              Working
                capital loans;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
               

            	
              3.1.1.2
                

            	
              Trade
                financing: 

            

    

    

    
      	
               

            	
              3.1.1.3

            	
              Discount
                of draft accepted by bank;

            

    

    

    
      	
               

            	
              3.1.1.4

            	
              Discount
                of commercial draft ;

            

    

    

    
      	
               

            	
              3.1.1.5

            	
              Acceptance
                of commercial draft ;

            

    

    

    
      	
               

            	
              3.1.1.6

            	
              Opening
                of letters of credit;

            

    

    

    
      	
               

            	
              3.1.1.7

            	
              Issue
                of confirmations.

            

    

     

    The
      allocation of the above facilities is to be confirmed by Party A.

    

    
      	 	
              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.

            

    

    

    
      	
               

            	
              3.3

            	
              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.
                

            

    

    

    
      	
              4.

            	
              Interest
                and Fees

            

    

    

    Relevant
      Interest or fees shall be determined by the specific contracts or application
      forms. 

    

    
      	
              5.

            	
              Guarantee
                Clause

            

    

    

    
      	 	
              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

            

    

    

    
      	 	
              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.

            

    

    

    
      	 	
              5.3

            	
              Other
                means of guarantee: Jianquan Li provides personal guarantee with
                limitless
                liability.

            

    

    

    
      	 	
              5.4

            	
              Party
                A may demand Party B to provide other supplementary security or deposit
                for any specific operation. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
              6.

            	
              Rights
                and Obligations of Party B

            

    

    

    
      	 	
              6.1

            	
              Party
                B shall have the following rights:

            
	 	 	 
	 	
              6.1.1

            	
              to
                request Party A to make available the Loans or other facilities under
                the
                facility upon the conditions stated
                herein;

            

    

    

    
      	
               

            	
              6.1.2

            	
              to
                utilize the facility according to this
                Agreement;

            

    

    

    
      	
               

            	
              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.

            

    

    

    
      	
               

            	
              6.1.4

            	
              to
                transfer the debts to a third party after obtaining consent from
                Party
                A.

            

    

     

    
      	 	
              6.2

            	
              Party
                B shall undertake the following obligations:

            
	 	 	 
	 	
              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;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              6.2.5

            	
              to
                obtain written consent from Party A before transferring the debts
                hereunder, in whole or in part, to a third
                party;

            

    

    

    
      	
               

            	
              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:

            

    

     

    
      	 	
              6.2.6.1

            	
              Party
                B suffers grave financial loss, asset loss or other financial
                distress;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              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;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
               

            	
              6.2.6.5

            	
              Party
                B’s controlling shareholder and other affiliates suffer great difficulty
                in business or finance which affects its normal
                operation;

            

    

    

    
      	
               

            	
              6.2.6.6

            	
              Party
                B concludes material related transactions with its controlling shareholder
                and other affiliates which affect its normal
                operation;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              6.2.6.8

            	
              other
                material events have happened which are likely to affect the solvency
                of
                Party B.

            

    

    

    
      	
              7.

            	
              Rights
                and Obligations of Party A

            

    

    

    
      	 	
              7.1

            	
              Party
                A shall have the following rights:

            
	 	 	 
	 	
              7.1.1

            	
              to
                require Party B to make payment of the principal and interest of
                the Loans
                and advances hereunder on time;

            

    

    

    
      	
               

            	
              7.1.2

            	
              to
                require Party B to provide any information about the utilization
                of the
                facility;

            
	 	 	 
	
               

            	
              7.1.3

            	
              to
                obtain information about the production, operation and financial
                activities of Party B;

            

    

    

    
      	
               

            	
              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;

            
	 	 	 
	
               

            	
              7.1.5
                

            	
              to
                transfer the principal and interest of the Loans and/or advances
                hereunder
                directly out of Party B’s account;

            

    

    

    
      	
               

            	
              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;

            

    

     

    
      	
               

            	
              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.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              7.2

            	
              Party
                A shall undertake the following obligations:

            
	 	 	 
	 	
              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;

            

    

    

    
      	 	
              7.2.2

            	
              to
                keep the information concerning the assets, finance, production and
                operational conditions of Party B confidential unless otherwise required
                by law.

