EXHIBIT 10.16
[ENGLISH TRANSLATION]
PREPARED UNDER THE SUPERVISION OF HUAXIA BANK HEADQUARTERS
MAXIMUM AMOUNT GUARANTEE CONTRACT
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SHIJIAZHUANG BRANCH, HUAXIA BANK CO., LTD.
MAXIMUM AMOUNT GUARANTEE CONTRACT
No. : 0311006012005048 Bao 1
Party A (Guarantor): Baoding Tianwei Baobian Electric Co., Ltd.
Address: 000 Xxxxxxxxxx Xxxx, Xxxxxxx
Zip Code: 071056
Legal Representative: Xxxx Xxxxx
Telephone: 0000-0000000
Fax: 0312-3308895
Basic Account Opening Bank: Industrial and Commercial Bank of China, Baoding
Sub-branch Office
Bank Account: 0409003809221002578-002
Party B (Creditor): Huaxia Bank Co., Ltd., Shijiazhuang Branch
Address: 00, Xxxxxxxxx Xxxx Xxxx
Zip Code: 050000
Legal Representative/
Responsible Person: Xx Xxxxxxx
Telephone: 00000000
Fax:
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In accordance with the relevant provisions of the Guarantee Law of the
People's Republic of China, Party B will enter into several business contracts
with the debtor under the master contract (the "Master Contract"), Baoding
Xxxxxxx Xxxxxx New Energy Resources Co., Ltd. (the "Debtor"), during the period
set forth in this contract (this "Contract"), and Party A is willing to provide
a guarantee to Party B with respect to all creditor's rights under such business
contracts to the extent of the maximum amount of credit claim. Party A and Party
B hereby enter into this contract through consultation.
ARTICLE I
TYPE, AMOUNT AND PERIOD OF THE GUARANTEED PRINCIPAL CREDIT CLAIM
1.1 The choice of the Master Contract under this Contract shall be as
follows:
__________________ (No.:______) [INFORMATION MISSING IN THE ORIGINAL
DOCUMENT] entered into by Party B and the Debtor, such contract and the
specific business contracts thereunder shall constitute the Master Contract
of this Contract.
Several Letter of Credit Issuance Contracts and Loan Contracts entered into
by Party B and the Debtor during the period set forth herein shall
constitute the Master Contract of this Contract.
1.2 The business type of the principal credit claim guaranteed by
Party A shall be the same as set forth in the Master Contract.
1.3 The maximum amount of the principal of the principal credit claim
guaranteed hereunder shall be in Renminbi (currency) Thirty Eight Million Yuan
(in words) (among which, the business amount in any other currency shall be
converted based on the exchange rate quoted by Party B on the occurrence date of
such business).
1.4 The execution date for any specific business contract guaranteed
hereunder shall be from August 24, 2005 to August 23, 2006.
1.5 The Debtor's debt performance period shall be within the meaning
set forth in the Master Contract. If Debtor repay its debt in installments
pursuant to the Master Contract, the maturity date for each debt shall be the
expiration date of the performance period of such debt; If the Creditor declares
pursuant to the Master Contract that any debt becomes mature prior to its
maturity date, the premature date shall be the expiration date of the
performance period of such debt.
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ARTICLE II
SCOPE OF GUARANTEE
2.1 The scope of guarantee provided by Party shall cover the principal
and interest of the credit claim under the Master contract, default interest,
fine, compound interest, liquidated damages, damages, expenses incurred in
connection with the realization of the credit claim by Party B (including, but
not limited to, litigation fees, arbitration fees, preservation fees, public
announcement fees, evaluation fees, appraisal fees, auction fees, travel
expenses, telecommunication expenses and attorney's fees) and all other fees
payable by the Debtor.
ARTICLE III
FORM OF GUARANTEE
3.1 The guarantee provided by Party A shall be a joint and several
liability guarantee. In the event that the Debtor fails to perform its repayment
obligation under the Master Contract, Party B shall have the right to directly
seek indemnification from Party A, and Party A shall immediately satisfy the
credit claim under the Master Contract to Party B.
ARTICLE IV
GUARANTEE PERIOD
4.1 The guarantee period for Party A to bear its liabilities shall be
two (2) years, i.e., two (2) years from the expiration date of the debt
performance period of the Debtor set forth in the Master Contract. The guarantee
period under each business contract (or agreement) shall be calculated
separately.
