EXHIBIT 10.3
STANDARD
CHARTERED
STANDARD TERMS AND CONDITIONS FOR BANKING FACILITIES AND SERVICES - TC2 (04)
(FOR CORPORATE, SOLE PROPRIETOR & PARTNERSHIP)
Any request or application made by the Customer for the utilisation of the
Facilities and/or Services is subject to and on the basis that the Customer has
agreed to be bound by the Agreement (as defined below).
1. DEFINITIONS AND INTERPRETATION
1.1 In the Agreement:-
"AGREEMENT" means the Standard Terms and Conditions for Banking Facilities
and Services (including any supplement) ("STANDARD TERMS AND CONDITIONS"),
any Facility Letter and any other agreement incorporating the Standard
Terms and Conditions;
"ASSETS" includes present and future properties, revenues and rights of
every description;
"BANK" means Standard Chartered Bank (Hong Kong) Limited which includes all
its branches and offices wherever situated and its successors and assigns;
"CUSTOMER" means the customer(s) specified in the Facility Letter and, as
the case may be, any other person(s) who agree to the Standard Terms and
Conditions, and where there is more than one Customer, all references to
the "Customer" shall mean all such persons or any one or more of them;
"EXCHANGE RATE" means the rate for converting one currency into another
currency which the Bank determines to be prevailing in the relevant foreign
exchange market at the relevant time, such determination to be conclusive
and binding on the Customer;
"FACILITIES" means the banking facilities (or any part of it) specified in
the Facility Letter;
"FACILITY LETTER" means the facility letter(s) (including all its schedules
and appendices) issued by the Bank in relation to the Facilities extended
by the Bank to the Customer, and includes references to any accession
letter executed by any Customer for acceding to the Facility Letter;
"HIBOR" means the Hong Kong Interbank Offered Rate quoted by the Bank for
the relevant period;
"LIBOR" means the London Interbank Offered Rate quoted by the Bank for the
relevant period;
"PRIME" means the respective rates which the Bank announces or applies from
time to time as its prime rates for lending Hong Kong Dollars and United
States Dollars;
"SCB" means Standard Chartered Bank (including all its branches), and
"SERVICES" means any banking services provided by the Bank or SCB to the
Customer.
1.2 Unless a contrary indication appears, a reference in the Agreement to:-
(a) a person includes an individual, a company, sole proprietorship,
partnership or body unincorporated and its successors and assigns;
(b) any document includes a reference to that document as amended, varied,
supplemented, replaced or restated from time to time; and
(c) a provision of law is a reference to that provisions as amended or
re-enacted.
1.3 The obligations and liabilities of the Customer to the Bank include all its
past, present and future, actual and contingent obligations and liabilities
to the Bank, whether incurred alone or jointly with another.
1.4 Unless the context otherwise requires, words importing the singular include
the plural and vice versa and the neuter gender includes the other genders.
1.5 The headings in the Agreement are for convenience only and are to be
ignored in construing the Agreement.
2. APPLICATION
2.1 The Standard Terms and Conditions shall apply to any Facilities and
Services which the Bank or SCB, in its sole discretion, may agree to make
available and provide to such extent and in such manner as the Bank thinks
fit.
2.2 The Standard Terms and Conditions shall be subject to such other terms and
conditions which may be specified by the Bank and/or SCB from time to time
in other documents, agreements or applications.
2.3 In the event of any conflict or inconsistency between the Standard Terms
and Conditions and the provisions of any agreement between the Customer and
the Bank, the latter shall prevail.
3. PAYMENTS
3.1 All payments by the Customer to the Bank shall be made without any set-off,
counterclaim, deduction, withholding or condition of any kind. If the
Customer is compelled by law to make any withholding, or deduction, the sum
payable by the Customer shall be increased so that the amount actually
received by the Bank is the amount it would have received if there had been
no such withholding or deduction.
