Art. 1 THE GUARANTEE
The Guarantee applies only to loans granted in connection with export sales for the period after delivery and provided that
i) no part of the cash payment, which according to the loan agreement falls due prior to disbursement of the loan, remains unpaid; and that
ii) at the time of disbursement of the loan there are no circumstances which give reasonable grounds for the Guarantee Holder to assume that claims will be made under the Guarantee.
The expressions “export sales” and “delivery” in this Guarantee include the provision of services where such services are covered by the loan and are specified in the Special Conditions. Subject to the limitations specified in the Special Conditions in respect of percentage share and maximum amount, this Guarantee applies to losses incurred by the Guarantee Holder as a consequence of non-payment of the loan. The Guarantee Holder may be a financial institution which has granted a loan to the Debtor to assist the Debtor in the financing of the payment of the purchase price to the Exporter.
Art. 2 THE SCOPE OF THE GUARANTEE
A: Commercial Risk
1) Insolvency
The Guarantee covers non-payment as a direct result of insolvency on the part of the Debtor. Insolvency will be deemed to have occurred if:
i) bankruptcy proceedings or court-administered composition proceedings have been instituted in respect of the estate of the Debtor, or
ii) the Debtor has notified its creditors that it has suspended its payments in general, or
iii) the Guarantee Holder has completed debt enforcement proceedings required by GIEK within the limits stipulated in Article 6, cf. Article 8, or
iv) the Guarantee Holder has demonstrated to GIEK’s satisfaction the existence of other circumstances which entail that the Debtor must clearly be deemed to be definitively unable to meet its payment obligations.
2) Protracted Default
The Guarantee covers non-payment as a direct result of the Debtor neglecting to fulfil its payment obligation despite demands for payment having been presented.
B: Political Risk
The Guarantee covers non-payment as a direct result of:
1) New legislation, public restrictions, rules on moratorium etc. laid down by the authorities in the home country of the Debtor, or a state of war, border closures, civil unrest or similar circumstances affecting that country.
2) Political or economic circumstances in the home country of the Debtor, or new legislation, regulations or administrative decisions by the authorities in the country in question preventing the transfer to the Guarantee Holder of the amount deposited by the Debtor for transfer in accordance with the rules in force in the home country of the Debtor.
C: Notwithstanding the provisions of item A 1) above, the Guarantee also covers non-payment in cases where the Debtor is a foreign state, a public institution, a publicly owned company or a legal entity which, under the laws of its own home country, may not be sued or declared bankrupt.
If specified in the Special Conditions, the Guarantee also covers non-payment by a private Debtor domiciled in a country for which GIEK has made an express exception from the requirement for proof of insolvency.
D: The Guarantee is conditional upon all necessary licences in connection with the sale, importation, loan, repayment, lodging of security etc. having been granted by the authorities in the country in question at the time the loan was disbursed. The Guarantee shall nonetheless be valid if the Guarantee Holder has exercised such degree of care as can reasonably be required in this respect.
E: The Guarantee does not cover non-payment as a result of the Guarantee Holder, former holders of the Guarantee, or any person acting on their behalf having defaulted on the loan agreement covered by the Guarantee, or as a result of errors or omissions on their part. Nor does the Guarantee cover non-payment as a result of insolvency on the part of the Guarantee Holder or on the part of anyone transferring the payment to the Guarantee Holder.
F: If at any time during the term of the Guarantee there are reasonable grounds for assuming that the guaranteed loan will be defaulted upon, the Guarantee Holder shall notify GIEK and endeavour to prevent or limit the losses resulting from such default. The Guarantee Holder shall effect all lawful set-offs. The Guarantee does not cover losses which could have been prevented by such contingency actions.
Art. 3 DOCUMENTATION AND SECURITY
The Guarantee is conditional upon the existence of a valid claim between the lender and the borrower.
Loans covered by this Guarantee shall be supported by documentation in such form which at the time of issue seems most appropriate with a view to possible subsequent debt enforcement in the home country of the Debtor or at the location of the asset provided as security. If the guaranteed loan is repayable in instalments, the Debtor must issue a promissory note for each instalment, each such promissory note including the provision that all promissory notes shall fall due if one or more promissory notes are in default. The requirement that there be separate promissory notes for each instalment may be waived by agreement, and in such case, this shall be specified in the Special Conditions.
