Yugoslavia - Fifth Industrial Credit Project : Loan 1912 - Guarantee Agreement - Conformed

LOAN NUMBER 1909 YU OVVICIAL LOAN NUMBER 1910 YU IDOCUMENTS LOAN NUMBER 1911 YU LOAN NUMBER 1912 YU Guarantee Agreement (Fifth Industrial Credit Project) between SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated ,1981 LOAN NUMBER 1909 YU LOAN NUMBER 1910 YU LOAN NUMBER 1911 YU LOAN NUMBER 1912-YU GUARANTEE AGREEMENT AGREEMENT, dated Jwa. , 1981, between SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA (hereinafter called the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS by the Loan Agreement of even date herewith between the Bank and Privredna Banka Sarajevo Udrulena Banka (herein- after sometimes called PBS), the Bank has agreed to make to PBS a loan in various currencies equivalent to thirty million dollars ($30,000,000), on the terms and conditions set forth in that Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of PBS in respect of such loan as hereinafter provided; WHEREAS by the Loan Agreement of even date herewith between the Bank and Stopanska Banka Zdrulena Banka - Skopje (herein- after sometimes called SBS) the Bank has agreed to make to SBS a loan in various currencies equivalent to ten million dollars ($10,000,000), on the terms and conditions set forth in that Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of SBS in respect of such loan as hereinafter provided; WHEREAS by the Loan Agreement*of even date herewith between the Bank and Investiciona Banka Titograd Udrulena Banka (herein- after sometimes called IBT) the Bank has agreed to make to IBT a loan in various currencies equivalent to twenty million dollars ($20,000,000), on the terms and conditions set forth in that Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of IBT in respect of such loan as hereinafter provided; WHEREAS by the Loan Agreement of even date herewith between the Bank and UdruEena Kosovska Banka Prigtina (hereinafter sometimes called KBP) the Bank has agreed to make to KBP a loan in various currencies equivalent to fifty million dollars ($50,000,000), on the terms and conditions set forth in that Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of KBP in respect of such loan as hereinafter provided; and WHEREAS the Guarantor, in consideration of the Bank's enter- ing into the said Loan Agreement with PBS, SBS, IBT and KBP has agreed so to guarantee such obligations of PBS, SBS, IBT and KBP; NOW THEREFORE the parties hereto hereby agree as follows: -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank dated October 27, 1980, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Schedule 3 to each of the Loan Agreements described in the Pream- ble to this Agreement (said General Conditions Applicable to Loan and Guarantee Agreements, as so modified, being hereinafter called the General Conditions), provided, however, that: (a) the term "Borrower" shall be read to refer to PBS, SBS, IBT or KBP, as the case may be; (b) the term "Loan Agreement" shall be read to refer to either the Loan Agreement referred to in the Preamble to the Guarantee Agreement and concluded with PBS, or the Loan Agreement referred to in the Preamble to the Guarantee Agreement and con- cluded with SBS, or the Loan Agreement referred to in the Preamble to the Guarantee Agreement and concluded with IBT, or the Loan Agreement referred to in the Preamble to the Guarantee Agreement and concluded with KBP, as the case may be; (c) the term "Loan" shall be read to refer to the Loan made under any given Loan Agreement, as the case may be; (d) the term "Loan Account" shall be read to refer to the Loan Account to which the amount of any given Loan is credited, as the case may be; and (e) the term "Project" shall be read to refer to the Project described in any given Loan Agreement, as the case may be. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in Section 1.02 of, and in the Preamble to, each Loan Agreement have the respective meanings therein set forth. ARTICLE II Guarantee Section 2.01. Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the -3- Guarantor hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of the principal of, and interest and other charges on, each Loan, and the premium, if any, on the prepayment of each of the Loans, all as set forth in the Loan Agreement concerned. ARTICLE III Other Covenants Section 3.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, specific security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto, and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, each Loan, and the Guarantor, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Guarantor shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, each Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Guarantor, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Guarantor or any such subdivision, including gold and other foreign exchange 4- assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Guarantor. Section 3.02. The Guarantor covenants that it will not take, or cause or permit to be taken, any action which would prevent or interfere with the performance by PBS, SBS, IBT or KBP of their respective obligations contained in each Loan Agreement and that, within the limits of its constitutional powers, it will take or cause to be taken all reasonable action necessary or appro- priate to enable each of PBS, SBS, IBT and KBP to perform such obligations. ARTICLE IV Representative of the Guarantor; Addresses Section 4.01. The Federal Secretary for Finance of the Guarantor is designated as representative of the Guarantor for the purposes of Section 11.03 of the General Conditions. Section 4.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Guarantor: Savezni Sekretarijat za Finansije Bulevar Avnoja 104 11070 Belgrade Yugoslavia Cable address: Telex: SAVEZNI SEKRETARIJAT 11448 YU SIV ZA FINANSIJE Belgrade, Yugoslavia For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America -5- Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By // 6 Regional Vice President Europe, Middle East and North Africa INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this 9tL day of-f 198 A FORSECRETARY