Exhibit 10.1
FORM OF
CONTINUING LETTER OF CREDIT AGREEMENT
This CONTINUING LETTER OF CREDIT
AGREEMENT (this “Agreement”) dated as of
May 21, 2007, among THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED (“Bank”) and
(“Applicant”).
For the
purpose of inducing Bank to issue one or more irrevocable
commercial and/or standby letters of credit (each individually, a
“Credit”, and collectively, the “Credits”)
from any office of Bank in or outside the United States in
Bank’s sole discretion from time to time, for
Applicant’s account substantially as shown in
Applicant’s application (or in an application by any
subsidiary of Applicant designated by Applicant from time to time
to make a Credit application or request) made on a standard Bank
form or other form of letter of credit application satisfactory to
Bank, Applicant hereby agrees as follows:
1. Payment
Obligation .
(a) Applicant unconditionally agrees to reimburse Bank at such
office, place or account of Bank as specified by Bank, on or before
an agreed value date (or, if there is no agreed value date, then on
demand), each amount paid by Bank with respect to any draft or
demand for payment under, or purporting to be under, any Credit
issued at the request or for the account of Applicant (i) against a
presentation that appears to comply with the terms and conditions
of the Credit, or (ii) with Applicant’s waiver of
noncompliance or authorization to pay.
(b) As to
any draft or demand for payment which is payable in United States
Dollars, Applicant shall reimburse Bank in United States Dollars.
As to any draft or demand for payment which is payable in a
currency (“Alternate Currency”) other than United
States Dollars, Applicant shall reimburse Bank, as Bank in its sole
discretion may elect, either (i) in such Alternate Currency or
(ii) in United States Dollars, in which case the amount to be
paid by Applicant to Bank shall be the equivalent amount (as
determined by Bank at its rate of exchange) in United States
Dollars of the amount payable in the Alternate Currency under such
draft or demand for payment, on the day such draft was paid or
demand honored for the purchase by Bank of such Alternate Currency.
Applicant shall comply with any and all governmental exchange
regulations now or hereafter applicable to any foreign exchange
provided to Bank pursuant to this paragraph 1(b) and will indemnify
and hold Bank harmless from any failure to so comply. Applicant
shall assume all risks (political, economic or otherwise) of
disruptions or interruptions in currency exchange with respect to
any demand payable in an Alternate Currency, and if there is no
then prevailing exchange rate, then Bank may obtain the Alternate
Currency from any commercially reasonable source, in which case
Applicant shall pay Bank’s cost therefor, inclusive of all
reasonable expenses, in United States currency.
All payments to
be made to Bank under any Credit or this Agreement shall be payable
in immediately available funds, without withholding, deduction or
set-off and free and clear of taxes (other than income and
franchise taxes imposed on Bank).
2. Fees and
Costs .
Except as otherwise provided in
paragraph 4(i) of this Agreement, Applicant agrees to pay to Bank
in connection with each Credit issued at the request or for the
account of Applicant fees, charges and expenses (whether incurred
by Bank or its correspondents in connection with the Credits or
this Agreement), and any applicable interest thereon, in such
amounts and at such times as are mutually agreed by Bank and
Applicant from time to time.
3. Penalty
Interest .
If for any reason Bank makes payment
under a Credit and is not reimbursed in full by Applicant on the
agreed value date (or on demand if there is no agreed value date)
in the manner prescribed by Bank, then Applicant agrees to pay Bank
interest at a rate per annum equal to two percent (2%) plus the
Prime Rate (as defined below), from the agreed value date (or from
the date Bank makes such reimbursement demand) to the date
Applicant reimburses Bank for the amount of such payment. All
computations of interest shall be made by Bank on the basis of a
year of 360 days for the actual number of days elapsed.
“Prime Rate” means the rate of interest announced
publicly, from time to time, by HSBC Bank USA at its office in New
York, New York as its prime rate and is a base rate for calculating
interest on certain loans. Without notice to Applicant, the Prime
Rate will change automatically from time to time as and in the
amount by which HSBC Bank USA’s prime rate shall fluctuate
and any change in the interest rate resulting from a change in the
prime rate shall be effective on the date of such change in the
prime rate.
4. Other Matters
Pertaining to Credits .
