Guarantee Agreement
EXHIBIT
10.24
THIS
GUARANTEE AGREEMENT is made and entered into by and between SinoHub SCM Shenzhen,
Ltd. (the “Trustor”) with Xxx
Xxx Tao as the legal representative and Shenzhen Hongfeng Paper Products
Co. Limited (the “Guarantor”) with Li Xxxx Xxx as the legal
representative.
WHEREAS,
the Trustor, pursuant to the application made to China Construction Bank
Shenzhen Chengdong Sub-branch (the “Beneficiary” or the “Creditor”) for credit
line to open letters of credit, hereof to entrust the Guarantor to provide
guarantee of credit.
WHEREAS,
the Guarantor, has stated to provide guarantee of credit under the condition
that the terms of this agreement is executed and delivered by the
Trustor.
Hereinafter,
the Trustor and the Guarantor have reached an agreement through friendly
consultation to conclude the following contract.
Section
I Issuance of the Guarantee
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1.1
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Classification of guarantee:
provision of counter guarantee against the credit line according to letter
of credit the Bank issued to the Trustor and trust
receipt.
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1.2
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Purpose
of guarantee: the Trustor applies the credit line issued by the
Bank to open letter of credit.
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1.3
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the
Beneficiary or the Creditor of this agreement (name and
address):
China
Construction Bank Shenzhen Chengdong Sub-branch
11th
Floor, Huadouyuan Mansion, No. 1034 Jiabin Road Luohu District, Shenzhen,
P.R. China
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1.4
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The
master contract of the guarantee made by the guarantor under this
agreement: the Trustor applied to the Beneficiary or the Creditor by June,
2006 for the credit line of RMB22,000,000.00, and the contract number is:
Borrow
2008 Trade 614001R.
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1.5
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Guarantee
amount of this agreement:
RMB22,000,000.00.
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1.6
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Guarantee
term: 1 year.
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1.7
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Other
major terms:
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1.8
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The Trustor
entrusts the Guarantor to provide guarantee to the Beneficiary or the
Creditor. Within the term all the occurring expenses, such as notarization
fees, evaluation fees, appraisal fees, insurance fees, mortgage fees,
witness fees, etc., shall be at the cost of the
Trustor.
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1.9
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The
Trustor and the Guarantor have agreed on condition that the Suretyship
Contract or the guarantee letter the Guarantor issued to the Beneficiary
or the Creditor is not compliant with this agreement, this agreement shall
apply.
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Section
II Guarantee Fee
The
guarantee fee is calculated and collected on the basis of guarantee amount and
according to the guarantee term and rate of guarantee fee.
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2.1
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The
guarantee fee of the agreement is RMB560,000.00, being calculated based on
the yearly rate.
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2.2
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Guarantee
term: 1 year.
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2.3
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Guarantee
amount: RMB560,000.00
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2.4
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Payment
options: Cash or cash cheque
(cash/transfer)
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2.5
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Time
of payment: the Trustor shall issue a cash cheque at RMB560,000.00 as the
payment guarantee to the Guarantor in 20 days before the Guarantor issue
the Suretyship Contract or guarantee letter to the Beneficiary or the
Creditor, and simultaneously start transferring agreed amount of guarantee
fee to the specified account of the Trustor in cash since the day when the
Guarantor issues the Suretyship Contract or guarantee letter to the
Beneficiary or the Creditor until the total amount reaches RMB560,000.00,
and in the end the Guarantor, after confirming having received all the
guarantee fee at RMB560,000.00, shall issue a cash cheque with the total
amount of RMB560,000.00 back to the Trustor. If the Trustor
fails to deliver the guarantee fee as required in time and amount after
the Guarantor issues the Suretyship Contract or guarantee letter to the
Beneficiary or the Creditor, the Guarantor is entitled to cash the cheque
that the Trustor issued in advance as the guarantee
fee.
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2.6
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Overdue
guarantee fee: on the condition that the Trustor fails to execute the
terms in the master Suretyship Contract on schedule, which lead to
the overdue guarantee, then the Trustor is obliged to pay the Guarantor
for overdue guarantee fee. Overdue guarantee fee is based on the total of
overdue guarantee principal and interest, and shall be calculated and
collected according to 3% per month; monthly charge will still periods
less than a calendar month. The Guarantor shall collect 5‰ of the
overdue guarantee fee as penalty for breach of contract from the Trustor
in case of the overdue delivery of guarantee fee without the written
consent of the Guarantor.
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Section
III Guarantee Fee and Other Counter Guarantee
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3.1
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After the Guarantor issues the
above guarantee to the Beneficiary or the Creditor, the Trustor shall
deposit no less than 30% of the credit line as guarantee money to the
account specified by the Bank before applying for opening each letter of
credit to the Bank. The guarantee money is performance bond,
serving as counter guarantee against
the guarantee that the Trustor executes the master contract with the
Beneficiary or the
Creditor.
