Document:

posama3ex10xlix_keyuan.htm

 

Exhibit 10.49

 

 

Contract No. (2011Xin)Yin (YongYa) No. 107

 

Contract on Import Bill Advance

 

China CITIC Bank

 

 

  

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Contract on Import Bill Advance

This Contract on Import Bill Advance (“Contract”) is made and entered into by and between the applicant for import bill advance, Ningbo Keyuan Plastics Co., Ltd. having its registered office at Qingshi, Beilun District, Ningbo 315803, telephone number of 86232932, fax number of 86232618, legally represented by Tao Chun Feng and having a bank account opened with the Zhongshan Road Sub-branch of the China CITIC Bank (“the Client”) and the processing bank, Ningbo Branch of the China CITIC Bank Co., Ltd having its registered office at No.36, Zhenming Road 315000 and legally represented by Xia Nianlu (“the Bank”).

This Contract is executed at No.36, Zhenming Road as of the fourth day of August, 2011.

WHEREAS, the Client has applied with the Bank for import bill advance for payments to be made under the letter of credit (No. 31500LC1100563)and the Bank has accepted such application.

NOW THEREFORE, in order to clarify the rights and obligations of both parties, in accordance with applicable laws and regulations, in consideration of mutual covenants and on an equal basis, the parties hereto hereby agree as follows:

Article 1 Details of Letter of Credit/Collection

1.1 If the import bill advance is based on a letter of credit (L/C), details of such letter of credit will be as follows:

L/C No.: 31500LC1100563

Invoice No.: V201457

Amounts specified in the documents: (in words) Sixteen Million Three Hundred and Two Thousand One Hundred and Eighty Eight Dollars Seventy Nine Cents

                                 (in numbers) USD 16,302,188.79

1.2 If the import bill advance is on a collection basis, the details of such collection will be as follows:

Collection No.:    Name of the Remitting Bank: 

Invoice No.: 

Amounts specified in the documents: (in words) 

                              (in numbers) 

Article 2 Details of the Import Bill Advance

2.1 Currency: United States Dollar .

2.2 Amounts of advance: (in words) Five Million Three Hundred and Two Thousand One Hundred and Eighty Eight Dollars Seventy Nine Cents.

                    (in numbers) USD 5,302,188.79;

2.3 Term of this Import Bill Advance: 30 days commencing on August 5, 2011 and ending on September 5, 2011. If an event specified herein occurs and as a result repayment becomes due and payable prior to the date of repayment, the repayment will be due on the date when such event occurs.

 

  

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2.4 The amounts of advance under this Contract shall be applied exclusively towards payments under the foregoing letter of credit (letter of credit/import contract) and the Client shall not use the same for any other purposes.

2.5 The amounts of advance, date of advance and the date of repayment will be determined as per the bank certificate to be issued by the Bank.

Article 3 Interest Rate, Calculation and Payment of Interest

3.1 Interest rate applied to the amounts of advance under this Contract will be an annual rate and the Article 3.1(1) hereunder will apply:

(1) The interest rate to be applied to the amounts of advance under this Contract will be a fixed rate of 4.20506% and the interest rate will remained unchanged during the term of this import bill advance.

(2) The interest rate to be applied to the amounts of advance under this Contract will be a fixed rate which will be BPs above the base rate which is the Libor/Hibor interest rate for           months’ loan in the same currency business days prior to the date of advance. Such interest rate will be specified in the bank certificate to be issued by the Bank and will remain unchanged during the term of this import bill advance.

(3) The interest rate to be applied to the amounts of advance under this Contract will be a floating rate which will be            BPs above the base rate which is the Libor/Hibor interest rate for         months’ loan in the same currency            business days prior to the date of advance. Meanwhile, the interest rate will be adjusted during each interest rate adjustment period (i.e. the selected Libor/Hibor period). The date of interest rate adjustment will be the same day of the month of adjustment as the date of advance, or the last day of the month of adjustment if there is no corresponding date in that month of adjustment. The adjusted interest rate will be the Libor/Hibor interest rate of           business days prior to the date of interest rate adjustment plus any increase determined pursuant to the foregoing. The interest rate will be specified in the bank certificate to be issued by the Bank.

(4) Others:

3.2 Calculation and Payment of Interest

(1) normal interest = interest rate agreed upon herein × amounts of advance × the number of days for possession of the advance/360.

(2) Penalty interest rate will be   50 % above the interest rate specified in Article 3.1 of this Contract. penalty interest = penalty interest rate × the overdue amounts × the number of overdue days/360. The interest will be calculated based on the overdue amounts and the actual number of overdue days from the day when the repayment becomes overdue and will be paid quarterly. In the event that the Client fails to pay the interest on time, compound interest will be charged at the penalty rate specified herein.

3.3 Interest hereunder will be paid in pursuance to Article 3.3(2) below.

(1) Interest will be prepaid and will be settled on the due date.

(2) Interest will be paid on the due date together with the principal amounts from which such interest accrues.

 

  

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Article 4 Release of the Amounts of Advance

4.1 The Bank will release the amounts of this import bill advance on the condition that all of the following requirements are met to the satisfaction of the Bank (unless the Bank waives all or any of them):

(1) The Client has completed all formalities as may be required by the Bank and such formalities continue in force;

(2) The guaranty contract (if any) under this Contract has become effective and continues in force;

(3) There has been no material change of the business operation and financial condition of the Client;

(4) The Client breaches none of the terms or conditions of this Contract.

