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Revolving Lc Template for United States

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Key Requirements PROMPT example:

Revolving Lc

"I need a Revolving LC agreement for my U.S.-based manufacturing company to secure regular monthly shipments of raw materials from our Japanese supplier, with a credit limit of $2 million and automatic monthly reinstatement, starting March 2025."

Document background
This document is essential for businesses engaged in recurring international trade transactions requiring continuous letter of credit support. A Revolving LC agreement is particularly useful when parties anticipate multiple drawings over time without the need for separate credit applications. The document, governed by U.S. law and typically incorporating UCP 600, establishes the framework for a self-replenishing credit facility that returns to its original amount after each drawing is paid, subject to specified conditions. It includes comprehensive provisions addressing credit limits, drawing procedures, reinstatement mechanisms, compliance requirements, and security arrangements. This type of agreement is commonly used in ongoing supply relationships, regular import/export transactions, or recurring purchase arrangements where continuous credit support is needed.
Suggested Sections

1. Parties: Identifies all parties to the agreement including the issuing bank, applicant, and beneficiary

2. Background: Sets out the context and purpose of the revolving letter of credit

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

4. LC Amount and Revolving Nature: Specifies the credit limit and describes how the revolving mechanism works, including reinstatement terms

5. Conditions Precedent: Lists the conditions that must be satisfied before the LC becomes effective

6. Fees and Charges: Details all fees, commissions, and charges payable in connection with the LC

7. Drawing Mechanics: Specifies the process and requirements for making drawings under the LC

8. Representations and Warranties: Standard representations and warranties from the applicant

9. Covenants: Ongoing obligations of the applicant during the LC term

10. Events of Default: Lists circumstances that constitute default and their consequences

11. Termination: Provisions regarding expiry, early termination, and consequences of termination

12. Governing Law and Jurisdiction: Specifies the governing law and dispute resolution mechanisms

Optional Sections

1. Security Arrangements: Required when the LC is secured by collateral or other security interests

2. Counter-Indemnity: Used when additional indemnification from the applicant or a third party is required

3. Electronic Commerce Platform: Included when the LC will be handled through specific electronic systems or platforms

4. Sanctions and Compliance: Detailed compliance requirements when dealing with high-risk jurisdictions or industries

5. Transfer Provisions: Required if the LC needs to be transferable to other beneficiaries

6. Multiple Currency Provisions: Included when the LC can be drawn in multiple currencies

7. Insurance Requirements: Detailed insurance obligations when required for specific types of underlying transactions

Suggested Schedules

1. Form of LC Application: Standard form for applying for issuance or amendment of the LC

2. Fee Schedule: Detailed breakdown of all applicable fees, charges, and commission rates

3. Required Documents: List of documents required for drawing under the LC

4. Form of Drawing Certificate: Standard format for beneficiary's drawing certificate

5. Authorized Signatories: List of persons authorized to act on behalf of the applicant

6. Reporting Requirements: Templates and formats for required periodic reporting

7. Security Documents: Forms of security documents if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
















































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Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Retail

Commodities Trading

Energy

Agriculture

Mining

Construction

Import/Export

Wholesale Distribution

Relevant Teams

Treasury

Trade Finance

Legal

Compliance

Risk Management

International Banking

Corporate Finance

Trade Operations

Documentary Credits

Credit Administration

Relevant Roles

Trade Finance Manager

Chief Financial Officer

Treasury Manager

International Trade Director

Finance Director

Credit Manager

Compliance Officer

Risk Manager

Corporate Banking Officer

Trade Operations Manager

Import Manager

Export Manager

Documentary Credits Specialist

Legal Counsel

Banking Relationship Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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