            

    

    

    
      	
              8.

            	
              Party
                B hereby warrants that:

            

    

    

    
      	 	
              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;

            

    

    

    
      	 	
              8.2

            	
              it
                executes and performs this Agreement with proper authorization from
                its
                board of directors or any other
                authority;

            

    

    

    
      	 	
              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;

            

    

    

    
      	 	
              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;

            

    

    

    
      	 	
              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;

            

    

    

    
      	 	
              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;

            

    

    

    
      	 	
              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.

            

    

    

    
      	
              9.

            	
              Other
                Expenses

            

    

    

    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.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              10.

            	
              Breach
                of Contract and Remedy

            

    

    

    
      	 	
              10.1

            	
              Any
                of the following events on the side of Party B shall be deemed as
                breach
                of contract:

            
	 	 	 
	 	
              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;
                

            

    

    

    
      	
               

            	
              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;

            
	 	 	 
	
               

            	
              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;

            

    

     

    
      	
               

            	
              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;

            
	 	 	 
	
               

            	
              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;

            

    

    

    
      	
               

            	
              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;

            
	 	 	 
	
               

            	
              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;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
               

            	
              10.1.8

            	
              the
                occurrence of any other events which in the opinion of Party A may
                impair
                Party A’s lawful interests. 

            

    

    

    
      	 	
              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:

            

    

      

    
      
        	
                 

              	
                10.2.1

              	
                any
                  event similar to those described in Clause 6.2.6 hereof
                  occurs;

              

      

       

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              10.2.3
                

            	
              the
                guarantor fails to pass the corporation annual
                examination;

            

    

    

    
      	
               

            	
              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.

            

    

     

    
      	 	
              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:

            

    

     

    
      	 	
              10.3.1

            	
              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;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              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.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
              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:

            
	 	 	 
	 	
              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;

            

    

    

    
      	
               

            	
              10.4.2

            	
              to
                declare the principal and interest of the Loans advanced under the
                facility and relevant expenses immediately due and
                payable;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              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;

            

    

    

    
      	
               

            	
              10.4.5

            	
              to
                make recourse pursuant to Clause 13
                hereof.

            

    

    

    
      	
              11.

            	
              Modification
                and Termination

            

    

    

    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.
      

    

    
      	
              12.

            	
              Miscellaneous

            

    

    

    
      	 	
              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.

            

    

    

    
      	 	
              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.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
              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.

            

    

    

    
      	 	
              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.

            

    

    

    
      	
              13.

            	
              Applicable
                Law and Settlement of
                Disputes

            

    

    

    
      	 	
              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.

            

    

    

    
      	 	
              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.

            

    

     

    
      	
              14.

            	
              Effectiveness

            

    

    

    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.

    

    
      	
              15.

            	
              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. 

            

    

    

    

    
      	
              PARTY
                A (OFFICIAL SEAL)

              Shenzhen
                Anlian Branch of China Merchants Bank

            	
              PARTY
                B (OFFICIAL SEAL)

              Winner
                Industries (Shenzhen) Co., Ltd.

            
	
               

            	
               

            
	 	 
	
              /s/
                Yuxuan Yan

            	
              /s/
                Jianquan Li

            
	
              
                

              

              AUTHORIZED
                SIGNATORY

              (SIGNATURE):
                Yuxuan Yan

            	
              
                

              

              AUTHORIZED
                SIGNATORY

              (SIGNATURE):
                Jianquan Li

            
	
               

            	
               

            
	
              DATE:
                July 27th,
                2006

            	
              DATE:
                July 27th,
                2006ENGLISH
      TRANSLATION OF MORTGAGE 

    CONTRACT
      OF MAXIMUM AMOUNT

    

