BayernLB

General Terms and Conditions for Guarantee Transactions

Upon request from the customer ("Principal"), Bayerische Landesbank ("BayernLB") issues guarantees (Garantie), standby letters of credit (Akkreditive) and sureties (Bürgschaften) (collectively referred to as "Guarantees") subject to the following terms and conditions:

1. Direct and Indirect Guarantees

In accordance with the Principal’s instructions, BayernLB will either issue the Guarantee itself ("Direct Guarantee") or instruct another credit institution ("Issuing Bank") to issue a Guarantee in its own name backed by a counter-indemnity (counter-guarantee) issued by BayernLB in favour of the Issuing Bank ("Indirect Guarantee"). In the absence of related instructions from the Principal, BayernLB may provide an Indirect Guarantee if it considers it necessary in the given circumstances, taking into account the Principal’s interests.

2. Guarantee Account / Commission and Fees

In the case of a Direct Guarantee, BayernLB will debit the Principal's guarantee account with the guarantee amount upon delivery or dispatch of the Guarantee. In the case of an Indirect Guarantee, the guarantee amount will be debited upon dispatch of the guarantee request to the Issuing Bank.
From the debit until the deletion of the Guarantee as a liability from the guarantee account, BayernLB shall invoice the Principal the contractually agreed guarantee commission, as well as the contractually agreed fee for the issuance, amendment and/or any other handling of the Guarantee. In the absence of a contractual agreement, BayernLB shall be entitled to charge a reasonable fee, determined in accordance with statutory law, for any services rendered at the request of the Principal or rendered in the Principal's presumed interest (mutmaßliches Interesse) and which, under the given circumstances, may only be expected to be rendered in consideration for a fee.

3. Reimbursement of Expenses

BayernLB shall be reimbursed for its expenses pursuant to statutory law.The Principal shall pay any amounts invoiced pursuant to clauses 2 and 3. Unless agreed otherwise, BayernLB shall be entitled to debit the account indicated in the guarantee request with any amounts due.

4. Demand for Payment//Payment

Upon receipt of a demand for payment from a beneficiary or the Issuing Bank, BayernLB shall notify the Principal without undue delay.
BayernLB shall be obliged to effect the payment, provided that it receives a demand for payment prior to expiry of the Guarantee from the beneficiary or the Issuing Bank which complies with the terms of the Guarantee.
In the case of guarantees (Garantien), counter-guarantees (Rückgarantien), standby letters of credit (Akkreditive) or sureties payable upon first demand (Bürgschaften auf erstes Anfordern), BayernLB shall be obliged to effect payment immediately upon the beneficiary’s or the Issuing Bank’s first demand. With respect to such demand for payment, BayernLB will only take into consideration an objection for abuse of rights, provided such objection is raised promptly and is either self-evident or clearly recognisable by any person based on documentary evidence (liquide Beweismittel). BayernLB shall therefore be entitled to debit the Principal’s account even if the Principal considers the demand for payment to be unjustified, but an abuse of rights was not self-evident and could not be proven by documentary evidence (liquide Beweismittel) at the time of the demand. In such case, the Principal shall only be entitled to raise any repayment claims against the beneficiary after payment by BayernLB. As a consequence, the Principal therefore bears the risk that the beneficiary is subsequently not willing or, due to insolvency, not able to repay the amount received.
In the case of a surety (Bürgschaft) which is not payable upon first demand, BayernLB will, to the extent permitted by law, take into consideration any objections and defences (Einwendungen und Einreden) which may be raised by the Principal in connection with its contractal relationship with the beneficiary, provided that the Principal notifies BayernLB of such objections and defences (Einwendungen und Einreden) in writing and presents related prima facie evidence within a reasonable period of time following notification of receipt of the demand for payment.

