¶¶Òõ¶ÌÊÓƵ

A Cash Collateralized Letter of Credit is commonly used in international trade and financial transactions where the issuing bank requires full cash security against its potential liability under the letter of credit. This document, governed by Danish law, is particularly relevant when the applicant's creditworthiness or relationship with the bank necessitates full cash backing, or when regulatory requirements or risk management policies demand cash collateral. The agreement covers the establishment and maintenance of the cash collateral account, the mechanics of the letter of credit, drawing conditions, and the rights and obligations of all parties. It incorporates relevant Danish banking and financial regulations, contract law, and international banking practices, providing a comprehensive framework for securing and operating the letter of credit facility.

1. Parties: Identification of all parties to the agreement including the issuing bank, applicant, and beneficiary

2. Background: Context of the transaction and purpose of the letter of credit

3. Definitions: Definitions of key terms used throughout the agreement

4. Letter of Credit Terms: Core terms including amount, expiry date, and conditions for drawing

5. Cash Collateral Requirements: Details of the cash collateral amount, maintenance requirements, and top-up obligations

6. Collateral Account: Specifications for the account where cash collateral will be held

7. Security Interest: Creation and perfection of security interest in the cash collateral

8. Drawing Conditions: Specific conditions and documentation required for drawing under the LC

9. Bank's Rights and Obligations: Detailed description of the bank's responsibilities and rights

10. Applicant's Rights and Obligations: Detailed description of the applicant's responsibilities and rights

11. Fees and Expenses: All fees, charges, and expenses related to the LC and collateral

12. Representations and Warranties: Standard representations and warranties from all parties

13. Events of Default: Circumstances constituting default and consequences

14. Termination: Conditions and process for termination of the agreement

15. Governing Law and Jurisdiction: Specification of Danish law as governing law and jurisdiction