Subject Authorization To Award General Obligation Bonds Within: Fill & Download for Free

Economically Speaking: California's Silent Crisis, by Colin GallagherFor the question, “How financially stable is California?” I will provide an answer that is as optimistic as is possible. Unfortunately, even with projected revenue enhancements and a planned surplus (as most recently planned for through Governor Brown's last approved budget and Governor Newsom's stated budget plans in early 2019), California cannot be said to be financially stable, for the reasons described below. (The below points constitute the most optimistic assessment for California's near-term financial future that one could present as a reasonable person, even considering only year-after-year fire costs and no other factors, though I have included further factors in the below assessment.)Fire Costs, Past and Ongoing.(Edit from Feb. 2019: Newsom is reallocating reservists from border duty to eventual fire duty. This effort however does not put a dent in covering the real costs of fires described below.)Here is a 2015 article on some California fire related costs: http://fortune.com/2015/09/15/cost-california-wildfires/In September 2015 a more dire prognostication began to emerge about California's economy and budget which was woefully inadequate to deal with actual fire costs. As reported in late 2015:"Before the Valley and Butte wildfires exploded, California Governor Jerry Brown’s administration pegged the total cost of the state’s wildfire season at more than $212 million through early last week.The Valley fire is on track to be the most destructive California wildfire, measured in insurance losses, since the Oakland firestorm of 1991, according to senior research meteorologist Mark Bove at Munich Re America, a reinsurance company. That fire resulted in an industry-wide insurance cost of about $3 billion. But the holistic cost of wildfires goes far beyond the cash that insurance companies dole out for destroyed buildings.The other costs–of fire suppression, post-fire rehabilitation, and indirect impacts like drops in property value and lost taxes–can add to up make total expenses of a wildfire more than forty times the cost of insurance claims."Yes, you read that right. Over forty times the cost of any claims. And growing every year.And here is a 2018 article on further California fire related costs: California's $442 Million Fire Budget Is Exhausted—and Needs $234 Million More to Keep FightingThis year after year cost of fires is real. It is not a partisan fiction. I live in California (though I have planned a feasible permanent exit, to occur within a few years) and my parents were evacuated from their home in California. Friends in Northern California lost their homes. Californians are literally dying in fires because the State government fails to plan and prioritize sufficiently to deal with what is now year round fire danger, and fire related costs, caused by profound, long-term weather and climate shifts that are not dissipating in terms of their local effects on the State. What may cause cold elsewhere currently and for the long term causes increased warmth and greater fire danger local to California and some other areas of the USA as well. However, the State does not budget appropriately for it nor does it act sufficiently to ensure a greater level of prevention. The State of California currently prioritizes fights with Trump, unnecessary governmental programs (such as expanded gun control expenditures) and other expenditures above the far more necessary task of focusing on California's fire and water problems.For 2017 alone, the estimated economic cost of California wildfires, including fire suppression, insurance claims (for which the State must ultimately cover), direct and indirect economic losses, and recovery expenditures has been estimated at about $180 billion (2017 USD). That number may be low, however, as it does not include claims not awarded which may still be in process nor does it estimate the economic effect of those who have had to leave California.What was the State budgeting for that same period? According to the California state government itself for that time, on its own website -- "The proposed 2017-18 state budget at the May Revision is $183.4 billion. It includes $124 billion General Fund, $56 billion special funds, and $3.4 billion bond funds. The proposed budget package maintains a balanced budget through 2019-20, with 2020-21 projected to end with a modest deficit(...)"And: "In June, the Governor signed the 2017 Budget Bill and various pieces of related legislation that were passed by the Legislature to implement the budget for the 2017-18 fiscal year." As a result, the budget was designed to authorize spending of $183.3 billion in total state funds, consisting of $125.1 billion from the General Fund, $54.9 billion from special funds, and $3.3 billion from bond funds.The fire costs ALONE were in excess of 180 billion. Yet the (proposed 2017-2018 budget) at the time of the May Revision back when that budget was being formed, was 183.4 billion. (The Enacted 2018–19 Budget was different of course: On June 27, 2018, Governor Brown signed the 2018–19 Budget Act, which included $201.4 billion in spending. General Fund appropriations totaled $138.7 billion, an $11.6 billion (or 9.2%) increase over the revised 2017–18 budget expenditures.) And Newsom's proposed budget as of early January 2020: $222.2 billion. (Meanwhile, California's outmigration continues.)The California budget (or at least the notion of a realistic assessment of a California surplus) is a fiction!You can look up the total prevention, suppression, claims, and direct and indirect loss figures for any year in California yourself from any number of sources. Comparing those fire costs to actual revenue of the State or actual budget priorities of the State is at best a depressing exercise.Annual insurance payouts (in 2018 dollars) surpassed the $1 billion threshold just nine times since 1990, but 2018 was going to be the such fourth consecutive year even before the November 2018 wildfires in California, Intelligent Insurer reported. The 2017 wildfires triggered nearly $16 billion in insurance payments, almost entirely from the fall blazes in California. As