Uganda - Electricity Board Project : Loan 0279 - Guarantee Agreement - Conformed

LOAN NUMBER 279 UG Guarantee Agreement (Uganda Electricity Board Project) BETWEEN UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED MARCH 29, 1961 LOAN NUMBER 279 UG Guarantee Agreement (Uganda Electricity Board Project) BETWEEN UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED MARCH 29, 1961 (klarattier Agrerntnt AGREEMENT, dated Marich 29, 1961, between N1ITED KINTDOM 01 EAT BlITAIN AN NorHEaN tUELAND (herein- after called the Guarantor) and INTinNATiONAL BANK FOR RIECONss[[oN AN 1) DEvELoPMrmT (hereinafter called the Bank). W in,,As by an agreement of even date herewith )etweeil tle Uganda Protectorate (hereinafter called the Borrower) and the Bank, which agreement and the schedules thercin referred to are hereinafter called the Loan Agreement, the Bank has agreeld to make to the Borrower a loan in various currencies equivalent to eight million four hundred thonsand dollars ($8,400,000), on the terims and conditions set forth or referred to in the Loan Agreement, but only on condi- tion that the Guarantor agree to guarantee such loan as hereiafter provided; and WREREAs the Guarantor, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed so to guarantec such loan; Nowv TH-IEREFORE fhe parties hereto hereby agrce as follows: ARTIOLE I SETION 1.01. The parties to this Guarantee Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated February 15, 1961, subject, however, to the modifications thereof set forth in Schedule 3 to the Loan Agreement (said Loan Regulations No. 4 as so niodified being hereinafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. SECTIoN 1.02. Wherever used in this Guarantec Agrec- ment, unless the context shall otherwise require, the r- spective terms which are defined in the Loan Agreement shall have the respective mi eanings therein set forth. 4 A"l'ICLE II SECTION 2.01. Without limitation or restriction upon any of the other covenants on its part in this Agreement con- tained, the Guarantor hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of the principal of, and the interest and other charges on, the Loan, the principal of and interest on the Bonds, and the premium, if any, on the prepayment of the Loan or the redemption of the Bonds, all as set forth in the Loan Agreement and in the Bonds. SECTIoN 2.02. Whenever there is reasonable cause to be- lieve that the Borrower will not have sufficient funds to carry out or cause to be carried out the Project in accord- ance with the Loan Agreement, the Guarantor will, in consultation with the Bank and the Borrower, take appro- priate measures to assist the Borrower to obtain the additional funds necessary therefor. ARTICLE III SECTION 3.01. It is the mutual understanding of the Guar- antor and the Bank that, except as otherwise herein pro- vided, the Guarantor will not grant in favor of any ex- ternal debt any preference or priority over the Loan. To that end, the Guarantor undertakes that, except as other- wise herein provided or as shall be otherwise agreed be- tween the Guarantor and the Bank, if any lien shall be created on any assets or revenues of the Guarantor as secu- rity for any external debt, such lien shall equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision shall be made to that effect. This Section shall not apply to the following: (a) the creation of any lien on any property purchased, at the time of the purchase, solely as security for the payment of the purchase price of such property; 5 (b) any lien on commercial goods to secure a debt ma- turing not more than one year after the date on which it is originally incurred and to be paid out of the proceeds of sale of such commercial goods; or (c) any pledge by or on behalf of the Guarantor of any of its assets in the ordinary course of banking busi- ness to secure any indebtedness maturing not more than one year after its date. For the purposes of this Section the expression "assets or revenues of the Guarantor" shall include assets or revenues of any territorial subdivision of the Guarantor which has power to raise revenues by taxation and to charge such revenues or any of its assets as security for external debt; and the term "external debt" means any debt payable in any medium other than currency of the Guarantor, whether such debt is or may become payable absolutely or at the option of the creditor in such other medium. SECTION 3.02. (a) The Guarantor and the Bank shall co- operate fully towards achievement of the purposes of the Loan. To that end, each of them shall furnish to the other all such information as it shall reasonably request with re- gard to the general status of the Loan. On, the part of the Guarantor, such information shall include information with respect to financial and economic conditions in the terri- tories of the Guarantor and the international balance of payments position of the Guarantor. (b) The Guarantor and the Bank shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Guarantor shall promptly inform the Bank of any condition which inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. 6 (c) Within the limits of its constitutional powers, the Guarantor shall afford all reasonable opportunity for ac- credited representatives of the Bank to visit any part of the territori.e of the Guarantor (including those of the Borrower) for purposes related to the Loan. SECTION 3.03. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for, and free from, any taxes or fees imposed under the laws of the Guarantor; provided, however, that the provisions of this Section shall not apply to taxation of, or fees upon, pa-yments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guarantor. SECTIoN 3.04. This Agreement, the Loan Agreement, the Project Agreement and the Bonds shall be free from any taxes or fees that shall be imposed under the laws of the Guarantor on or in connection with the execution, issue, delivery or registration thereof. SEcTION 3.05. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid free from all restrictions now or at any time hereafter imposed under the laws of the Guarantor. ARTICLE IV SECTION 4.01. The Guarantor shall endorse, in accordance with the provisions of the Loan Regulations, its guarantee on the Bonds to be executed and delivered by the Bor- rower. The Secretary of the Treasury of the Guarantor and such person or persons as he shall designate in writing are designaled as the authorized representatives of the Guarantor for the purposes of Section 6.12 (b) of the L-oan Regulations. ARTICLE V SECTION 5.01. The following addresses are specified for the puriposes of Section 8.01 of the Loan Regulations: 7 For the Guarantor: H. M. Treasury Treasury Chambers Great George Street London, S.W. 1., United Kingdom Alternative address for cablegrams and radiograms: Profilist London For the Bank: International Bank for Reconstruction and Develoument 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. SECTION 5.02. The Ambassador of the Guarantor to the United States of America is designated for the purposes of Section 8.03 of the Loan Regulations. SECTION 5.03. The following event is specified as an addi- tional condition to the effectiveness of this Agreement within the meaning of Section 9.01 (c) of the Loan Regulations: legislation, satisfactory to the Guarantor, to meet the requirements of the Colonial Loans Act, 1949, as amended, has been enacted by the Legislative Council of the Bor- rower. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have 8 caused this (Xuarantee Agreenieiit to be sigined in their respective nanies and delivered in the District of Columbia, United States of America, as of the day and year first above written. UNrEriL KINGDOM OF GREAT BRITA1N AND NORTHERN IRELAND By HAnOLD CACCIA Auhorized Representattve INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By EUGENE R. BLACK President