West Africa - Cimao Regional Clinker Project : Loan 1295 - Guarantee Agreement - 1 - Conformed

LOAN NUMBER VAF GUARANTEE AGREEMENT (CIMAO Regional Clinker Project) between REPUBLIC OF THE IVORY COAST and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated ,1976 GUARANTEE AGREEMENT AGREEMENT, dated 1. , 1976, between REPUB- LIC OF THE IVORY COAST (hereinafter called the Ivory Coast) 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'Afrique 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 Ivory Coast and the Republic of Ghana (hereinafter called Ghana) agree to guaran- tee 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 Ghana and the Bank; WHEREAS the Ivory Coast, in consideration of the Bank's en- tering into the Loan Agreement with the Borrower, and in consid- eration of such Guarantee Agreements with Togo and Ghana, has agreed so to guarantee such obligations of the Borrower; NOW THEREFORE the parties hereto hereby agree as follows: 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, the Ivory Coast hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of the princi- pal of, and interest and other charges on, the Loan, and the pre- mium, if any, on the prepayment of the Loan, all as set forth in the Loan Agreement. Section 2.02. (a) The Ivory Coast 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, the Ivory Coast 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 3uch portion of its clinker production as shall be required in accordance with the provisions of the Treaty or 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, the Ivory Coast undertakes: (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 permit 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 Ghana 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 expendi- tures or to comply with such obligations. -5- 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 cir- cumstances, 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 the Ivory Coast, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any consti- tutional or other legal reason such provision cannot be made with re- spect to any lien created on assets of any of its political or admin- istrative subdivisions, the Ivory Coast 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 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; - 6 - 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 the Ivory Coast, of any political or administrative sub- division thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Ivory Coast or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Ivory Coast, provided, however, that for the purposes of this Sec- tion, the term "entity" shall not apply to Ivory Coast State Com- panies which are organized as business corporations in accordance with laws and regulations applicable to private companies and whose activities are not reflected in the Ivory Coast's budget, except that the provisions of this Section shall apply to any such entity to the extent that it shall hold gold and other for- eign exchange assets on behalf of the Ivory Coast. Section 3.02. The Ivory Coast 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 the territory of the Ivory Coast; -7- (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 inconsistent 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 the Ivory Coast; Addresses Section 4.01. The Ministre de 1'Economie et des Finances of the Ivory Coast is designated as representative of the Ivory Coast 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 Ivory Coast: Minist4re de l'Economie et des Finances B.P. 1766 Abidjan Ivory Coast Cable address: Telex: MINIFIN MINIFIN 747 Abidjan Abidjan 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 (wUI) -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 Lomf, Republic of Togo, as of the day and year first above written. REPUBLIC OF THE IVORY COAST *By( 9kl4 ' Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPM ENT By cL 1S'."r-dn 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 01k day of JUAIA,, 197k. FOR SECRETARY