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3.2
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The
Trustor shall provide the Guarantor with the following mode of guarantee
before the Guarantor provides the Beneficiary or the Creditor with the
above guarantee:
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The
legal representative of the Trustor, Hantao Cui and Lei Xia, the couple,
unlimited counter guarantee
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3.3
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The
above counter Suretyship Contract or agreement shall be signed separately,
and constitutes a part of this Agreement, having
the same legal effect as this
agreement.
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3.4
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The
Trustor commits that the Guarantor shall be the only beneficiary of the
above counter guarantee measures, and means the exclusive right. If the
Trustor re-mortgages or re-pledges, sub-mortgages or sub-pledges, assigns,
transfers, leases or uses the above counter guarantee for other purposes
that may affect the interest of the Guarantor before or after signing this
Agreement, then the Guarantor is entitled to claim the Trustor for
criminal responsibility.
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Sector
IV Provision of the Documents
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4.1
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Before
the Guarantor signs the Suretyship Contract or opens guarantee letter with
the Beneficiary or the Creditor, the Trustor is obliged to provide the
Guarantor with the original copies of the following documents, or the true
and complete duplicates testified with the corporate chop and the
signature of the legal representative of the Trustor. The original copy of
the first document shall be returned to the Trustor after being validated;
whereas the copy of this document with the corporate chop shall be
retained.
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1.
Enterprise's legal person's business license of the Trustor;
2.
The latest one-month commercial information of the Trustor;
3.
Articles of
association
of the Trustor;
4.
The list of all the incumbent directors and signature samples of the
Trustor;
5.
Resolutions of the meetings of the board of directors, resolutions of the
meetings of the board of shareholders agreeing on Trustor signing this
Agreement;
6.
The financial report and auditing report of the prior year of the Trustor,
together with the financial report of the prior month before
application;
7.
Ownership certificate of the collateral or pledge (if there’s any collateral or
pledge) and other relative documents;
8.
Relative documents of the third party.
Section
V Representations and Warranties
5.1
The Trustor makes the following representations and warranties:
5.1.1
The Trustor is a valid company legally registered according to laws of People’s
Republic of China, or the natural person with full capacity for civil rights and
civil conduct;
5.1.2
The Trustor commits to operate legally and obeys the rules and regulations of
People’s Republic of China. Its operation or investment shall not pollute the
environment or do harm to the health of people;
5.1.3
The Trustor is fully entitled and legally capable of signing and executing this
Agreement;
5.1.4
The Trustor is legally entitled to sign the contract with the Beneficiary or the
Creditor, and fully capable of executing the contract;
5.1.5
The Trustor fully accepts the guarantee terms that the Guarantor proposes to the
Beneficiary or the Creditor;
5.1.6
The Trustor is responsible for the authenticity of all the documents provided to
the Guarantor;
5.1.7
The Trustor commits to exempt the Guarantor from any harm or losses incurred by
the guarantee issues for the Trustor;
5.1.8
The Trustor shall take in use the guarantee letter within the coverage and
purpose specified in this Agreement;
5.1.9
The Trustor shall execute the contract signed with the Beneficiary or the
Creditor;
5.1.10
The Trustor is obliged to inform the Guarantor the significant issues occurring
when executing the contract according to the facts, such as registered address,
legal representative, contact number, changes of the ownership (stock
ownership), litigation or arbitration, capital loans, reconstruction or
reorganization, operation loss, etc. all the matters that may affect the
debtor-creditor relationship;
5.1.11
The Trustor shall accept being examined by the Guarantor regularly or randomly
for its operation and financial conditions, and cooperate with the work staff of
the Guarantor to complete the monitoring work. The Trustor shall deliver the
financial report for the first month to the Guarantor after signing the loan
contract, and afterwards deliver the financial reports
quarterly;
5.1.12
The Guarantor, in order to pay off the debt under the Suretyship Contract or
guarantee letter, is entitled to deal with the collateral or
pledge;
5.1.13
The Guarantor is not responsible for the authenticity of all the documents
concerning claim for compensation, xxxx of document or testifying documents
provided to the Beneficiary or the Creditor;
5.1.15
The Trustor shall not conduct any behaviour with any other third parties to harm
the benefit of the Guarantor.
5.1.16
If the Trustor fails to execute this Agreement, then the Trustor shall authorize
the Guarantor to publish the facts that the shareholders and senior management
breach the terms on its website and media.