4.2 The Bank is authorized by the Client to pay to a third party the amounts of advance under this Contract.

Article 5 Repayment of Debts under the Import Bill Advance

The Client warrants that it will, on or before the prescribed due date of repayment of the advance, pay back all principal amounts, interest and charges connected with the amounts of advance under this Contract. The Client shall transfer the foregoing principal amounts, interest and charges into a bank account designated by the Bank. In the event that the Client fails to pay back any amount on its due date, the Bank shall be entitled to the following rights:

1.debiting and collecting from any account opened by the Client with the China CITIC Bank an amount covering all the due principal amounts, interest, penalty interest, liquidated damages and compensatory damages (if any), and costs and expenses incurred by the Bank to collect such amount (collectively “the Debts”),

2.deducting an amount equivalent to the full amount of the Debts from all kinds of the Client’s receivables including payments for export of goods and/or services,

3. charging penalty interest to be determined in pursuance to the penalty interest rate set forth in Article 3.2 of this Contract provided that the Client fails to pay back the principal amounts, interest and charges under this Contract on their respective due dates,

4 disposing of collaterals or demanding that the Guarantor repay the Debts,

5.effecting any other measures which are adequate to protect the Bank’s rights and interests under this Contract.

Article 6 Guaranty and Safeguard Measures under the Import Bill Advance

6.1 The Client, upon entering into the import bill advance, transfers all titles, rights and interests in and to the documents and the goods represented by such documents to the Bank as guaranty or safeguard measures for repayment of the Debts so as to ensure that the Bank will collect in full amount the amounts of advance paid under the letter of credit/import contract, interest and charges.

The Bank shall be entitled to the ownership of the full set of documents/goods under this import bill advance as a result of the foregoing transfer. The Bank will, upon request of the Client, entrust the title documents and the goods represented by such documents to the Client in trust, in which case The Client is the trustee and the Bank is the grantor and sole beneficiary. The Client as the trustee shall act in good faith to the extent possible, prudently hold and dispose of the documents and goods represented by such documents for the best interest of the Bank, including taking delivery of, transporting, storing, processing, effecting insurance for and sell the foregoing goods, and undertake to sell the documents and the goods represented by such documents at reasonable prices, and shall apply in a timely manner the proceeds from such sale to repayment of the principal amounts, interest and charges under the import bill advance, or transfer the same to the account of the Bank (Account No. 7337610182400000111) as may be instructed by the Bank. To this end, the Client has issued to the Bank a trust receipt (No. YongYa 11243), which is attached hereto.

 

 

  

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6.2 In order to pay back the Debts, The Client, upon request of the Bank, provides the guaranty specified in Article 6.2(1) below:

(1) Ningbo Litong Plastics Co., Ltd. undertakes to be a surety (who is primarily and jointly and severally liable to repayment of the Debts) and has issued the Irrevocable Guarantee;

(2)Mortgagor               attaches security interest to its property and a separate Mortgage Contract (contract No. ) is executed;

(3) Pledgor                pledges properties and a separate Pledge Contract (contract No.                 ) is executed;

(4) Other guaranty: _________

Article 7 The Client’s Representations and Warranties

7.1 The Client is a duly organized and validly existing legal person, has the full right, power and authority to enter into this Contract and to perform all of its obligations hereunder, and is able to be held independently accountable for civil liability.

7.2 It is the Client’s real intention to execute and perform this Contract and the Client has obtained all approvals required either by applicable laws or by its corporate bylaws for its execution and performance of this Contract, and all necessary approvals and authorizations by the regulatory authority (if any) and/or its corporate authority (board of directors, shareholders’ meeting) and there exist no flaws at law.

7.3 All documents, statements, materials and information provided by the Client to the Bank during execution and/or performance of this Contract are true, accurate, complete and valid; the Client did not hold back any information that might have an effect on its financial condition and/or ability to pay back the Debts.

7.4 The Client has the right of import and export. There are real and lawful transactions from which the letter of credit /collection arises and the imported goods specified therein are within the approved scope of business of the Client.

7.5 The Client warrants that neither its execution nor its performance of the Contract will result in a default or violation of any regulation applying to or covenant or undertaking binding to the Client or any of its assets or any agreement to which the Client is a party.

7.6 The Client hereby confirms that the documents and title to the goods under the foregoing letter of credit/collection and the rights and interests under the insurance policy are the properties of the Bank, and the Client warrants that it will go through all necessary formalities in order for the Bank to be entitled to the foregoing rights and will cause the Bank to be listed as the first beneficiary in the insurance policy. The Client shall not, without authorization by the Bank, dispose of any of the said documents and/or goods in any manner. None of the foregoing acts will result in deduction or release of or set-off against the debts owned by the Client to the Bank.

 

  

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Article 8 The Client’s Obligations

8.1 The Client shall repay the Debts under this Contract at such time, in such currency and amount and at such interest rate as is specified in this Contract.

8.2 The Client shall bear all costs, expenses and charges arising out of or in relation to this Contract, including without limitation to notary fees, valuation and survey fees, appraisal fees and registration charges. The Client will take care of the goods (i.e. the bailed property) and assume all costs and expenses related thereto, including without limitation to insurance expenses, storage expenses, transportation costs and wharfage charges.

8.3 The Client undertakes to deposit all payments for the goods under this import bill advance into the account opened by the Client with the Bank (Account No. 7337610182400000111) to repay the Debts.