    Mortgagee:
      Shenzhen Anlian Branch of China Merchants Bank ("Party A")

    

    Address:
      1F Anlian Building, No 2222 Jitian Rd, Shenzhen, Guandong Province 

    Legal
      Representative (Person-in-charge): Yuxuan Yan    Position:
      President

    

    Mortgagor:
      Winner Industries (Shenzhen) Co., Ltd.  ("Party B")

    

    Address:
      Winner Industrial Park, Bulong Road Longhua Town, Shenzhen City 

    Legal
      Representative: Jianquan Li    Position:
      Board Chairman

    

    Whereas:

    

    Party
      A
      and Party B, being the Facility Applicant, have entered into a Credit Facility
      Agreement (Contract No.: Year 2006 She Zi No. 0006475001) on July 27 2006,
      pursuant to which Party A agrees to grant to Party B a comprehensive facility
      of
      up to RMB 40,000,000 yuan (the “Facility”) during the term of the Facility
      commencing from the August 15, 2006 to August 15, 2007 (the “Availability
      Period”).

    

    Party
      B
      is willing to place a mortgage on the property to which it has title or of
      which
      it is rightfully entitled to dispose for the purpose of securing the full
      payment of all the debts owed to Party A by Party B under the Credit Facility
      Agreement on time. Upon examinations, Party A agrees to accept such property
      as
      security. Parties A and B, after negotiations on the basis of equality, hereby
      enter into this Contract subject to the following terms and in accordance with
      the relevant laws and regulations:

     

    
      	
              1.

            	
              SECURITY
                OFFERED BY PARTY B 

            

    

    

    Details
      in security list

     

    
      	
              2.

            	
              MORTGAGE
                FOR MAXIMUM AMOUNT OF THE
                FACILITY

            

    

    

    
      	 	
              2.1

            	
              The
                Facility referred to herein shall mean the maximum extent of facility
                which Party A will grant to Party B during the Availability Period
                in
                respect of on-balance-sheet transactions such as continuing and revolving
                loans, trade financing and discount of bills (collectively referred
                to as
                the “Loans”) and off-balance-sheet transactions such as acceptance of
                commercial draft, opening of letters of credit and issue of confirmations
                pursuant to the Credit Facility
                Agreement.

            

    

    

    
      	 	
              2.2

            	
              During
                the Availability Period, Party A may separately release the Loans
                or
                provide other facilities under the Facility to Party B. Party B may
                utilize the Facility available in various forms in a revolving manner.
                The
                details of each provision of the Loans or other facilities such as
                the
                amounts, periods and specific purposes shall be prescribed in the
                respective loan contracts, certificates of indebtedness or contracts
                for
                granting other facilities. Any of the above transactions may end
                on a date
                later than the expiry date of the Availability Period and both parties
                shall not raise any objection
                thereto.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              2.3

            	
              If
                any of the Loans or other facilities advanced to Party B by Party
                A under
                the Facility Agreement remains outstanding upon the expiry of the
                Availability Period, Party B shall guarantee the repayment of the
                same to
                the extent of the Facility by way of the security it has offered.
                

            

    

    

    
      	 	
              2.4

            	
              Regarding
                the Facility provided by Party A to Party B by ways of acceptance
                of
                commercial draft, opening of letters of credit, issue of confirmations
                and
                so forth during the Availability Period, Party B shall guarantee
                the
                repayment of all the debts incurred by Party B (including but not
                limited
                to the principal and interest of the advances made by Party A and
                relevant
                expenses) by way of the security it has offered notwithstanding that
                Party
                A has not made any advances upon the expiry of the Availability
                Period.

            

    

    

    
      	 	
              2.5

            	
              The
                guarantee given by Party B for the Facility by way of the security
                it has
                offered shall remain effective if Party A demands early payment from
                Party
                B in accordance with the Credit Facility Agreement and the respective
                specific contracts before the expiry of the Availability
                Period.