you can see this figure is only part of the larger fire related expenditure, as the insurance claims above are only those 2017 insurance claims issued as payments by November 2018, and are not representative of the total claims requested and pending for which the State is on the hook.The California debt (that we know of, at least) as of Jan 2017 was about 1.3 trillion with a T dollars. The personal income tax revenue was 83 billion in 2016-2017. In other words: Fire related costs outpace what the State brings in. The federal government has responded to State requests for emergency funding over the past few years, but won't continue to throw money at California year after year (also, consider the federal shutdowns of both 2018 and 2019, which are reflective of the huge divide between left coast “Western Wall” states and the rest of the country, Senate, and the White House) - at some point the federal government will just ask California to live within its means (cut spending on useless programs and devote a much higher percent of its budget to fire prevention, suppression, and fire related claims). California will refuse to do this and will end up without money to sufficiently continue its planned (budgeted) operations by (the end of) 2020.Keep in mind the following important caveats to these above dire “Fire Cost” statements:on paper, by time Brown left office, the overall California budget appeared to present a surplus. However, it will not truly be a surplus due to fire costs from weather and climactic changes occurring every year in a more pronounced way.Newsom, who is now Governor of California, recently committed to building up California's reserves further. (This is part of what Newsom must do in light of the situation.) However, I doubt that Newsom's recently announced efforts (as of his early January 2019 announcements) will have an effect on the CA budget in reality, unless all of the following happen:a. the State Legislature stops passing more bills which create new programs or add new costs to existing programs and areas of expenditure for which appropriations already exist (since the State will not stop adding new programs and will not stop passing bills which require more money be spent, this is basically an impossible outcome).b. businesses begin to enter the State (net gain of businesses) instead of leave it (the problem of net outmigration of individuals and businesses is well documented by the State LAO, which even published a study on the subject).c. Taxes are increased to cover all the costs of both the ongoing year-after-year fire reality (and fire related claims), as well as tax increases to saddle the public for the cost of PG&E's culpability in fires which the Legislature has authorized to give PG&E a free pass (a minimum of 17 billion in PG&E liabilities, or more, to be passed onto the taxpayer to bail out PG&E — more, since PG&E just requested additional bailout from the State as of mid-January 2019), as well as tax increases sufficient to cover the Legislature's new idea of "free healthcare for all" persons immigrating to California. The cost of "free coverage" for this segment of the population in CA would likely be as much as 2/3rds the total dollar value of the most recently passed budget - the last time the Legislature tried a "free healthcare for all,” in a prior Legislative session, it failed to pass, because Democrats realized the plan would have costs equivalent to the dollar value of the whole State budget as it existed at that time of the proposal. (I personally support the idea of single payer or at least more affordable competitors being introduced to the system, but we don't see that happening in any economically viable proposal yet.) Meanwhile as taxes go up by anywhere from 1 & 1/2 to 2x to cover everything Newsom and the CA majority wants, who pays these taxes? Yep, the people fleeing California. So this will be impossible to meaningfully raise revenue while simultaneously driving businesses out of the state. Only brick and mortar, tourist serving, and ag businesses are truly captive in CA, others are moving away.2. Costs of Illegal Immigration.Per a recent PPIC study, for which data was assessed through 2016,“California has more immigrants than any other state. California is home to more than 10 million immigrants—about a quarter of the foreign-born population nationwide. In 2016, the most current year of data, 27% of California’s population was foreign born, about twice the US percentage. Foreign-born residents represented more than 30% of the population in seven California counties; in descending order, these counties are Santa Clara, San Francisco, Los Angeles, San Mateo, Alameda, Monterey, and Orange. Half of California children have at least one immigrant parent.”The above includes legal and illegal immigration. It is not easy to discern how much of it is unauthorized or illegal, but the costs of illegal immigration are described further below.If immigration rates to California are high, doesn't that imply that the state is at least sufficiently business friendly to support the recent arrivals? Actually, no, because the decision involves geography and the concept of “protection” offered by the State from the federal government.California has a border with Mexico. Assuming one is planning on legally entering and remaining in the United States (with work visa, legal residency, etc.), one could drive here or fly here, either way. (It is worthwhile to point out also that immigrants come to California from many countries across the planet and not only from Mexico, various Central American countries, and South American countries.) California's Salinas Valley is often referred to as “the salad bowl” of the United States. If you are eating a salad in New York, there is a good chance the lettuce came from California and was harvested as a result of immigrant labor. Migrant farmworkers traverse California and are utilized in crop production that serves many parts of the United States. The Legislature remains averse to doing anything that would reduce the availability of low-wage labor to the agricultural industry -- one of the few industries in California that is truly confined to the State. (While many other businesses have left California, big ag in CA cannot