信贷融资合同英.docx

信贷融资合同英.docx

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信贷融资合同英

DocumentInformation

DocumentName

Credit&Finance–DraftingConsiderations

Chapter

Credit&Finance

Language

ThisdocumentwasoriginallydraftedinChinese.

Disclaimer

Whilereasonablecareistakentoensuretheaccuracyandcompletenessofthepublication,TheChapterEditormakesanyrepresentationsorwarranties,expressorimplied,thatthepublicationisfreefromerrorsoromissions.ThisdocumentisbasedupontheEditor’sexperienceonly,andshouldbeusedforgeneralreferencepurposesonly.Specificanddetailedprofessionaladviceshouldalwaysbeobtainedinrelationtoanyproposedlegalagreement.Thisdocumentshouldnotberelieduponasasubstituteforlegalorotherprofessionaladvice.

DocumentNumber

CC01

ReleaseNumberandDate

Release3December2008

creditaNDfinance–draftingconsiderations

1.introduction

Thischapterisconcernedwithavarietyofaspectsofborrowingandlendingandincludesarangeofdocumentationfrombasiclendercommitmentstosecurityandguarantees.WiththeexceptionofDocument4“LoanAgreement–ShortForm”（whichdoesnotcontainstandardrepresentationsandwarrantiesandperformancecovenants）andDocument7“ComfortLetter”,thedocumentsarepreparedfromtheperspectiveofprotectionandpreservationoftherightsofthelenderandnotoftheborrower.

ThedocumentationmaybemodifiedforuseinconnectionwithdirectforeigncurrencyloansorforeignexchangeloansinthePRC.WherePRClawappliestothetransaction,specificregardshouldbehadtothevariouslegislationinChinarelatingtoborrowingandlending.

2.Relevantlegislationandregulations

InenteringintoanycontractsinthePRC,thepartiesshould,ofcourse,haveregardtotermsoftheContractLawofthePeople’sRepublicofChina.OfparticularsignificanceinthePRCContractLawisArticle12,whichpermitsthecontentofacontracttobedetermined,forthemostpart,bythepartiestoit.AlsosignificantisArticle126,whichprovidesthatpartiestoa“foreign-relatedcontract”maychoosethoselawsapplicabletothesettlementofcontactdisputesarisingfromthecontractunlessotherwisestipulatedbylaw.Importantly,however,Article123affirmstheprinciplethatwhereotherPRClawsstipulateotherwiseoncontracts,theprovisionsofthoselawsshallprevail.

Accordingly,itisimportanttoconsiderallPRClegislationpossiblyimpactingontheinstrumentinquestiontoensurethatformand,whereapplicable,registrationrequirements,ofthelawhavebeencompliedwith.

Inthefollowingdocumentdescriptions,thefollowinglegislationisdiscussedandemphasised:

∙TheContractLawofthePeople’sRepublicofChina（adoptedattheSecondSessionoftheNinthNationalPeople’sCongresson15March1999）–the“ContractLaw”;

∙TheCommercialBankingLawofthePeople’sRepublicofChina,1995（adoptedattheThirteenthSessionoftheStandingCommitteeoftheEightNationalPeople’sCongresson10May1995;promulgatedbyOrderNo.47on10May1995）–the“BankingLaw”;and

∙ThePRCSecurityLaw（adoptedattheFourteenthSessionoftheStandingCommitteeoftheEighthNationalPeople’sCongressandpromulgatedon30June1995;effectiveasof1October1995）–the“SecurityLaw”.

Ofthislegislation,thePRCSecurityLawinparticularhaspavedthewayforavarietyofdifferentformsoflendinginstrumentsbywhichfinancialinstitutionscansecuremoniesowingtothemandmanagetheattendantrisksinconnectionwithloansgrantedbythem.

Youshouldalsobeawareofthe“ForeignDebtAdministrationTentativeProcedures”whichcameintoeffecton1March2003.Theseprovideageneralcodewithrespecttoforeignborrowingincludingbybothsovereignandnon-sovereignentities.Theproceduresincludeguidelinesconcerninghowgenerallyforeignfundingistobeusedincluding,atArticle23,astatementthatforeigndebtfundsaretobeusedmainlyforeconomicdevelopmentandstructureadjustmentsofthebalanceofforeigndebts.Alsoimportantly,Article40providesthatwhereadomesticinstitutionthatborrowsforeignfundsorhasprovidedexternalsecurityforitfailstoobtaintherequiredapprovals,anyexternallendingcontractorsecuritycontractexecutedisdeemednottohaveanylegalbindingeffect.

Finally,acautionarynote.ThetypesoffinancingfacilitiesavailableandlawandregulationrelatingtothemareconstantlyexpandingandbeingrevisedinthePRC.Accordingly,practitionersshouldbeawareofandconcernthemselveswithanychangesinsuchlawsastheyoccur.

3.documentintroductions

Themodelcontractsinthechapteraredescribedbelow.Includedforthemoresubstantialcontractsisadiscussionofthefactpattern,assumptionsandkeyprovisionsofthecontracts.