            

    

     

    
      	
              3.

            	
              COVERAGE
                OF THE MORTGAGE

            

    

    

    
      	 	
              3.1

            	
              The
                mortgage constituted hereunder shall cover the outstanding principal
                of
                the Loans or other facilities advanced to Party B by Party A in accordance
                with the Credit Facility Agreement (up to the extent of the Facility
                of
                RMB 25,000,000) and interest thereon, default interest, default payments
                and all other relevant expenses such as those arising from the enforcement
                of the security, including but not limited to the
                following:

            

    

    

    
      	 	
              3.1.1

            	
              the
                outstanding principal of the Loans advanced by Party A pursuant to
                the
                respective loan contracts or certificates of indebtedness concluded
                under
                the Credit Facility Agreement and interest thereon, default interest,
                default payments and relevant
                expenses;

            

    

    

    
      	 	
              3.1.2

            	
              the
                outstanding principal of the advances made to Party B by Party A
                in
                fulfilling its obligations of making payment in respect of the commercial
                draft, letters of credit and confirmations under the Credit Facility
                Agreement and interest thereon, default interest, default payments
                and
                relevant expenses;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              3.1.3

            	
              all
                expenses accrued to Party A as a result of recovering the debts from
                and
                enforcing the security against Party
                B.

            

    

    

    
      	 	
              3.2

            	
              If
                the outstanding principal of the Loans or other facilities advanced
                to
                Party B by Party A exceeds the extent of the Facility, the exceeding
                amount shall not fall within the guarantee given by Party B. The
                guarantee
                given by Party B shall only cover the outstanding principal of the
                Loans
                or other facilities that is within the extent of the Facility, interest
                thereon, default interest, default payments and other relevant
                expenses.

            

    

    

    
      	
              4.

            	
              INDEPENDENCE
                OF THE CONTRACT

            

    

    

    
      	 	
              4.1

            	
              This
                Contract is independent and unconditional. Subject only to the completion
                of the formalities giving effect to this Contract as provided for
                in
                Clauses 6 and 19 hereof, this Contract shall be legally binding on
                Parties
                A and B. The validity of this Contract shall not be affected by the
                validity of the Credit Facility Agreement and the respective specific
                contracts and by any agreements or documents entered into between
                Party B
                and any entity. Nor shall it be altered as a result of fraud,
                reorganization, winding up, dissolution, liquidation, bankruptcy
                or
                whatever on the part of Party B. 

            

    

    

    
      	 	
              4.2

            	
              The
                guarantee given by Party B hereunder shall not be affected if Party
                A
                stops releasing the unutilized portion of the Loans and/or other
                facilities to Party B and declares that the loan advanced shall be
                immediately due and payable or makes claims for the same pursuant
                to the
                Credit Facility Agreement.

            

    

    

    
      	
              5.

            	
              CUSTODY
                AND OBLIGATIONS IN RESPECT OF THE SECURITY AND DOCUMENTS OF TITLE
                TO OR
                RIGHTS OVER THE SECURITY

            

    

    

    
      	 	
              5.1

            	
              During
                the term of the mortgage, the security shall be placed in custody
                of Party
                B or its attorney. Party B and its attorney shall keep the security
                in
                safe custody, be responsible for the maintenance and repair of the
                security and keeping the security in good order and condition, and
                at any
                time allow Party A to examine the
                security.

            

    

     

    The
      term
      of the mortgage shall mean the period commencing from the effective date of
      this
      Contract and ending on the date on which the principal and interest of the
      Facility and all other relevant expenses under the Credit Facility Agreement
      are
      paid off.

