Common use of Refundment Guarantee Clause in Contracts

Refundment Guarantee. After signing this Contract and in accordance with Paragraph 7 of Article II, the BUILDER shall furnish the BUYER, for the first, second, third and fourth instalments, before the Builder’s receipt of the respective instalment, with a Refund Guarantee from a reputable bank in China or an international insurance company acceptable to the BUYER and the BUYER’s bank for the advance money, in favour of the BUYER, guaranteeing the BUILDER’s refundment to the BUYER, in the form Exhibit A attached hereto. Such Refund Guarantee shall cover the advance money as above referred to plus interest thereon as described in this Article and shall remain in full force and effect from the date of receipt by the BUILDER of the said advance money from the BUYER until (i) receipt by the BUYER of the sum of the advance money aggregated hereby together with interest thereon or (ii) upon acceptance by the BUYER of the delivery of the VESSEL at the BUILDER’s SHIPYARD in accordance with the terms of this Contract, whichever comes earlier and in any such case, the Refundment Guarantee shall be returned to the BUILDER.