3.2 Payment by the Customer to the Bank shall be in the currency of the
relevant liability or, if the Bank so agrees in writing, in a different
currency, in which case the conversion to that different currency shall be
made at the Exchange Rate. The Customer shall be liable for any shortfall
if the converted currency is less than the outstanding liability.
3.3 Any monies paid to the Bank in respect of the Customer's obligations may be
applied in or towards satisfaction of the same or placed to the credit of a
suspense account with a view to preserving the Bank's rights to prove for
the whole of the Customer's outstanding obligations.
3.4 It any payments paid to the Bank in respect of the Customer's obligations
are required to be repaid by virtue of any law relating to insolvency,
bankruptcy or liquidation or for any other reason, the Bank shall be
entitled to recover such sums from the Customer as if such monies had not
been paid.
4. DRAWINGS AGAINST UNCLEARED EFFECTS
If the Bank permits the Customer to draw against funds to be collected or
transferred from any account(s) the Customer shall on demand reimburse the
Bank in full the amount so drawn if the Bank does not receive the funds in
full at the time the Bank ought to have received the same or if, after the
Bank has accepted the transfer, the Bank is prevented from collecting or
freely dealing with the funds in accordance with usual banking practice.
5. TREASURY FACILITIES
5.1 Any foreign exchange, options, futures, swap or other structured or
derivative products ("Treasury Products") applications will only be
considered by the Bank or SCB subject to its receipt of the documentation
that the Bank may require from time to time. Any Treasury Products contract
will be entered into by the Customer at the rate(s) quoted by the Bank at
its absolute discretion.
5.2 The terms included or referred to In the relevant confirmation issued by
the Bank shall apply to all Treasury Products transactions between the
Customer and the Bank.
5.3 The Customer warrants that it will enter into any transaction with the Bank
or SCB solely in reliance upon its own judgement and at its own risk, and
the Bank shall not be responsible for any loss incurred by the Customer,
whether or not acting on advice received from the Bank. The Customer
further warrant that he/she understands and is aware of the risks involved.
5.4 The Treasury Products contracts amounts shall be subject to the relevant
facility limit(s) (if any) stipulated in the Facility Letter and the risk
exposure limit(s) set (either advised or otherwise) by the Bank or SCB from
time to time.
5.5 The Bank or SCB may from time to time xxxx the Customer's outstanding
Treasury Products contracts to market by reference to the prevailing market
rate or quotation in order to calculate the Customer's gain or loss under
the contracts. If the Bank or SCB determines that the Customer has incurred
a loss under any such contracts by the then prevailing xxxx-to-market
calculation, the Customer shall forthwith pay such sum or deliver such
collaterals as required by the Bank to cover such loss.
5.6 The Bank or SCB has the right to dose out and/or terminate any or all
outstanding Treasury Products contracts of the Customer if:
(a) the Customer fails to perform any terms of the Agreement including its
default in payment;
(b) the outstanding contracts amounts exceed the facility limit(s) (if
any) or the Bank's risk exposure limit(s);
(c) the Customer shall become insolvent or generally suspended payment of
any debt when due or subject to any bankruptcy or winding-up petition;
or
(d) any circumstances have arisen or continued which, in the Bank's
opinion, might adversely affect the Bank's position under the relevant
contracts.
Upon closing-out or termination of the Treasury Products contracts, the
Customer shall pay to the Bank or SCB any loss incurred under those
contracts. Such loss shall be determined by the Bank or SCB (acting in good
faith) based on the replacement market value of the contracts so closed-out
or terminated, which determination shall be binding and conclusive on the
Customer.
6. SECURITY
6.1 The Bank holds all Assets of the Customer including those Assets held to
the Bank's order or for account of the Customer (whether for safe custody,
collection, security or for any specific purpose or generally) as
continuing security for the payment and discharge of all the Customer's
obligations and liabilities to the Bank.
6.2 The Bank may (at any time, without prior notice to the Customer or any
other person and in such manner as the Bank thinks fit), sell, dispose of
or otherwise deal with any of the Assets of the Customer the subject of the
security hereby created.