    

    
      	 	
              5.2

            	
              During
                the term of the mortgage, Party B shall refrain from any acts that
                are
                likely to depreciate the value of the security. Should Party B commit
                such
                act, Party A shall be entitled to demand Party B to stop doing such
                act
                and restore the value of the security or provide additional security
                approved by Party A. Expenses arising from restoration of the value
                of the
                security or creation of new security shall be borne by Party
                B.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              5.3

            	
              During
                the term of the mortgage, Party B shall deliver to Party A the documents
                of title to or rights over the security and other relevant certifying
                documents. Party A shall keep such documents in safe custody or it
                shall
                bear the costs of replacement of the documents damaged or lost due
                to
                improper custody on the part of Party
                A.

            

    

    

    
      	
              6.

            	
              REGISTRATION
                OF SECURITY

            

    

    

    Parties
      A
      and B shall deliver this Contract and the relevant materials to the registration
      authority for registration of the security within 15 days from the execution
      date of this Contract.

     

    
      	
              7.

            	
              INSURANCE

            

    

    

    
      	 	
              7.1

            	
              Party
                B shall keep the security insured against such risks as Party A may
                require with Shenzhen Branch of China Pacific Property Insurance
                Co.,
                Ltd., the insurer designated by Party A, for an amount not less than
                the
                full replacement cost thereof. The insurance policy shall be placed
                in the
                custody of Party A who shall be named as the first beneficiary therein.
                The insurance shall be maintained in full force and effect beyond
                the
                Availability Period agreed in the Credit Facility Agreement. Whenever
                the
                Availability Period is extended, Party B shall go through the formalities
                to extend the term of the insurance. In case of any damages to the
                security insured, Party A shall be given priority to recover the
                principal
                and interest of the Loans and the advances and all other relevant
                expenses
                under the Credit Facility Agreement out of the insurance
                indemnity.

            

    

    

    
      	 	
              7.2

            	
              Party
                B shall extend the term of the insurance on the security if it fails
                to
                pay off all its debts under the Credit Facility Agreement upon the
                expiry
                of the Availability Period notwithstanding that the Availability
                Period
                has not been extended. If Party B fails to extend the term of the
                insurance on the security, Party A is entitled to do so on behalf
                of Party
                B and the expenses arising therefrom shall be borne by Party
                B.

            

    

    

    
      	
              8.

            	
              LIMITATIONS
                ON DISPOSAL OF THE SECURITY DURING THE TERM OF THE
                MORTGAGE

            

    

    

    
      	 	
              8.1

            	
              During
                the term of the mortgage, Party B shall not transfer the security
                hereunder by ways of sale, exchange, gift or whatever without
                authorization. If Party B is required to transfer the security hereunder
                for consideration, it shall be subject to the following
                conditions:

            

    

     

    
      	 	
              8.1.1

            	
              Party
                B shall obtain written consent from Party A and inform the transferee
                of
                the mortgage placed on the security to be transferred, otherwise
                the
                transfer shall be null and void;

            

    

    

    
      	 	
              8.1.2

            	
              Party
                B shall, on demand of Party A, provide additional security if the
                security
                will be transferred at a price far less than its value and the proceeds
                from such transfer are insufficient to cover the Facility and all
                other
                expenses in full; and no such transfer shall be effected if Party
                B fails
                to do so;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              8.1.3

            	
              The
                proceeds from the transfer of the security shall be deposited directly
                in
                the bank account designated by Party A for the purpose of payment
                or early
                payment of the principal and interest of all the Loans or advances
                and all
                other relevant expenses under the Credit Facility Agreement. After
                Party B
                has deposited the full amount of the proceeds from the transfer of
                the
                security in the bank account designated by Party A, Party A may assist
                Party B to cancel the registration of the security and return to
                Party B
                the documents of title to or rights over the
                security.

            

    

    

    
      	 	
              8.2

            	
              Without
                prior written consent from Party A, Party B shall not transfer, lease
                out,
                place a second mortgage on the security hereunder or dispose of the
                security hereunder in any other improper
                manner.

            

    

    

    
      	
              9.

            	
              All
                expenses in connection with matters such as insurance, notarization
                and
                registration hereunder shall be borne by Party
                B.

            

    

     

    
      	
              10.

