The LC Agreement is a fundamental document in international trade finance, particularly in Hong Kong's robust financial services sector. This agreement is used when a business needs to establish an ongoing arrangement with a bank for the issuance of letters of credit, typically for international trade transactions. The LC Agreement outlines the complete framework under which letters of credit will be issued, including application procedures, fees, security requirements, and the rights and obligations of all parties involved. It incorporates both Hong Kong's local banking regulations and international standards such as the UCP 600, making it suitable for cross-border transactions. The document is essential for businesses engaged in international trade who require a reliable payment mechanism that provides security to both buyers and sellers.

1. Parties: Identification of the applicant, issuing bank, and any other relevant parties to the agreement

2. Background: Context of the LC arrangement and relationship between the parties

3. Definitions: Definitions of key terms used throughout the agreement, including banking and trade finance terminology

4. LC Application and Issuance: Process and requirements for LC application and issuance procedures

5. Rights and Obligations of the Bank: Detailed description of the issuing bank's responsibilities, rights, and discretionary powers

6. Obligations of the Applicant: Applicant's duties, including reimbursement obligations and provision of security

7. Fees and Charges: Structure and payment terms for all banking fees, charges, and commissions

8. Security and Collateral: Requirements for security or collateral to support the LC facility

9. Representations and Warranties: Standard and specific representations and warranties from the applicant

10. Events of Default: Circumstances constituting default and consequent remedies

11. Indemnification: Scope of indemnity provided by the applicant to the bank

12. Communications: Procedures for notices and other communications between parties

13. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction provisions