pick up the fertile soil of the Salinas Valley and move it to another state. It is an industry held captive by virtue of that it relies on California's soil. Its labor usage will continue in the same way it always has until robots and automation can do most of the field work.) Similarly, the service industry, in particular tourist-serving restaurants in California in the coastal cities, rely upon immigrant labor for the time being. The California ag and tourist-serving industries are “captive” industries, others are not. The United States generally, but California particularly in recent history, has a history of both encouraging and exploiting immigrant labor, whether the immigrants in question arrive legally or illegally. Some are quick to claim this isn't really a big deal, or they'll claim the California Legislature historically hasn't been trying to exploit illegal immigrants (as gangs and other human smugglers absolutely are). Given the history however, the more positive examples of federal immigrant labor programs, like the bracero system that once existed (which came into being in the 1940s as U.S. law, as a result of acts of Congress) have been replaced with State mechanisms that attempt to encourage illegal immigration — including California's deeply flawed Sanctuary and non-cooperation policies that harm everyone (regardless of one's immigration status) such as SB54, or the Sanctuary State law in California (proposed by State Senator Kevin de Leon in late 2016, and signed into law by Gov. Brown in late 2017). Since that became law just in late 2017, we are only now able to really begin to evaluate its effects, but generally the Sanctuary State law is poor and improper law which has numerous negative consequences.Here is an article which discusses some of the costs of illegal immigration — though frankly, it is difficult to economically measure the pain someone must feel when they are forced into slavery in California by members of criminal gangs that consider illegal immigration acceptable and routine:Illegal Immigration Costs California $30.3 Billion A Year—17.7 Percent Of State BudgetAfter you read that, you may also ask yourself why we tolerate having State leaders in power who encourage illegal immigration, which in part is what allows modern slavery (including both indentured servitude, outright slavery such as forced prostitution of children, and other common forms of gang violence) to continue at its current levels today.3. Costs of Remaining in Business in California.California, unfortunately, is one of the most hostile states to business in the country. Even the State Legislative Analyst's office acknowledged in a recent study that California has long suffered from net outmigration year after year — that is, more people are leaving California (individuals and businesses) than are entering the State.The State Legislative Analyst's Office published a study, in early 2018, on the trouble California was experiencing with net outmigration (you can find this study on the California LAO's website), but the Legislature did not change its practices in response, nor did it attempt to retain business.4. The Claim of Surplus is a Fiction in light of Ongoing State Commitments to New Programs that Cost Money.Now back to the matter of the claimed surplus. We should seriously doubt the numbers the State has claimed result in a surplus, for the simple reason that California's actual cost of fire prevention, suppression, and fire related claims for one year alone (the 2017 figures as an example) has exceeded the amount that California was able to take in or even "budget" to cover it. Consider this:With the California Democratic Party having a supermajority, the California Legislature allocated only enough each year for fire prevention, suppression and fire related claims to minimally budget for fires, such that the fire related costs described above exceeded the personal income tax revenue collected for each year — by several billion dollars -- and these costs were never fully budgeted for by the State despite its years of observations of intensifying fire behavior and changing climate. (With the fire related costs now regularly exceeding the personal income tax that the State can collect, and the State's misplaced priorities and constant overspending on unrelated matters, this strongly suggests that it is not possible for the State to tax its way out of this problem.) Meanwhile, the existing fire policies and budgets, coupled with years of thoughtless State general land use planning, led to an epic failure of preparedness, and the result was communities across the State being destroyed, with costs and lives lost still being counted from the most recent California fires of 2018.At the same time, business costs and regulation were repeatedly increased by the Legislature, as were state laws designed to impair the exercise of due process, the First Amendment, and the Second Amendment. Numerous businesses left the State in response. As mentioned, the State Legislative Analyst's Office later published a study, in early 2018, on the trouble California was experiencing with net outmigration, but the Legislature did not change its practices in response, nor did it attempt to retain business, as mentioned above.5. Pension Cost Problems and Lack of Structural Reforms.For each fiscal year of the period (2016 — present), which is inclusive of FY 2016-2017 up through the present fiscal year, California's available state funds for fire prevention and suppression were exhausted well before the fiscal year ended, and emergency federal funds were sought to make up various shortfalls.Prior to this period (2016 — present), pension cost overruns plagued California, but no meaningful reforms were made. As of June 2017, the 10-year annualized median return for all public pensions tracked by the Wilshire Trust Universal Comparison Service was 5.57%, which is nearly 250 basis points below California's 8% target. As we know, pensions collect funds from active workers and taxpayers. When these funds drop their return expectations, it has real life implications. With a lower, projected return, a pension fund needs more cash to pay out its future liabilities. For example, CalPERS, which is dropping its expected return to 7% by 2021, said