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
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. 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,
Bank is not responsible for the validity, genuineness, or sufficiency
of the documents, even if the documents are fraudulent or forged.
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. Bank is not responsible 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. 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.
Agreement Between Donor and Donee of Interest In Income Producing