GUARANTEE AGREEMENT(TECHNICAL PASSENGER STATION (TPS) ZEMUN PROJECT - PHASE 2) BETWEEN REPUBLIC OF SERBIA AND EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT("Off. Herald of RS - Treaties", No. 15/2018) |
(Operation Number 50043)
Dated 9 October, 2018
Table of contents
ARTICLE I - STANDARD TERMS AND CONDITIONS; DEFINITIONS |
4 |
Section 1.01. Incorporation of Standard Terms and Conditions |
4 |
Section 1.02. Definitions |
4 |
Section 1.03. Interpretation |
5 |
ARTICLE II - GUARANTEE; OTHER OBLIGATIONS |
5 |
Section 2.01. Guarantee |
5 |
Section 2.02. Project Completion |
5 |
Section 2.03. Other Obligations |
5 |
Section 2.04. Effectiveness of the Guarantee |
6 |
ARTICLE III - MISCELLANEOUS |
6 |
Section 3.01. Notices |
6 |
Section 3.02. Legal Opinion |
6 |
GUARANTEE AGREEMENT
AGREEMENT dated 9 October, 2018 between REPUBLIC OF SERBIA (the "Guarantor") and EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (the "Bank").
Preamble
WHEREAS, the Guarantor and Akcionarsko društvo za železnički prevoz putnika "Srbija Voz", Beograd have requested assistance from the Bank in the financing of part of Phase 2 of the refurbishing and upgrading the railway technical passenger station in Zemun, Belgrade (the "Project");
WHEREAS, pursuant to a loan agreement dated the date hereof between Akcionarsko društvo za železnički prevoz putnika "Srbija Voz", Beograd as Borrower and the Bank (the "Loan Agreement" as defined in the Standard Terms and Conditions), the Bank has agreed to make a loan to the Borrower in the amount of EUR 22,000,000 (twenty two million euros), subject to the terms and conditions set forth or referred to in the Loan Agreement, but only on the condition that the Guarantor guarantees the obligations of the Borrower under the Loan Agreement as provided in this Agreement; and
WHEREAS, the Guarantor, in consideration of the Bank entering into the Loan Agreement with the Borrower, has agreed to guarantee such obligations of the Borrower.
NOW, THEREFORE, the parties hereby agree as follows:
Article I
Standard terms and conditions; definitions
Section 1.01.
Incorporation of Standard Terms and Conditions
All of the provisions of the Bank’s Standard Terms and Conditions dated 1 December 2012 are hereby incorporated into and made applicable to this Agreement with the same force and effect as if they were fully set forth herein, subject, however, to the modifications set out in the Loan Agreement.
Section 1.02.
Definitions
Wherever used in this Agreement (including the Preamble), unless stated otherwise or the context otherwise requires, the terms defined in the Preamble have the respective meanings given to them therein, the terms defined in the Standard Terms and Conditions and the Loan Agreement have the respective meanings given to them therein and the following term has the following meaning:
"Guarantor" Authorised Representative" |
means the Minister of Finance of the Guarantor. |
"PSO" or "Public Service Obligation" |
means the obligation imposed by the relevant Governmental Authority on the Borrower whereby the Borrower is compensated on a periodic basis for financial losses it incurs in operating services and facilities required by the Governmental Authority, which it would not otherwise operate. |
"PSO Compensation" |
means compensation paid by the relevant Governmental Authority to the Borrower for implementation of the PSO. |
"State Ownership Policy" |
means a framework document which sets out, inter alia, the rationale(s) for state ownership, public policy objectives under which one or more companies in state ownership are required to operate, the principles behind the Guarantor’s role in the governance of those companies, and its expectations from the companies and their directors. |
Section 1.03.
Interpretation
In this Agreement, a reference to a specified Article or Section shall, except where stated otherwise in this Agreement, be construed as a reference to that specified Article or Section of this Agreement.
Article II
Section 2.01.
Guarantee
The Guarantor hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of any and all sums due under the Loan Agreement, whether at stated maturity, by acceleration or otherwise, and the punctual performance of all other obligations of the Borrower, all as set forth in the Loan Agreement.
Section 2.02.
Project Completion
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, the Guarantor shall promptly take measures satisfactory to the Bank to provide the Borrower, or cause the Borrower to be provided, with such funds as are needed to meet such expenditures and requirements.
Section 2.03.
Other Obligations
Unless the Bank otherwise agrees, the Guarantor shall:
(a) support timely implementation of the Corporate Governance Action Plan;
(b) develop a State Ownership Policy relevant for state owned enterprises in the railway sector, as described in the Corporate Governance Action Plan;
(c) ensure state budget allocations for timely coverage of debt service obligations;
(d) ensure prompt approvals on an annual basis for the PSO Compensation in accordance with the approved methodology and with the existing Public Services Obligation contract; and
(e) cause the Borrower to perform all of its obligations under the Loan Agreement.
Section 2.04.
Effectiveness of the Guarantee
This Agreement shall become effective in accordance with Article IX of the Standard Terms and Conditions and upon the corresponding ratification of this Agreement by the National Assembly of the Republic of Serbia.
Article III
Section 3.01.
Notices
The following addresses are specified for purposes of Section 10.01 of the Standard Terms and Conditions:
For the Guarantor:
Ministry of Finance of the Republic of Serbia
Kneza Milosa 20
11000 Belgrade
Serbia
Attention: Minister of Finance
Fax + 381 11 361 8961
For the Bank:
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
United Kingdom
Attention: Operation Administration Department
Fax: +44-20-7338-6100
Section 3.02.
Legal Opinion
For purposes of Section 9.03(b) of the Standard Terms and Conditions and in accordance with Section 6.02(b) of the Loan Agreement, the opinion or opinions of counsel shall be given on behalf of the Guarantor by the Minister of Justice.
IN WITNESS WHEREOF the parties hereto, acting through their duly authorised representatives, have caused this Agreement to be signed in six copies in the English language and delivered at Belgrade as of the day and year first above written.
REPUBLIC OF SERBIA
By: ______________________________
Name: Siniša Mali
Title: Minister of Finance
EUROPEAN BANK
FOR RECONSTRUCTION AND DEVELOPMENT
By: ______________________________
Name: Sue Barrett
Title: Director, Head of Transport