Surety agreement

This Surety Agreement (the “Agreement”) is made on ____________,  in Moscow, the Russian Federation, 

between: 

(1) Close joint-stock company ____________, represented by ____________, acting on the basis of the Charter, hereinafter referred to as the “Creditor”, as the party on the one hand, and

(2) “____________” (LLC) (PSRN ____________, ITN ____________), represented by _____________________,  acting on the basis of the __________________ (hereinafter referred to as the “Guarantor”), 

Hereinafter jointly referred to as the “Parties”, and separately – “Party”, as follows:

1. Surety

1.1. In accordance with the article 363 of the Civil Code of the Russian Federation, the Guarantor hereby irrevocably and unconditionally undertakes to be liable before the Creditor for the non-performance or the improper performance by Limited Liability Company “____________”(PSRN ____________, ITN ____________) (the “Debtor”) of its obligations which are provided for by the Settlement agreement dated ________________ (the “Settlement agreement) and precisely defined in article 1.3 of this Agreement.  

1.2. The Settlement agreement has been concluded by the Creditor and the Debtor for the purpose of adjustment (settlement) of judicial dispute with a case number ____________, that has been considered by Moscow Arbitration Court and adjudicated with a court decision of ____________ (the “Decision”).  

1.3. According to the terms and conditions of the Settlement agreement the Debtor bears obligations (the “Debtor’s obligations”) to carry out the following actions in favor of the Creditor: 

1.3.1.  to pay to the Creditor the sum of principal indebtedness in the amount of ____________ RUB and the compensation for storage of the goods in the sum of ____________ RUB;

1.3.2. within 7 business days after a competent arbitration court approves the Settlement agreement to compensate the Creditor for ____________ per cent of the official fee (previously paid by the Creditor) in the amount of ____________ RUB;

1.3.3. within 7 business days after a competent arbitration court approves the Settlement agreement to reimburse court costs in the amount of ____________ RUB. 

1.3.4. not later than  ____________ reimburses to the Claimant ____________ per cent of the contractual penalty in the amount of ____________ RUB. 

1.4. The Settlement agreement sets forth that if the Debtor breaches (in whole or in part) or delays fulfillment of at least one of the Debtor’s obligations, provided for in article 1.3 of this Agreement for more than 3 (Three) business days:

- all time periods which are set forth for disbursement of Debtor’s indebtedness and explicitly defined in article 1.3 of this Agreement shall be deemed and treated as arrived and mature (on the day of the breach of an obligation to make due payment), and

- the Debtor should be deemed as it has violated (exceeded all time limits for) all Debtor’s obligations, set out in article 1.3 of this Agreement. 

1.5. Pursuant to article 4.3 of the Settlement agreement in the event indicated in article 1.4 of this Agreement the Creditor is entitled to immediately apply to a competent arbitration court with the request for issuance of execution writ for enforced collection of all remained indebtedness which have not been discharged till the moment when the Creditor addresses to a court with such request in connection with Debtor’s breach of the Settlement agreement.   

1.6. For the purposes of the article 367 of the Civil Code of the Russian Federation, in case if the Debtor’s obligations or only part of them are altered or modified, the Guarantor hereby gives its consent to any alteration and/modification of the Debtor’s obligations. To avoid any possible misunderstanding the Guarantor acknowledges and confirms herewith that it remains liable for fulfillment of Debtor’s obligations regardless of the fact that they have been somehow altered or modified.     

2.    The volume of Guarantor’s liability: 

2.1.   The surety under this Agreement secures the performance of the following obligations arisen out of or in connection with the Settlement agreement:

2.1.1.  repayment of any amount, subject to be reimbursed by the Debtor under the Settlement agreement and defined in article 1.3 of this Agreement;

2.1.2. compensation for any damages arisen due to the fact that any of Debtor’s obligations are not fulfilled or fulfilled improperly; 

2.1.3. any default interests accrued pursuant to article 395 of the Civil Code of the Russian Federation;

2.1.4. reimbursement of any legal costs or official fees related to enforced recovery of Debtor debt under the Settlement agreement or any damages or default interests arising out of  non-performance or improper performance of the Debtor’s obligations. 

