West Africa - Cimao Regional Clinker Project : Loan 1295 - Guarantee Agreement - 3 - Conformed

LOAN NUMBER WAF GUARANTEE AGREEMENT (CIMA0 Regional Clinker Project) between REPUBLIC OF GHANA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 19T6 GUARANTEE AGREEMENT AGREEMENT, dated f3 , 1976, between REPUB- LIC OF GHANA (hereinafter called Ghana) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS by the Loan Agreement of even date herewith between the Bank and Ciments de l'Afrigue de l'Ouest (CIMAO) (hereinafter called the Borrower) the Bank has agreed to make to the Borrower a loan in various currencies equivalent to forty-nine million five hundred thousand dollars ($49,500,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Republic of Togo (hereinafter called Togo), the Republic of the Ivory Coast (hereinafter called the Ivory Coast), and Ghana agree to guarantee the obligations of the Borrower in respect of such loan as provided hereinafter and in two Guarantee Agreements of even date herewith between, respectively, Togo and the Bank, and the Ivory Coast and the Bank; WHEREAS Ghana, in consideration of the Bank's entering into the Loan Agreement with the Borrower, and in consideration of such Guarantee Agreements with Togo and the Ivory Coast, has agreed so to guarantee such obligations of the Borrower; 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 Guar- antee Agreements of the Bank dated March 15, 1974, with the same force and effect as if they were fully set forth herein subject, however, to the modifications thereof set forth in Section 1.01 of the Loan Agreement (said General Conditions Applicable to Loan and Guarantee Agreements, as so modified, being hereinafter called the General Conditions). 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 the Loan Agreement have the respective meanings therein set forth. -3- ARTICLE II Guarantee; Provision of Funds Section 2.01. Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, Ghana 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, the Loan, and the premium, if any, on the prepayment of the Loan, all as set forth in the Loan Agree- ment. Section 2.02. (a) Ghana shall exercise its rights and powers as a signatory of the Treaty and as a shareholder of the Borrower and every other right, power or remedy available to it to permit or cause the Borrower to perform all its obligations under the Loan Agreement, and it shall not take, nor cause or permit any of its political subdivisions or any of its agencies or any agency of any such political subdivisions to take, any action which would prevent or interfere with the performance by the Borrower of its obligations contained in the Loan Agreement. (b) Without limitation or restriction upon the provisions of paragraph (a) above, Ghana shall permit the Borrower (i) to maintain and renew all rights, privileges, franchises, licenses, consents or other rights required for the carrying out of the Project or the operation of the facilities included therein, (ii) to export such portion of its clinker production as shall be required in accordance with the provisions of the Treaty or 14 of the instrument referred to in Recital (J) to the Loan Agree- ment, and (iii) to operate and maintain the facilities included in the Project in accordance with appropriate mining and indus- trial practices. Section 2.03. Without limitation or restriction upon any other provision of this Agreement, Ghana uAdertakes: (a) to promptly subscribe, and/or pay-in, as the case may be, 30.74% of any share capital increase of the Borrower or of any call upon the non paid-in portion of its share capital issued by the Borrower, as the case may be, all as and when required to per- mit the Borrower to perform its obligations under Section 5.09 of the Loan Agreement; and (b) 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 Proj- ect or inadequate to permit the Borrower to comply with its obli- gations under Section 5.08 (a) of the Loan Agreement, together with Togo and the Ivory Coast 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 expen- ditures or to comply with such obligations. 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, the Loan, and Ghana, 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 administra- tive subdivisions, Ghana shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfac- tory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely -6- as security for payment of the purchase price of such property; and (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. (c) As used in this Section, the term "public assets" means assets of Ghana, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, Ghana or any such subdivision, including gold and other foreign exchange assets held by any in- stitution performing the functions of a central bank or exchange stabilization fund, or similar functions, for Ghana. Section 3.02. Ghana undertakes: (a) to exercise its rights and powers as a signatory of the Treaty to cause or permit the Borrower to set its prices for the sale of clinker at such a level as will permit the Borrower to meet all its obligations, including debt service, and to earn a reasonable return on capital invested; (b) to provide the Borrower, or cause the Borrower to be provided, with all such information as the Borrower shall re- quire to establish adequate projections for clinker demand in Ghana's territory; (c) to take, or cause to be taken, all reasonable action necessary as appropriate to cause and enable the Borrower to fulfill its obligations with respect to the payment of the guar- antee fee referred to in Section 2.09 of the Loan Agreement; and (d) (i) to duly perform all its obligations under the Treaty and under the instrument referred to in Recital (J) to the Loan Agreement, provided that such obligations are not inconsis- tent with a provision hereunder, in which case such provision shall govern, and (ii) without the Bank's prior approval, (A) not to consent to any modification or termination of the Treaty, of such instrument or of the Borrower's Statutes, nor (B) to sell, pledge or otherwise dispose of any of its shares of the Borrower or permit a change in the percentage of its holdings of such shares. -8- ARTICLE IV Representative of Ghana; Addresses Section 4.01. The Senior Principal Secretary, Ministry of Finance of Ghana is designated as representative of Ghana 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 Ghana: The Senior Principal Secretary Ministry of Finance P.O. Box M 76 Accra Ghana Cable address: PRUDENCE Accra For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (wII) -9- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment to be signed in their respective names in Lom6, Republic of Togo, as of the day and year first above written. REPUBLIC OF GHANA *By f l/ (2. rY,? \ " -- Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 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 42 day of ,197A FOR SECRETARY