Thailand - Yanhee Project : Loan 0175 - Guarantee Agreement - Conformed

LOAN NUMBER 175TH Guarantee Agreement (Yanhee Project) BrWEEN KINGDOM OF THAILAND AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED SEPTEMBER 12, 1957 LOAN NUMBER 175TH Guarantee Agreement (Yanhee Project) BETWEEN KINGDOM OF THAILAND AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED SEPTEMBER 12, 1957 6uaranter Agrrement AGREEMENT, dated September 12, 1957, between the KINGDOM OF THAILAND (hereinafter called the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVEL- OPMENT (hereinafter called the Bank). WHEREAS by ail agreement of even date herewith between the Bank and the Yanhee Electricity Authority (here- inafter called the Borrower), which agreement and the schedules therein referred to are hereinafter called the Loan Agreement, the Bank has agreed to make to the Bor- rower a loan in various currencies equivalent to sixty-six million dollars ($66,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of the Borrower in respect of such loan as hereinafter provided; and WHEREAS the Guarantor, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed so to guarantee such obligations of the Borrower; Now THEREFORE 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 June 15, 1956, subject, however, to the modifica- tions thereof set forth in Schedule 3 to the Loan Agreement (said Loan Regulations No. 4 as so modified being herein- after called the Loan Regulations), with the same force and effect as if they were fully set forth herein. SECTION 1.02. The terms defined in the Loan Agreement shall have the same meaning 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 performance of all the covenants and agreements of the Borrower, 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 the carrying out of the Project or for the construction of the thermal generating facilities described in paragraph B of Schedule 2 to the Loan Agreement, to make arrange- ments, 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. (a) The Guarantor shall, not later than January 1, 1959 (or such other date as the Guarantor and the Bank may agree), establish a single agency to operate the distribution facilities in Bangkok referred to in para- graph C of Schedule 2 to the Loan Agreement. (b) The Guarantor shall employ or cause to be employed engineering consultants, mutually satisfactory to the Guar- antor and to the Bank, for the carrying out of the part of the Program described in paragraph C of Schedule 2 to the Loan Agreement and shall carry out or cause to be carried 5 out such part of the Program in accordance with sound engineering and financial practices. SEcTIoN 3.02. The Guarantor shall transfer, or cause to be transferred, to the Borrower, not later than January 1, 1959 (or such other date as the Guarantor and the Bank may agree), all the plant and equipment necessary or useful for the generation of electricity in Bangkok now owned by the Guarantor, together with all rights, powers, privileges and franchises which are necessary or useful for the opera- tion of such plant aned equipment. SECTION 3.03. Until the completion of the Subsequent Stages, the Guarantor shall permit the Borrower to retain any surplus arising out of the operations of the Borrower for the purpose of financing part of the cost of any develop- merit, including the Subsequent Stages, that may be under- taken within the scope of the responsibilities of the Bor- rower to satisfy future power demand in the areas to be supplied by it. ARTICLE IV SECTION 4.01. It is the mutual intention of the Guaran- tor 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 foreogoing provi- sions of this Section shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as secu- rity 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- 6 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 than one year after its date. The term "assets of the Guarantor" as used in this Sed- 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 4.02. (a) The Guarantor and the Bank shall cooperate 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 request with regard to the Program and the general status of the Loan. On the part of the Guarantor, such informa- tion shall include information with respect to financial and economic conditions in the territories of the Guarantor and the international balance of payments position of the Guar- antor. (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 (including the carrying out of the Program and the financing thereof) and the maintenance of the service of the Loan. The Guar- antor 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 main- tenance of the service thereof. (c) The Guarantor shall enable the Bank's representa- tives to inspect all properties and operations included in the Program and shall afford such representatives all rea- sonable opportunity to visit any part of the territories of the Guarantor for purposes related to the Loan. SECTION 4.03. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without 7 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 4.04. 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 Guarantor or laws in effect in its territories on or in connection with the execution, issue, delivery or registration thereof. SECTION 4.05. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid free from all restrictions imposed under the laws of the Guar- antor or laws in effect in its territories. ARTICLE V SECTION 5.01. 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 Guarantor and such person or persons as he shall designate in writing are desig- nated as the authorized representatives of the Guarantor for the purposes of Section 6.12 (b) of the Loan Regula- tions. ARTICLE VI SECTION 6.01. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Guarantor: Ministry of Finance Bangkok, Thailand 8 Alternative address for cablegrams and radiograms: Minance Bangkok, Thailand For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. SECTION 6.02. The Minister of Finance of the Guarantor is designated for the purposes of Section 8.03 of the Loan Regulations. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Guarantee Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. KINGDOM OF THAILAND By SAWET PIAMPHONGSANT Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By EUGENE R. BLACK President