8.4 Title to the goods under this import bill advance will remain with the Bank unless and until the Client pays off the Debts. The Client shall not mortgage or pledge the aforementioned goods to any entity or individual, or cause a lien or any other security interest to be attached to the goods.

8.5 Upon request of the Bank, the Client shall hand over to the Bank all such materials as sales contracts, sales statements and sales records with respect to the goods.

8.6 The Client undertakes to act prudently as the trustee for the best interest of the Bank, sell the entrusted goods at reasonable prices, and to repay the Bank as soon as possible with the proceeds from the sale of the goods. The Client will, as is instructed by the Bank, transfer the money into the account designated by the Bank. The Client promises not to use the money for any other purpose.

8.7 The Client voluntarily waives any and all possible defenses against the Bank under this Contract and/or the letter of credit and/or import collection and/or trust receipt that may result in reduction or release in whole or in part of the Client’s liability.

8.8 The Client shall not cause the Bank’s entitlement and rights to be jeopardized as a result of any dispute arising from the trade contract on which this Contract is based. The legal dispute(s) between the Client and a third party shall have no effect on the Bank’s rights and interests under this Contract.

8.9 After the Bank releases the documents to the Client, the Client shall not assert any such defenses against the bank as a discrepancy or discrepancies contained in any of the documents.

8.10 The Client shall, on a monthly basis, submit to the Bank financial statements and related plans and Statistics statements and shall provide convenience for the Bank in its management of this advance.

8.11 The Client shall not, without the Bank’s consent, decide to return the goods to the Bank based on such excuses as impossibility of selling the goods, price decrease, financial inability to pay back the Debts and/or others. The Bank shall have the right to first demand repayment of the Debts in cash from the Client.

8.12 In case that any of the following events occurs to the Client, the Client shall give the Bank at least thirty days’ notice, and shall, as may be requested by the Bank, pay off all the principal amounts and interest under the Contract regardless of whether they are due and payable, or as an alternative furnish the Bank with repayment schedules and guaranty. The Client shall not, without first obtaining written consent of the Bank, conduct any of the following acts:

(1) selling, giving away as gifts, leasing, lending, transferring, mortgaging, pledging or otherwise disposing of its major assets or all or any substantial part of its business income;

 

  

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(2) causing its business system, business decisions or forms of business ownership to be or possibly to be changed, including without limitation to decisions that might have an effect on the right and/or interest of the Bank, on transfer of shares, reorganization, merger, division, transformation into a joint-stock company limited by shares, establishment of joint ventures or cooperatives, affiliation, independent contracts, lease, change of scope of business or registered capital;

(3) intending to file for bankruptcy, discontinue or suspension of business, and etc.;

(4) intending to enter into a contract that has materially adverse effects on its business and financial condition.

8.13 In case that any of the following events occurs to the Client, the Client shall, within seven days from the date of occurrence of the event, give notice to the Bank thereof and shall, as may be requested by the Bank, pay off all the principal amounts and interest under the Contract regardless of whether they are due and payable, or as an alternative furnish the Bank with repayment schedules and guaranty:

(1) The Client is ordered to be shut down or dissolved or the registration of the Client is cancelled or its business license is revoked or a bankruptcy petition is filed against it, and etc.;

(2) The Client is involved in any material economic disputes, lawsuit or arbitration, or a preservation order is issued against any of its major assets;

(3) Any act of the Client or of its legal representative violates any law;

(4) The Client encounters serious difficulties in business operations or the Client’s financial condition worsens or any other event occurs, which has materially adverse effect on its financial condition or its ability to perform its obligations under this Contract.

(5) The Client provides guaranty for a third party, which has materially adverse effect on its financial condition or its ability to perform its obligations under this Contract.

8.14 In case of any change of the guaranty under this Contract which adversely affects rights and/or interest of the Bank, the Client shall, upon request by the Bank, provide such other guaranty as is agreed to by the Bank.

8.15 During the term of this Contract, in the event of any amendment to the Client’s corporate bylaws, any change of the name of the Client or replacement of its legal representative or personnel in charge of the project, change of its registered address, telephone number, fax number or scope of business, the Client shall notify the Bank of the same within seven days thereafter.

Article 9 Rights and Obligations of the Bank

9.1 The Bank shall have the right to, in pursuance to provisions of this Contract, collect the principal amounts of the advance together with interest (including penalty interest and compound interest) and charges payable by the Client, and to exercise all other rights conferred by applicable laws or granted by this Contract.

9.2 The Bank shall have the right to inspect on and supervise over the sale of the goods and collection of payments for the goods under the letter of credit, conduct inspection on the Client’s business operations, financial activities and inventory of materials and, in case of necessity, to dispose of the goods.

9.3 After the Client sells the entrusted documents or goods and collects the payments, such payments shall be the property of the Bank and the Bank shall be entitled to demand immediate handover of the same by the Client to the Bank. During the period of time when the Client keeps such payments as a trustee, even if the Client becomes bankrupt, such payments will not be the bankruptcy estate of the Client and shall be returned to the Bank. The Bank shall have the trustor’s rights to such payments.

 

  

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9.4 No matter where the proceeds from the sale of the entrusted goods obtained by the Client may be transferred and no matter whose account such proceeds are paid into (including that of a third party), the Bank shall nevertheless be entitled to a right of recourse in accordance with the Trust Law of the People’s Republic of China and may demand from the third party in possession of the proceeds return to the Bank the trust interest that the Bank is entitled to in respect of such proceeds.

