��������Ƶ

The Letter of Credit Facility Agreement is essential for businesses engaged in international trade or requiring bank guarantees for commercial transactions. It enables companies to obtain Letters of Credit from their bank up to a pre-approved limit without negotiating terms for each individual LC. This facility is particularly valuable for Canadian businesses involved in import/export operations or those requiring standby letters of credit for commercial contracts. The agreement must comply with Canadian banking regulations while incorporating international banking practices, particularly the UCP 600 rules. It details crucial elements such as facility limits, types of permitted LCs, fee structures, security requirements, and operating procedures. The document serves as a master agreement, streamlining the process of obtaining individual Letters of Credit while managing the bank's risk exposure and the customer's obligations.

1. Parties: Identification of the financial institution (issuing bank) and the customer (applicant)

2. Background: Context of the facility arrangement and relationship between parties

3. Definitions: Key terms used throughout the agreement including 'Letter of Credit', 'Facility Limit', 'Expiry Date', etc.

4. Facility Terms: Core terms including facility limit, purpose, availability period, and types of LCs permitted

5. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available

6. Issuance Procedure: Process and requirements for requesting and issuing Letters of Credit

7. Fees and Charges: All applicable fees, commission rates, and charges related to the facility

8. Security: Security arrangements required to support the facility

9. Representations and Warranties: Standard declarations by the customer about their legal and financial status

10. Covenants: Ongoing obligations of the customer during the facility period

11. Events of Default: Circumstances that would constitute default and their consequences

12. Indemnity: Customer's obligation to indemnify the bank for losses related to LCs

13. Communications: Methods and requirements for formal communications between parties

14. Governing Law and Jurisdiction: Applicable law and courts having jurisdiction over disputes