The requirement for appropriate documentation also applies to any security GIEK may have required to be provided for the loan.
The promissory notes and other documents relating to the security required by GIEK shall be provided in a form permitting the perfection of a transfer to GIEK, if such perfection can be obtained pursuant to the laws in force at the time of issue.
If the promissory notes or the other documents relating to the security have not been provided in the form described above, GIEK's liability under this Guarantee will be reduced by an amount corresponding to the loss resulting from such non-conformance, including any increase in recovery costs.
The Guarantee shall nonetheless apply if the Guarantee Holder has exercised such degree of care as can reasonably be required in connection with obtaining the necessary documentation.
Art. 4 CHANGES TO LOAN TERMS AND CONDITIONS
The Guarantee Holder shall not permit any changes to the terms and conditions governing the loan or the security without GIEK’s consent.
Art. 5 PREMIUM
This Guarantee shall not enter into force until payment of the premium specified in the Special Conditions has been correctly effected.
If the premium is payable in several instalments over the course of the guarantee period, the Guarantee will not apply to instalments of the loan that fall due during periods for which instalments on the premium have not been paid. In the event of previous non-payment of a premium instalment, the Guarantee may be reinstated by payment of the premium together with such penalty interest as may be determined by GIEK, provided that no part of the loan has been defaulted upon prior to such late payment of premium.
In the event loan instalments are paid out under the Guarantee, GIEK shall be entitled to set off its claim for overdue and not-yet-due premium instalments.
Art. 6 TIME OF PAYMENT UNDER THE GUARANTEE
It is incumbent on the Guarantee Holder to document that the conditions for payment under the Guarantee have been met.
Payment by GIEK will be effected no later than two months after such documentation has been received, although
i) in cases as specified in Article 2 A 2), 2 B 1) and Article 2 C, payment under the Guarantee will be effected at the earliest six months after the guaranteed loan or loan instalment has fallen due for payment, and
ii) in cases as specified in Article 2 B 2), payment under the Guarantee will be effected at the earliest six months after the Debtor has effected the payment in question to a foreign exchange bank in the Debtor’s home country and at the earliest six months after the contractual due date.
The above time limits apply only to the extent that different time limits are not specified in the Special Conditions.
Payment under the Guarantee may not be claimed until efforts at recovery and/or realization have been in progress for six months, cf. Article 2 A iii), cf. Article 8, unless one of the other conditions for payment under the Guarantee as specified in Article 2 is met in the meantime.
Art. 7 LIMITATION AND LAPSE OF GUARANTEE LIABILITY
The Guarantee is based on the assumption that there shall be a specific relation between the specified maximum amount payable under the Guarantee and the loan actually disbursed. If the loan amount actually disbursed is less than the loan amount specified, the maximum amount payable under the Guarantee will be reduced proportionately.
Notwithstanding the limitation specified above, the Guarantee will cover interest on the loan (the principal) up to the maximum amount agreed and specified in the Special Conditions. Only contractually agreed interest (but not penalty interest) will be covered. The rules on proportionate reductions in the Guarantee provided for in the first paragraph above will apply correspondingly to interest.
Unless the Special Conditions so specify, interest accrued between the contractual due date and the time of Guarantee Payment is not covered. GIEK’s liability under the Guarantee in respect of instalments payable on the loan will lapse if the Guarantee Holder fails to present a claim for payment under the Guarantee within three months of becoming aware of the circumstances giving rise to the liability. GIEK’s liability under the Guarantee will lapse in its entirety if the Guarantee Holder fails to present a claim for payment under the Guarantee within 12 months of becoming aware of the circumstances giving rise to the liability.
Art. 8 RECOVERY OF THE GUARANTEED LOAN ETC.