the state and school districts paying into the pension will have to pay at least $15 billion more over the next 20 years once the 7% target kicks in. As a result of this, people depending on a pension not only likely won’t get the money owed to them in the future, but they’ll also get stuck paying more into the system today.Example article documenting this problem during 2020: Monterey area cities concerned about jump in pension obligationsEach new bill sent to the Governor from the beginning of 2016 to the present day committed more State funds the State did not have to new programs. On paper, California had a surplus by the time Governor Brown finalized his last term. In reality, however, an economic wreck was being handed off to the incoming Newsom, who as newly elected Governor (having won the seat during 2018 midterms) was planning even further unsustainable levels and types of spending than had his predecessor.Convinced that the Party could do no wrong, economically speaking, its adherents in Sacramento followed the Party line as it leaned into the phenomenon known in biology as the Death Spiral.References:a. Colin Gallagher's answer to What happens to California now with a solid Democratic supermajority in the House, Senate, and Governor?b. J. Brian Watkins's answer to Why is the state of California bankrupt?c. Colin Gallagher's answer to Are people really leaving California because the cost of living is too high?d. Spencer P Morrison's answer to What is the truth about California's financial state?e. Addressing California's failures openly and honestly: Colin Gallagher's answer to What are the most epic failures in history?f. User-12105935119209804706's answer to Which states in the U.S.A. are most likely to have the equivalent of an economic collapse at some point before the end of 2022, and why?g. Erik Fair's answer to What will happen with the U.S. public (national) debt?

SBLC TRANSACTION PROCEDURE​​Instrument & Service DescriptionA Bank Guarantee (BG) is the name used mostly in Europe and Standby Letter of Credit (SBLC) is exactly the same, but used in the USA. Since we are working globally you will see the expression BG/SBLC in our documents.Our Purchased as well as leased BG/SBLCs are issued by World's rated Top 25 Banks. We use the Bank SWIFT Network to have clients' BG/ SBLC delivered Bank to Bank using SWIFT MT799 followed by SWIFT MT760. We operate an extremely reliable, efficient delivery and authentication process.STEP BY STEP PROCEDURE FOR OBTAINING BG/ SBLC1. BENEFICIARY SUBMITS TO PRINCIPAL A SIGNED BG-SBLC LOI TOGETHER WITH COMPLIANCE DOCUMENTS:1.1 CLIENT INFORMATION SHEET (CIS)1.2 STATEMENT OF NON-SOLICITATION OF FUNDS1.3 IRREVOCABLE FEE PROTECTION AGREEMENT COVERING ALL IDENTIFIED BENEFICIARIES FOR BOTH SIDES1.4 CLEAR COLOR COPY OF THE BENEFICIARY SIGNATORY’S PASSPORT1.5 CERTIFICATE OF INCORPORATION1.6 PROOF OF FUND (POF). There must be availability of cash funds (not credit line) in the beneficiary's bank account which must be sufficient to cover the price of the first tranche of the Instrument. This can be in the form of a Bank Comfort Letter (BCL) or RWA (Ready, Willing, and Able) Letter issued by the beneficiary's bank and signed by at least two bank officers or a Screen Shot of the Account Statement no older than three days from the date of filling the CIS.2. AFTER DUE-DILIGENCE APPROVAL, BENEFICIARY WILL FIRST RECEIVE A WRITTEN EMAIL FROM LONDON BASED SBLC PROVIDER CONFIRMING WHAT THE SBLC CONTRACT AMOUNT HAS BEEN APPROVED FOR AND TRANCHE SCHEDULE. THE SBLC TRANCHES WILL START FROM 50M - 250M EURO.3. AFTER DUE-DILIGENCE APPROVAL, THE BENEFICIARY WILL SECONDLY RECEIVE FROM THE INVESTMENT BANKER WHO IS PART OF THE PROVIDER GROUP AN SBLC APPLICATION TEMPLATE CONTAINING: a. THE APPROVED CONTRACT AMOUNT b. SBLC TRANCHE SCHEDULE c. THE BENEFICIARY CIS AND PASSPORT.4. THE BENEFICIARY COMPLETES THE REST OF THE BG-SBLC APPLICATION STATEMENTS:a. ACCEPTING THE SBLC PRICE.b. MY BANK WILL ACCEPT THE CORPORATE INVOICE ACCEPTANCE COMINGc. MT799 BPU DECLARATIONS. The SBLC APPLICATION TEMPLATE MUST BE RETURNED ON BENEFICIARY’S LETTERHEAD & SENT TO THE INVESTMENT BANKER VIA E-MAIL.5. AFTER SUCCESSFUL BENEFICIARY DUE-DILIGENCE AND BG-SBLC APPLICATION SUBMISSION TO THE PRINCIPAL GROUP, THE PROVIDER WILL PREPARE A FUNDING DEED OF AGREEMENT OR DOA FOR COUNTERSIGNING.6. AFTER DOA SIGNING, BOTH PARTIES MAY LODGE THE FUNDING DOA WITH THEIR RESPECTIVE BANKS. THIS SIGNED DOA BECOMES THE LEGALLY BINDING CONTRACT (DEED OF AGREEMENT) BETWEEN THE PARTIES.7. THE PRINCIPAL WILL ISSUE A CORPORATE INVOICE TO THE BENEFICIARY’S BANK SHOWING THE ALL-INCLUSIVE AMOUNT OF THE BG-SBLC PRICE AND COMMISSION TO BE PAID AFTER THE BG-SBLC HAS BEEN DELIVERED VIA SWIFT. THE BENEFICIARY’S BANK WILL SEND A WRITTEN CONFIRMATION BY MT199 TO THE PRINCIPAL BANK STATING THAT “IT IS RWA TO RECEIVE THE BG-SBLC MT799 PRE-ADVISE FROM PRINCIPAL AND WILL SEND BACK MT799 BPU VERBIAGE TO PRINCIPAL TO GUARANTEE PAYMENT FOR THE CORPORATE INVOICE AFTER DELIVERY OF BG-SBLC.”8. WITHIN THREE (3) BANKING DAYS, THE PRINCIPAL’S BANK WILL ISSUE THE PRE-ADVICE VIA SWIFT MT799 CONFIRMING THAT THE INSTRUMENT WILL BE DELIVERED AGAINST THE ISSUANCE OF BPU (BANK PAYMENT UNDERTAKING) VIA SWIFT MT799 BY THE BENEFICIARY'S BANK AND PROVIDING SWIFT COPY VIA BANK EMAIL.9. WITHIN FIVE (5) BANKING DAYS AFTER PRINCIPAL’S BANK RECEIVES AND AUTHENTICATES BPU SWIFT MT799, THE PRINCIPAL’S BANK DELIVERS THE SBLC VIA SWIFT MT760 PROVIDING THE COPY VIA BANK E-MAIL.10. WITHIN SEVEN (7) BANKING DAYS AFTER THE SBLC IS DELIVERED AND RECEIVED BY SWIFT MT760 AND IS AUTHENTICATED, THE BENEFICIARY’S BANK WILL ACTIVATE THE BANK PAYMENT UNDERTAKING (XX% BPU) AND PAY THE PRINCIPAL VIA SWIFT MT103. THE HARD COPIES OF THE SBLC TO BE DELIVERED VIA BANK BONDED COURIER TO THE BENEFICIARY’S BANK WITHIN SEVEN (7) DAYS AFTER THE PAYMENT BEING RECEIVED BY PRINCIPAL’S BANK.11. THE BENEFICIARY PAYS XXXXXXX PERCENT ALL INCLUSIVE (XX% + 2%) OF FACE VALUE OF EACH TRANCHE, AS PER THE RELEVANT IRREVOCABLE FEE PROTECTION AGREEMENT (ANNEX 4).12. ALL SUBSEQUENT TRANCHES WILL BE BASED ON THE SAME PROCEDURE, UNTIL THE AGREED AMOUNT OF THE CONTRACT WITH PRINCIPAL WILL BE COMPLETED, OR THE COLLATERAL OR FUNDS BECOME EXHAUSTED.13. ANY UNAUTHORIZED BANK CALLS WITHOUT AGREEMENT BETWEEN PARTIES, PROBES OR COMMUNICATIONS, OR AN IMPROPER SOLICITATION OR DISCLOSURE INVOLVING ANY OF THE BANKS CONCERNED IN THIS TRANSACTION WILL RESULT IMMEDIATE CANCELLATION OF THIS TRANSACTION AND SUBJECT THE VIOLATING PARTY TO DAMAGES.