6.3 The Bank may apply the net proceeds of any sale, disposition or dealing in
or towards discharge of the Customer's obligations to the Bank in whatever
priority that the Bank may determine.
6.4 The Customer shall, upon demand by the Bank:
(a) provide such further security in form and value as may be required in
the opinion of the Bank sufficient to secure any of the Customer's
obligations to the Bank; and
(b) execute and deliver to the Bank any documents in form and substance
satisfactory to the Bank over any of the Customer's Assets as the Bank
specifies in any such demand.
6.5 Save for gross negligence or wilful default, the Bank shall not be liable
for any loss or damages or depreciation in value of any security granted in
favour of the Bank due to the Bank's exercise of any of its rights over any
security.
7. INTEREST
7.1 The Bank shall charge interest on any sum(s) outstanding or owing by the
Customer from time to time. Unless otherwise specified, interest will
accrue on a daily basis and shall be calculated, compounded and payable on
such basis and in such manner as the Bank may determine at its absolute
discretion.
7.2 Unless otherwise stipulated, a default rate of 8% per annum over Prime or
the Bank's cost of funding, whichever is higher, will apply to amounts not
paid when due or in excess of any facility limit.
8. COST AND EXPENSES
8.1 The Customer shall pay to the Bank on demand the commissions, fees and
charges in connection with the Facilities and/or Services (including
insurance cover) at the rates and in the amount and manner stipulated by
the Bank. The Customer shall indemnify against the Bank for all costs and
expenses (including legal costs on a full indemnity basis) in connection
with the performance, perfection or enforcement of or preservation of
rights under the Agreement or any security provided by the Customer or any
third party in respect of the Customer's obligations to the Bank.
8.2 In the event of any prepayment of the Facilities, the Customer shall on
demand fully reimburse and indemnify the Bank for the costs incurred by the
Bank as a result of the prepayment. Such costs include all costs, losses,
liabilities and expenses incurred or suffered by the Bank in cancelling,
terminating and unwinding any arrangements previously effected by the Bank
to secure funding of the Facilities concerned.
8.3 The costs and expenses are payable by the Customer notwithstanding that the
Customer's applications for the Facilities are not accepted or the
Facilities are cancelled, modified or withdrawn at any time before
completion of the relevant transaction.
9. INSURANCE AND VALUATION
9.1 The Customer shall maintain insurance coverage against loss and damages
(insurable value and types of risks are determined by the Bank from time to
time) with insurance companies acceptable to the Bank with respect to
Assets in which the Bank has an interest failing which the Bank may cover
the insurance at the expense of the Customer.
9.2 The Bank's interest shall be duly noted on the policies or relevant
insurance documents and the amount due under any insurance shall be paid to
the Bank. The Customer shall, upon request, lodge with the Bank all
evidence of such insurance.
9.3 For any properties charged to the Bank, a full valuation report is required
before the Facilities are utilized and an updated valuation report is
required at any time that the Bank may think fit. All the valuation fees
are for the account of the Customer.
10. INDEMNITY
10.1 The Customer shall indemnify the Bank and keep the Bank indemnified against
all claims, demands, actions, liabilities, damages, costs, losses and
expenses or other consequences which may arise or result from providing the
Facilities or Services to the Customer.
10.2 The Customer shall, upon request by the Bank, forthwith appear and defend
at its own cost and expense any action which may be brought against the
Bank in connection with the Facilities or Services provided by the Bank to
the Customer.
10.3 The Customer shall indemnify and forthwith reimburse the Bank for all
payments, claims, demands, actions, losses incurred or suffered by the Bank
as a result of the Bank giving any guarantee, indemnity and/or other
payment undertaking issued at the request or for the account of the
Customer.
