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1.
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Credit
Amount
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2.
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Earnest
Money
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3.
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Cost
for Credit Issuance
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4.
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Preconditions
for Party B to Issue the Credit to Party
A
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4.1
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Party
A has already handled and completed all relevant formalities of approval,
registration, delivery and insurance, as well as other statutory
formalities under this Contract, in accordance with relevant laws and
regulations.
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4.2
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The
security to Party B’s satisfaction have become and remained
effective.
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4.3
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Party
A does not breach any provisions of this
Contract.
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4.4
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Other
conditions:
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5.
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Application
of Uniform Customs and Practice for Documentary Credits
(“UCP”)
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6.
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Issuance
and Modification of the Credit
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7.
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Payment
under the Credit
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7.1
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Party
A shall advise Party B in writing to honour (pay/ accept/incur a deferred
payment undertaking) or refuse to honour within the deadline provided in
Party B’s advise note of the credit document; where Party A fails to
advise Party B in writing within the prescribed deadline, Party B has the
right to decide to honour or refuse to honour at its full discretion and
Party A agree to undertake all the liabilities and consequences arising
therefrom.
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7.2
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Where
Party A determines the presentation under the credit is not a complying
presentation and proposes to requests Party B not to honour, Party A shall
provide to Party B a written request and explanation for not to honour
within the deadline provided in the advise note of the credit document,
listing all the discrepancies, and Party A shall return Party B all the
documents and materials transferred by Party
B.
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7.3
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Party
B has the right to check the documents independently and to determine
whether the presentation under the credit is complying or not at its full
discretion. Where Party B determines the presentation is not
complying after its independent check, it has the right to determine how
to deal with the discrepant document and whether to accept the
discrepancies or not at its full discretion. Party A’s
acceptance of the discrepancies or not shall not affect Party B’s final
determination on whether to accept the discrepancies or
not. Provided that Party B determines the presentation under
the credit is complying, it may
honour.
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7.4
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If
the credit applied by Party A is a sight credit, and Party B determines
the presentation constitutes a complying presentation or accepts the
discrepancies as required by Party A, then Party A shall commit that it
shall pay off all the payables to Party B within the deadline provided in
the advise note of the credit document issued by Party
B.
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7.5
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If
the credit applied by Party A is a usance credit, and Party B determines
the presentation constitutes a complying presentation or accepts the
discrepancies as required by Party A, and based on which Party B has
already honored, then Party A shall commit that it shall pay off all the
payables to Party B before the due date of
payment.
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7.6
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Party
A shall commit to pay the following payments to Party B within the time
limit required by Party B, including but not limited to, trade payables,
relevant commission charge, tele-transmission cost and other costs under
the credit, the interest on overdue payments, liquidated damages and
compensations arising from Party B’s prepayment under the credit which
shall be borne by Party A, any relevant banking expenses that the overseas
beneficiary refuses to bear, all the expenses for the purpose of realizing
Party B’s creditor’s rights (including but not limited to litigation cost,
arbitration cost, property preservation cost, travelling expenses,
enforcement expenses, appraisal cost, auction cost, notary cost, delivery
cost, announcement cost, attorney
cost).
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8.
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Disclaimer
on Transmission and Translation
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9.
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Disclaimer
for Acts of an Instructed Party
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10.
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Underlying
Contract Dispute or Credit Fraud
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11.
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Other
Rights and Obligations of the
Parties
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11.1
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Unless
otherwise agreed by the Parties, Party B has the right to select the
advising bank, the negotiation bank and the confirmation bank for the
credit, and has the right to entrust other third party to handle the
matters related to the credit.
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11.2
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The
RMB and foreign currency settlements under the credit applied by Party A
shall be handled through Party B.
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11.3
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As
requested by Party B, Party A shall provide true, lawful and effective
financial statements and relevant information, as well as the information
related to all its opening bank (such as, the names, account numbers,
deposit balance, etc.). Party A shall accept Party B’s
supervision over its production, operation, and financial
activities. Party A shall not illegally withdraw its capital,
transfer asset or take any other measures to evade its debt toward Party
B.
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11.4
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Without
Party B’s written consent, Party A shall not transfer its asset at low
price or free of change, abate a debt of third party, or untimely exercise
or waive to exercise its creditor’s rights or any other
rights.
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11.5
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Where
there is any change to Party A’s name, legal representative (or
principal), legal address, business scope, registered capital, company’s
(enterprise’s) articles of association or other registered items with
Administration for Industry and Commerce, Party A shall notify Party B in
writing within ____ working days after such
change.
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11.6
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Where
Party B honors an un-complying presentation according to Party A’s
direction, or where Party B refuses to honor after both Party A and Party
B determine that a presentation does not comply, Party A shall bear all
the liabilities arising therefrom.
