Thailand - Second Railway Project : Loan 0128 - Guarantee Agreement - Conformed

LOAN NUMBER 128 TH Guarantee Agreement (Second Railway Project) BETWEEN KINGDOM OF THAILAND AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED AUGUST 9, 1955 Guaranter Aree~ment AGREEMENT, dated August 9, 1955, between KIIuoM OF THAILAND (hereinafter called the Guarantor) and INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS by an agreement of even date herewith between the -Bank and The State Railway of Thailand (hereinafter called the Borrower), which agreement and the schedules therein referred to are hereinafter called the Loan Agree- ment, the Bank has agreed to make to the Borrower a loan in various currencies in an aggregate principal amount equiv- alent to twelve. million dollars ($12,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Guarantor agree to guarantee the pay- ment of the principal, interest and other charges on such loan and the obligations of the Borrower in respect thereof; and WHEREAS the Guarantor, in consideration of the Bank's entering into the Loan Agreement with th Borrower, has agreed to guarantee the payment of the principal, interest and other charges on such loan and the oblligations of the Borrower in respect thereof; Now THEREFOiE the parties hereto hereby agree as fol- lows: ARTICLE I SECTION 1.01. The parties to this Guarantee Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated February 15, 1955 (said Loan Regulations No. 4 being hereinafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. 4 ARTICLE 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, the premium, if any, on the prepayment of the Loan or the redemption of the Bonds, and the punctual per- formance of all the covenants and agreements of the Bor- rower, all as set forth in the Loan Agreement and in the Bonds. SECTION 2.02. Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guarantor specifically undertakes, whenever there is reasonable cause to believe that the funds available to the Borrower will be inadequate to meet the estimated expenditures required for carrying out the Project, to make arrangements, satisfactory to the Bank, promptly to provide the Borrower or cause the Borrower to be provided with such funds as are needed to meet such expenditures. ARTICLE III SECTION 3.01. It is the mutual intention of the Guarantor and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. To that end, the Guarantor undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Guarantor as security for any external debt, such lien will ipso facto 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 will be made to that effect; provided, however, that the foregoing provi- sions of this Section shall not apply to: (i) any lien created 5 on property, at the time of purchase thereof, solely as secur- ity for the payment of the purchase price of such property; (ii) any lien on commercial goods to secure a debt maturing not more than one year after the date on which it is orig- inally incurred and to be paid out of the proceeds of sale of such commercial goods; or (iii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more thain one year after its date. The term "assets of the Guarantor" as used in this Sec- tion includes assets of the Guarantor or of any of its politi- cal subdivisions or of any agency of the Guarantor or of any such political subdivision, including the Bank of Thai- land. SECTION 3.02. (a) The Guarantor and the Bank shall co- operate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably re- quest with regard to the general status of the Loan. On the part of the Guarantor, such information shall include information with respect to financial and economic condi- tions in the territories of the Guarantor and the inter- national 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 interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan or the maintenance of the service thereof. (c) The Guarantor shall afford all reasonable opportunity for accredited representatives of the Bank to visit any part of the territories of the Guarantor for purposes related to the Loan. 6 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 or laws in effect in its territories; provided, however, that the provisions of this Section shall not apply to taxation of, or fees upon, pay- ments 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 and the Bonds shall be free from any taxes or fees that shall be imposed under the laws of the Guaranitoi or laws in effect in its territories on or ii comiection with the execution, issue, delivery or registration thereof. SECTION 3.05. The principal of, and interest and other charges on, the Loan aid the 'Bonds shall be paid free from all restrictions imposed under the laws of the Guarantor or laws in effect in its territories. ARTICLE IV SECTION 4.01. The Guarantor shall endorse, in accord- ance with the provisions of the Loan Regulations, its guar- antee on the Bonds to be executed and delivered by the Bor- rower. The Minister of Finance of the Gma rantor and such person or persons as he shall designate ill writing are designated as the author-ized representatives of the Guaran- tor for the purposes of Section 6.12 (b) of the Loan Regula- tions. ARTICLE V SECTIo,Y-5.01. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: 7 For the Guarantor: Minister of Finance Ministry of Finance Bangkok, Thailand For the Bank: International Bank for Reconstruction and Developient 1818 H Street, N. W. Washington 25, D. C. United States of America SECTION 5.02. The Minister of Finance of the Guarantor is designated for the purposes of Section 8.03 of the Loan Regulations. IN WITNEss I WIEREoF, the parties herelo, acting through their represcntatives thereunto dulv authorized, have caused this Guarantee Agreement to be signed in their re- spective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. K\mI,Nm.1 OF rTHlAILAND By3 , P, 1. SAILasrx Ju tlorized presenta1ire INTEUNATIONAL BANK FoR RECoNsTRUCTIoN AND DipvEsoPIENT By /s/ EUIGENE r. BLACE