11. SET-OFF
11.1 The Bank may, at any time and without notice, combine or consolidate all
the Customer's accounts (whether sole or joint) with the Bank, SCB, the
holding company or subsidiaries or associated companies of SCB and apply
any credit balance (whether matured or not) to which the Customer is
entitled in or towards satisfaction of any obligation (whether or not
matured, actual, future, contingent, unliquidated or unascertained) owed by
the Customer to the Bank or SCB, regardless of the currency, the place of
payment or the office through which the Bank is acting.
11.2 For this purpose, the Bank is authorised to purchase, at the Exchange Rate,
such other currencies as may be necessary to effect such application with
the monies standing to the credit of such accounts. The Customer shall be
liable for shortfall if the converted currency is less than the outstanding
liability.
11.3 If any of the Customers obligations and liabilities owed to the Bank is
unliquidated or unascertained, the Bank may set off an amount estimated by
it in good faith to be the amount of that obligation.
12. LIEN AND POWER OF SALE
The Bank shall have a lien on all property of the Customer coming into the
possession or control of the Bank, for custody or any other reason and
whether or not in the ordinary course of banking business, with power for
the Bank to sell such property to satisfy any obligations owed by the
Customer to the Bank.
13. DISCLOSURE
13.1 Any personal data relating to the Customer may be used and disclosed for
such purposes and to such persons (whether the recipient is located in Hong
Kong SAR or another country, or in a country that does not offer the same
level of data protection as Hong Kong SAR) in accordance with the Bank's
policies on the use and disclosure of personal data. Such policies are set
out in statements, circulars, terms and conditions or notices made
available by the Bank to its customers from time to time. The collected
data may be used in connection with matching procedures (as defined in the
Personal Data (Privacy) Ordinance). (This sub-clause does not apply if the
Customer is a limited company).
13.2 The Bank is authorized to disclose and transfer from time to time all
information in connection with the Customer's accounts and business with
the Bank (including credit balances and any security given) to all or any
of the following persons (whether in or outside Hong Kong SAR):
(a) SCB, the holding company of SCB and any of the offices, branches,
divisions, related companies or associates of SCB or the Bank;
(b) any actual or proposed participant or sub-participant in, or assignee
or novatee of the Bank's right in relation to the Facilities and/or
Customer's accounts;
(c) agent, contractor or third party service provider which provides
services of any kind to the Bank or SCB in connection with the
operation of its business; and
(d) any financial institution with which the Customer has or proposes to
have dealings to enable credit checks to be conducted on the Customer.
The Customer also consents to the disclosure of any of its information by
the Bank or SCB if required or permitted to do so by any law, regulation,
court order or any regulatory authority in any jurisdiction.
14. CUSTOMER'S CONSENT
The Customer consents and acknowledges that the Bank may provide the
Customer's information to any proposed or actual individual guarantor or
other security provider (or their solicitors) in respect of any credit
facilities extended to the Customer, including (without limitation):
(a) any financial information concerning the Customer;
(b) a copy of the contract evidencing the obligations to be guaranteed or
secured or a summary of such contract;
(c) a copy of any formal demand for overdue payment which may be sent to
the Customer after it has failed to settle an overdue amount; and
(d) from time to time on request by the proposed or actual guarantor or
security provider, a copy of the Customer's latest statement of
account or other information showing the financial status of the
Customer and/or credit facilities extended to the Customer.
15. AUTHORISATION
15.1 The Customer hereby authorises the Bank to appoint any other person
(including correspondent, agent or third party contractor) in relation to
the Facilities and Services and the Bank may delegate any of its powers in
the Agreement to such person.
15.2 To secure due performance of obligations by the Customer under the
Agreement, the Customer irrevocably and unconditionally authorises the Bank
to be the Customer's true and lawful representative (with full power of
delegation and substitution) to execute, sign and do all documents, acts
and things (in the name of the Customer or otherwise) for carrying out any
of Customers obligations or for exercising the Bank's rights under the
Agreement.
15.3 The Customer irrevocably authorises the Bank to debit any of its accounts
maintained with the Bank for any sums due or owing to the Bank.
