PART 204—HOUSING GUARANTY STANDARD TERMS AND CONDITIONS Authority: 22 U.S.C. 2381. Source: 53 FR 33805, Sept. 1, 1988, unless otherwise noted. Subpart A—Definitions § 204.1 Definitions. Wherever used in these standard terms and conditions: (a) A.I.D. (b) Eligible Note(s) (c) Eligible Investor (d) Lender (e) Investment (f) Assignee (g) Outstanding Investment (h) Further Guaranteed Payments (i) Loss of Investment (j) Application for Compensation (k) Applicant (l) Date of Application (m) Business Day (n) Guaranty Payment Date [53 FR 33805, Sept. 1, 1988; 53 FR 39015, Oct. 4, 1988] Subpart B—The Guaranty § 204.11 The Guaranty. Subject to these standard terms and conditions, the United States of America, acting through A.I.D., agrees to pay to any Lender or Assignee who has been determined to be an Eligible Investor compensation in Dollars equal to its Loss of Investment under the Eligible Note; provided, however, that no such payment shall be made for any such loss arising out of fraud or misrepresentation for which such Lender or Assignee is responsible or of which it had knowledge at the time it became such Lender or Assignee. This Guaranty shall apply to each Eligible Note registered on the Note Register required to be maintained by the Paying Agent. § 204.12 Guaranty eligibility. (a) Eligible Notes only may be guarantied hereunder, and Eligible Investors only are entitled to the benefits of this Guaranty. 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 guaranty legend incorporating these standard terms and conditions signed on behalf of A.I.D. by either a manual signature or a facsimile signature or an authorized representative of A.I.D. together with a certificate of authentication manually executed by a Paying Agent whose appointment by the Borrower is consented to by A.I.D. in a Paying and Transfer Agency Agreement. (b) A.I.D. shall designate in a certificate delivered to the Lender and to the Paying Agent, the person(s) whose signature shall be binding on A.I.D. The certificate of authentication of the Paying Agent issued pursuant to the Paying and Transfer Agency Agreement shall, when manually executed by the Paying Agent, be conclusive evidence binding on A.I.D. that the Note has been duly executed on behalf of the Borrower and delivered. § 204.13 Non-impairment of the guaranty. The full faith and credit of the United States of America is pledged to the performance of this Guaranty. The Guaranty shall not be affected or impaired by any defect in the authorization, execution, delivery or enforceability of any agreement or other document executed by the Lender, A.I.D., the Paying Agent or the Borrower in connection with the transactions contemplated by this Guaranty. This non-impairment of the guaranty provision shall not, however, be operative with respect to any amount arising out of fraud or misrepresentation for which the Lender or Assignee is responsible or of which it had knowledge prior to the time it became such Lender or Assignee. § 204.14 Transferability of guaranty; Note Register. The Lender of any Assignee may assign, transfer or pledge the Eligible Notes to any Eligible Investor. Any such assignment, transfer or pledge shall be effective on the date that the name of the new Assignee is entered on the Note Register required to be maintained by the Paying Agent pursuant to the Paying and Transfer 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 Guaranty and A.I.D. shall not be affected by notice to the contrary. § 204.15 Paying agent obligations. Failure of the Paying Agent to perform any of its obligations pursuant to the Paying and Transfer Agency Agreement shall not impair the Investor's or any Assignee's rights under this Contract of Guaranty, but may be the subject of action for damages against the Paying Agent by A.I.D. as a result of such failure or neglect; provided, however, that the Paying Agent is not authorized to issue and authenticate and have Notes outstanding at any time in excess of the principal amount of the Loan. Subpart C—Procedure for Obtaining Compensation § 204.21 Event of default; Application for compensation; Payment. (a) Within one year after an Event of Default, as this term is defined in an Eligible Note, the Lender or Assignee may file with A.I.D. an Application for Compensation in form as provided in Exhibit A. A.I.D. shall make the required payment not later than sixty (60) days after the Date of Application unless A.I.D. has cured the default under § 204.22. (b) Guaranty Payment. § 204.22 Right of A.I.D. to cure default. Within sixty (60) days after the Date of Application for