​​​​GENERAL PROVISIONS AND CONDITIONS:Parties are not allowed to contact the other Party’s bank without express written permission. Any Party attempting to do so will lead to cancellation of this Agreement and invoke the penalties described in Paragraph 16, below. For greater clarity, any telephone calls, facsimile or other prohibited forms of communication shall cause the immediate cancellation of this transaction and incur a liability for damages on the part of the breaching Party.After countersign The LOI package by PRINCIPAL, the LOI becomes a legally binding Contract (Dead of Agreement) between both parties, only if the BENEFICIARY’s bank issues Proof of Fund (POF) and deliver to the PRINCIPAL’s Bank’s coordinated indicated in this document according timing of mentioned procedure. If the BENEFICIARY’s bank does not issue this mentioned SWIFT within Seven (7) calendar days after date of countersign LOI by the PRINCIPAL, will result immediate cancellation of this transaction and subject the violating party to damages. As mentioned in Paragraph 3 below.As mentioned in the Procedures above, should the BENEFICIARY default to pay the purchase price to the PRINCIPAL as agreed upon confirmation of BG MT760 in the BENEFICIARY’s bank account, PRINCIPAL will instruct the issuing bank to put a claim on the BG thereby obliging the BENEFICIARY’s Bank to return the BG MT760 to the issuing Bank.Each Party warrants and represents that it has full power and authority to enter into this Agreement and to perform the transaction as per the terms stated herein.The Parties agree that the Non-Circumvention / Non-Disclosure rules of all issues from the (International Chamber of Commerce) ICC up to and including the latest edition apply and shall remain effective for a period of five years from the date of execution of this Agreement. All information contained herein including banking information and codes are privileged information and represent the sole property of the Party from which they originate.The terms of this Agreement are binding upon the Parties whose signatures appear herein. The Parties to this Agreement and their respective employees, agents, associates/affiliates, transferees, assignees or designees agree to be bound by the Non-Circumvention / Non-Disclosure and Force Majeure provisions of the ICC as mentioned in Paragraph 5 above.This Agreement is subject to the domestic laws of any country properly having jurisdiction over the subject-matter of this Agreement. The Parties agree that they will strive to resolve all disputes amicably. All disputes arising out of or in connection with the present Agreement that cannot be resolved amicably shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce in Paris, France, by one or more arbitrators appointed in accordance with the said Rules. The language of Arbitration shall be English and the governing law shall be the law of United Kingdom (England). The arbitration award shall be considered as final and shall be binding upon both Parties. The arbitration fee shall be paid by the losing Party.Neither Party may assign, transfer or delegate its interest or duties without prior written consent of the other Party. No modification, amendment or supplement of this Agreement shall be binding unless it is in writing and signed by both the BENEFICIARY and the PRINCIPAL.If any provision of this Agreement shall be or become prohibited or invalid under any applicable law, rule or regulation, then such provision shall be deemed ineffective to the extent of such prohibition or invalidity only, without thereby invalidating any of the remaining terms or provisions of this Agreement.Neither Party hereto is making any representation regarding the tax consequences, if any, of the transactions envisaged herein. It is understood that the BENEFICIARY and the PRINCIPAL individually accept responsibility and liability for any/all taxes, imposts, levies, duties or charges that may be applicable in the execution of their respective roles and the discharge of this Agreement.The BENEFICIARY and the PRINCIPAL shall be responsible only for those commissions/fees that they have respectively agreed, in writing, to pay.Each Party shall indemnify and hold harmless the other Party against any and all claims, demands, damages or expenses of any nature arising out of the execution or implementation of this Agreement for a period beginning with the execution of this Agreement and ending three (3) years after the date of the completion of all acts contemplated in this Agreement.The Parties hereby agree that the Parties have entered into this private transaction at their sole discretion and no one Party has solicited the other Party in any way neither it can be considered as the solicitation of funds. This transaction is strictly of a private nature between the private Parties which is being defined by this private Agreement. This transaction does not and shall not be interpreted as the sale of securities as defined by the Securities Act of 1933/34 of the United States of America as amended and/or any other laws of any other nation related to the securities transaction. This transaction/Agreement is exempted from the Securities Act and would not be required to be registered with any authority or with any government body department.This Agreement embodies the entire understanding of the Parties hereto. There is no other Agreement, understandings, representations or warranties, whether written or oral, in effect between the Parties. The Parties acknowledge that this Agreement is the sole governing document between the Parties. The Parties agree that this Agreement supersedes any and all prior correspondence, Agreements or drafts, which shall be null and void and of no further force and effect.All terms, condition and closing procedures of this Agreement shall be binding upon and inure to the benefit of the Parties hereto, and their respective heirs, legal representative, successor and assigns.These documents may be signed in counterparts, which when taken together shall constitute an original. This