16. STATEMENT BY THE BANK
A statement issued by the Bank as to the amount at any time owing by the
Customer to the Bank, save for manifest error, shall be conclusive evidence
for all purposes.
17. LIMITATION ON LIABILITY
The Bank, its agent and correspondent shall not be liable to the Customer
for any action taken or not taken by them unless directly caused by their
gross negligence or wilful misconduct.
18. CONTINUING AGREEMENT, WAIVERS AND REMEDIES
This is a continuing agreement and the rights of the Bank hereunder.-
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under any other
agreement and the general law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such rights is not a waiver of
that right.
19. SEVERABILITY
If any provision of the Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect the legality,
validity or enforceability of any other provision of the Agreement or the
legality, validity or enforceability of such provision in any other
jurisdiction.
20. VARIATION
The Bank may, at its absolute discretion, by notice to the Customer vary,
amend or supplement any of the terms of the Agreement (including without
limitation, the basis of calculation of any interest, charges, commissions
or fees). Such variation, amendment or supplement shall take effect on the
date of the notice setting out details of such variation, amendment or
supplement or, if later, the date specified in the notice.
21. CHANGE IN CONSTITUTION OR PARTNERSHIP
21.1 All securities, agreements, obligations given or undertaken by the Customer
shall continue to be valid and binding notwithstanding any change in the
constitution of the Customer or the Bank, by amalgamation, consolidation,
reconstruction or otherwise.
21.2 If the Customer is a partnership, the dissolution of the partnership for
any reason shall not affect the liabilities of the Customer as partner(s)
until the Bank receives written notice from the Customer to such effect but
no notice shall affect the Customer's liability for any transaction made
prior to the Bank's receipt of such notice.
21.3 In the case of the death of a partner, the liability of the estate of the
deceased partner to the Bank shall cease only with regard to transactions
made with the Bank subsequent to the receipt by the Bank of written notice
of the death of the deceased partner.
22. ASSIGNMENT
22.1 The Customer may not assign or transfer all or any of its rights, benefits
or obligations under or referred to in the Agreement without the Bank's
prior written consent.
22.2 The Bank may at any time assign or transfer to any person all or any of its
rights, benefits or obligations under or referred to in the Agreement or
change its lending office.
23. NOTICES
23.1 Any notice given by the Bank to the Customer shall be deemed to have been
received:-
(a) if delivered personally, at the time of delivery;
(b) if sent by post, two or seven working days after posting to an address
in Hong Kong SAR or overseas respectively, and
(c) if by facsimile, at the time of transmission.
23.2 The address and/or facsimile number of the Customer are those set out in
the Facility Letter or any other agreement(s) submitted by the Customer or
those last known to the Bank.
23.3 Any notice by the Customer to the Bank shall be in writing and shall be
deemed to have been given only on actual receipt.
24. GOVERNING LAW AND JURISDICTION
24.1 The Agreement is governed by and shall be construed in accordance with the
laws of Hong Kong SAR. The Customer hereby irrevocably submits to the non-
exclusive jurisdiction of the Hong Kong SAR courts.
24.2 It the Customer is not ordinarily resident in Hong Kong SAR or a company
incorporated under the laws of Hong Kong SAR or a foreign company
registered under the Companies Ordinance (Cap.32, Laws of Hong Kong), the
Customer hereby appoints a process agent (as notified to the Bank) to
accept service of any legal process in Hong Kong SAR on behalf of the
Customer in connection with the Agreement. The Customer agrees that any
writ, summons, order, judgment or other document shall be deemed duly and
sufficiently served on the Customer when left at or sent by post to the
address of the process agent last known to the Bank. The foregoing shall
not limit the Bank's right to serve process on the Customer by any other
mode of service.
TRADE FINANCE SUPPLEMENT - TCT (04)
This Supplement forms an integral part of the Standard Terms and Conditions for
Banking Facilities and Services ("Standard Terms and Conditions") of Standard
Chartered Bank (Hong Kong) Limited. Except otherwise defined, the words defined
in the Standard Terms and Conditions shall have the same meanings when used in
this Supplement.