Compensation, A.I.D. may at any time make payments to the Lender or any Assignee equal to all installments of principal due and unpaid under any Note (other than installments whose maturity has been accelerated), together with interest on the unpaid principal amount of the Note to the date of such payment by A.I.D., and any Further Guaranteed payments due and unpaid, and thereby prevent or cure any default under the Note. Upon such a payment by A.I.D., if the Lender or Assignee shall have accelerated such Note, such acceleration shall be immediately rescinded or, if such Note shall not have been accelerated, such Note shall not thereafter be accelerated as a result of such Event of Default. § 204.23 Payment to A.I.D. of excess amounts received by the lender of any assignee. If the Lender or Assignee shall, as a result of A.I.D. paying compensation under this Guaranty, receive an excess payment, it shall refund the excess to A.I.D. Subpart D—Covenants § 204.31 Prosecution of claims. After an assignment to A.I.D. by the Lender or any Assignee pursuant to § 204.21(b), A.I.D. shall have exclusive power to prosecute all claims related to the outstanding Eligible Notes so assigned. If the Lender or such Assignee continues to have an interest in the outstanding Eligible Notes, the Lender or such Assignee 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. § 204.32 Change in agreements. Neither the Lender nor any Assignee will consent to any change or waiver of any provision of any document contemplated by this Guaranty without the prior written consent of A.I.D. § 204.33 A.I.D. approval of acceleration of notes. Without the prior approval of A.I.D., the Lender or any Assignee shall not accelerate any Eligible Notes held by it on account of the happening of an Event of Default other than failure to make a payment when due on the note. Subpart E—Administration § 204.41 Arbitration. Any controversy or claim between A.I.D. and the Lender or any Assignee arising out of this Guaranty 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. § 204.42 Notice. Any communication to A.I.D. pursuant to this Guaranty shall be in writing in the English language, shall refer to the A.I.D. Housing Guaranty Project Number inscribed on the Eligible Note and shall be complete on the day it shall be actually received by A.I.D. at the address specified below: Mail Address: Office of Housing and Urban Programs, Agency for International Development, Washington, DC 20523. Re: A.I.D. Housing Guaranty Project ____-HG-____ 1 1 Telex Nos.: ITT 440001 (Answer back is AIDWNDC) RCA 248379 (Answer back is 248379 AID UR) WU 892703 (Answer back is AID WSH) WU 64154 (Answer back is AID 64154) Fax No.: 202/647-4958 Cable Address: AID WASH DC Other addresses may be substituted for the above upon the giving of notice of such substitution to each Lender or Assignee by first class mail at the addresses set forth in the Note Register. § 204.43 Governing law. This Guaranty 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. Exhibit A to Part 204—Application for Compensation Office of Housing and Urban Programs, Agency for International Development, International Development Cooperation Agency, Washington, DC 20523 Ref: Guaranty dated as of __________________, 19____: A.I.D. Housing Project HG-________ Gentlemen: You are hereby advised that payment of $__________ (consisting of $__________ of principal, $__________ of interest and $__________ in Further Guaranteed Payments as defined in Section 204.01(i) of the Standard Terms and Conditions of the above-mentioned Guaranty 1 2 1 2 [Name of Applicant] By Name Title Dated Exhibit B to Part 204—Assignment The undersigned, being the registered owner of a Note in the principal amount of $____________ issued by the ____________ (the “Borrower”), pursuant ____________, and guaranty, dated as of ______, ______ the “Guaranty”), between the Lender and the United States of America, acting through the Agency for International Development (“A.I.D.”), hereby assigns to A.I.D., without recourse (i) its entire right, title and interest in and to the Note of the Borrower referred to above (which Note is attached hereto), including its rights to unpaid interest on such Note, and (ii) its entire outstanding right, title and interest arising out of said Loan Agreement with respect to such Note, except the undersigned's right to receive payments under the Loan Agreement in respect of which A.I.D. has made no payment to the undersigned as of the date hereof. [Name of Applicant] By Name Title Dated Accepted: UNITED STATES OF AMERICA By Name Title Dated