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11.7
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Party
A shall not take advantage of affiliated transaction to evade the debts
toward Party B; shall not take advantage of the fake contract concluded
with its affiliates, to arbitrage banking fund or credit by means of
discount or pledge of such claims as notes or accounts receivables, etc.
without actual trade background in the
bank.
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11.8
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If
Party A is a group client, Party A shall timely report to Party B the
information about its affiliated transactions concerning 10% of its net
assets or more, including: (1) the affiliated relationships of all parties
to the transaction; (2) the transaction project and transaction nature;
(3) the amount of transaction or the corresponding proportion; and (4) the
pricing policies (including the transactions with no amount or with
symbolic amount).
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12.
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Liability
for Breach of Contract and Remedies in Events which Jeopardizing Party B’s
Creditor’s Right
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12.1
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The
following events shall be deemed as Party A’s breach of
contract:
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(1)
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Party
A breaches any provisions of this Contract or any statutory
duties.
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(2)
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Party
A expresses explicitly or indicates by its conduct that it will not
perform any of its obligations under this
Contract.
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12.2
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The
events which may jeopardize Party B’s creditor’s rights,
include:
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(1)
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Party
B shall regard it will jeopardize the security of the creditor’s rights
under this Contract where any of the following events arise: Party A has
any of contractual operation, trusteeship (take-over), leasing,
shareholding system reform, reduction of registered capital, investment,
joint operation, merger, acquisition, buy-up and reorganization, split-up,
joint venture, filling (or being called for) for suspending business for
rectification, filing for dissolution, being called for cancelled, filing
(or being called for) for bankruptcy, or controlling shareholder/actual
controller changes, or transfer of material assets, production
suspension, business close-down, being charged of high-rate fines by
competent authorities, or the registration being cancelled, the business
licenses being revoked, or being involved in significant legal disputes,
or great difficulties in the production and business, or financial status
deteriorating, or the legal representative or the major principals
incapable of performing duties
regularly.
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(2)
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Party
B shall regard it will jeopardize the security of the creditor’s rights
under this Contract where any of the following events arise: Party A fails
to pay off other matured debts (including the matured debts towards the
branches of China Construction Bank of all levels or the matured debts
toward other third parties), Party A transfers the asset at low price or
free of charge, abates a debt of a third party, is remiss in exercising
its creditor’s right or other rights, or Party A provides security to a
third party;
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(3)
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Party
B shall regard it will jeopardize the security of the creditor’s rights
under this Contract where Party A’s shareholder abuses the company’s legal
person status or the shareholder’s limited liabilities for the purpose of
evading debts.
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(4)
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Party
B shall regard it will jeopardize the security of the creditor’s rights
under this Contract in case the guarantor has any of the following
events:
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(i)
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The
guarantor breaches any provisions of the guarantee contract or any of its
representation and warranty is false, incorrect or
omitted.
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(ii)
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The
guarantor has any of contractual operation, trusteeship (take-over),
leasing, shareholding system reform, reduction of registered capital,
investment, joint operation, merger, acquisition, buy-up and
reorganization, split-up, joint venture, filling (or being called for) for
suspending business for rectification, filing for dissolution, being
called for cancelled, filing (or being called for) for bankruptcy, or
controlling shareholder/actual controller changes, or transfer
of material assets, production suspension, business close-down, being
charged of high-rate fines by competent authorities, or the registration
being cancelled, the business licenses being revoked, or being involved in
significant legal disputes, or great difficulties in the production and
business, or financial status deteriorating, or the legal representative
or the major principals incapable of performing duties regularly, which
may impair the guarantor’s capability to undertake the
guarantee.
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(iii)
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It
is in any other circumstance which will or may cause it to lose its
guarantee capability.
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(5)
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Party
B shall regard it will jeopardize the security of the creditor’s rights
under this Contract where the following events arises in respect to the
mortgage and pledge:
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(i)
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The
mortgaged property or the pledged property is damaged, lost or the value
of which decreases caused by the third party’s action, the national
collection, confiscation, expropriation, gratuitous withdrawal,
demolition, vary of market conditions, or any other
reasons.
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(ii)
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The
mortgaged property or the pledged property is sealed up, withheld, frozen,
transferred and deducted, liened, auctioned, supervised by the
administrative authorities, or whose ownership is being in
dispute.
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(iii)
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The
mortgagor or the pledgor breaches any provisions of the mortgage or pledge
contract or any of its representation and warranty is false, incorrect or
omitted.
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(iv)
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Other
circumstances which may jeopardize the realization of Party B’s mortgage
right or pledge right.
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(6)
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Party
B shall regard it will jeopardize the security of the creditor’s rights
under this Contract where the security is not established, or does not
come into effect, becomes invalid, is cancelled, is terminated, or the
guarantor breaches contract or expresses explicitly or indicates by its
conduct that it will not perform its guarantee obligations, or the
guarantor losses all or part of its guarantee capabilities, or the value
of the collateral decreases; or
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(7)
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Other
circumstances which may jeopardize the security of the creditor’s right
under this Contract regarded by Party
B.