document may also be transmitted by facsimile or email and shall be deemed as original for the purposes of enforceability. The Parties declare that they have read this entire Agreement and have clearly understood the same to its fullest.By signing this LOI / DOA, both parties agree under the laws and trading guidelines set forth by the ICC that they are ready willing and able to complete this transaction under the terms and conditions stated within this letter of intent.EDT (Electronic document transmissions) shall be deemed valid and enforceable in respect of any provisions of this Contract. As applicable, this agreement shall be: (1)-Incorporate U.S. Public Law 106-229,” Electronic Signatures in Global and National Commerce Act” or such other applicable law conforming to the UNCITRAL Model Law on Electronic Signatures (2001) and; (2)-ELECTRONIC COMMERCE AGREEMENT (ECE/TRADE/257, Geneva, May 2000) adopted by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). (3)-EDT documents shall be subject to European Community Directive No. 95/46/EEC, as applicable.Either Party may request hard copy of any document that has been previously transmitted by Electronic means provided however, that any such request shall in no manner delay the parties from performing their respective obligations and duties under EDT instruments.The BENEFICIARY hereby acknowledges and confirms that neither the Collateral Provider nor their associates, nor any person on their behalf solicited him/her in any way whatsoever that can be construed to be a solicitation herein. Both parties hereby confirm with full authority that the above terms are agreed and acceptable.

IF YOU ARE LOOKING TO PURCHASE AN SBLC, GET IN TOUCH WITH SUBCONTRACTS INDIAWHAT IS AN SBLC (STANDBY LETTER OF CREDIT) ?A standby letter of credit (SBLC) is a guarantee of payment issued by a bank on behalf of a client that is used as "payment of last resort" should the client fail to fulfill a contractual commitment with a third party. Standby letters of credit are created as a sign of good faith in business transactions and are proof of a buyer's credit quality and repayment abilities. The bank issuing the SBLC performs brief underwriting duties to ensure the credit quality of the party seeking the letter of credit, then sends notification to the bank of the party requesting the letter of credit (typically a seller or creditor).A standby letter of credit shows a company’s credit quality and ability to repay loans. Although a SBLC is not intended for use, it helps fulfill business obligations in case the business stops operations, cannot pay its vendors or becomes insolvent.Small businesses often face difficulty when securing financing. For this reason, standby letters of credit may be especially beneficial for encouraging investors to lend money to a company. In case of default, investors are assured they will be paid principal and interest from the bank through which the SBLC is secured.Standby Letters of Credit are issued for use in a wide variety of commercial and financial operations. Standby letters of credit are very much alike documentary letters of credit, their main difference is that unlike DLC’s, they only become operative in case the applicant defaults, then the beneficiary in whose favor the SBLC was issued, can draw on the SBLC and demand payment.Historically, Standby letters of credit were developed because the US regulator legally limited US bank’s authority to issue guarantees.SBLC’s are very similar to demand guarantees, which also require that the presentation of stipulated documents be compliant with the terms and conditions of the guarantee. SBLC’s and guarantees are different in terms of protection, they both serve the primary purpose of making sure that sellers get paid, but while a standby letter of credit protects the seller, a bank guarantee protects both sides, since it also protects the buyer in case the supplier never ships the goods or ships them in a damaged condition.When requesting an SBLC, a business owner proves to the bank he is capable of repaying the loan. Collateral may be required to protect the bank in case of default. The bank typically provides a letter to the business owner within one week of receiving documentation. The business owner must pay a SBLC fee for each year that the letter is valid. The fee is typically 1-10% of the SBLC value. If the business owner meets the criteria outlined in the contract before the due date, the business owner can cancel the SBLC without further charges.Standby Letters of Credit (SBLC) are a very flexible tool, making them a suitable product for securing a wide range of payment scenarios. A financial SBLC, the most common type, is typically used in international trade or other high-value purchase contracts where litigation or other non-payment actions may not be feasible. A financial SBLC guarantees payment to the beneficiary if criteria outlined in the contract are left unfulfilled. For example, an exporter sells goods to an overseas buyer who guarantees payment in 30 days. When the payment does not appear by the deadline, the exporter presents the SBLC to the importer’s bank and receives the payment.A performance SBLC ensures the time, cost, amount, quality of work and other criteria are fulfilled in a manner acceptable to the client. The bank pays the beneficiary if any of the written obligations are unmet. For example, a contractor guarantees a construction project will be finished in 90 days. If work remains incomplete after the 90-day period, the client can present the SBLC to the contractor’s bank and receive the payment due.HOW DOES IT WORK?A breakdown of SBLC types is provided below:1. A performance standby – backs a commitment to perform other than to pay money/funds and includes an obligation to pay for loses occurring from a default of the buyer in the process of completing an underlying transaction.2. An advance-payment standby – supports an obligation to account for an advance payment made by the supplier to the buyer.3. A bid-bond or tender-bond standby – backs an obligation of the buyer to execute a contract if the buyer is awarded a bid.4. A counter standby – backs the issuance of another, separate standby letter of credit or other undertaking by the supplier of the counter