LOAN NUMBER 204 JA Guarantee Agreement (Kobe Steel Project) BETWEEN JAPAN AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED AUGUST 18, 1958 LOAN NUMBER 204 JA Guarantee Agreement (Kobe Steel Project) BETWEEN JAPAN AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED AUGUST 18, 1958 I (6uaranter Ag3reement AGREEMENT, dated August 18, 1958, between JAPAN (hereinafter called the Guarantor) and INTERNATIONAL BANK FOR RECONSTHi UCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS by an agreement of even date herewith between the Bank and The Japan Development Bank (hereinafter called the Borrower), which agreement and the schedules therein referred to are hereinafter ca"ed the Loan Agree- ment, the Bank has agreed to make to the Borrower a loan in various currencies equivalent to ten million dollars ($10,000,000), 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 follows: 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 modifi- cations thereof set forth in Schedule 3 to the Loan Agree- ment (said Loan Regulations No. 4 as so modified 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 Guarantee Agree- ment, unless the context shall otherwise require, the sev- eral terms defined in the Loan Agreement shall have the respective meanings therein set forth. 4 ARTICLE II SECTION 2.01. Without limitation or restriction upon any of the other covenants on its part in this Agreement contained, the Guarantor hereby unconditionally guaran- tees, 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 *orth in the Loan Agreement and in the Bonds. ARTICLE III SECTION 3.01. 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 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 pro- visions of this Section shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security 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 originally 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 to secure a debt maturing not more than one year after the date on which it is originally incurred. The term "assets of the Guarantor" as used in this Section includes assets of the Guarantor or of any agency of the Guarantor. The Guarantor further undertakes that, within the limits of its constitutional powers, it will make the foregoing 5 undertaking effective with respect to liens on the assets of any of its political subdivisions and their agencies, includ- ing local governing authorities. SECTIoN 3.02. (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 reason- ably request 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 interna- tional 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 accom- plishment of the purposes of the Loan or the maintenance of the service thereof. (c) The Guarantor shall afford all reasonable opportu- nity for accredited representatives of the Bank to visit any part of the territories of the Guarantor 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 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 indi- vidual 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 Guarantor or laws 6 in effect in its territories 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 imposed under the laws of the Guarantor or laws in effect in its territories. SECTION 3.06. The Guarantor will not take any action which would prevent or interfere with the performance by the Borrower of any of the covenants, agreements and obligations of the Borrower in the Loan Agreement con- tained and will take or cause to be taken all action neces- sary or appropriate to enable the Borrower to perform such covenants, agreements and obligations. ARTICLE IV SECTION 4.01. The Guarantor shall endorse, in accord- ance with the provisions of the Loan Regulations, its gilar- antee on the Bonds to be executed and delivered by the Borrower. The Minister of Finance of the Guarantor and such person or persons as he shall designate in writing are designated as the authorized representatives of the Guarantor for the purposes of Section 6.12 (b) of the Loan Regulations. ARTICLE V SECTION 5.01. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Guarantor: Minister of Finance Ministry of Finance 3-2, Kasumigaseki, Chiyoda-ku Tokyo, Japan Alternative address for cablegrams and radiograms: Minister of Finance Okurasho, Tokyo 7 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 5.02. 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. JAPAN By KoICHIRo ASAKAI Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By W. A. B. ILIFF Vice President LOAN NUMBER 204 JA (Amendment) Agreement Amending Loan Agreement Dated August 18, 1958 (Kobe Steel Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE JAPAN DEVELOPMENT BANK DATEJ APRIL 24, 1967 LOAN NUMBER 204 JA (Amendment) Agreement Amending Loan Agreement Dated August 18, 1958 (Kobe Steel Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE JAPAN DEVELOPMENT BANK DATED APRIL 24, 1967 AMENDING LOAN AGREEMENT DATED AUGUST 18, 1958 BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE JAPAN DEVELOPMENT BANK AGREEMENT, dated April 24, 1967, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and TLE, JAPAN EjVmELOPM\ENT BANK (hereinafter called the Borrower). WHEREAS by a loan agreenment (hereinafter called the 1958 Loan Agreement) dated August 18, 1958 between the Bank and the Borrower, the Bank made a loan (herein- after called the 1958 Loan) to the Borrower of an amount in various currencies equivalent to ten million dollars ($10,000,000) ; WHEREAS by a guarantee agreement dated August 18, 1958 between Japan and the Bank, Japan guaranteed the obligations of the Borrower in respect of said loan on the terms and conditions set forth in said guarantee agree- ment; WHEREAS the 1958 Loan Agreement provided for the re- lending the proceeds of the 1958 Loan to Kobe Steel Works, Ltd., on terms and conditions set forth in the 1958 Loan Agreement and the proceeds were so reloaned, and the agreements between the Borrower and Kobe Steel Works, Ltd. with respect thereto are in full force and effect; WHEREAS the 1958 Loan Agreement contained certain provisions with respect to the exercise of the Borrower's rights against Kobe Steel Works, Ltd. arising out of such relending and with respect to the repayment by Kobe Steel Works, Ltd. of amounts so reloaned; 4 WHEREAS the project as described in the 1.958 Loan Agrement has been completed; TVIEREAS the Bank and the Borrower have agreed that the rights of the Borrower arising out of the relending of the proceeds of the 1958 Loan to Kobe Steel Works, Ltd. should henceforth