EXHIBIT 10.6
[English Translation]
Bank of Communications
No: Baoezi 405/208
MAXIMUM AMOUNT GUARANTEE CONTRACT
(Apply to loans and trade financing contracts in which the guarantor is legal
entity or other organization)
No: Baoezi 405/208
MAXIMUM AMOUNT GUARANTEE CONTRACT
Important Notice
Guarantor please read this contract carefully, especially provisions with
In case of any uncertainty, please ask the creditor for clarification.
Guarantor: Baoding Tianwei Baobian Electric Co., Ltd.
Legal Representative (responsible person): Xxxx Xxxxx
Registered Address: Xx. 00 Xxxxxxx Xxxxxx, Xxxxxxx National High-tech Technology
Industry Development District
Mail Address: Xx. 00 Xxxxxxx Xxxxxx, Xxxxxxx National High-tech Technology
Industry Development District
Creditor: Bank of Communications, Shijiazhuang Branch
Responsible person: Xx Xxxxxxx
Mail Address: Xx. 00 Xxxxxxx Xxxx, Xxxxxxxxxxxx
Whereas: Baoding Xxxxxxx Xxxxxx New Energy Resource Co., Ltd. (hereinafter
referred to as the "Debtor") and the Creditor have entered into a Maximum Amount
Loan Contract No. Daiezi 405/208 (hereinafter the "Principal Contract"), and the
Guarantor is willing to provide maximum amount guarantee for the fulfillment of
credit claims continuously arising from December 20, 2005 to December 20, 2006
(the "Credit Extension Period") under the Principal Contract.
To clarify rights and obligations of both parties, upon discussion, the
Guarantor and the Creditor hereby agree to enter into this Contract.
Article 1 Principal Credit Claims
1.1 The principal credit claims secured by the Guarantor are credit claims
arising during the Credit Extension Period under the Principal Contract,
including various loans, import bill advance, export bill advance, export
collection financing, export check financing or pack loans extent by the
Creditor to the Debtor in accordance with the Principal Contract.
For credit claim arising during the credit extension period, the Creditor
and the Debtor may
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achieve agreement upon currency, amount, interest rate and debt performance time
limit of corresponding principal in Credit Use Application under the Principal
Contract.
1.2 The maximum amount of credit claims secured by the guarantee is
(currency and amount in words) Renminbi Fifty Million.
1.3 The credit claims secured under this Contract will be determined on the
expiry date of the Credit Extension Period. In case that the Creditor
discontinues credit extension according to the Principal Contract, the date
discontinuing credit extension is the expiry date of the Credit Extension
Period.
The principal credit claims arising before the expiry date of the Credit
Extension Period (including such date) and interest thereof until the Guarantor
bears its liability (including compound interest, delay and appropriation
interest), litigation fee (arbitration fee) occurred to the Creditor in
enforcement of credit claims, lawyer fee, notice expense, acceleration fee and
other relevant expenses are all in the scope of guarantee under this Contract.
Article 2 Guarantee liability
2.1 The guarantee under this Contract is joint-liability guarantee.
2.2 The scope of guarantee includes principal and interest, compound
interest, penalty interest, liquidated damage, compensation for damage and
expenses for enforcement of credit claims under the Principal Contract. The
expenses caused in enforcement of credit claims includes but not limited expense
to press for payment, litigation fee (or arbitration fee), conservation fee,
publication fee, enforcement fee, lawyer fee, travel expense and other expenses.
2.3 The guarantee period shall be counted separately based on debt paying
deadline agreed in each Credit Use Application under the Principal Contract. The
guarantee period under each Credit Use Application shall commence from the date
when the debt paying deadline agreed in such Credit Use Application expires
until two years after the debt paying deadline agreed in the last Credit Use
Application under the Principal Contract expires. .
If any Credit Use Application under the Principal Contract provides that
the Debtor may pay its debt by installments, the guarantee period of such debt
shall commence from the date when each installment's debt paying deadline
expires until two years after the date when the last installment's debt paying
deadline expires.
The date of maturity of the debt under issuance of bank acceptance, letter
of credit or security bond shall be the date when the creditor makes advance
disbursement.
If the Creditor declares earlier expiry of all debt under the Principal
Contract, such earlier expiry date declared shall be the date when the debt
paying deadline expiries.
2.4 In accordance with provisions of Article five of Security Law of
People's Republic of China, both parties of this Contract specifically agree
that: the effect of this Contract shall be independent from that of the
Principal Contract; the nullification of the Principal Contract or relevant
provisions thereof may not affect the effect of this Contract. The Guarantor
shall bear joint liability for returning liability or compensation liability to
be born by the Debtor after the Principal Contract is invalid.
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Article 3 Representation and Warranty of the Guarantor
3.1 The Guarantor is an independent civil entity organized in accordance
with law and existing legally, has all necessary capability to civil right and
may perform obligations under this Contract in its own name and bear civil
liability.
3.2 Execution and implementation of this Contract is out of real intent of
the Guarantor and has all required consent, approval and authorization without
any legal defect.
3.3 All documents, materials and information provided by the Guarantor to
the Creditor during execution and implementation of this Contract are true,
proper, complete and valid.