(a) Bank
shall not be responsible to Applicant for, and Bank’s rights
and remedies against Applicant shall not be impaired by, a payment
by Bank against a presentation that (i) does not appear to
comply with the terms and conditions of a Credit, or (ii) does
appear to comply with the terms and conditions of a Credit but such
terms and conditions are not strictly in compliance with
Applicant’s application or request for such Credit, except,
in either event, to the extent and in the amount of any direct
damages suffered or incurred by Applicant in connection with the
underlying transaction as a result of such noncompliance. Except as
may be expressly provided in this Agreement, Bank shall not be
liable to Applicant in contract, tort, or otherwise for any
special, indirect, consequential, or punitive damages.
(b) Applicant agrees that in the event of any increase in the
amount of any Credit, any extension of the time for presentment of
drafts, or any other modification of the terms of any Credit, this
Agreement shall be binding upon Applicant with regard to any such
Credit so increased or otherwise modified, to drafts covered
thereby and to any action taken by Bank or any of Bank’s
correspondents in accordance with such extension, increase or other
modification provided Applicant has consented in writing to any
such increase, extension or other modification.
(c) Applicant agrees to notify Bank of any objection Applicant
may have to Bank’s issuance or amendment of a Credit,
Bank’s acceptance or rejection of a presentation under a
Credit, or any other action or inaction taken or proposed to be
taken by Bank under or in connection with this Agreement or any
Credit. Applicant’s notice of objection must be given to Bank
by expeditious means within
three
(3) banking days after Applicant receives notice of the action
or inaction taken or proposed to be taken by Bank. For example,
within three (3) banking days after receiving a copy of a
Credit or the originals or copies of documents presented under a
Credit, Applicant must examine them, notify Bank of any defect in
such Credit as issued or of any discrepancy in any presentation to
which Applicant objects, and specify each such defect or
discrepancy, even if Bank has indicated its satisfaction with the
issuance or presentation or its awareness of the defect or
discrepancy.
(d) Absent fraud or manifest error on the part of Bank,
Applicant’s failure to give timely and specific notice of
objection shall automatically waive Applicant’s objection,
authorize Bank’s action or inaction, and absolutely preclude
Applicant from raising the objection as a defense or claim against
Bank.
(e) Applicant’s acceptance or retention of any documents
presented under or in connection with a Credit (including originals
or copies of documents sent directly to Applicant) or of any
property for which payment is supported by a Credit shall ratify
Bank’s honor of the documents and absolutely preclude
Applicant from raising a defense or claim with respect to
Bank’s honor of the relevant presentation.
(f) Applicant must take action to avoid and reduce the amount
of damages to be claimed against Bank. For example, in case of a
claim for wrongful honor of the like, Applicant must enforce its
rights arising out of the underlying transaction, except to the
extent that enforcement is impractical because of the insolvency of
the beneficiary or other person against whom Applicant might
otherwise recover. In case of a claim for wrongful dishonor or the
like, Applicant must specifically and timely authorize Bank to
effect a cure and must give written assurances to the beneficiary
that such cure is being arranged.
(g) If Bank honors a presentation under or in connection with
a Credit for which Applicant claims it is not obligated to
reimburse or indemnify Bank, then Applicant shall nonetheless pay
to Bank the amount Bank paid, without prejudice to
Applicant’s claims against Bank to recover any Bank fees and
costs paid by Applicant with respect to the honored presentation,
plus any direct damages that Applicant is unable to avoid or
reduce.
(h) Applicant’s aggregate remedies against Bank for
honoring a presentation or retaining honored documents in breach of
Bank’s obligations to Applicant (whether arising under this
Agreement, applicable letter of credit practice or law, or any
other agreement or law) are limited to the aggregate amounts paid
by Applicant to Bank with respect to the honored
presentation.
(i) In any dispute or litigation between Applicant and Bank,
Applicant must pay Bank’s reasonable and documented
attorney’s fees, expert witness fees, and other expenses of
litigation, arbitration or dispute resolution, unless Applicant
prevails in obtaining an award of damages claimed against Bank.
(Applicant does not prevail if it obtains a contested injunction
against honor of a Credit or to the extent its damage claim against
Bank is denied, reduced, or offset by a damage remedy in favor of
Bank.)
(j) Applicant agrees to indemnify Bank (and Bank’s
directors, officers, employees, attorneys, and agents), on demand,
against claims and liabilities (and related costs, including
reasonable attorney’s
fees, and other
dispute resolution expenses) that arise out of or in connection
with this Agreement or any Credit to the extent that (i) Bank
prevails in the matter; or (ii) Applicant is responsible for
the matter under this Agreement or applicable law; or
(iii) Bank is not responsible to Applicant for the matter
under this Agreement or applicable law. This indemnity covers
claims and liabilities, whether they arise or are settled formally
or informally, in which (i) a beneficiary seeks to enforce a
Credit
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