Guarantee Agreement China Construction Bank Hunan Branch
Exhibit 10.5
China
Construction Bank
Hunan
Branch
1
Contract
Number: 43068864320060004
Guarantor
(Party A): Shenzhen Zhaoheng Industrial Co., Ltd
Address:
▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇:
518015
▇▇.▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇
Legal
Representative ( Person in-Charge): ▇▇▇▇▇▇▇▇ ▇▇
Facsimile:
0755-82071998
Telephone: ▇▇▇▇-▇▇▇▇▇▇▇▇
Creditor
(Party B): China Construction Bank Co., Ltd. Changde Branch
Address:
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Zip:
415000
Person
in-Charge: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile:
Telephone: ▇▇▇▇▇▇▇
2
Guarantor
(hereinafter “Party A”): Shenzhen Zhaoheng Industrial
Co., Ltd.__
Creditor
(hereinafter “Party B”): China Construction Bank Co.,
Ltd. Changde Branch
Party A
agrees to provide joint liability guarantee for the indebtedness under the Capital Loan Agreement
in Renminbi, Contract No. 43068864320060004, (hereinafter "Underlying
Contract") between Hunan Sanjiang Electric
Power Co., Ltd. (hereinafter "Debtor") and Party B, in order to ensure
performance under the Underlying Contract and to safeguard realization of Party
B's rights as a creditor. Party A and Party B upon consultation have reached the
following agreement in accordance with relevant laws and regulations, for mutual
observance and compliance.
Article
1. Type of Guarantee
Party A
shall provide a joint liability guarantee.
Party A
hereby confirms that when the Debtor fails to perform its obligations in
compliance with the Underlying Contract, notwithstanding any security under the
Underlying Contract available for the benefit of Party B (including but not
limited to guarantee, mortgage, pledge, letter of guarantee, standby letter of
credit), 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 Renminbi (currency
type) 15
million (capital), together 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 in connection with litigation, arbitration, property
preservation, travel, enforcement, and appraisal as well as auction
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 Debtor, and Party A’s obligation
hereunder shall not be reduced or discharged thereby:
|
(1)
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The
term of the Loan is extended;
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(2)
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The
principal amount of the Loan is
raised.
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3
Article
5. Effect and
Validity
The effect and validity of the agreement hereunder shall be separate from and
independent of that of the Underlying Contract; and invalidity of the Underlying
Contract shall not affect the effect and validity of the agreement hereunder. If
the Underlying Contract is held to be void, Party A shall be also jointly liable
for all obligations of the Debtor for return of properties and indemnification
against losses.
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, 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 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 10 banking days of
the accelerated maturity date, and in which case Party A agrees to perform its
guarantee obligations as required 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 China Construction Bank Co., Ltd.
Article
10. Miscellaneous
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(3)
|
Party
A's guarantee obligations shall not be reduced or discharged on account of
any circumstance such as Debtor's merger, spin-off, shareholding
reorganization, decrease or increase in capital, joint venture, joint
operation,, or change of Debtor's name
etc.
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4
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(4)
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The
Guarantor is obliged to supervise and monitor any use of the loan proceeds
by the Debtor.
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(5)
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In
case foreign exchange loan is extended by Party B to the Debtor, 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,
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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
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exchange
on that date.
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(6)
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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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(7)
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The following space is
intentionally left
blank__________;
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(8)
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_______________________________________________.
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Article
11 Dispute
Resolution
Any
dispute arising during the performance of this agreement may be settled through
consultation. If the consultation fails, it shall be settled through the first of the
following methods:
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(1)
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Bring
a suit before the court in the jurisdiction where Party B
domiciles;
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(2)
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File
the dispute to BLANK_
arbitration commission for arbitration (Arbitration place is BLANK
) in accordance with the effective arbitration rules of the
arbitration commission at the time of applying for arbitration.
Arbitration award shall be final and conclusive and be binding
on both Parties.
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During
the suit or arbitration, the provisions in this agreement which are not in
dispute shall still be performed.
Article
12 Effectiveness of the
Agreement
The
Agreement shall come into effect once it is executed by the legal representative
(person in-charge) or authorized representative of Party A and affixed with the
official seal of Party A (executed by Party A is enough, if Party A is a natural
person) and executed by the person in-charge or authorized representative of
Party B and affixed with the official seal of Party B.
Article
13 The
Agreement is executed in four original
copies
Article
14 Representations
5
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(1)
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Party
A is clearly aware of Party B's scope of business and limit of
authorization;
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(2)
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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;
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(3)
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Party
A is authorized to enter into and execute the Agreement
herein.
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Party A
(Seal): (Seal)
Legal
representative (person in-charge) or authorized representative (Signature):
/s/ ▇▇▇▇▇▇▇▇
▇▇
August 31, 2006
Party B
(Seal): (Seal)
Person
in-charge or authorized representative (Signature):
/s/ Baining Li
August 31,
2006
6