5.1.17
Within the term of this Agreement, the Guarantor is entitled to monitor the
condition described as following:
(1)
The Trustor shall inform the Guarantor in advance when applying for new bank
loans or providing external guarantee.
Section
VI Modification to Suretyship Contract or Guarantee Letter
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6.1
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The
Trustor shall provide the application in written form or the written
consent of the Beneficiary or the Creditor while asking the Guarantor to
modify the contents of Suretyship Contract or guarantee letter. On the
condition that the Trustor increases guarantee amount or extend the
guarantee term, the Trustor shall increase or extend the counter guarantee
collateral correspondingly, and pay the Guarantor for the guarantee fee of
the enhanced amount or extended term. Otherwise, the Guarantor shall not
accept the application of
modification.
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6.2
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The
modification shall not take effect until the Guarantor issues the
confirmation letter in written form upon agreeing on the guarantee
modification of this Agreement.
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Section
VII Event of Default
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7.1
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The
Trustor and the Guarantor shall obey the terms described in this
Agreement, and the following situations will be regarded as events of
default.
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7.1.1 The
Trustor, after signing this Guarantee Agreement, fails to provide the Guarantor
with any mode of counter guarantee in accordance with terms of this Agreement,
or the counter guarantee option that the Trustor provides the Guarantor with
does not comply with the regulations of this Agreement;
7.1.2 The
counter guarantor, which signs and issues irrevocable counter guarantee
statement with
joint and
several liability
to the Guarantor, or signs counter guarantee contract with the Guarantor,
has not been approved by the Guarantor;
7.1.3 The
Trustor or the third party fails to sign the collateral or pledge contract with
the Guarantor as specified in this Guarantee Agreement;
7.1.4 The
Trustor or the third party fails to provide the Guarantor with collateral or
pledge as specified in this Guarantee Agreement;
7.1.5 The
Trustor or the third party signs the collateral or pledge contract with the
Guarantor, but fails to complete the collateral or pledge
procedure;
7.1.6
7.1.7
7.1.8
7.1.9
7.1.10
7.1.11
7.1.12 Other
behavior that breach the terms of this Agreement.
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7.2
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The
Guarantor is entitled to take all the following measures or partially
when, before or after the above situation
occurs:
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(1)
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Require
the Trustor to continue offering the counter guarantor with the approval
and acceptance of the
Guarantor;
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(2)
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Require
the Trustor or the third party to sign the collateral or pledge contract
with the Guarantor as specified in this Guarantee Agreement, and keep on
the registration procedures of relative collateral or
pledge;
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(3)
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Require
the Trustor or the third party to adopt other remedial measures, i.e.
taking its assets as collateral or pledge to the Guarantor, and work on
the registration procedures of relative collateral or
pledge;
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(4)
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The
Guarantor is entitled to terminate this Agreement on one party, and
require the Trustor to be liable for compensation for the harm and losses
of the Guarantor;
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(5)
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Entitled to investigate against the Trustor the liabilities for breaching
this Agreement.
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Section
VIII Claim under the Suretyship Contract or Guarantee Letter
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8.1
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The
Trustor pledges to fulfill its payment and other obligations specified in
the contracts or agreements or other relative contracts and agreements
(the “Contract” and “Agreement”) signed with the Beneficiary or the
Creditor.
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8.2
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On
the condition that the Beneficiary or the Creditor claims for compensation
from the Guarantor in accordance with the regulations in the Suretyship
Contract or Guarantee Letter under the loan contract or agreement or other
relative contract or agreement, and the Guarantor testifies the claim
documents, receipts or certificate comply with the regulations of the
Suretyship Contract or Guarantee Letter, the Guarantor, while prepaying
for the Trustor to the Beneficiary or the Creditor in order to fulfill its
guarantee obligations, shall absolutely have the right of recourse against
the Trustor and its successors or assignees, which won’t be affected by
any commands directed by the senior authorizations of the Trustor or any
contract or agreement signed between the Trustor and any
units.
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8.3
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On
the condition that the Trustor fails to fulfill its payment or obligations
as stated in the above contract or agreement signed with the Beneficiary
or the Creditor and enables the Guarantor to be liable for the guarantee
obligations against the Beneficiary or the Creditor for the principal,
interest, penalty interest, compound interest, penalty, compensation,
expenses for ensuring the proprietyization of the creditor’s credits, then
the Trustor shall be liable for the following
obligations:
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(1)
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Pay
the Guarantor for all the above advance
payment;
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(2)
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Pay
the Guarantor for the interest of above expenses in accordance with the
loan interest rate stipulated by the bank for the corresponding period
(shall be calculated from the day that the actual advance payment of the
Guarantor to the Beneficiary or the Creditor until the day that the
Trustor repays the Guarantor for the above
expenses);
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(3)
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Pay
the Guarantor for the penalty at 1‰ per day of
the total delivered amount (i.e. penalty = total amount that the Guarantor
has paid X 1‰ X actual
days that the Guarantor
advanced)
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8.4
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The
Trustor shall pay the Guarantor all the advance payment, corresponding
interest, and penalty unconditionally within 7 days after receiving the
notice of claim from the
Guarantor.