1. APPLICATION
1.1 Each documentary credit shall be subject to the Uniform Customs and
Practice for Documentary Credits ("UCP") of the International Chamber of
Commerce ("ICC") (including eUCP, if applicable) as are in effect from time
to time.
1.2 Each standby letter of credit shall be subject to the UCP or International
Standby Practices ("ISP") of the ICC (as stipulated in the relevant
application form(s) or the text of the instrument) as are in effect from
time to time.
1.3 Each guarantee, bond or payment undertaking issued by the Bank shall be
subject to ISP, Uniform Rules for Demand Guarantees ("URDG") of the ICC as
are in effect from time to time or the governing law as stipulated in the
relevant application form(s) or the text of the instrument.
1.4 Collection (either documentary or clean) shall be subject to the Uniform
Rules for Collections ("URC") of the ICC as are in effect from time to
time.
1.5 In the event of any conflict or inconsistency between the Agreement and the
UCP, ISP, URC, URDG or any other ICC rules, the Agreement shall prevail.
2. COMMERCIAL DOCUMENTARY CREDITS/STANDBY LETTERS OF
CREDIT/GUARANTEES/BONDS/INDEMNITIES OR THE LIKE (THE "PAYMENT UNDERTAKINGS")
2.1 The Bank is authorized to accept and pay all documents drawn or purporting
to be drawn and presented or negotiated under each of the Payment
Undertakings issued by the Bank.
2.2 The Bank may restrict negotiations of any documentary credit or standby
letter of credit to its own offices or to any correspondent or agent of its
choice.
2.3 The Customer will reimburse the Bank on demand any amount paid by the Bank
and will pay the Bank no later than the applicable date an amount equal to
the amount due under each of the Payment Undertakings issued by the Bank or
any bills of exchange accepted by the Bank under any inward collection
transactions.
2.4 The Customer agrees that the Bank is fully entitled to reject any
discrepant documents presented under any of the Payment Undertakings
notwithstanding that the Customer may have waived such discrepancies.
2.5 The Customer agrees that the Bank may, at its sole discretion and without
notice or consent from the Customer, amend the terms and conditions
submitted by the Customer and/or insert additional terms and conditions
into the Payment Undertakings as the Bank thinks appropriate including
cancellation of the whole or any unused balance of any Payment Undertakings
issued by the Bank.
2.6 The Customer agrees and undertakes to examine the customer copy of each of
the Payment Undertakings issued by the Bank and irrevocably agrees that
failure to give a notice of objection about the contents of the Payment
Undertakings within 90 calendar days after the sending of the customer copy
of the Payment Undertakings to the Customer by the Bank shall be deemed to
have agreed to waive any rights to raise objections or pursue any remedies
against the Bank in respect thereof.
3. PLEDGE OF GOODS
3.1 In consideration of the Facilities and/or Services, the Bank shall have a
pledge on (i) the goods and (ii) the documents, bills of exchange,
negotiable instruments, documents of title, transport documents, insurance
policies, delivery orders, godown warrants and any other documents
processed or handled through the Bank ("Documents"), until all the
obligations owed by the Customer to the Bank have been fully discharged.
3.2 The pledge shall be a continuing security in addition to any other security
held by the Bank and the Bank is authorised to sell, dispose of or
otherwise deal with any of the goods or Documents subject to the pledge.
3.3 The risks in the goods shall be with the Customer and the Bank shall not be
responsible for any loss or damage or depreciation in value of any goods or
Documents held by the Bank as security.
4. BACK-TO-BACK CREDIT
4.1 If the Bank issues any documentary credit for the account of the Customer
("Back-to-Back Credit") against the support of a documentary credit issued
in favour of the Customer ("Master Credit"), the Bank is authorised (but
not obliged) to:-
(a) retrieve the documents presented under the Back-to-Back Credit and to
take any actions that the Bank thinks appropriate for the drawing of
the Master Credit;
(b) negotiate or discount the Master Credit; and
(c) apply the proceeds of the Master Credit to pay the corresponding
drawing(s) under the Back-to-Back Credit irrespective of discrepancies
in any of the presented documents (all of which, if any, are hereby
waived).
