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The Standby Credit Agreement is a crucial financial instrument used in various commercial contexts where one party requires financial assurance from another. Governed by Hong Kong law, this agreement is commonly utilized in international trade, project finance, and commercial transactions to provide payment security or performance support. The document establishes the relationship between the issuing bank, the applicant requesting the standby credit, and the beneficiary, detailing crucial elements such as credit amount, validity period, drawing conditions, and reimbursement obligations. It incorporates specific Hong Kong regulatory requirements while often following international practices such as ISP98 or UCP 600. The agreement is particularly valuable in cross-border transactions where parties seek the security of Hong Kong's well-established legal and financial framework.

1. Parties: Identifies the credit issuer (typically a bank), the applicant, and the beneficiary

2. Background: Explains the context and purpose of the standby credit arrangement

3. Definitions and Interpretation: Defines key terms and establishes interpretation rules for the agreement

4. Facility Terms: Details the credit amount, currency, and availability period

5. Conditions Precedent: Lists conditions that must be satisfied before the credit becomes available

6. Drawing Mechanics: Specifies how and when the credit can be drawn, including required documentation

7. Fees and Expenses: Details all fees, charges, and expense allocation

8. Representations and Warranties: Standard representations by the applicant regarding their capacity and authority

9. Undertakings: Ongoing obligations of the applicant during the life of the facility

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

11. Payments and Calculations: Payment mechanisms, calculations of interest and fees

12. Changes to Parties: Rules regarding assignment and transfer rights

13. Notices: Communication procedures between parties

14. Miscellaneous: Standard boilerplate provisions

15. Governing Law and Jurisdiction: Specifies Hong Kong law as governing law and jurisdiction for disputes