4.2 The "expiration date of the debt performance period of the Debtor
set forth in the Master Contract" described above shall include the maturity
date in the case of repayment of debt in installments by the Debtor; and the
debt premature date declared by the Creditor pursuant to the Master Contract.
4.3 If the business contemplated by the Master Contract is letter of
credit, bank acceptance draft, guarantee or guarantee for delivery of goods, the
guarantee period shall be two (2)
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years from the advance date; if the advance is made in installments, the
guarantee period shall be calculated from each advance date.
ARTICLE V
PARTY A'S RIGHTS AND OBLIGATIONS
5.1 Party A is a legal entity incorporated and validly existing in
accordance with law, has the capacity to act as guarantee and make repayment on
behalf of the debtor as provided in law, and is will to bear and perform the
liabilities under the guarantee to the extent of the assets owned by it or of
which it has the right to dispose.
5.2 Party A hereby guarantees that the execution of this Contract has
been approved by its superior competent authority or the power organ of the
company, such as the Board of Directors, and it has obtained all necessary
authorization.
5.3 Party A hereby guarantees that the execution and performance of
this Contract does not violate any stipulations or provisions by which Party A
or any of its assets is bound, any guarantee agreement or other agreement
between Party A and any other party, or any other instrument, agreement or
covenant by which Party A is bound.
5.4 All documents and materials provided by Party A to Party B shall
be true, accurate, legal and effective.
5.5 Party A is aware of and consents to all provisions of the Master
contract, and is will to provide the guarantee to the Debtor and guarantees that
it will perform the repayment obligation on behalf of the Debtor pursuant to
this Contract.
5.6 If the Master Contract covered by this Contract is a Bank
Acceptance Agreement, Party A guarantees that Party A's guarantee liabilities to
Party B hereunder shall not be affected by any dispute relevant or irrelevant to
any notes between the Debtor and the holder, endorser or any other party of the
acceptance draft.
5.7 In the event that there is any guarantee under the Master Contract
other than the guarantee provided hereunder, Party A's guarantee liabilities to
Party B shall not be affected, or released or reduced, by the guarantee provided
by any other guarantor, nor will Party A's performance of such guarantee
liabilities be subject to any claim made or litigation/arbitration/enforcement
brought by Party B against any other guarantor.
5.8 Party A hereby guarantees that it will not provide any guarantee
in any other form to any third party beyond its guarantee capacity during the
effective term hereof.
5.9 Party A hereby guarantees that, during the effective term hereof,
it shall provide its financial statements, including balance sheet and
statements of income and cash flow,
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upon request by Party B, and accept the investigation and supervision of its
operation activities and financial position by Party B.
5.10 During the effective term hereof, in the event of any change in
its operation model, nature or legal status, such as contractual operation,
lease, custody, asset restructuring, debt restructuring, joint-stock
restructuring, joint operation, merger (or consolidation), split-off, title
transfer of consideration, joint venture (or cooperation), decrease in
registered capital, or petition for winding-up, dissolution (or revocation) or
bankruptcy, Party A shall notify Party B in writing at least thirty (30) days
prior to such change, and bear all liabilities under the guarantee set forth
herein;
5.11 During the effective term hereof, in the event of any change in
its nature or legal status, such as declaration of winding-up, close-down,
dissolution (revocation) or petition for bankruptcy, or any other circumstance
that would have an adverse effect on its normal operation or deprive it of its
guarantee capacity, Party A shall notify Party B in writing at least three (3)
days prior to such change;
5.12 Party A shall notify Party B of any change in its address, name
or legal representative within seven (7) days after such change.
ARTICLE VI
PARTY B'S RIGHTS AND OBLIGATIONS
6.1 Party B shall have the right to request, from time to time, Party
A to provide its financial reports, financial statements and other materials
reflecting its operation situation and creditworthiness.
6.2 In the event that the Debtor fails to make any repayment upon
expiration of the debt performance period set forth in the Master Contract
(including the expiration of each debt due in installments comprising the
principal credit claim or premature date of the debt which has been declared
mature by the Creditor prior to its maturity), Party B shall have the right to
request Party A to bear the joint and several liabilities under the guarantee
pursuant to this Contract.
6.3 In the event that Party B has any other guarantee over the credit
claim under the Master Contract, Party B shall have the right to first exercise
its rights hereunder, and request Party A to bear its joint and several
liabilities under the guarantee.