standby.5. A financial standby – supports an obligation to pay funds, including any instrument evidencing an obligation to repay borrowed money.6. An insurance standby – supports an insurance obligation of the applicant.7. A commercial standby – backs the commitment of a buyer to pay for goods or services in the event of non-payment by other methods.8. A direct-pay standby – intended to be the primary method of payment. It may or may not be linked to a default in performance or payment.TRANSACTION PROCEDURE FOR SBLC (STANDBY LETTER OF CREDIT) / BANK GUARANTEE​NO UP-FRONT FEEBuying a Bank Guarantee (BG) or Standby Letter of Credit (SBLC) OwnedInstrument & Service DescriptionA Bank Guarantee (BG) is the name used mostly in Europe and Standby Letter of Credit (SBLC) is exactly the same, but used in the USA. Since we are working globally you will see the expression BG/SBLC in our documents.Our Purchased Bank Guarantees – Owned, are issued by World's Top 25 Banks. We use the Bank SWIFT Network to have clients' Owned Bank Guarantees (BG) delivered Bank to Bank using SWIFT MT799 followed by SWIFT MT760. We operate a reliable, efficient delivery and authentication process.PROCEDURES:1. BENEFICIARY SUBMITS TO PRINCIPAL A SIGNED BG-SBLC LOI TOGETHER WITH COMPLIANCE DOCUMENTS:1.1 CLIENT INFORMATION SHEET (CIS)1.2 STATEMENT OF NON-SOLICITATION OF FUNDS1.3 IRREVOCABLE FEE PROTECTION AGREEMENT COVERING ALL IDENTIFIED BENEFICIARIES FOR BOTH SIDES1.4 CLEAR COLOR COPY OF THE BENEFICIARY SIGNATORY’S PASSPORT1.5 CERTIFICATE OF INCORPORATION2. AFTER DUE-DILIGENCE APPROVAL, BENEFICIARY WILL FIRST RECEIVE A WRITTEN EMAIL FROM LONDON BASED SBLC PROVIDER CONFIRMING WHAT THE SBLC CONTRACT AMOUNT HAS BEEN APPROVED FOR AND TRANCHE SCHEDULE. THE SBLC TRANCHES WILL START FROM 50M - 250M EURO.3. AFTER DUE-DILIGENCE APPROVAL, THE BENEFICIARY WILL SECONDLY RECEIVE FROM THE INVESTMENT BANKER WHO IS PART OF THE PROVIDER GROUP AN SBLC APPLICATION TEMPLATE CONTAINING: a. THE APPROVED CONTRACT AMOUNT b. SBLC TRANCHE SCHEDULE c. THE BENEFICIARY CIS AND PASSPORT.4. THE BENEFICIARY COMPLETES THE REST OF THE BG-SBLC APPLICATION STATEMENTS: a. ACCEPTING THE SBLC PRICE. b. MY BANK WILL ACCEPT THE CORPORATE INVOICE ACCEPTANCE COMING c. MT799 BPU DECLARATIONS. The SBLC APPLICATION TEMPLATE MUST BE RETURNED ON BENEFICIARY’S LETTERHEAD & SENT TO THE INVESTMENT BANKER VIA E-MAIL.5. AFTER SUCCESSFUL BENEFICIARY DUE-DILIGENCE AND BG-SBLC APPLICATION SUBMISSION TO THE PRINCIPAL GROUP, THE PROVIDER WILL PREPARE A FUNDING DEED OF AGREEMENT OR DOA FOR COUNTERSIGNING.6. AFTER DOA SIGNING, BOTH PARTIES MAY LODGE THE FUNDING DOA WITH THEIR RESPECTIVE BANKS. THIS SIGNED DOA BECOMES THE LEGALLY BINDING CONTRACT (DEED OF AGREEMENT) BETWEEN THE PARTIES.7. THE PRINCIPAL WILL ISSUE A CORPORATE INVOICE TO THE BENEFICIARY’S BANK SHOWING THE ALL-INCLUSIVE AMOUNT OF THE BG-SBLC PRICE AND COMMISSION TO BE PAID AFTER THE BG-SBLC HAS BEEN DELIVERED VIA SWIFT. THE BENEFICIARY’S BANK WILL SEND A WRITTEN CONFIRMATION BY MT199 TO THE PRINCIPAL BANK STATING THAT “IT IS RWA TO RECEIVE THE BG-SBLC MT799 PRE-ADVISE FROM PRINCIPAL AND WILL SEND BACK MT799 BPU VERBIAGE TO PRINCIPAL TO GUARANTEE PAYMENT FOR THE CORPORATE INVOICE AFTER DELIVERY OF BG-SBLC.”8. WITHIN THREE (3) BANKING DAYS, THE PRINCIPAL’S BANK WILL ISSUE THE PRE-ADVICE VIA SWIFT MT799 CONFIRMING THAT THE INSTRUMENT WILL BE DELIVERED AGAINST THE ISSUANCE OF BPU (BANK PAYMENT UNDERTAKING) VIA SWIFT MT799 BY THE BENEFICIARY'S BANK AND PROVIDING SWIFT COPY VIA BANK EMAIL.9. WITHIN FIVE (5) BANKING DAYS AFTER PRINCIPAL’S BANK RECEIVES AND AUTHENTICATES BPU SWIFT MT799, THE PRINCIPAL’S BANK DELIVERS THE SBLC VIA SWIFT MT760 PROVIDING THE COPY VIA BANK E-MAIL.10. WITHIN SEVEN (7) BANKING DAYS AFTER THE SBLC IS DELIVERED AND RECEIVED BY SWIFT MT760 AND IS AUTHENTICATED, THE BENEFICIARY’S BANK WILL ACTIVATE THE BANK PAYMENT UNDERTAKING (XX% BPU) AND PAY THE PRINCIPAL VIA SWIFT MT103. THE HARD COPIES OF THE SBLC TO BE DELIVERED VIA BANK BONDED COURIER TO THE BENEFICIARY’S BANK WITHIN SEVEN (7) DAYS AFTER THE PAYMENT BEING RECEIVED BY PRINCIPAL’S BANK.11. THE BENEFICIARY PAYS XXXXXXX PERCENT ALL INCLUSIVE (XX% + 2%) OF FACE VALUE OF EACH TRANCHE, AS PER THE RELEVANT IRREVOCABLE FEE PROTECTION AGREEMENT (ANNEX 4).12. ALL SUBSEQUENT TRANCHES WILL BE BASED ON THE SAME PROCEDURE, UNTIL THE AGREED AMOUNT OF THE CONTRACT WITH PRINCIPAL WILL BE COMPLETED, OR THE COLLATERAL OR FUNDS BECOME EXHAUSTED.13. ANY UNAUTHORIZED BANK CALLS WITHOUT AGREEMENT BETWEEN PARTIES, PROBES OR COMMUNICATIONS, OR AN IMPROPER SOLICITATION OR DISCLOSURE INVOLVING ANY OF THE BANKS CONCERNED IN THIS TRANSACTION WILL RESULT IMMEDIATE CANCELLATION OF THIS TRANSACTION AND SUBJECT THE VIOLATING PARTY TO DAMAGES.​​GENERAL PROVISIONS & CONDITIONS:The BENEFICIARY and the PRINCIPAL do hereby agree and mutually acknowledge to each other as follows:1 Parties are not allowed to contact the other Party’s bank without express written permission. Any Party attempting to do so will lead to cancellation of this Agreement and invoke the penalties described in Paragraph 16, below. For greater clarity, any telephone calls, facsimile or other prohibited forms of communication shall cause the immediate cancellation of this transaction and incur a liability for damages on the part of the breaching Party.2. After the PRINCIPAL countersigns the Funding DOA, the DOA becomes a legally binding Contract (Deed of Agreement) between both parties and delivers it to the PRINCIPAL’s Bank’s coordinates indicated in this document according to the mentioned procedure. If the BENEFICIARY’s bank does not issue this aforementioned SWIFT within Seven (7) calendar days after date of countersigned DOA by the PRINCIPAL, the result will be an immediate cancellation of this transaction as well as subject the violating party to damages as mentioned in Paragraph 3 below.3. As mentioned in the Procedures above, should the BENEFICIARY default to pay the BG/SBLC purchase price to the PRINCIPAL as agreed upon confirmation of BG MT760 in the BENEFICIARY’s bank account, the PRINCIPAL will instruct the issuing bank to place a claim on the BG/SBLC thereby obliging the BENEFICIARY’s Bank to return the BG/SBLC to the Issuing Bank4. Each Party warrants and represents that it has full power and authority to enter