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A Letter of Credit Facility Agreement is a crucial document in international trade finance, particularly when companies require regular access to letters of credit for their business operations. This agreement, governed by Dutch law, establishes a pre-approved facility under which a bank agrees to issue letters of credit up to a specified limit, saving time and reducing documentation requirements for each individual letter of credit. The document is typically used by companies engaged in regular import/export activities, requiring a steady stream of letters of credit for their trade transactions. It includes comprehensive provisions covering facility limits, conditions precedent, utilization procedures, fees, security arrangements, and compliance requirements under Dutch banking regulations. The agreement must comply with Dutch financial services laws, EU regulations, and international banking standards such as UCP 600, while also addressing specific requirements of the Dutch Civil Code regarding contract formation and enforcement.

1. Parties: Identification of the bank/financial institution (issuer), the applicant (borrower), and any other relevant parties

2. Background: Context of the facility arrangement and purpose of the agreement

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. The Facility: Details of the letter of credit facility including the facility limit, availability period, and purpose

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

6. Utilization: Procedures and requirements for requesting letters of credit under the facility

7. Letters of Credit: Terms and conditions applicable to individual letters of credit, including form, content, and UCP 600 application

8. Fees and Charges: All applicable fees, commissions, and charges related to the facility and individual letters of credit

9. Payments and Calculations: Payment mechanisms, calculation methods, and currency provisions

10. Representations and Warranties: Standard representations and warranties given by the applicant

11. Undertakings: General and specific covenants of the applicant

12. Events of Default: Circumstances constituting default and consequences thereof

13. Changes to Parties: Provisions regarding assignment, transfer, and succession

14. Notices: Communication procedures and contact details

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