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This document is essential for transactions in the Philippines where a Standby Letter of Credit (SBLC) is being used as collateral to secure financial or commercial obligations. The SBLC As Collateral agreement is commonly used in project financing, large-scale commercial transactions, and international trade dealings where additional security is required. It must comply with Philippine banking regulations, particularly those issued by the Bangko Sentral ng Pilipinas, while also considering international banking standards such as the ISP98 and UCP 600. The document is typically required when a party needs to provide bank-backed security without immediate cash deployment, offering a flexible and internationally recognized form of collateral. It includes comprehensive details about the SBLC, collateral arrangements, drawing mechanisms, and enforcement procedures, all structured within the Philippine legal framework.

1. Parties: Identifies all parties to the agreement including the collateral provider, collateral receiver, and any relevant banking institutions

2. Background: Sets out the context of the agreement, including the purpose of the collateral arrangement and reference to the underlying SBLC

3. Definitions: Defines key terms used throughout the agreement, including banking, financial and legal terminology specific to SBLCs and collateral arrangements

4. SBLC Details: Specific details of the SBLC including issuing bank, beneficiary, amount, validity period, and reference numbers

5. Collateral Terms: Terms and conditions under which the SBLC serves as collateral, including the secured obligations and collateral value

6. Rights and Obligations: Detailed responsibilities of each party regarding the maintenance, renewal, and handling of the SBLC as collateral

7. Drawing Conditions: Circumstances under which the SBLC can be drawn upon, including notice requirements and procedures

8. Default Events: Specifies events that constitute default and the consequences thereof

9. Representations and Warranties: Standard and specific representations and warranties from each party regarding their capacity and the SBLC

10. Governing Law and Jurisdiction: Specifies Philippine law as governing law and sets out jurisdiction for dispute resolution

11. Notices: Communication procedures and contact details for all parties

12. Execution: Signature blocks and execution formalities