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8.5
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On
the condition that the Trustor breaches the terms of the above contract or
agreement signed with the Beneficiary or the Creditor and enforces the
Guarantor to be responsible for the guarantee obligations against the
Beneficiary or the Creditor, then the Trustor shall be liable for the
following obligations other than those stated in article 8.3 of this
Agreement:
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(1)
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When
the Beneficiary or the Creditor brings litigation or arbitration to the
Guarantor, or during the process of reconciliation, the Trustor shall be
responsible for all the expenses on the cost of the Guarantor (including
but not limited to the litigation or arbitration fee, property
preservation or Property Preservation fee, enforcement fee, evaluation
fee, auction fee, appraisal fee, legal fees, travel expenses,
investigation and evidence collection fee, etc.)
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(2)
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The
Trustor shall be responsible for all the expenses on the cost of the
Guarantor (including but not limited to the litigation or arbitration fee,
property preservation or Property Preservation fee, enforcement fee,
evaluation fee, auction fee, appraisal fee, legal fees, travel expenses,
investigation and evidence collection fee, etc.) occured in order to
resourse advance payment from the
Trustor.
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8.6
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On
the condition that the Trustor fails to fulfill its payment and other
obligations as stated in the above contract or agreement signed with the
Beneficiary or the Creditor and enables the Guarantor to be liable for the
guarantee obligations against the Beneficiary or the Creditor, or the
Trustor breaches the terms of this Guarantee Agreement, the Guarantor is
entitled to select one or several requirements in the counter guarantee
provided by the Trustor (stated in Section 3 of this Agreement, and the
counter guarantee contract or agreement shall apply) to require the
Trustor or the third party be liable for the prior guarantee
responsibility.
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8.7
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On
the condition that the Trustor fails to fulfill its obligations as stated
in the master contract signed with the Beneficiary or the Creditor and
enables the Guarantor to be liable for the guarantee obligations against
the Beneficiary or the Creditor, the Trustor shall approve and authorize
the Guarantor to release the fact about its/his breaches and relative
information at financial organizations, monitoring organizations,
government departments, new media, internet media or other enterprises,
public institutions without reservation, and waive its/his right of
defense.
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Section
IX Governing Law
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9.1
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This
Guarantee Agreement shall be deemed to be a contract made under the
laws of the People’s Republic Of china, and for all purposes shall be
governed by and construed in
accordance with such laws. Any disputes arising from the performance of
this Agreement shall be resolved through a friendly negotiation of each
party concerned. Where all the parties fail to solve it, the dispute shall
be resolved through the following
mode:
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(1)
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bring
a suit directly at the local people's court where the Guarantor is
located.
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Section
X Validity and Termination of the Agreement
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10.1
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This
Agreement shall take effect in accordance with the following
regulations:
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10.1.1
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On
the condition that the Trustor is natural person, the Agreement becomes
effective with the signature and humbprint of witness of the Trustor and
signature of legal representative or authorized representative and chop of
the Guarantor.
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10.1.2
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On
the condition that the Trustor is a legal person, the Agreement becomes
effective with the signature and corporate chop of legal representative or
authorized representative of both
parties.
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10.2
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This
Guarantee Agreement shall be deemed to terminate after the rights and
obligations are fulfilled.
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Section
XI Appendix
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11.1
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The
other issues that both parties agreed
hereinof:
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11.2
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This
Agreement has two identical duplicates and a copy of which shall be kept
by each of the two parties,
holding the same legal effects.
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11.3
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Special
reminder: the Guarantor has made a hint on all the articles in this
Agreement, and made explanation correspondingly in answer to the request
of the Trustor; moreover, the Trustor has studied and analyzed each
articles of this Agreement and has got comprehensive and accurate
understanding; therefore, both parties has reached an agreement to the
meaning of each article of this
Agreement.
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Appendix:
Counter Guarantee Agreement (Guarantee/Mortgage/Pledge)
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The
Trustor: (corporate chop)
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The
Guarantor: (corporate chop)
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(Finger
print of the natural person):
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Legal
representative or
authorized
representative: /s/Lei
Xia
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Legal
representative or
authorized
representative: /s/Xx
Xxxxx
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Address:
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Address:
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Telephone:
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Complaint
telephone:
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Date:
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Date:
June 26, 2007
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