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Agreement Between Bank & Customer For Issuance Of Letter Of Credit
1. Parties. [Name] of [address] (Bank) and [name] of [address] (Customer) have established a Commercial Letter of Credit, a copy of which is attached [omitted].
2. Reimbursement. Drafts or acceptances under this Letter of Credit are to be reimbursed to Bank in U.S. currency at Bank's office at [address]. These shall be paid on demand or, in any event, no later than one business day before maturity. If any drafts or acceptances are not payable in U.S. currency, reimbursement shall be at the equivalent amount of the U.S. dollar rate of exchange on the day of demand.
3. Commission. For any sum paid under the Letter of Credit, Customer will pay Bank a commission of ---------- percent (----------%) of such sum. The minimum commission shall be ---------- dollars ($----------). Customer shall reimburse Bank for all charges and expenses incurred by Bank in the administration of the Letter of Credit.
4. Security. Bank may hold and dispose of the following items as security for all sums owed to Bank by Customer under the Letter of Credit:
(a) all property shipped under or pursuant or in connection to the Letter of Credit and
(b) any drafts, shipping documents, warehouse receipts, policies, or certificates issued in connection with the Letter of Credit. Bank may hold these items and their proceeds until all obligations under the Letter have been fully performed or discharged.
5. Partial Shipments. Partial shipments may be made under the Letter of Credit, and the drafts accompanying these shipments may be honored.
6. Modification of Letter of Credit. If the Letter of Credit is modified at any time, such as, but not limited to, a change in the terms of the credit or an extension of the term, or increase in the amount of the Letter of Credit, the terms of this Agreement will be binding in accordance with the Letter of Credit as modified.
7. Bank's Disclaimer of Liability. Any users of the Letter of Credit are Agents of Customer, and, as such, Customer assumes all the risks of the users acts and omissions and
(a) Bank is not responsible for the existence, character, quality, condition, packing, value, or delivery of the property represented by the delivery documents, or for any difference in the value, character, quality, or condition of the property from that described in the documents. Further,
(b) Bank is not responsible for the validity, genuineness, or sufficiency of the documents, even if the documents are fraudulent or forged.
(c) Bank is not responsible for the time, manner, or place of shipment, the partial or incomplete shipment of the property referred to in the Letter of Credit, or the character, quality, or solvency of the insurer of the property.
(d) Bank is not esponsible for delays in shipments or the failure of Shipper to provide the proper documents in connection with the shipment, or for any breach of contract between Shippers or Vendors and Customer.
(e) Bank is not responsible if any draft does not contain adequate reference to the Letter of Credit, or if the shipping documents fail to state facts in compliance with the Letter of Credit. Any action taken by Bank or its Agents in connection with the Letter of Credit shall not create any liability on the part of Bank to Customer, unless the action taken is in breach of good faith.
8. Licenses. Customer will obtain any necessary import and export licenses and will comply with all foreign and domestic governmental regulations regarding the shipment of the property referred to in the Letter of Credit.
9. Insurance. Customer agrees to keep the property covered by insurance, the amount of which is subject to Bank's approval. Customer agrees to furnish proof of such insurance to Bank on demand. Bank shall be the loss payee on all such insurance policies.
10. Additional Security. Customer agrees to transfer to Bank any additional security of a value and character that Bank deems necessary for its protection. If Customer fails to keep an adequate margin of security with Bank, or file for, or have cause to have filed against it, a petition in bankruptcy, all obligations hereunder shall become immediately due and payable, without notice. At such time, Bank may sell, without notice or advertisement, any security that it holds to satisfy the Letter of Credit.
*** If Required By State Law ***
This Section for Notary:
State of _________
County of ________ [County]
On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
My commission expires: _____