9.5 If any third party acquires the entrusted goods without paying reasonable consideration for them, the Bank shall have the right to demand from such third party the trust interest that the Bank is entitled to in respect of the goods.

Article 10 Liability for Breach of the Contract

10.1 Upon occurrence of any one of the following (“Event of Default”), the Bank shall have the right to cease to make any advance under the Contract or to declare that the amounts already released to the Client be due and payable in whole or in part prior to the date of repayment and demand that the Client immediately pay back all amounts due and payable together with interest:

(1) The Client breaches any provision of this Contract or any Event of Default described herein occurs;

(2) The representations and/or warranties made by the Client in Article 7 are false or the Client fails to live up to such representations and/or warranties;

(3) In the opinion of the Bank, the credibility of the Client or that of the guarantor goes through such a change or changes that their performance of obligations under this Contract will be adversely affected;

(4) The Client is or is likely to be dissolved, reorganized or become bankrupt;

(5) The Client fails to pay any amount due and payable under this Contract;

(6) The Client breaches any other contract entered by and between the Client and the Bank (e.g. delay in performing any of its obligations under that contract) and fails to cure the default after being reminded thereof by the Bank.

10.2 In the even that the Client breaches this Contract and as a result thereof the Bank resorts to lawsuit, arbitration or any other means to get the repayment, the Client shall indemnify and hold the Bank harmless from and against all costs and expenses (including but not limited to reminder fees, court costs (or arbitration costs), preservation costs, public notice costs, enforcement costs, attorneys’ fees and travelling expenses) incurred by the Bank.

Article 11 Agreement on Debiting

11.1 The Client authorizes the Bank to debit directly from any one of the bank accounts opened by the Client with any of the branches or sub-branches of the China CITIC Bank an amount equivalent to the total amount of the due principal amounts, interest, penalty interest, compound interest and other charges. When the Bank debits an amount from the Client’s account, any pre-mature amount of deposit in the account will be deemed to be broken.

11.2 If the debited amount is in a currency different from the currency of the amount due and payable, the debited amount will be converted into the latter at the exchange rate published by the China CITIC Bank on the date of debiting.

 

  

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Article 12 Effectiveness of the Contract

This Contract shall become effective after the parties hereto cause their respective legal representatives/the person in charge of a party or duly authorized agent(s) to put their respective signatures (or name seals) on this Contract and affix their respective corporate seals (or contract seals) to the Contract.

Article 13 Applicable Law and Dispute Resolution

13.1 This Contract shall be governed by the laws and regulations of the People’s Republic of China.

13.2 Any dispute arising out of or in relation to this Contract shall be settled by the parties through amicable consultation. Absent such settlement, the parties agree to cause the dispute to be settled in accordance with Article 13.2(1) below:

(1) to be litigated in the competent court in the venue of the Bank’s location;

(2) to be referred to and determined by the   Arbitration Commission in accordance with the then current arbitration rules of that arbitration commission. The arbitral award is final and binding to both parties.

Article 14 Miscellaneous

14.1 Other covenants: (In case of any conflict between this Article and other articles of this Contract, this Article will prevail.)

 finance arrangement fees of 0.15% will be charged.

14.2 The Application for the Import Bill Advance, Trust Receipt and bank certificates as well as related documents and materials confirmed by both parties hereto shall be integral parts of this Contract and provisions contained therein shall have the same legal effect as provisions of this Contract. In case of any dispute between the parties over any provision of this Contract (including but not limited to unclear expression or ambiguity in meaning, or anything not stipulated herein), the parties hereto agree to have the same construed in accordance with rules on import bill advance and rules on trust receipt established by the Bank.

14.3 IN WITNESS WHEREOF, this Contract is executed in two duplicates with each party hereto receiving and holding one executed copy.

The Bank has taken all measures to direct the Client’s attention to the provisions of this Contract that release or limit liability of the Bank and has made adequate explanations to such provisions upon request of the Client; the parties hereto agree with each other on the meaning(s) of each provision of this Contract.

The Client (seal):   Ningbo Keyuan Plastics Co., Ltd

Legal Representative:    name seal of Tao Chunfeng

(or duly authorized agent)

The Bank (seal): Ningbo Branch of China CITIC Bank Co., Ltd

Legal Representative:  name seal of Xia Nianlu

(or duly authorized agent)

 

 

9posama3ex10l_keyuan.htm

Exhibit 10.50

 

 

Attachment 2:

 

Agreement on Import Payment

 

To: Ningbo Ximen Branch/Sub-branch of Shanghai Pudong Development Bank

 

                                                                                                          NO.: 940J2011280214

 

	
Name of Client

	
Ningbo Keyuan Plastics Co., Ltd.

	
Date of Application

	  
	
Address

	
Bei Lun

	
Liaison for Client

	
Chen Xiaoying

	
Tel.

	
86232932

	
SPD Bank Liaison(filled up by bank)

	 
	
Fax:

	  	  
	
This company hereby irrevocably applies to SPD bank for import pay on other’s behalf service in accordance with following provisions of This Agreement due to in need of financing.