3.1CommitmentLetter–AdditionalFacility（CC02）

Thisprecedentcommitmentletterandaccompanyingtermsheetcontemplatesprovisionofanadditionalloanfacility,specificallyanon-revolvingcreditfacility,pursuanttoanexistingloancontract.

Theprecedentcanbemodifiedforuseforanumberofcurrenciesandforanumberofpurposes.Includedinthetermsheetisprovisionforbankers’acceptancesanddocumentarycreditswhicharediscussedingreaterdetailunderthedocumentdescriptionforItem5“LoanAgreement–LongForm”.

3.2CommitmentLetter–LongForm（CC03）

Thisprecedentcontemplatesfundingforanacquisitionfinancingandoffersarangeoffacilities,specificallyanunspecifiedcurrencyloanfacilityandU.S.Dollartermloanfacility,combinedwithanacquisitionofanequityinterestintheborrower,asmayoccurwithmanysubstantialprojectloans.Thecommitmentletteralsocontemplatesanumberofco-arrangers.

Thecovenantscontainedinthiscommitmentaresophisticatedandunlikelytosuiteverycircumstance,eveninthecontextofa“standard”projectloan.Inaddition,certainrestrictionsrelatedtothegrantingofsuchloansbyforeignpartiesmayapply.ThesearemorefullyspelledoutinthedocumentdescriptionsforItem4“LoanAgreement–ShortForm”andItem5“LoanAgreement–LongForm”below.

3.3LoanAgreement&PromissoryNote–ShortForm（CC04）

Thissimpleformofloanagreementisrepresentativeofthoseoften-usedinlendingtransactionsinChina.ItcontemplatesabasicformoftermloandenominatedinU.S.Dollars.Theagreementmaybesignificantlydeficientfromalender’spointofviewasitlacksrepresentationsandwarrantiesandperformancecovenantsotherthandefaultfromnon-payment.

UnderPRClaw,thepartiesmusthaveregardfortheBankingLaw,whichintroducessomeformrequirementsintolendingtransactions.Specifically,underArticle37oftheBankingLaw,commercialbanksinmakingloansarerequiredtoenterintowrittenlendingcontracts.Suchcontractsmuststipulatethetype,purpose,amountandinterestrateoftheloan,anyrepaymentterms,themethodofrepayment,liabilityforbreachofcontractandothermattersdeemednecessarybytheparties.Outsideoftheambitoftheseformalrequirements,thepartiesareallowedagreatdealofleewayintheircontracts.Asregardsinterest,however,theyshouldhaveregardtoArticle38oftheBankingLawwhichstipulatesthatbanksmaydetermineloaninterestrateswithinupperandlowerlimitsspecifiedbythePeople’sBankofChina（the“PBOC”）.TheProvisionalRegulationsonInterestRateControlpromulgatedon11December1990bythePBOCgivethebankawidescopeindeterminingsuchratesfromtimetotime,includingpenaltyinterestrates.

InadditiontotheformrequirementsprovidedintheBankingLaw,foreignexchangeloansaresubjecttocertainadditionalforeigndebtregistrationrequirementswhichare,forthemostpart,containedinthe“TentativeProvisionsoftheStateAdministrationofForeignExchange’s（SAFE）MonitoringofForeignDebtsStatistics”（the“DebtRegistrationRegulations”）andtheForeignExchangeControlRegulations.

UndertheDebtRegistrationRegulationsandtheirImplementationRules,banksareprohibitedfromopeningaforeignexchangeaccountordebtservicingaccountforaborrowerunlessthatborrowerhasobtainedaForeignDebtRegistrationCertificate.Intheabsenceofsuchcertificate,nopaymentsofprincipalorinterestcanberemittedabroad.

SAFEhasissuedanopinionontheimplementationofitsguidelinesandcircularsrelatingtoregistration（OpiniononTheImplementationofthe“FurtherStrengtheningtheMonitoringofForeignDebtsStatisticsCircular”）.ThisopinionprovidesspecificrulesrelatingtotherequirementsforChineselanguageversionsofloancontractsandalsoprovidesthataloanagreementsubjecttoforeigndebtregistrationmustcontainthefollowingprovision:

“Afterthesigningofthe[loan]agreement,theborrowershallundertakeforeigndebtregistrationproceduresattheSAFEinaccordancewiththerequirementsunderArticle24ofChapter3ofthePRCForeignExchangeControlRegulationspromulgatedon29January1996.TheregistrationdocumentissuedbySAFEshallbeoneoftheessentiallegaldocumentsfortheloanagreement.”

3.4LoanAgreement–LongForm（CC05）

Inconsideringthisprecedent,inadditiontothespecificsrelatingtothesubjectlendingtransaction,youshouldconsidertheformandregistrationrequirementsregardingforeignexchangeloansdiscussedinthedocumentdescriptionforItem4“LoanAgreement–ShortForm”.NotallofthefacilitiescontemplatedheremaybeavailableinapurelyPRC-basedloan.

ThisagreementisdraftedfromaLender’sperspective.TheBorrowerhasthreedifferentmethodsforobtainingcreditunderthesefacilities:

（i）loanadvances,（ii）bankers’acceptances,and（iii）documentarycredits.TheBorroweragreestogivetheLendersecurityoverallits