4.2 The Customer shall not, without the Bank's prior written consent, assign
the proceeds of any Master Credit to any other party.
5. ASSIGNMENT OF EXPORT CREDIT PROCEEDS
If the Bank makes a loan to the Customer against an export documentary
credit deposited by the Customer with the Bank or issues a Back-to-Back
Credit against such export documentary credit, the Customer shall
absolutely assign all its rights, title, interest and benefits in and to
all the proceeds of such documentary credit as continuing security for the
payment and discharge of the Customer's obligations and liabilities to the
Bank. All monies received by the Bank in respect of such documentary credit
shall be applied to discharge the obligations and liabilities of the
Customer in such order and manner as the Bank determines.
6. EXPORT DOCUMENTS
6.1 Notwithstanding the provisions of the UCP or other ICC rules, the Customer
hereby expressly agrees that the Bank will have full recourse against it
and it will reimburse the Bank on demand for any advances (including
purchase, negotiation or financing of any draft(s) and/or documents)
against any Documents which have not been duly taken on presentation or in
respect of which payment has not been duly made to the Bank on the due date
due to whatever reason.
6.2 The Customer will refund to the Bank on demand for any monies received by
the Customer under any guarantee or indemnity countersigned or issued by
the Bank covering discrepancies of the Documents if such Documents are
subsequently not accepted or not paid due to whatever reason.
7. BILLS OF EXCHANGE NEGOTIATION
7.1 If the Bank agrees to purchase or negotiate any bills of exchange or
negotiable instruments of which the Customer is a party, the Customer
agrees to guarantee the full payment at maturity of such instruments and to
indemnify the Bank against any losses or expenses on a full indemnity
basis.
7.2 The Customer agrees to waive the requirement for the Bank to give notice of
dishonour and/or to note and protest any dishonoured instruments without
affecting the Bank's right of recourse against the Customer.
8. PRE-SHIPMENT LOAN
8.1 In respect of any pre-shipment loan application, the Customer undertakes to
present to the Bank the Documents for negotiation/presentation properly
drawn and conforming to the terms and conditions of the export documentary
credit referred to in such application as soon as available and in any case
not later than the latest presentation period stipulated in the credit.
8.2 If the Customer fails to deliver the Documents to the Bank on or before the
agreed date mentioned above, the Customer shall immediately pay to the Bank
in full all advances made by the Bank pursuant to the relevant pre-shipment
loan together with all interest accrued.
9. RELEASE OF PLEDGED GOODS
If any goods or Documents relating to goods pledged to the Bank are
released to the Customer or to its order, the Customer shall execute and
deliver to the Bank trust receipts in form and substance satisfactory to
the Bank together with any other documentation that the Bank may require.
10. TRUST RECEIPTS
10.1 For shipping or other documents in respect of such pledged goods which have
been handed over to the Customer, the Customer shall hold such goods, bills
of lading or other transport documents, certificates or receipts on trust
for the Bank and shall sign a trust receipt agreement in the form required
by the Bank. The Bank and/or its agent may at any time inspect such goods
and take possession thereof and the Customer shall arrange for the
inspection and possession by the Bank.
10.2 For goods held by the Customer on trust for the Bank, the Customer shall
dispose of such goods only to bona fide buyers for full value and on normal
commercial terms. Proceeds of the goods shall be received and held by the
Customer on trust for the Bank.