5. Deletion of the Guarantee as a Liability from the Guarantee Account

BayernLB will not delete a Direct Guarantee or an Indirect Guarantee as a liability from the guarantee account until it has received the original deed of guarantee, including all appendices, with the clear intention to release BayernLB from its liability under such Guarantee, or until the beneficiary or the Issuing Bank has issued a written declaration in favour of BayernLB with the clear intention to unconditionally release BayernLB from its liability.
If a Direct Guarantee is not explicitely governed by foreign law, and if such Guarantee expires without any doubt pursuant to its terms for example on a specific calendar date or upon the presentation of certain documents defined in the expiry provisions of such Guarantee, BayernLB will delete such Guarantee as a liability from the guarantee account on the day after the expiry day, provided that it has not received a demand for payment prior to expiry.
In the case of litigation guarantees (Prozessbürgschaften) which will not be returned by the beneficiary to BayernLB for the purpose of re-leasing the latter from its liabilities thereunder, BayernLB will not delete such Guarantee as a liability from the guarantee account until it has received evidence of the beneficiary’s consent to such release, or evidence of a court order issued under section 109 (2) German Code of Civil Procedure (Order Regarding the Expiry of the Surety).
The Principal is responsible for ensuring that the conditions for the deletion of the Guarantee as a liability from the guarantee account are fulfilled.
Should BayernLB still be held liable under a Guarantee following its deletion as a liability from the guarantee account or reduction, it shall generally only effect payment if it has received (i) the Principal’s consent authorising such payment, or (ii) a court ruling for payment which is enforceable in the country where it has been is-sued. In such case, the Principal shall pay to BayernLB the guarantee commission for the period commencing on the deletion or reduction and ending on the payment date.

6. Reduction of the Guarantee Amount

To the extent the conditions for a reduction of the amount guaranteed by BayernLB, as set out under a reduction clause in the Guarantee, have been undoubtedly met, or if BayernLB has been unconditionally released from its liability in writing, BayernLB will delete the respective reduction amount as a liability from the guarantee account and calculate the guarantee commission accordingly. This shall also apply in case of Indirect Guarantees, provided that BayernLB has received a partial release from the Issuing Bank.

7. Examination of Documents

BayernLB will duly examine all demands for payment, declarations and other documents required and presented under a Guarantee, as to whether, from the face of each of them, they comply with the terms of the Guarantee, and whether they are consistent with each other.
Any demand for payment, related declaration or other document received by way of an authenticated teletransmission, such as SWIFT or encrypted remote messaging, may be treated by BayernLB as an original. BayernLB shall not be subject to any further examination obligations, in particular, it is not obliged to examine the deeds, documents and declarations with regard to their authenticity, form, completeness, accuracy or legal enforceability. Nor shall BayernLB be under any obligation to verify the general or special terms and conditions enclosed or included therein, or the accuracy of any submitted translations.

7. Examination of Documents

BayernLB will duly examine all demands for payment, declarations and other documents required and presented under a Guarantee, as to whether, from the face of each of them, they comply with the terms of the Guarantee, and whether they are consistent with each other.

Any demand for payment, related declaration or other document re-ceived by way of an authenticated teletransmission, such as SWIFT or encrypted remote messaging, may be treated by BayernLB as an original.

BayernLB shall not be subject to any further examination obligations, in particular, it is not obliged to examine the deeds, documents and declarations with regard to their authenticity, form, completeness, ac-curacy or legal enforceability. Nor shall BayernLB be under any obli-gation to verify the general or special terms and conditions enclosed or included therein, or the accuracy of any submitted translations.

8. Provision of Security / Release from Liability

In case of a legitimate interest for security (berechtigtes Sicherungsinteresse), the Principal shall, upon BayernLB’s request, grant a pledge in favour of BayernLB over a credit balance in an amount corresponding to the amount guaranteed under the Guarantee, or provide other (additional) security in accordance with generally accepted banking standards (bankmäßige Sicherheit), or release BayernLB from the liability arising from the execution of the Principal's guarantee request. This shall apply in particular if the risk situation changes due to certain subsequent events or events which only become known to BayernLB at a later stage, such as the deterioration or threatened deterioration of the financial position of the Principal, a joint and several obligor or a guarantor or of the value of any existing security. In the case of guarantee requests from consumers, BayernLB shall only be entitled to request (additional) security to the extent such security is specified in the facility agreement; if the net credit amount exceeds EUR 75,000, BayernLB shall also be entitled to request (additional) security even if the facility agreement does not provide for or is not conclusive on security.

9. Standby Letters of Credit

BayernLB issues standby letters of credit under express application of the Uniform Customs and Practice for Documentary Credits published by the International Chamber of Commerce in Paris. These apply to the contractual relationship between the Principal and BayernLB with respect to the deletion of standby letters of credit which are not available with an Issuing Bank as a liability from the guarantee accounts, the examination of documents and generally to standby letters of credit to the extent these General Terms and Conditions for Guarantee Transactions do not contain any related provisions.

10. Application of BayernLB's General Business Conditions

In addition, BayernLB’s General Business Conditions shall apply. These can be delivered/dispatched upon request.

German terms used in these General Terms and Conditions for Guarantee Transactions shall prevail over their English translation.