EXHIBIT 10.76
GUARANTEE CONTRACT
China Construction Bank
Langfang Branch
Contract No.: 2006-01
GUARANTOR (PARTY A): LIBBEY INC.
Address:
Postcode:
Legal Representative (Principal Officer):
Fax:
Telephone:
CREDITOR (PARTY B): China Construction Bank Corporation Langfang Economic
Development Area Sub-branch
Address: ▇▇. ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Economic Development Area
Postcode: 065001
Legal Representative (Principal Officer): ▇▇ ▇▇▇
Fax: 0316 - ▇▇▇▇▇▇▇
Telephone: 0316 - ▇▇▇▇▇▇▇
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Guarantor ("Party A"): Libbey Inc.
Creditor ("Party B"): China Construction Bank Corporation Langfang Economic
Development Area Sub-branch
Party A agrees to provide joint and several liability guarantee for the
indebtedness under the Loan Contract No. 2006-01 ("Underlying Contract") between
Libbey Glassware (China) Company Limited (the "Borrower") and Party B, in order
to ensure performance under the Underling Contract and to safeguard realization
of Party B's rights as a creditor. Party A and Party B upon consultation have
reached the following contract in accordance with relevant laws and regulations,
for mutual observance and compliance.
ARTICLE 1 TYPE OF GUARANTEE
PARTY A SHALL PROVIDE A JOINT AND SEVERAL LIABILITY GUARANTEE.
PARTY A HEREBY CONFIRMS THAT WHEN THE BORROWER FAILS TO PERFORM ITS OBLIGATIONS
IN COMPLIANCE WITH THE UNDERLYING CONTRACT, NOTWITHSTANDING ANY OTHER FORM OF
SECURITY UNDER THE UNDERLYING CONTRACT AVAILABLE FOR THE BENEFIT OF PARTY B
(INCLUDING, WITHOUT LIMITATION, GUARANTEE, MORTGAGE, PLEDGE, LETTER OF
GUARANTEE, STANDBY LETTER OF CREDIT ETC.), PARTY B SHALL BE ENTITLED TO DIRECTLY
REQUEST PARTY A TO PERFORM ITS GUARANTEE OBLIGATIONS WITHIN THE SCOPE OF THE
GUARANTEE.
Article 2 Scope of Guarantee
Loan principal in the amount of ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ with interest
(including compound interest and penalty interest), damages for breach of
contract, compensation and expenses incurred by Party B in realizing its rights
as a creditor (including, without limitation, expenses
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in connection with litigation, arbitration, property preservation, enforcement,
appraisal and auction as well as travel expenses).
Article 3 Period of Guarantee
The Period of Guarantee shall commence from the date of effectiveness hereof and
continue until two (2) years after the term of the Underlying Contract has
expired. In case of agreement by Party A for an extension under the loan, the
Period of Guarantee shall continue until two (2) years after the extended term
of the Underlying Contract has expired.
ARTICLE 4 VARIATIONS TO THE UNDERLYING CONTRACT
PARTY A CONFIRMS, THAT EXCEPT FOR THE FOLLOWING CASES, PRIOR CONSENT OF PARTY A
SHALL BE DEEMED AS HAVE BEEN OBTAINED IN CASE OF ANY VARIATION TO THE UNDERLYING
CONTRACT MUTUALLY AGREED BETWEEN PARTY B AND THE BORROWER, AND PARTY A'S
OBLIGATION HEREUNDER SHALL NOT BE REDUCED OR DISCHARGED THEREBY:
(1) THE TERM OF THE LOAN IS EXTENDED;
(2) THE PRINCIPAL AMOUNT OF THE LOAN IS RAISED.
ARTICLE 5 EFFECT AND VALIDITY
THE EFFECT AND VALIDITY OF THE CONTRACT HEREUNDER SHALL BE SEPARATE FROM AND
INDEPENDENT OF THAT OF THE UNDERLYING CONTRACT; AND INVALIDITY OF THE UNDERLYING
CONTRACT SHALL NOT AFFECT THE EFFECT OF THE CONTRACT HEREUNDER. IF THE
UNDERLYING CONTRACT IS HELD TO BE VOID, PARTY A SHALL BE ALSO JOINTLY AND
SEVERALLY LIABLE FOR ALL OBLIGATIONS OF THE BORROWER FOR RETURN OF PROPERTIES
AND INDEMNIFICATION AGAINST LOSSES.
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Article 6 Capacity as a Guarantor
During the Period of Guarantee, Party A shall send a written notice to Party B
in advance in case of any of the following: loss or possible loss by Party A of
its capacity as a guarantor or any activities undertaken by the guarantor's
legal person or other organization such as tendering for a contract, lease,
merger, acquisition, joint venture, spin-off, joint operations or shareholding
reorganization or revocation etc. All obligations hereunder shall be resumed by
the organization newly formed through the above activities or by the agency
ordering the revocation. In case that Party B does not believe that the new
organization so formed has necessary capacity as a guarantor, Party A or the
agency ordering the revocation shall provide a new security acceptable to Party
B and enter with Party B into relevant security contract.