3. Representations and warranties of the Guarantor:

3.1.  The Guarantor under this Agreement represents and confirms herewith that up to the moment of conclusion of this Agreement: 

3.1.1. it has informed on and acquainted with all terms and conditions of the Settlement agreement which are entirely clear, definite and unambiguous for it;

3.1.2. it has presented to the Creditor a comprehensive and accurate information as to its financial status;

3.1.3. the surety under this Agreement doesn’t infringe or otherwise negatively affect any rights and legal interests of third persons, companies or other legal entities;

3.1.4. is duly empowered to conclude this Agreement and it obtained all applicable approvals of management bodies of the Guarantor for the conclusion of this Agreement.

3.1.5. is not engaged in any legal or administrative controversy which might result in any material attrition of its property or aggravation of its financial state.  

4. Method and terms of performance of the Guarantor’s obligations: 

4.1.   The Guarantor  shall be jointly and severally liable for non-performance or improper performance of Debtor’s obligations. Therefore upon any violation of Debtor’s obligations the Creditor is enabled to lodge its complaint directly and immediately with the Guarantor and it is not obligatory to previously (before addressing to the Guarantor):

4.1.1. apply to the Debtor with a demand to remedy its violations and carry out the Debtor’s breached obligations and/or 

4.1.2. file a relevant application to a competent arbitration court for issuing of execution writ for enforcement of the Settlement agreement or obtain such execution writ. 

4.2.   In the event of non-performance or improper performance of the Debtor’s obligations provided for by the Settlement agreement  the Contractor has a right to forward to the Guarantor a written request for repayment of any Debtor’s indebtedness payable under the Settlement agreement or connected with violations of terms and conditions of the Settlement agreement. The written request of the Creditor shall be accompanied by a calculation of all Debtor’s indebtedness subject to be reimbursed by the Guarantor pursuant to this Agreement. 

4.3.   The Creditor’s request referred to in article 4.2 of the Agreement shall be satisfied by the Guarantor within 5 (Five) business days from the date of its reception of the said request. Monetary sums which are paid by the Guarantor in accordance with this Agreement shall be transferred to the Creditor’s bank account, indicated below in this Agreement. The Creditor is herewith entitled to forward to the Guarantor written instructions containing other bank details to which the Guarantor shall transfer the said monetary sums. 

5. Additional obligations of the Guarantor: 

5.1.   The Guarantor shall:

5.1.1. notify the Creditor in written on upcoming change of the legal or postal address indicated in this Agreement within 15 (Fifteen) business days prior to the change; 

5.1.2. within 5 (Five) business days from the date when the relevant decision is adopted inform the Creditor on upcoming reorganization or liquidation of the Guarantor;

5.1.3. give notice to the Creditor on any application for bankruptcy lodged with a competent arbitration court in respect to the Guarantor within 2 (Two) business days after it becomes informed of such fact;

5.1.4. communicate to the Creditor about any circumstances which might result in significant reduction of the Guarantor’s assets or worsening of the Guarantor’s financial state within 2 (Two) business days after it is informed of the said circumstances;

5.1.5. pay to the Creditor a penalty in the amount of ____________ RUB for each day of delay in fulfilment of the Guarantor obligations under this Agreement. 

6. Term of the Agreement: 

6.1.   This Agreement becomes effective on the day of its conclusion and shall remain its legal force for ____________ years.  

7.      Applicable law and dispute resolution

7.1.  This agreement is governed by and shall be interpreted in accordance with the law of the Russian Federation. 

7.2.   Any dispute arising out of or in connection with this Agreement shall be resolved by the Moscow Arbitration court. 

8.      Miscellaneous

8.1.    All alterations and amendments to this Agreement shall be enforceable only when they are made in written and signed by the Parties or their duly authorized representatives. All verbal amendments to this Agreement shall be deemed as null and void.

8.2.   Without Guarantor’s approval the Creditor is entitled herewith to transfer all its rights under this Agreement to any persons, companies or other legal entities. The said assignment shall be valid only if rights under this Agreement are transferred jointly with the Creditor’s rights under the Settlement agreement. 

8.3.   Any notification or other notice to be forwarded under this Agreement shall be made in written. Such notification or notice shall be deemed as duly delivered, if it has been delivered to the addressee either by courier or registered mail to the address set under this agreement.

8.4.    Each of the Parties to this Agreement shall keep strictly confidential all financial, commercial and other information received from the other Party. The transfer of such information to third persons is allowed only upon a consent of both Parties as well as in events and on conditions set forth by legislation of the Russian Federation.

8.5.   This Agreement is made in English language in 3 (Three) original copies of equal legal force, per 1 (One) for each Party, and 1 (One) for entering into legal case # ____________.    

9.      Parties’s signatures, contacts and bank details: