22 C.F.R. PART 221—ISRAEL LOAN GUARANTEE STANDARD TERMS AND CONDITIONS
Title 22 - Foreign Relations
Authority: 22 U.S.C. 2186.
Source: 58 FR 14148, Mar. 16, 1993, unless otherwise noted.
Wherever used in these standard terms and conditions: (a) A.I.D. means the United States Agency for International Development or its successor with respect to the guarantee authorities contained in title III, chapter 2 of part I of the Foreign Assistance Act of 1961, as amended (the “Act”). (b) Eligible Note(s) means [a] Notes[s] meeting the eligibility criteria set out in §221.12 hereof. (c) Noteholder means the owner of an Eligible Note who is registered as such on the Note Register of Eligible Notes required to be maintained by the Fiscal Agent. (d) Borrower means the Government of Israel, on behalf of the State of Israel. (e) Defaulted payment means, as of any date, (1) In respect of any current coupon Eligible Note, any interest amount and/or principal amount not paid when due, and (2) In respect of any zero-coupon Eligible Note, any maturity amount not paid when due. (f) Further guaranteed payments means the amount of any loss suffered by a Noteholder by reason of the Borrower's failure to comply on a timely basis with any obligation it may have under an Eligible Note to indemnify and hold harmless a Noteholder from taxes or governmental charges or any expense arising out of taxes or any other governmental charges relating to the Eligible Note in the country of the Borrower. (g) Loss of investment respecting any Eligible Note means an amount in Dollars equal to the total of the: (1) Defaulted Payment unpaid as of the Date of Application, (2) Further Guaranteed Payments unpaid as of the Date of Application, and (3) Interest accrued and unpaid at the rate(s) specified in the Eligible Note(s) on the Defaulted Payment and Further Guaranteed Payments, in each case from the date of default with respect to such payment to and including the date on which full payment thereof is made to the Noteholder. (h) Application for compensation means an executed application in the form of appendix A to this part which a Noteholder, or the Fiscal Agent on behalf of a Noteholder, files with A.I.D. pursuant to §221.21 of this part. (i) Applicant means a Noteholder who files an Application for Compensation with A.I.D., either directly or through the Fiscal Agent acting on behalf of a Noteholder. (j) Date of application means the effective date of an Application for Compensation filed with A.I.D. pursuant to §221.21 of this part. (k) Business day means any day other than a day on which banks in New York, New York are closed or authorized to be closed or a day which is observed as a federal holiday in Washington, DC, by the United States Government. (l) Guarantee payment date means a Business Day not more than three (3) Business Days after the related Date of Application. (m) Person means any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof. Subject to these terms and conditions, the United States of America, acting through A.I.D., agrees to pay to, or upon the instructions of, any Noteholder on each Guarantee Payment Date compensation in Dollars equal to such Noteholder's Loss of Investment under its Eligible Note; provided, however, that no such payment shall be made to any Noteholder, for any such loss arising out of fraud or misrepresentation for which such Noteholder is responsible or of which it had knowledge at the time it became such Noteholder. This Guarantee shall apply to each Eligible Note registered on the Note Register required to be maintained by the Fiscal Agent. (a) Eligible Notes only may be guaranteed hereunder. Notes in order to achieve Eligible Note status must be signed on behalf of the Borrower, manually or in facsimile, by a duly authorized representative of the Borrower; and they must contain a guarantee legend incorporating these Standard Terms and Conditions signed on behalf of A.I.D. by either a manual signature or a facsimile signature of an authorized representative of A.I.D., together with a certificate of authentication manually executed by a Fiscal Agent whose appointment by the Borrower is consented to by A.I.D. in a Fiscal Agency Agreement (the “Fiscal Agent”). (b) A.I.D. shall designate, in a certificate delivered to the Fiscal Agent, the Person(s) whose signature shall be binding on A.I.D. The certificate of authentication of the Fiscal Agent issued pursuant to the Fiscal Agency Agreement shall, when manually executed by the Fiscal Agent, be conclusive evidence binding on A.I.D. that a Note has been duly executed on behalf of the Borrower and delivered. The full faith and credit of the United States of America is pledged to the performance of this Guarantee. The Guarantee shall not be affected or impaired by any defect in the authorization, execution, delivery or enforceability of any agreement or other document executed by a Noteholder, A.I.D., the Fiscal Agent or the Borrower in connection with the transactions contemplated by this Guarantee. This non-impairment of the guarantee provision shall not, however, be operative with respect to any amount with respect to any loss arising out of fraud or misrepresentation for which the claiming Noteholder, is responsible or of which it had knowledge at the time it became a Noteholder. A Noteholder may assign, transfer or pledge an Eligible Note to any Person. Any such assignment, transfer or pledge shall be effective on the date that the name of the new Noteholder is entered on the Note Register required to be maintained by the Fiscal Agent pursuant to the Fiscal Agency Agreement. A.I.D. shall be entitled to treat the Persons in whose names the Eligible Notes are registered as the owners thereof for all purposes of this Guarantee and A.I.D. shall not be affected by notice to the contrary. Failure of the Fiscal Agent to perform any of its obligations pursuant to the Fiscal Agency Agreement shall not impair any Noteholder's rights under this Guarantee, but may be the subject of action for damages against the Fiscal Agent by A.I.D. as a result of such failure or neglect. A Noteholder may appoint the Fiscal Agent to make demand for payment on its behalf under this Guarantee. At any time after an Event of Default, as this term is defined in an Eligible Note, any Noteholder hereunder, or the Fiscal Agent on behalf of a Noteholder