6.4 In the event that Party A fails to bear its liabilities pursuant
to this Contract, Party B shall have the right to directly deduct and collect
any amount payable by Party A from the account opened by Party A with any
business organization of Huaxia Bank. In the event of any such deduction from
Party A's account by Party B, if the currency of such account is different from
that of the principal credit claim, the amount concerned shall be converted
based on the exchange
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rate published by Party B on the date on which such deduction has been made.
6.5 Party B shall not be required to notify Party A of its execution
of any specific business contract (agreement) with the Debtor.
ARTICLE VII
LIABILITY FOR BREACH
7.1 Upon effectiveness of this Contract, Party A and Party B shall
perform their obligations under this Contract. In the event that any party fails
to perform, in whole or in part, any obligation provided hereunder, such party
shall be liable for the relevant breach and indemnify the other party against
any losses suffered by the other party.
ARTICLE VIII
EFFECTIVENESS OF CONTRACT
8.1 This Contract shall become effective on the date on which the
parties have executed this Contract.
8.2 The validity of this Contract shall be independent from the
validity of the Master Contract. This Contract shall not be invalid as a result
of the invalidity of the Master Contract. If the Master Contract is held
invalid, Party A shall be liable for any indebtedness incurred in connection
with the return of property or indemnification for damages by the Debtor.
ARTICLE IX
AMENDMENT TO AND DISCHARGE OF CONTRACT
9.1 Upon effectiveness of this Contract, neither Party A nor Party B
shall amend or discharge this Contract without authorization.
9.2 Party B and the Debtor may amend the Master Contract without the
consent of Party A, except for any renewal thereof or any increase in the amount
of the principal credit claim.
9.3 In the event that the principal credit claim under this Contract
falls into the category of advance payment by letter of credit, Party A hereby
confirms that, if the applicant of the letter of credit and Party B agree to
amend the letter of credit, and the amount under the
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amended letter of credit (excluding interest, liquidated damages, damages and
other relevant expenses) does not exceed the sum of the amount of the letter of
credit and exceeded amount provided under the relevant Master Contract, such
amendment shall be deemed to have been approved by Party A ( regardless of any
change whatsoever in the amount or any other provision of the letter of credit),
this Contract shall remain valid, and Party A shall continue to bear its several
and joint liabilities under the guarantee.
ARTICLE X
DISPUTE RESOLUTION
10.1 Any dispute arising from the performance of this Contract shall
be settled through consultation. If no settlement can be reached through such
consultation, the parties may choose the following method to solve such dispute:
to bring an action before the People's Court in the jurisdiction in which
Party B is located.
to submit the dispute to _____________ [INFORMATION MISSING IN THE ORIGINAL
DOCUMENT] arbitration commission for arbitration.
ARTICLE XI
MISCELLANEOUS
11.1 During the effective term hereof, if Party B has not been
notified in writing of the change in Party A's legal person name, legal
representative or address, all instruments sent to Party A by Party B based on
the information set forth herein shall be deemed to have been sent and given.
11.2 Other matters as agreed by the parties:
This guarantee shall not be affected by any amendment, supplement or
change to any loan contract by the borrower and lender, so long as there is no
increase in the amount guaranteed by the guarantor.
11.3 This Contract shall be prepared in five copies with Party A
holding one (1) copy, Party B holding two (2) copies and the borrower holding
two (2) copies, all of which shall have equal legal validity.
11.4 The relevant exhibits to this Contract shall be a part of this
Contract, and shall have the same legal validity as this Contract.
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11.5 Party B has taken reasonable measures to draw the attention of
Party A to the terms hereof with respect to the release or restriction of its
liabilities, and has given a full explanation of the relevant terms at the
request of Party A; and Party A and Party B have no different opinions as to the
understanding of all terms hereof.
Party A: Baoding Tianwei Baobian
Electric Co., Ltd. (Seal)
Legal Representative: /s/ Xxxx Xxxxxxxx
(or Attorney-in-fact) ----------------------------------------
(Signature)
September 6, 2005
Party B Huaxia Bank Co., Ltd.,
Shijiazhuang Branch
Legal Representative/
Chief Responsible Person: /s/ Xx Xxxxxxxx
(or Attorney-in-fact) ----------------------------------------
(Signature or Seal)
September 6, 2005
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