            	
              Once
                this Contract has taken into effect, neither party shall modify or
                terminate this Contract without prior consent of the other party.
                This
                Contract shall only be modified or terminated upon a written agreement
                between the two parties through negotiations. All provisions hereof
                shall
                remain in force until the said written agreement has been
                reached.

            

    

     

    
      	
              11.

            	
              If
                Party B undergoes division or amalgamation during the continuance
                of this
                Contract, the organization(s) so formed thereafter shall be jointly
                or
                severally liable for Party B’s obligations hereunder. In the event that
                Party B is declared dissolved or bankrupt, Party A shall be entitled
                to
                dispose of the security prior to the expiry of this
                Contract.

            

    

     

    
      	
              12.

            	
              Party
                A may dispose of the security in accordance with the law upon occurrence
                of any of the following events:

            

    

    

    
      	 	
              12.1

            	
              any
                of the events of default specified in Clause 10.1 of the Credit Facility
                Agreement occurs on the part of Party B and Party A exercises the
                right of
                recourse pursuant to the Credit Facility Agreement and the respective
                specific contracts;

            

    

    

    
      	 	
              12.2

            	
              any
                of the events of default specified in Clause 10.3 of the Credit Facility
                Agreement occurs on the part of Party B, or Party B fails to perform
                its
                obligations hereunder, constituting default under the provisions
                hereof;

            

    

    

    
      	 	
              12.3

            	
              Party
                B dies without appointing a successor or
                beneficiary;

            

    

    

    
      	 	
              12.4

            	
              Party
                B’s successor or beneficiary waives its right of succession or to gift,
                and refuses to undertake the obligation to pay the principal and
                interest
                of loans;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              12.5

            	
              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;

            

    

    

    
      	 	
              12.6

            	
              the
                occurrence of any other matters that would jeopardize the enforcement
                of
                claims under the Credit Facility
                Agreement.

            

    

     

    
      	
              13.

            	
              LIABILITY
                FOR DEFAULT

            

    

    

    
      	 	
              13.1

            	
              If
                Party B violates Clause 5 hereof and fails to maintain and manage
                the
                security properly, resulting in depreciation of the value of the
                security,
                or Party B commits any acts that jeopardize the security directly,
                resulting in depreciation of the value of the security, and refuses
                to
                restore the value of the security as required by Party A or provide
                additional security acceptable to Party A, Party A shall be entitled
                to
                dispose of the security lawfully before the expiry of this
                Contract.

            

    

    

    
      	 	
              13.2

            	
              If
                Party B violates Clause 8 hereof and disposes of the security without
                authorization, such disposal shall be null and void. Party A shall
                be
                entitled to require Party B to stop doing such tortious act immediately,
                restore the original security and, where the actual circumstances
                so
                require, provide other security acceptable to Party A, or Party A
                shall be
                entitled to dispose of the security lawfully before the expiry of
                this
                Contract.

            

    

    

    
      	 	
              13.3

            	
              If
                Party B conceals the fact that the security is jointly owned, in
                dispute,
                attached, distrained, leased out or in mortgage, or the fact that
                Party B
                has no title to and right of disposition over the security, Party
                B shall
                be liable for the economic losses so incurred to Party
                A.

            

    

    

    
      	 	
              13.4

            	
              If
                Party B fails to provide additional security on demand of Party A,
                Party B
                shall pay to Party A a default payment equivalent to 10 % of the
                Facility
                under the Credit Facility Agreement. Moreover, Party B shall indemnify
                Party A against any economic loss arising
                therefrom.

            

    

     

    
      	
              14.

            	
              If
                the security is attached or distrained by a People’s court as a result of
                Party A's application for enforcement of its right to the security
                hereunder due to the fact that the principal and interest of the
                Loans and
                advances and all other relevant expenses owed to Party A by Party
                B have
                not been paid on time upon expiry of the Availability Period, Party
                A
                shall be entitled to, from the date of such attachment or distraint,
                receive the natural yields derived from the security and the legal
                yields
                payable to Party B in respect of the
                security.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              15.