Article 4 Obligation of the Guarantor
4.1 If the Debtor fails to timely and fully repay the principal and
interest of loan, import bill advance, export bill advance, export check
financing or pack loan under any Credit Use Application, the Guarantor shall
unconditionally and immediately pay to the Creditor all mature and payable
amounts of the Debtor.
4.2 The Guarantor shall cooperate with the Creditor to supervise and
inspect its operation and financial condition, provide all financial statements,
other materials and information required by the Creditor on a timely basis and
warrant all documents, materials and information provided to be true, complete
and proper..
4.3 To take any of the following action, the Guarantor shall notify the
Creditor in writing at least thirty days in advance and shall not take such
action until the credit claims under the Principal Contract have been satisfied
or unless agreed by the Creditor in writing:
a. to sell, donate, lease, lend, move, mortgage, pledge or otherwise
dispose substantial assets or all or most of assets;
b. to make material change to its operation structure or property
organization, including but not limited to construction contract, lease,
corporation restructure, joint stock cooperative system restructure, sale of
enterprise, merger (acquisition), co-investment (cooperation), split-up,
establishment of subsidiaries, transfer of property and decrease of registered
capital.
4.4 In case that any of the following event occurs or may occur, the
Guarantor shall notify the Creditor within seven days:
a. the amendment of articles of association, change of name, legal
representative, registered address, mail address, business scope or other
registered matters, decision that has material effect on finance or human
resource;
b. the plan to apply for bankruptcy or the possibility or the fact on the
part of the creditors to apply for its bankruptcy;
c. involvement in great litigation or property conservation or other
judicial force enforcement upon its major assets;
d. extension guarantee to any third party which thereby has material
negative effect on its financial condition or its ability to perform its
obligation under this Contract;
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e. execution of contracts that have material effect on its operation and
financial condition;
x. xxxxx of production, cease of business, dissolution, suspension of
business for rectification, forced dissolution or revocation of business
license;
g. involvement of legal representative (responsible person) or major
officer in illegal activities; or
h. occurrence of serious difficulty in operation or financial condition, or
other matters that have negative effect on the Guarantor's normal operation,
financial condition or liquidity.
4.5 Before the Debtor repay to the Creditor all debts under the Principal
Contract, the Guarantor may not exercise its right to recourse arising under
this Contract against the Debtor or other guarantors.
Article 5 Agreement about debit
5.1 The Guarantor authorizes the Creditor to debit against any of its
accounts with Bank of Communications certain amount to repay for its mature debt
payable.
5.2 After such debit, the Creditor shall notify the Guarantor the account
involved, serial number of the principal contract, serial number of Credit Use
Application, contract number the amount debited and the balance of the debt.
5.3 If the debited amount is not sufficient to offset all debt of the
Guarantor, such debited amount shall be used to offset unpaid expense. If the
payment of principal and interest has been delayed for less than 90 days, the
balance after offsetting expenses shall be firstly used to offset unpaid
interest or penalty interest, compound interest and then be used to offset
un-repaid mature principal; if the payment of principal and interest has been
delayed for more than 90 days, the balance after offsetting expenses shall be
firstly used to offset un-repaid mature principal and then be used to offset
unpaid interest or penalty interest, compound interest.
5.4 In case that the currency of debited amount is different from that of
the debt to be repaid, such amount shall be converted into the debt to be repaid
on the basis exchange rate announced by the Bank of Communications on debit
date.
Article 6 Settlement of Disputes
Any dispute under this Contract shall be settled in the first way of the
following. During such dispute, each party shall continue to implement
provisions that are not involved in dispute.
a. to go to court for the place of the Creditor's domicile that has
jurisdiction;
b. to apply for arbitration of ____________ arbitration commission in
accordance then valid arbitration rules of such commission whose
decision shall be final and binding on both parties.
Article 7 Miscellaneous
7.1 If the Guarantor has any action to avoid supervision of the Creditor,
delay in performance of guarantee obligation or refuse to repay in bad faith,
the Creditor shall have the right to report such action to relevant authorities
and make it public on news media.
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7.2 The Guarantor has read the Principal Contract carefully and has
confirmed all provisions thereof.
7.3 This Contract has come into effect upon signature (or stamp) by legal
representative (responsible person) or authorized representative of both parties
and affixed with official chops.
7.4 This Contract is executed with four originals. Each of the Guarantor,
Creditor and Debtor keeps one copy respectively.
Article 8 Other matters agreed
(No content below)
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The Guarantor has read all above provisions and the Creditor has made
corresponding explanation upon request by the Guarantor. The Guarantor has not
disagreement upon above contents.
Guarantor (official chop): Baoding Tianwei Baobian Electric Co., Ltd.
Legal representative (responsible person) or authorized representative:
/s/ Xxxx Xxxxxxxx
------------------------------------
(signature or stamp)
Dated: December 20, 2005
Creditor (chop): Bank of Communications, Shijiazhuang Branch
Responsible person or authorized representative :
/s/ Xx Xxxxxxx
------------------------------------
(signature or stamp)
Dated: December 20, 2005
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