be exercised by the Borrower in its sole discretion and that the 1958 Loan Agreement should hence- forth be administered by the Bank and the Borrower with- out reference to such relending; and WHEREAS it is the mutual intention of the Bank and the Borrower to maintain unimpaired the pecuniary obligation of the Borrower under the 1958 Loan Agreement, irrespec- tive of the amendments effected under this Agreement; Now THEREFORE, the Bank and the Borrower agree that the provisions of the 1958 Loan Agreement be amended to read as follows: ARTICLEI 0 Loan Regulations SECTION 1.01. The parties to this Agreement accept all the provisions of Loan Rogulations No. 4 of the Bank dated June 15, 1956, subject, however, to the modifications thereof set forth in Schedule 3 to this Agreement (said Loan Regulations No. 4 as so modified being hereinafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. ARTICLE II The Loan SECTION 2.01. The Bank has agreed to lend to the Bor- rower under the 1958 Loan Agreement an amount in various currencies equivalent to ten million dollars ($10,000,000), of which an amount in various currencies 5 equivalent to ten million dollars ($10,000,000) has been disbursed and loaned to the Borrower. The 1958 Loan of the Bank to the Borrower shall be ad- ministered pursuant to the terms and conditions in this Agreement set forth or referred to. SECTION 2.02. The Borrower shall pay interest at the rate of five and three-eighths per cent (5%o) per annum on the principal amount of the Loan outstanding from time to time. SECTION 2.03. Interest and other charges shall be pay- able semi-annually on February 1 and August 1 in each year. SECTION 2.04. The Borrower shall repay the principal of the Loan outstanding from time to time in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE III Bonds SECTION 3.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTION 3.02. The Governor of the Borrower and such person or persons as he shall appoint in writing are desig- nated as authorized representatives of the Borrower for the purposes of Section 6.12 (a) of the Loan Regulations. ARTICLE IV Particular Covenants SECTION 4.01. The Borrower shall carry on its opera- tions and conduct its affairs in accordance with sound business and financial practices. 6 SECTIoN 4.02. (a) The Bank and the Borrower 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 request with regard to the general status of the Loan. (b) The Bank and the Borrower 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 Borrower 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. SECTION 4.03. The Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any 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; pro- vided, however, that the foregoing provisions of this Sec- tion shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (ii) any lien arising in the ordinary course of banking trans- actions and securing a debt maturing not more than one year after its date. SECTION 4.04. The Borrower shall pay or cause to be paid all taxes or fees, if any, imposed under the laws of the Guarantor or laws in effect in the territories of the Guarantor on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee Agreement or the Bonds, or the payment of principal, in- terest or other charges thereunder; provided, however, that 7 the provisions of this Section shall not apply to taxation of, or fees upon, payments under any Bond to a holder thereof other than the Bank when such Bond is benoficially owned by an individual or corporate resident of the Guarantor. SECTION 4.05. The Borrower shall pay or cause to be paid all taxes and fees, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee Agreement or the Bonds. SECTION 4.06. The Borrower shall exercise its rights under the agreement, as amended, between the Borrower and Kobe Steel Works, Ltd. with respect to the relending of the proceeds of the 1958 Loan to Kobe Steel Works, Ltd. by the Borrower in such manner as to protect the interests of the Borrower. Decisions regarding such exercise of said rights shall be entirely within the power of the Borrower. ARTICLE V Remedies of the Bank SECTION 5.01. (i) If any event specified in paragraph (a), paragraph (b), paragraph (e) or paragraph (f) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due 8 and payable immediately, anything in this Agreement or in the Bonds to the contrary notwithstanding. ARTICLE VI Miscellaneous SECTION 6.01. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: The Japan Development Bank 5-5, Otemachi 1-chome Chiyoda-ku Tokyo, Japan Alternative address for cablegrams and radiograms: Devebank Tokyo For the Bank: International Bank for Reconstruction and Development 1818 II Street, N.W. Washington, D.C. 20433 United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective 9 names and delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ J. BURKE KNAPP Vice President THE JAPAN DEVELOPMENT BANK By /s/ KANICHI OSHIMA Authorized Representative 10 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars) * August 1, 1960 $257,000 February 1, 1961 264,000 August 1, 1961 271,000 February 1, 1962 278,000 August 1, 1962 286,000 February 1, 1963 293,000 August 1, 1963 301,000 February 1, 1964 309,000 August 1, 1964 318,000 February 1, 1965 326,000 August 1, 1965 335,000 February 1, 1966 344,000 August 1, 1966 353,000 February 1, 1967 363,000 August 1, 1967 372,000 February 1, 1968 382,000 August 1, 1968 393,000 February 1, 1969 403,000 August 1, 1969 414,000 February 1, 1970 425,000 August 1, 1970 437,000 February 1, 1971 448,000 August 1, 1971 460,000 February 1, 1972 473,000 August 1, 1972 485,000 February 1, 1973 498,000 August 1, 1973 512,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 11 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than 3 years before maturity. . 1/2 of 1% More than 3 years but not more than 6 years before maturity ............. .2% More than 6 years but not more than 11 years before maturity .......... 3% More than 11 years but not more than 13 years before maturity ............ 43/ % More than 13 years before maturity ... 53/8 % 12 SCHEDULE 2 Description of Project [The text of the Description of Project is deleted.] 0 13 SCHEDULE 3 Modifications of Loan Regulations No. 4 For the purposes of this Agreement the provisions of Loan Regulations No. 4 of the Bank, dated June 15, 1956, shall be deemed to be modified as follows: By the addition, in paragraph 12 of Section 10.01 at the end thereof the words "with the concurrence of the Guarantor".