            	
              ENFORCEMENT
                OF SECURITY

            

    

    

    
      	 	
              15.1

            	
              Upon
                occurrence of any one or more of the events prescribed in Clauses
                12
                hereof, the right to the security may be enforced in the following
                ways:

            

    

    

    
      	 	
              15.1.1

            	
              the
                security may be converted into money directly or put up for auction
                or
                sale according to the agreement entered into between Parties A and
                B;

            

    

    

    
      	 	
              15.1.2

            	
              the
                security may be disposed of in such manner as stipulated in
                law.

            

    

    

    
      	 	
              15.2

            	
              Party
                A shall be given priority to have its claims satisfied with the proceeds
                from the above-mentioned disposal of the security. Any excess of
                the
                proceeds over the total of the principal and interest of the Loans
                and
                advances and all other relevant expenses owed by Party B under the
                Credit
                Facility Agreement, shall be vested in Party B. In case of deficiency,
                Party A shall exercise the right of recourse to recover the
                deficit.

            

    

     

    
      	
              16.

            	
              LAPSE
                OF RIGHT TO THE SECURITY

            

    

    

    If
      the
      principal and interest of the Loans and advances owed by Party B under the
      Credit Facility Agreement have been paid off on time upon expiry of the
      Availability Period, Party A’s right to the security shall lapse automatically.
      Party A shall return to Party B the documents of title or rights or certifying
      documents and the insurance policies of the security which are in its custody.
      Party A may, at the request of Party B, assist Party B to cancel the
      registration of the security.

     

    
      	
              17.

            	
              During
                the continuance of this Contract, no relaxation, forbearance or indulgence
                by Party A in enforcing any of its interests or rights under the
                Credit
                Facility Agreement against any events of default or delay of Party
                B shall
                prejudice, affect or restrict Party A’s interests and rights as creditor
                under the relevant laws and regulations and this Contract, nor shall
                it
                operate as a waiver of Party A’s rights to take actions against existing
                or future defaults. 

            

    

     

    
      	
              18.

            	
              APPLICABLE
                LAW AND SETTLEMENT OF
                DISPUTES

            

    

    

    
      	 	
              18.1

            	
              The
                execution, construction and settlement of disputes of this Contract
                shall
                be governed by the laws of the People’s Republic of
                China.

            

    

    

    
      	 	
              18.2

            	
              Any
                dispute between Parties A and B in connection with the performance
                of this
                Contract 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 of the territory where Party A is
                located.

            

    

     

    
      	
              19.

            	
              EFFECTIVENESS
                OF THE MORTGAGE CONTRACT

            

    

    

    This
      Contract shall take effect from the date on which the registration of the
      security comes into force upon affixing the signatures and official seals by
      the
      authorized signatories of the two parties. This Contract shall remain effective
      until the date on which the principal and interest of all the Loans and advances
      and all other expenses owed to Party A by Party B under the Credit Facility
      Agreement are settled in full.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              20.

            	
              This
                Contract is executed in 3 counterparts. Party A, Party B and the
                registration authority each holds one thereof.

            

    

     

    
      	 	 	 	 
	
              PARTY
                A:    (OFFICIAL
                SEAL)

              Shenzhen
                Anlian Branch of China Merchants Bank

            	 	 	 
	 	 	 	 
	AUTHORIZED
              SIGNATORY: Yuxuan Yan: /s/ Yuxuan Yan  	
            
	 	 	 	
            

    

     

    
      	PARTY
              B:    (OFFICIAL
              SEAL)
              Winner
                Industries (Shenzhen) Co., Ltd.

            	 	 	 
	 	 	 	 
	AUTHORIZED
              SIGNATORY: Jianquan Li: /s/ Jianquan Li  	
            
	
            	 	 	
            

    

    
       

    

    DATE:
      July 28, 2006

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