11. SHIPPING GUARANTEES
11.1 If the Bank, at the request of the Customer, countersigns or issues letters
of guarantee or indemnity covering the release of goods without production
to the shipping companies, carriers or forwarding agents of the relevant
bills of lading or other transport or title documents, the Customer
undertakes that:
(a) it will use its best endeavours to obtain the relevant bills of
lading, transport or title document;
(b) upon receipt of the bills of lading, transport or title documents, the
Customer shall deliver them to the Bank and procure the release of the
Bank from any shipping guarantee or indemnity given and the return of
the relevant shipping guarantee or indemnity to the Bank for
cancellation;
(c) it will waive all discrepancies that may appear in the import
documents and accept all such documents presented under the relevant
documentary credit; and
(d) it will, on demand by the Bank, deposit with the Bank such sum of
money or security equal to the Bank's obligations in respect of the
shipping guarantees or indemnities given by the Bank until they are
released and returned to the Bank.
11.2 The Customer authorizes the Bank to honour any relevant drawings without
examining the presented Documents and to endorse and countersign in the
Customer's name or otherwise all relevant bills of lading, title documents,
transport documents, insurance documents or any negotiable instruments as
the Bank thinks appropriate.
12. CUSTOMER'S UNDERTAKINGS
The Customer represents and undertakes to the Bank that:-
(a) it will provide the Bank with evidence of insurance acceptable to the
Bank for all the transactions that the Customer is responsible for
covering the relevant insurance;
(b) it will not accept or reject any amendments to any Master Credit,
Back-to-Back Credit or export documentary credit under which any
pre-export credit facility is provided without the Bank's prior
written consent;
(c) it is the sole beneficial owner of the goods and Documents and no
goods or Documents pledged or hypothecated to the Bank are or shall be
subject to any lien or charge in favour of any other person;
(d) it will pay all costs of and incidental to the transportation,
insurance and storage of the goods and the cost of compliance with any
reserve or similar requirement which may be imposed on or in
connection with any Payment Undertakings;
(e) it shall pay default interest on any sum due but unpaid by the
Customer in connection with the trade finance facilities at the rate
of 4% per annum above the interest rate charged on the trade finance
facilities provided to the Customer or at such other rate stipulated
by the Bank in the Facility Letter (if any);
(f) it will not encumber, transfer, sell, dispose of or otherwise deal
with the Documents and/or the goods except as directed by or with the
prior consent of the Bank;
(g) it will not take any action which might prejudice the value of the
goods and/or the effectiveness of the pledge;
(h) it will keep the goods and/or the sales proceeds of the goods separate
from any other property or accounts respectively of the Customer or
other persons;
(i) it will, at the request of the Bank, provide the Bank with such
information concerning the Documents, and any sales proceeds of the
goods shall be held on trust for the Bank;
(j) it will keep the Bank informed of the whereabouts of the goods and of
any change in the condition, market price, quality or quantity of the
goods; and
(k) it will execute such documents and performs such acts as the Bank may
consider expedient in connection with the exercise of its powers and
rights hereunder.
13. AUTHORISATIONS
The Customer hereby expressly authorises the Bank:-
(a) to make payment forthwith when due or on demand under any Payment
Undertakings issued by the Bank and to debit the Customer's accounts
for such payment without reference to the Customer or any other
person;
(b) to apply any export proceeds or monies received by the Bank for the
Customer to discharge any sum owing or payable to the Bank by the
Customer in such order and manner that the Bank determines;
(c) to land, ship, store, insure and to inspect the goods at any time; and
(d) to notify any other person of its interest in the Documents and the
goods.
14. LIMITATION ON LIABILITY
14.1 The Bank and/or its agent, acting in good faith and in accordance with its
normal policy or practice is entitled to honour claims drawn under any
documentary credit or standby letter of credit issued by the Bank at the
request of the Customer notwithstanding that the Bank and/or its agent is
not obliged or ought to reject such claims under the documentary credit or
standby letter of credit and/or the applicable edition of UCP, ISP or other
ICC rules on the ground that there are discrepancies.
14.2 The Bank is not responsible for any goods, Documents or items in its
possession beyond the exercise of reasonable care and shall not be held
liable for the default or negligence of any selected agent or correspondent
or for any losses incurred in transit.