	
I.   Prime Articles

	
o This Agreement is entered into as affiliated financing documents of Financing Limit Agreement with ref. No. of ( ) (hereinafter “Financing Limit Agreement”). After This Agreement comes into effect, all articles of it will merge to Financing Limit Agreement and be regarded as an integral part of it (The client should check this item and indicate ref. No. of Financing Limit Agreement if the client has signed Financing Limit Agreement with SPD bank. );

o This Agreement is an independent credit document entered into by and between applicant and SPD Bank  (the client should check this item if the client has not signed Financing Limit Agreement with SPD bank );

	
II.  Document Description and Condition of Payment on Other’s Behalf

	
(If there is discrepancy between Financing Limit Agreement signed by the client and This Agreement on interest rate of financing and penalty interest rate, provisions of This Agreement shall prevail.)

	
Type of Pay on Other’s Behalf

	
  þ Import Pay on Other’s Behalf under L/C

  o Import Pay on Other’s Behalf under Import Collection

  o Import Pay on Other’s Behalf under TT Pay on Delivery

 

	
No. of L/C

	
LC940511C00001

	
Amount of L/C Draft/ Invoice Amount

(Currency)

	
RMB143,691,658.36Yuan

	
Record of Document Examination

	
oInconsistent

oConsistent

 

	
No. of Import Trading Contract

	
KAO-20101230-045

	
No. of Import Collection (Name of the Collection Bank)

	
N/A

	
Amount of Import Collection Draft/ Invoice Amount(Currency)

	
N/A

 

	
TT Pay on Delivery Invoice No.

	
N/A

	
Deposit Amount(Currency)

	
RMB seven thousand two hundred Yuan only

	
Proportion of Deposit

	
50%

	
Document Treatment

	
oMortgage

oRelease Bill of Lading

oRelease Bill of Lading upon Signing Trust Receipt

	
Amount of Pay on Other’s Behalf (Currency)

	
RMB143,691,658.36Yuan

	
Term of Pay on Other’s Behalf

	
Six months

	
Interest Rate

	
4.2%

	
Penalty Interest Rate

	
5 out of ten thousand per day

 

 

  

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Note: 1. Interest rate of pay on other’s behalf shall be fixed annual interest rate. Under This Agreement, pay on other’s behalf service shall apply coterminous rate of London Interbank Offer Rate on the date of payment plus ______ (that is LIBOR+___). “LIBOR” refers to arithmetic average of interest rate reported displayed on pages of Reuters screen (if any) (rounded to five decimal places). Coterminous rate means LIBOR price in months matching the term of pay on other’s behalf and currency as well. If term of import pay on other’s behalf is less than one month, it will be calculated as LIBOR price of one month; if term of import pay on other’s behalf is more than one month and less than two months, it will be calculated as LIBOR price of two months, and so on. The limit is LIBOR price of twelve months.

2. This interest rate remains the same in term of pay on other’s behalf unless both parties agree otherwise.

3. Amount of pay on other’s behalf shall not exceed that of the draft. If no draft is available, it should not exceed the amount of the invoice.

4. Term of pay on other’s behalf refers to the period starting from the value date when SPD bank gives instruction to the bank to pay on other’s behalf, to the date when the client repays the amount.

 

	
III.   Confirmation of Guarantor

	
About the (                ) agreement with ref. No. of (        ) where This Company be the guarantor and SPD bank be the secured creditor.

This Company, as the guarantor between the client and SPD bank to skip opening deposit L/C, has already signed abovementioned guarantee documents along with SPD bank. This Company hereby agrees that: once SPD bank releases aforesaid amount for import pay on other’s behalf, This Company shall keep taking joint and several liability for the principal and interest of the amount released by SPD bank to pay on other’s behalf; and creditor’s rights enjoyed by SPD bank against the client belong to the range of creditor’s rights secured by guarantee agreement. This Confirmation shall be irrevocable.

 

Guarantor (Seal)

Legal Representative or Authorized Agent (Signature or Seal)

 

	
IV.    Newly-Added  Guarantee

	
Guarantor:

	
Form of Security :

 □ mortgage; □ impawn; □ guarantee

 

	
V    General   Provisions

	
The client hereby confirms that the client has read and agrees with general provisions of  following import pay on other’s behalf agreement:

1. Import pay on other’s behalf referred in This Agreement means a short-term financing act, that is, under import trading settlement business, upon client’s application, SPD bank selects the bank to pay on other’s behalf according to the credit status and repayment ability of the client, to pay import payment for goods for the client to the trading partner (the exporter)   under settlement methods such as L/C, import collection, TT payment, etc. on behalf of SPD bank.

2. Import pay on other’s behalf referred in This Agreement limits only to external payments under import trading contract provided by the second part of This Agreement (except for advance money under trading). International settlement services referred to as import pay on other’s behalf include: sight L/C, usance L/C, usance L/ C Payable at sight under L/C settlement; D/P under import collection settlement; D/A; Payment upon delivery under TT settlement.

 

 

  

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3. After signing This Agreement, SPD bank can at any time revoke the commitment to pay on other’s behalf made by the selected bank in This Agreement, and SPD bank takes no responsibility for the revocation, unless SPD bank has contacted this bank and this bank has actually carried out import pay on other’s behalf to the exporter as well.

4. The client hereby confirms that SPD bank shall have the right to independently select or change the bank to pay on other’s behalf. In case that the bank to pay on other’s behalf fails to keep performing the responsibility to pay on other’s behalf, or after changing the bank to pay on other’s behalf, the pay on other’s behalf service is still not provided, the client will not be entitled to demand SPD bank or the bank to pay on other’s behalf to take any liability.