The Guarantee Holder shall notify GIEK in writing and without delay if the guaranteed loan is not paid when due. The Guarantee Holder shall in consultation with GIEK actively endeavour to recover the claim from the Debtor, demanding realization of the security provided where necessary. The Guarantee Holder shall follow the instructions given by GIEK with regard to recovery. Upon payment by GIEK of any portion of the Guarantee, the Guarantee Holder shall as and when required by GIEK, assign all rights in connection with the loan, including the security provided, to GIEK or to any party nominated by GIEK. If deemed appropriate by GIEK the Guarantee Holder shall, in return for an agreed remuneration, continue the process of recovering the loan and/or continue the realization of the security, on GIEK’s behalf and if appropriate in the Guarantee Holder’s own name.
Recovery costs incurred with GIEK’s consent will be covered by GIEK and the Guarantee Holder in the same proportion as specified in the Special Conditions. The proceeds of recovery and realization will first be applied to cover costs incurred in connection with said recovery and realization. The special above mentioned remuneration payable to the Guarantee Holder will constitute part of said costs. The net proceeds will be divided between the Guarantee Holder and GIEK in proportion to their respective interests in the residual claim. Should the proceeds prove insufficient to cover the costs incurred, such costs will be paid by the Guarantee Holder and GIEK in proportion to their respective interests in the residual claim.
If the guaranteed loan falls due in instalments, GIEK may choose to discharge its liability under the Guarantee only for those instalments having fallen due. In this context «instalments having fallen due» shall be understood as instalments having fallen due in accordance with the original payment schedule as opposed to payments having fallen due because they have been brought forward as a result of default on the part of the Debtor.
Art. 9 DISCLOSURE OF INFORMATION ETC.
The Guarantee Holder shall keep GIEK informed of all circumstances that might reasonably be deemed to affect GIEK’s liability under this Guarantee, including in respect of all matters regarding any separate securities which the Guarantee Holder may have required for payment of the non-guaranteed part of the loan.
The Guarantee Holder shall, at GIEK’s request, permit GIEK to examine any documents etc. concerning the loan and the security that the Guarantee Holder may have in its possession. The Guarantee Holder shall notify GIEK if any part of the loan is to be insured or guaranteed by others.
Art. 10 COMPOSITION SCHEMES ETC.
Provided that the liability for payment to the Guarantee Holder under the Guarantee remains unchanged, the Guarantee Holder shall, if required by GIEK, accept that any agreements between Norway and the Debtor’s home country concerning changes in the conditions governing payments from the Debtor’s home country to Norway - including the determination of interest rates and rates of exchange - shall apply to the loan in its entirety. The Guarantee Holder shall accept corresponding arrangements for any part of the loan that is not covered by the Guarantee.
The same shall apply to any changes in payment conditions that might follow from GIEK’s agreement with the Debtor or others. In both cases the waiting period pursuant to Article 6 i) and ii) shall not apply to those parts of the loan which fall due for payment after the date on which the agreement entered into force and which are covered by such agreement.
Art. 11 CURRENCY
Payments under the Guarantee will be made in NOK (Norwegian kroner) only. If the loan is nominated in another currency, payments under this Guarantee shall be made in NOK, using for the conversion the lowest of the purchase rates quoted by the Oslo banks, based on the average rate of exchange quoted on Oslo Stock Exchange less normal banker’s margins on the delivery date, the due date or the payment date pursuant to the Guarantee, respectively. The
Special Conditions may specify that one of the aforementioned three rates of exchange shall apply. In such case, the agreed rate of exchange will apply to all payments under the Guarantee.
Art. 12 SUCCESSIVE DELIVERIES
If the Exporter’s performance encompasses more than one delivery, the Guarantee will apply proportionately to each part of the loan specified for the individual delivery. If no such allocation of the loan is specified, the term «delivery» as used in these conditions shall refer to the last of the deliveries.
Art. 13 RIGHT OF RECOURSE
GIEK shall be subrogated to the Guarantee Holder’s rights relating to the loan agreement and to the securities provided in proportion to the amount of payment(s) effected under the Guarantee.
GIEK shall be entitled to claim recourse against the Exporter for payments made under the Guarantee up to the percentage rate specified in the Special Conditions.
If it is subsequently established that disbursements have taken place in contravention of Guarantee conditions, GIEK shall be entitled to claim recourse against the Exporter and/or repayment from the Guarantee Holder regardless of such specified percentage rate.
Art. 14 NORWEGIAN LAW
The Guarantee is governed by the laws of Norway.