into this Agreement and to perform the transaction as per the terms stated herein.5. The Parties agree that the Non-Circumvention / Non-Disclosure rules of all issues from the (International Chamber of Commerce) ICC up to and including the latest edition apply and shall remain effective for a period of five years from the date of execution of this Agreement. All information contained herein including banking information and codes are privileged information and represent the sole property of the Party from which they originate.6. The terms of this Agreement are binding upon the Parties whose signatures appear herein. The Parties to this Agreement and their respective employees, agents, associates/affiliates, transferees, assignees or designees agree to be bound by the Non-Circumvention / Non-Disclosure and Force Majeure provisions of the ICC as mentioned in Paragraph 5 above.7. This Agreement is subject to the domestic laws of any country properly having jurisdiction over the subject-matter of this Agreement. The Parties agree that they will strive to resolve all disputes amicably. All disputes arising out of or in connection with the present Agreement that cannot be resolved amicably shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce in Paris, France, by one or more arbitrators appointed in accordance with the said Rules. The language of Arbitration shall be English and the governing law shall be the law of United Kingdom (England). The arbitration award shall be considered as final and shall be binding upon both Parties. The arbitration fee shall be paid by the losing Party.8. Neither Party may assign, transfer or delegate its interest or duties without prior written consent of the other Party. No modification, amendment or supplement of this Agreement shall be binding unless it is in writing and signed by both the BENEFICIARY and the PRINCIPAL.9. If any provision of this Agreement shall be or becomes prohibited or invalid under any applicable law, rule or regulation, then such provision shall be deemed ineffective to the extent of such prohibition or invalidity only, without thereby invalidating any of the remaining terms or provisions of this Agreement.10, Neither Party hereto is making any representation regarding the tax consequences, if any, of the transactions envisaged herein. It is understood that the BENEFICIARY and the PRINCIPAL individually accept responsibility and liability for any/all taxes, imposts, levies, duties or charges that may be applicable in the execution of their respective roles and the discharge of this Agreement.11. The BENEFICIARY and the PRINCIPAL shall be responsible only for those commissions/fees that they have respectively agreed, in writing, to pay.12. Each Party shall indemnify and hold harmless the other Party against any and all claims, demands, damages or expenses of any nature arising out of the execution or implementation of this Agreement for a period beginning with the execution of this Agreement and ending three (3) years after the date of the completion of all acts contemplated in this Agreement.13. The Parties hereby agree that the Parties have entered into this private transaction at their sole discretion and no one Party has solicited the other Party in any way; neither can it be considered as solicitation of funds. This transaction is strictly of a private nature between the private Parties which is being defined by this private Agreement. This transaction does not and shall not be interpreted as the sale of securities as defined by the Securities Act of 1933/34 of the United States of America as amended and/or any other laws of any other nation related to the securities transaction. This transaction/Agreement is exempted from the Securities Act and would not be required to be registered with any authority or with any government body department.14. This Agreement embodies the entire understanding of the Parties hereto. There is no other Agreement, understandings, representations or warranties, whether written or oral, in effect between the Parties. The Parties acknowledge that this Agreement is the sole governing document between the Parties. The Parties agree that this Agreement supersedes any and all prior correspondence, Agreements or drafts, which shall be null and void and of no further force and effect.15, All terms, condition and closing procedures of this Agreement shall be binding upon and inure to the benefit of the Parties hereto, and their respective heirs, legal representative, successor and assigns.16. These documents may be signed in counterparts, which when taken together shall constitute an original. This document may also be transmitted by facsimile or email and shall be deemed as original for the purposes of enforceability. The Parties declare that they have read this entire Agreement and have clearly understood the same to its fullest.17. By signing this DOA, both parties agree under the laws and trading guidelines set forth by the ICC that they are ready willing and able to complete this transaction under the terms and conditions stated within this letter of intent.18. EDT (Electronic document transmissions) shall be deemed valid and enforceable in respect of any provisions of this Contract. As applicable, this agreement shall be:1-Incorporate U.S. Public Law 106-229,” Electronic Signatures in Global and National Commerce Act” or such other applicable law conforming to the UNCITRAL Model Law on Electronic Signatures (2001) and;2-ELECTRONIC COMMERCE AGREEMENT (ECE/TRADE/257, Geneva, May 2000) adopted by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT);3-EDT documents shall be subject to European Community Directive No. 95/46/EEC, as applicable.Either Party may request hard copy of any document that has been previously transmitted by Electronic means provided however, that any such request shall in no manner delay the parties from performing their respective obligations and duties under EDT instruments.19. The BENEFICIARY hereby acknowledges and confirms that neither the Collateral Provider nor their associates, nor any person on their behalf solicited him/her in any way whatsoever that can be construed to be a solicitation herein. Both parties hereby confirm with full authority that the above terms are agreed and acceptable.​