hereunder, may file with A.I.D. an Application for Compensation in the form provided in exhibit A. A.I.D. shall pay or cause to be paid to any such Applicant any compensation specified in such Application for Compensation that is due to the Applicant pursuant to the Guarantee as a Loss of Investment not later than three (3) Business Days after the Date of Application. In the event that A.I.D. receives any other notice of an Event of Default, A.I.D. may pay any compensation that is due to any Noteholder pursuant to a Guarantee, whether or not such Noteholder has filed with A.I.D. an Application for Compensation in respect of such amount. Eligible Notes shall not be subject to acceleration by A.I.D., the Noteholder or any other party. If a Noteholder shall, as a result of A.I.D. paying compensation under this Guarantee, receive an excess payment, it shall refund the excess to A.I.D. In the event of payment by A.I.D. to a Noteholder under this Guarantee, A.I.D. shall be subrogated to the extent of such payment to all of the rights of such Noteholder against the Borrower under the related Note. After payment by A.I.D. to an Applicant pursuant to §221.21, A.I.D. shall have exclusive power to prosecute all claims related to rights to receive payments under the Eligible Notes to which it is thereby subrogated. If a Noteholder continues to have an interest in the outstanding Eligible Notes, such a Noteholder and A.I.D. shall consult with each other with respect to their respective interests in such Eligible Notes and the manner of and responsibility for prosecuting claims. No Noteholder will consent to any change or waiver of any provision of any document contemplated by this Guarantee without the prior written consent of A.I.D. Any controversy or claim between A.I.D. and any noteholder arising out of this Guarantee shall be settled by arbitration to be held in Washington, DC in accordance with the then prevailing rules of the American Arbitration Association, and judgment on the award rendered by the arbitrators may be entered in any court of competent jurisdiction. Any communication to A.I.D. pursuant to this Guarantee shall be in writing in the English language, shall refer to the Israel Loan Guarantee Number inscribed on the Eligible Note and shall be complete on the day it shall be actually received by A.I.D. at the Office of Housing and Urban Programs, Bureau for Private Enterprise, Agency for International Development, Washington, DC 20523–0030. Other addresses may be substituted for the above upon the giving of notice of such substitution to each Noteholder by first class mail at the address set forth in the Note Register. This Guarantee shall be governed by and construed in accordance with the laws of the United States of America governing contracts and commercial transactions of the United States Government. [________] Agency for International Development, International Development Cooperation Agency, Washington, DC 20523. Ref: Guarantee dated as of ______, 19__: Gentlemen: You are hereby advised that payment of $______ (consisting of $______ of principal, $______ of interest and $______ in Further Guaranteed Payments, as defined in §221.01(f) of the Standard Terms and Conditions of the above-mentioned Guarantee) [(consisting of $____ maturity amount and $____ in Further Guaranteed Payments, as defined in §221.01(f) of the Standard Terms and Conditions of the above-mentioned Guarantee)]1 1 Alternate language for zero-coupon Eligible Notes. 2 Alternate language for zero-coupon Eligible Notes. 3 In the event the Application for Compensation relates to Further Guaranteed Payments, such Application must also contain a statement of the nature and circumstances of the related loss. [Name of Applicant]
Title 22: Foreign Relations
PART 221—ISRAEL LOAN GUARANTEE STANDARD TERMS AND CONDITIONS
Section Contents
§ 221.01 Definitions.
§ 221.11 The Guarantee.
§ 221.12 Guarantee eligibility.
§ 221.13 Non-impairment of the Guarantee.
§ 221.14 Transferability of Guarantee; Note Register.
§ 221.15 Fiscal Agent obligations.
§ 221.21 Event of Default; Application for Compensation; payment.
§ 221.22 No acceleration of Eligible Notes.
§ 221.23 Payment to A.I.D. of excess amounts received by a Noteholder.
§ 221.24 Subrogation of A.I.D.
§ 221.31 Prosecution of claims.
§ 221.32 Change in agreements.
§ 221.41 Arbitration.
§ 221.42 Notice.
§ 221.43 Governing law.
Appendix A to Part 221—Application for Compensation
Subpart A—Definitions
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§ 221.01 Definitions.
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Subpart B—The Guarantee
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§ 221.11 The Guarantee.
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§ 221.12 Guarantee eligibility.
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§ 221.13 Non-impairment of the Guarantee.
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§ 221.14 Transferability of Guarantee; Note Register.
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§ 221.15 Fiscal Agent obligations.
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Subpart C—Procedure for Obtaining Compensation
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§ 221.21 Event of Default; Application for Compensation; payment.
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§ 221.22 No acceleration of Eligible Notes.
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§ 221.23 Payment to A.I.D. of excess amounts received by a Noteholder.
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§ 221.24 Subrogation of A.I.D.
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Subpart D—Covenants
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§ 221.31 Prosecution of claims.
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§ 221.32 Change in agreements.
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Subpart E—Administration
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§ 221.41 Arbitration.
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§ 221.42 Notice.
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§ 221.43 Governing law.
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Appendix A to Part 221—Application for Compensation
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Name____________________
Title____________________
Dated____________________
