Section 5--109. Fraud and forgery.

(a) If a presentation is made that appears on its face strictly to
comply with the terms and conditions of the letter of credit, but a
required document is forged or materially fraudulent, or honor of the
presentation would facilitate a material fraud by the beneficiary on the
issuer or applicant:

(1) The issuer shall honor the presentation, if honor is demanded

by:

(i) a nominated person who has given value in good faith and

without notice of forgery or material fraud,

(ii) a confirmer who has honored its confirmation in good

faith,

(iii) a holder in due course of a draft drawn under the letter

of credit which was taken after acceptance by the issuer

or nominated person, or

(iv) an assignee of the issuer's or nominated person's

deferred obligation that was taken for value and without

notice of forgery or material fraud after the obligation

was incurred by the issuer or nominated person; and

(2) The issuer, acting in good faith, may honor or dishonor the

presentation in any other case.

(b) If an applicant claims that a required document is forged or
materially fraudulent or that honor of the presentation would facilitate
a material fraud by the beneficiary on the issuer or applicant, a court
of competent jurisdiction may temporarily or permanently enjoin the
issuer from honoring a presentation or grant similar relief against the
issuer or other persons only if the court finds that:

(1) The relief is not prohibited under the law applicable to an

accepted draft or deferred obligation incurred by the issuer;

(2) A beneficiary, issuer, or nominated person who may be

adversely affected is adequately protected against loss that

it may suffer because the relief is granted;

(3) All of the conditions to entitle a person to the relief under

the law of this state have been met; and

(4) On the basis of the information submitted to the court, the

applicant is more likely than not to succeed under its claim

of forgery or material fraud and the person demanding honor

does not qualify for protection under paragraph (1) of

subsection (a) of this section.