During the Period of Guarantee, Party A shall not without written consent by
Party B provide any security to any third party in excess of its capacity.
Article 7 Financial Supervision against the Guarantor
During the Period of the Guarantee, Party B is entitled to monitor and supervise
over the capital and financial conditions of Party A, and Party A shall provide
relevant accurate information such as financial statements.
ARTICLE 8 ACCELERATED PERFORMANCE OF THE GUARANTEE OBLIGATION
DURING THE PERIOD OF GUARANTEE, WHEN PARTY B DECLARES ACCELERATED MATURITY OF
THE INDEBTEDNESS UNDER THE LOAN IN ACCORDANCE WITH THE UNDERLYING CONTRACT,
PARTY B IS ENTITLED TO REQUEST PARTY A TO PERFORM ITS GUARANTEE OBLIGATIONS
WITHIN 15 BANKING DAYS
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OF THE ACCELERATED MATURITY DATE, AND IN WHICH CASE PARTY A AGREES TO PERFORM
ITS GUARANTEE OBLIGATIONS AS REQUESTED BY PARTY B.
Article 9 Transfer of Amounts Payable
In connection with all amounts payable by Party A under its Scope of Guarantee,
Party B is entitled to transfer such amounts payable from accounts opened and
maintained by Party A with any bank under the CCB umbrella.
Article 10 Miscellaneous
1). Party A's guarantee obligations shall not be reduced or discharged on
account of any circumstance such as Borrower's merger, spin-off, shareholding
reorganization, joint venture, joint operation, decrease or increase in
Borrower's capital, or change of Borrower's name etc.
2). The Guarantor is obliged to supervise and monitor any use of the loan
proceeds by the Borrower.
3). In case foreign exchange loan is extended by Party B to the Borrower, Party
A agrees to perform its guarantee obligations in the currency specified in such
foreign exchange loan contract; in case of performance in any other currency,
consent shall be obtained from Party B and any payment on the repayment date
shall be converted at the selling rate published by Party B for such foreign
exchange.
4). The Guarantor is fully aware of potential interest rate risks. Where
floating rate is applied under the Underlying Contract, the Guarantor agrees to
bear any additional guarantee obligation that may arise from any fluctuation in
the floating rate.
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5). With regard to Article 2 of the Guarantee Contract, the Loan principal plus
interest shall mean the principal and interest outstanding; "expenses incurred
by Party B in realizing its rights as a creditor" shall mean reasonable
expenses.
6). With regard to Article 12, the following shall be added: This Loan Guarantee
is written in both English and Chinese, with the Chinese version as the official
document. This Loan Guarantee will be executed in any number of counterparts,
each of which shall constitute one and the same instrument, and either party
hereto may execute this Loan Guarantee by signing any counterpart. The Loan
Guarantee signed by the authorized person(s) of Party A in the United States as
well as the Board Resolution authorizing such execution shall be notarized by
relevant authorized departments in the United States and be attested by the
Chinese Embassy in the United States before forwarding the same to Party B by
post.
Article 11 Dispute Resolution
Any dispute in the course of the Contract may be resolved through consultation,
failing which, the same shall be resolved under Method 2) as further delineated
below:
1). Initiate legal proceedings before the court at the place of Party B;
2). Arbitration by China International Economic and Trade Arbitration Commission
(in Beijing) in accordance with the then current arbitration rules of the said
Arbitration Commission. The arbitration award shall be final and conclusive and
be binding on both Parties.
During such court proceedings or arbitration, performance of all remaining
provisions of the Contract, except for the matters under dispute, shall continue
unaffected.
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Article 12 Effectiveness of the Contract
The Contract shall come into effect once it is executed by the legal
representative (principal officer) or authorized representative of Party A and
sealed with the chop of Party A (executed by Party A, if Party A is a natural
person) and executed by the principal officer or authorized representative of
Party B and sealed with the chop of Party B.
Article 13 The Contract is executed in four original copies.
Article 14 Representations
1). Party A is clearly aware of Party B's scope of business and limit of
authorization.
2). Party A has read all provisions herein and is particularly aware of the
provisions highlighted in bold. At the request of Party A, Party B has explained
relevant provisions hereunder. Party A is fully aware of and completely
understands the meaning of each provision as well as its related legal
consequences.
3). Party A is authorized to enter into and execute the Contract herein.
Party A (chop):
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Legal representative (principal officer) or
authorized representative (signature):
Date:
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Party B (chop):
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Principal Officer or
authorized representative (signature):
Date:
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