5. The financing value date under This Agreement shall be the actual date when the bank to pay on other’s behalf makes the external payment (that is, actual date to pay on other’s behalf). In principle, actual date to pay on other’s behalf shall be no later than the latest L/C payment day.

6. Payment of interest. Except indicated otherwise, payment of interest under This Agreement shall always be calculated in days, and both principal and interest shall be settled once-off. If HK Dollar or Pound is chosen to be the currency to pay on other’s behalf, one year shall be calculated to include 365 days; for currencies other than HK Dollar and Pound, one year shall be calculated to include 360 days.

7. Document submission and conditions for pay on other’s behalf

Client promises to submit following documents to SPD bank 2 working days before the date of pay on other’s behalf or meet relevant conditions, yet SPD bank shall take no responsibility to verify authenticity of these documents.

(1) Copy of the latest Articles of Association and business license of the client;

(2) Resolution made by board of directors which authorizes the client to sign This Agreement and relevant affiliated financing documents (if there is restrictions on the mandate of the legal representative to enter into agreement in Articles of Association of the client);

(3) The authorization letter made by the client to the authorized agent and signature sample of the authorized agent;

(4)  This Agreement which has been legally signed by the client;

(5) The client is qualified for the requirement from SPD bank to conduct import pay on other’s behalf business and is from authentic trading background;

(6) The date to pay on other’s behalf designated by the client shall be a working day of SPD bank;

(7) If the pay on other’s behalf business under This Agreement is secured, then this security document shall have been signed prior to pay on other’s behalf and this guarantee shall have come into effect;

(8) The client’s basic trading contract, original ocean bill of lading, original import payment of foreign exchange sheet (if needed),  original import goods customs declarations and invoices etc.;

(9) The client has properly handled all necessary approval, registration, delivery and other legal procedure related to pay on other’s behalf under This Agreement in accordance with laws, regulations and regulatory rules.

(10) The client doesn’t violate any of the agreed in This Agreement;

(11) Other documents and/or conditions SPD bank might ask at any time.

8. Skip the inconsistence

The client hereby confirms that SPD bank handles the pay on other’s behalf and the use of it just based on client’s application. Therefore, once the client submits This Agreement which has been effectively signed, an irrevocable application for pay on other’s behalf has then been established, and the client has irrevocably agreed to waive counter-argument right of refusing payment on the grounds of documents inconsistence under relevant L/C.

 

  

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9. If the expiry date of period to pay on other’s behalf designated shall not be a working day of SPD bank, then the expiry date of financing period designated shall be put off to next working day of SPD bank, and interest shall be collected for this put-off period;

10. Reporting balance of international payments

After make import pay on other’s behalf, the client shall carry out relevant procedure according to requirement from foreign exchange control policies as soon as possible.

11. Prepayment and expiration ahead of time

Client can conduct a prepayment on condition that SPD bank agrees in writing and the client fully compensates SPD bank in terms of any costs and losses arising from prepayment, and this kind of prepayment shall be immediately regarded as expiration ahead of time. SPD bank shall have the right to inform the client at any time of expiration ahead of time of import pay on other’s behalf under This Agreement, without having to give any explanation. And the client shall immediately repay any amount related to pay on other’s behalf.

12. The client hereby confirms that:

(12) In case that the client presents trust receipt to SPD bank, and before the debt under This Agreement gets fully paid, SPD bank shall have the ownership of the goods under import pay on other’s behalf.

(13) When the client has any payment due against SPD bank, SPD bank shall have the right to dispose the goods under import pay on other’s behalf, and the processed, mixed and composite of the goods as well. Any amount acquired from these disposals shall first of all be used to repay the debt under This Agreement. And SPD bank shall still have the right to further claim against the client on the part of debt which can not be repaid due to inadequate amount. The client though, doesn’t raise objection about this.

(14) The client confirms that the deposit paid at application to SPD bank for import pay on other’s behalf and its interest shall be the mortgage to guarantee the performance of This Agreement, and authorizes SPD bank to directly deduct from this deposit and its interest when SPD bank needs to make external payment due to This Agreement.

13. Tax

The client shall repay full amount under This Agreement and shall not make deduction in any form from it, unless client shall, according to law, deduct relevant taxes at repayment of amount of pay on other’s behalf. In this case, the client shall pay SPD bank extra amount which shall be equal to the amount deducted.

14. Declaration and Guarantee

15. The client hereby makes following declaration and guarantee which will be viewed as repeatedly made each time SPD bank provides pay on other’s behalf service to the client according to provisions of This Agreement:

(15) The client shall be companies etc. which is established according to Chinese law (HK, Macau and Taiwan excluded, similarly hereinafter),  which have the right to sign This Agreement and any documents related to This Agreement, and have adopted any necessary corporation action to make This Agreement and any documents related to This Agreement legal, effective and enforceable;

(16) The client doesn’t and will not violate any other contracts or documents already signed by it, nor articles of association, any applicable laws, regulations or ordinance, relevant documents, rules and arbitration rules made by competent department, nor conflict with any other obligations or agreement borne by the client by signing This Agreement and implementing obligations under This Agreement;

(17) The client and its any shareholders, affiliates don’t be involved in any liquidation, bankruptcy, reconstruction, merger, consolidation, division,  reorganization, dissolve, close down, discontinuation  or similar legal procedure, nor is there any situation happening which could result in these legal proceedings;