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12.3
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Where
Party A breaches the contract or any circumstance which may jeopardize the
security of Party B’s creditor’s rights occurs, Party B is entitled to
exercise one or more of the following
rights:
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(1)
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Where
Party B makes any prepayment, Party B has the right to collect the
interest on overdue payments according to the overdue loan rate as of the
prepayment date; and the overdue loan rate is (1+50%)×normal loan
rate.
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(2)
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For
Party A’s payables, Party B has the right to directly transfer and deduct
the fund from Party A’s account for receiving the earnest money opened in
Party B, or from Party A’s other accounts opened in the system of China
Construction Bank, or from Party A’s other receivables, to collect such
payables.
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(3)
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Dispose
of the documents and/or the goods under the
credit.
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(4)
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Exercise
its security rights;
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(5)
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Require
Party A to supplement the earnest money or provide other types of security
which can be recognized by Party B;
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(6)
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Other
available measures according to the
law.
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13.
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Miscellaneous
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13.1
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Expenses
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13.2
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Fund
Transfer and Deduction for the
Payables
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13.3
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Usage
of Party A’s Information
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13.4
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Collection
by Announcement
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13.5
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Evidential
Effect of Party B’s Record
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13.6
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Non-waiver
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13.7
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In
addition to the debt under this Contract, where Party A has any other due
debt toward Party B, Party B has the right forcibly transfer or deduct the
fund (in RMB or other currency) in the account opened by Party A in the
system of China Construction Bank, which will be firstly used to pay off
any due debt, and Party A shall agree not to raise any
objection.
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13.8
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Party
A shall notify Party B immediately in writing upon any change of Party A’s
mail address or contact methods, and any losses arising from untimely
notification shall be borne by Party A on its
own.
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13.9
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This
Contract shall be interpreted and the true intention of the provisions
thereof shall be determined according to the purpose for concluding this
Contract, terms and expressions used in this Contract, the contents of the
relevant provisions of this Contract, the transaction practices, the
international practices (including but not limited to the applicable UCP
of International Chamber of Commerce and the latest version thereof on the
date when Party B issuing the irrevocable documentary credit ) and the
principle of good faith.
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13.10
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The
application letter for the documentary credit issuance, the application
letter for credit modification and other relevant documents submitted by
Party A to Party B shall be the integral parts of this Contract, which
shall have the same legal effect with this
Contract.
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13.11
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According
to the business demand, Party B is entitled to authorize other branches of
China Construction Bank to exercise and perform the rights and obligations
under this Contract, and Party A shall agree Party B’s such
authorization.
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13.12
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Dispute
Settlement
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(1)
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File
a lawsuit to the People’s Court where Party B is
located.
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(2)
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Submit
the dispute to Zhengzhou Arbitration Committee (Anyang Tribunal) for
arbitration (in Anyang Municipality) in accordance with its applicable
rules. The arbitration award is final and binding on the
Parties.
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13.13
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Effectiveness
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(1)
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This
Contract has been signed and stamped by Party A’s legal representative (or
principal) or authorized
representative;
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(2)
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This
Contract has been signed and stamped by Party B’s principal or authorized
representative; where Party B authorizes its subordinated branch to sign
this Contract, and then this Contract has been signed and stamped by the
principal of such branch.
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14.
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This
Contract has three original copies.
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15.
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Other
Provisions
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(1)
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Where
there is any discrepancy between this Contract and the “Commitment Letter
for Import Credit Transaction” issued by Party A before signing this
Contract, this Contract shall
prevail.
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(2)
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Party
B authorizes Anyang Branch of China Construction Bank Stock Limited
Company to sign and stamp this Contract on its
behalf.
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(3)
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Party
A and Party B agree that, Party A shall perform its obligations under this
Contract towards Anyang Branch of China Construction Bank Stock Limited
Company, where Party A fails to perform its obligations toward Anyang
Branch of China Construction Bank Stock Limited Company or fails to
perform its obligations according to this Contract, Party A shall be held
liable for breach of
contract.
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(4)
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Where
any damages incurred to Party B arising from Party A’s breach of contract,
Anyang Branch of China Construction Bank Stock Limited Company is entitled
to directly claim against Party A.
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16.
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Representation
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(1)
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Party
A is clearly aware of Party B’s business scope and
authorizations.
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(2)
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Party
A has already read all the provisions of this Contract. Upon
Party A’s request, Party B has already provided explanations to this
Contract accordingly. Party A has being clearly aware of and
fully understand all the provisions of this Contract and the correspondent
legal consequences thereof.
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(3)
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Party
A’s execution and performance of this Contract is in compliance with the
applicable laws, administrative regulation and rules and Party A’s
articles of association or internal organization documents, and has
already been approved by Party A’s internal authority and/or national
competent authorities.
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