(18) The client isn’t involved in any economic, civil, criminal, administrative procedure or similar arbitration proceedings which could have major adverse impact on it, nor is there any situation happening which could result in the client being involved in these legal proceedings or similar arbitration proceedings;

 

  

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(19) Legal representative, director, supervisor or other senior management of the client and any vital assets of the client isn’t involved in any enforcement, close down, seizure, freeze, lien and supervisory measures, nor is there any situation happening which could result in the client being involved in these measures;

(20) The client guarantees that all financial statements (if any ) presented by it are in line with provisions of Chinese laws, and are a true, complete and fair reflection of its financial status; and all data, documents and information etc. about the client itself and the guarantor etc. provided by the client to SPD bank during the process of signing and implementing This Agreement is true, effective, accurate, complete and no any hidden facts or omission;

(21) The client strictly abides by provisions of laws and regulations during its operational activities, carries out businesses exactly according to business scope approved by its business license or verified by laws, and handles annual inspection of registration procedure in a timely manner;

(22) The client guarantees that there shall not be any other situations or events which have or could have major adverse impact on contractual capacity of the client;

(23)  For the financing under this import pay on other’s behalf agreement provided by SPD bank, the client guarantees that repay all principal refinanced, interest (including compound interest and penalty interest ),  commission charge, postage/cable charge and all relevant charges once and for all before expiration of import pay on other’s behalf according to requirement from SPD bank.

15. Items Promised

The client hereby makes promises as follow:

(1) The client shall strictly abide by and implement each item of obligations under This Agreement;

(2) The client shall, according to provisions of This Agreement, repay the principal and interest of pay on other’s behalf and related charges in a timely manner; the client shall carry out, acquire and conform to all approval, authorization, registration and licensing procedure required by applicable laws and keep its effectiveness, to make it able to legally sign and perform obligations under This Agreement and any documents related to  This Agreement; the client shall be able to present prove accordingly at SPD bank’s request.;

(3) If the client shall be informed of its involvement of any economic, civil, criminal, administrative procedure or similar arbitration proceedings, or any enforcement, close down, seizure, freeze, lien and supervisory measures which could have a major adverse impact on it, the client shall, within 5 working days, inform SPD bank in writing and give a detailed explanation about the impact and what remedial measures it has taken or plans to take;

(4) The client shall in no case repay any third party other than SPD bank any debt of a large amount or perform any guarantee obligation without written approval from SPD bank;

(5) The client shall not incur any other liability or contingent liability with large amount, nor shall it set up or provide guarantee in any form with a nature of priority for itself or any third party without written approval from SPD bank. The client shall, since the signing of This Agreement, and before paid-up of pay on other’s behalf under This Agreement, without written approval from SPD bank, not

A.   carry out any liquidation, bankruptcy, reconstruction, merger, consolidation, division,  reorganization, dissolve, close down, discontinuation  or similar legal procedure;

B.   sell, lease, bestow, transfer or dispose any of its vital assets in any other ways except for daily operation purposes;

C.   incur any alternation of its stockholders’ rights structure;

D. sign any contract/agreement which could have major adverse impact on contractual capacity of the client under This Agreement, or take on obligations which could do the same impact.

 

  

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(1) As for the guarantee under This Agreement, if it incurs certain change under certain circumstances, the client shall, according to SPD bank’s requirement, provide other guarantees in time that SPD bank permits. These certain circumstances or certain changes include but not limited to guarantor suspension of production, close down, dissolve, suspension and correction, revocation or cancellation of business license, apply or be applied for reorganization, bankruptcy, substantive change in its operation or financial status, be involved in major litigation or arbitration cases, its legal representative, director, supervisor or senior management be involved in law suit, reduction or would-be reduction of value of collateral, or property preservation measures such as closing down be adopted on collaterals, breach of guarantee contract and demand to cancel guarantee contract etc.;

(2) The client shall also carry out enforceable public notary in public notary office designated by SPD bank at SPD bank’s request, and the client shall bear the cost and willingly accept the enforcement;

(3) If there shall be any events happening which could have an impact on client’s capability of performing obligations under This Agreement or any documents related to This Agreement, the client shall at any time keep SPD bank informed;

(4) The client guarantees that there shall be no restriction articles on the client’s acquiring the ownership of the goods in the basic trading contract about financing under This Agreement, including but not limited to the articles speculating the seller keeps ownership of the goods etc.;

(5) If the client imports to sell to domestic markets, the client shall provide domestic trading (sales) contract, and designates in this contract a certain bank account opened in SPD bank as the only bank account for collection of the payment of the goods. And the client further confirms that after payment of the goods is credited to this bank account, SPD bank shall have the right to proactively deduct amount from it to repay the financing amount under This Agreement.

16. Costs and expenses

The client shall pay any stamp duties and other taxes and charges on This Agreement and any documents related to This Agreement, except for those as law stipulates shall be paid by SPD bank.

17. Penalty interests

If the client shall have any payment due of pay on other’s behalf, the client shall pay SPD bank penalty interests for the period starting from expiration date of this payment to the actual payment date with the due amount (including due penalty interests) as the base. The penalty interests shall be settled monthly and compound interest shall be collected also monthly.

18. Authorization of repayment and its offset

The client hereby gives authorization to SPD bank, shall the client have any payment due in SPD bank, whether this payment due is under This Agreement or not, SPD bank shall have the right to, on the client’s behalf, directly deduct this amount from any bank account (whatever currency) opened in any branch administered by Head Office of SPD bank to pay up this payment due. This authorization shall be irrevocable. As for foreign exchange conversion, SPD bank shall do it according to its own foreign exchange rate, and the risk of foreign exchange rate shall be taken by the client.

19. Liability prove

SPD bank will, according to its consistent business operation principle, keep one set of account books and vouchers on its account for business activities This Agreement involves. The client admits that this record of account books and vouchers shall be the effective evidence of its liability except for obvious mistakes.

20. Transfer

The client shall not transfer any rights or obligations under This Agreement. SPD bank can at any time, transfer its rights or obligations under This Agreement to any third party, and disclose any information related to This Agreement, including those provided by the client and its guarantor to SPD bank for This Agreement.

 

  

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21. Disclosure of information

The client agrees that besides the disclosure permitted by Article 20, SPD bank can also disclose any information related to This Agreement to its HQ, branches, affiliates and the employees of these institutes. Still, disclosure is further permitted for SPD bank according to requirements from any laws, regulations, and supervisory bodies, governmental departments or judicial organs.

22. Breach of the contract

Any statements and guarantee from the client which violates  This Agreement, or these statements and guarantee is proved to be incorrect, untrue, incomplete, misleading or has been violated,  and/or the client violates or doesn’t fulfill any items promised in This Agreement, or the client violates any provision of  This Agreement,  and/or there is any situation happening on the client which could affect the security of the loan of SPD bank, and/or guarantor violates provisions of any guarantee documents etc, shall constitute breach of This Agreement by each of them. SPD bank shall have the right to declare expiration ahead of time, and demand the client to immediately repay the principal and interest (including penalty interest) of pay on other’s behalf, and compensate all losses incurred by SPD bank including legal costs, and take measures agreed on This Agreement to further claim against the client and the guarantor.

23. Special agreement for group client

If the client under This Agreement shall be group client, it agrees as follow:

(1) The client shall in time report the situation of affiliate transaction of 10% and above the net assets of actual fiduciary, including a.) affiliate relation between parties involved in the transaction; b.) transaction project and nature of the transaction; c.) amount of transaction or proportion; d.) pricing policy (including transactions where there isn’t an amount or there is only a symbolic amount)

(2) actual fiduciary having following situations will be regarded as breach under This Agreement by the client, and SPD bank shall have the right to unilaterally cancel the credit line the client has not used, and withdraw the credit line which has partly or wholly been used, or give the client a margin call up to 100%: a.) provide false material or hide substantive operational or financial facts; b.) unilaterally change the designated usage of credit line,  misappropriate credit line or engage in illegal transaction using credit line without permission from SPD bank; c.) using unreal contract with affiliate, to discount the creditor’s rights such as notes receivable and amounts receivable or mortgage to extract bank capital or credit line; d.) reject supervision and examination by SPD bank on usage of its credit and relevant operation and financial situation; e.) SPD bank thinks security of credit line could be affected due to substantive merger, acquisition and reorganization etc. emerging; f.) intentionally evade creditor’s rights of the bank by affiliate transaction.

24. Other agreements__________

25. Applicable laws and jurisdiction

This Agreement shall be governed by law of the People’s Republic of China (HK, Macau and Taiwan is not included here for the purpose of This Agreement), and interpreted by law of the People’s Republic of China. Any disputes related to This Agreement, shall be submitted to the People’s Court where SPD bank locates.

26. Place to serve litigation bills

The client confirms that if any law suits happen under This Agreement, legal papers such as summons, notice etc. issued against it during the process of litigation can be regarded as served only by delivering to the address listed at the head of This Agreement. Alternation of this address will not have legal effect until SPD bank is informed in advance.

27. Severability of articles

Any articles going void, illegal or unenforceable under This Agreement shall not affect effectiveness, validity and enforceability of other articles herein.

 

  

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28. During the period of validity of This Agreement, if SPD bank grants extension or defers to take action against any breaching or other activities of the client, it shall not damage, impact or restrict all rights or benefits that SPD bank enjoys as the creditor according to laws or This Agreement, nor shall it be regarded as permission for activities of breaching This Agreement of the client given by SPD bank, nor even be regarded as SPD bank waiving its rights to take action against existing or future breaching activities of the client.

29. Consistency of financing limit agreement

If there is discrepancy between financing limit agreement (if any, and including effective alternation made at any time) and This Agreement, the latter shall prevail.

30. This Agreement comes in 6 copies of the same content with equal legal effect, with the client holding one copy, the guarantor holding one copy, and SPD bank holding four copies. and it shall not be established until both parties affix stamp, or their legal representative/person in charge or authorized agent sign or affix stamp. This Agreement shall come into force since the bank to pay on other’s behalf completes import pay on other’s behalf.

 

 

	
Signature column

Both parties confirm that by the time of signing This Agreement, both parties have carefully read and discussed about all articles, and don’t raise any objections on any articles of This Agreement, and have correct understanding of rights and obligations of the involved parties and the legal definition of liability restrictions or exemption clause as well.

 

	
Client: (Seal: Ningbo Keyuan Plastics Co., Ltd.)

Legal representative or authorized agent (signature or seal) : Tao Chunfeng

	
 

SPD bank (Seal : Special stamp for business contract of Ningbo Ximen Branch of Shanghai Pudong Development  Bank )

person in charge or authorized agent( signature or seal) :  

	
Signing date: Jul.19, 2011

 

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