Dominican Republic - Second Puerto Plata Tourism Project : Loan 1699 - Guarantee Agreement - Conformed

스 LOAN NUMBER 1699 DO GUARANTEE AGREEMENT AGREEMENT, dated 1 1979, between DOMINICAN-2XPUBLIC (hereinahret called the Guarantor) and INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank)* WHEREAS by the Loan Agreement of even date herewith between the Bank and Banco Central de la Repfiblica Dominicana (herein- after called the Borrower) the Bank has agreed to make to the Borrower a loan in various currencies equivalent to twenty-five million dollars ($25,000,000), on the terms and . conditions set f orth 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 General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank dated March 15, 1.974, with the same f orce and ef f ect as if they were fully set f orth herein (said General Conditions Applicable to Loan and Guarantee Agree- ments 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. ARTICLE II Guarantee; Provision of Funds Section 2.01. Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the Guarantor hereby unconditionally guarantees, as primary obligor and not as pr 2 -2- surety carely, 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 and the punctual performance of all the other obligations of the Borrower, all as set forth in the Loan Agreement. 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 inade- quate to meet the estimated expenditures required for the carrying out of the Project, 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 expenditures. 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 f',r 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 Guarantor, 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 administrative subdivisions, the Guarantor 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; and (ii) any lien arising in the ordinary course of banking transactions 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 Guarantor, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Guarantor 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 Guarantor. Section 3.02. The Guarantor shall, subject to- the terms and conditions set forth in Schedule 5 to the Loan Agreement and until construction of all facilities included in Tourism Projects or in Part B of the Project has been completed, provide incentives to investors investing in (i) Tourism Enterprises or Tourism Projects in the Project Area, or (ii) for the purposes of Part B of the Project, which shall be not less favorable than those granted for similar investments in any other part of the Guarantor's territories or in companies operating therein. Section 3.03. The Guarantor shall, for purposes of the proviso to paragraph (c) of Section 3.04 of the Loan Agreement: (a) exchange views with the Bank and the Borrower on the adequacy of the rates of interest in effect in the Guarantor's territories; and (b) if, as a consequence of any such exchange of views, it has been agreed between the Guarantor and the Bank and the Borrower that the change of any of the rates of interest set forth in Schedule 5 to the Loan Agreement is needed, take all such measures as shall be necessary or advisable to put the changed rates in effect. Section 3.04. The Guarantor shall take all such action within its powers (including the provision of funds required for the purpose) as shall be necessary or convenient to enable Municipality and INAPA to comply with their respective under- takings under the contractual arrangements referred to in Section 3.03 of the Loan Agreement. Section 3.05. The Guarantor shall, by means of DNTI, use the consultants' services to be assigned to DNTI by the Borrower under the provisions of Section 3.05 of the Loan Agreement, exclusively 4 for purposes of Part F.2 of the Project, and furnish to the Borrover every report prepared by such consultante or as a conse- quence of the use of the services thereof. ARTItLE IV Representative of the Guarantor; Addresses Section 4.01. The Governor of the Borrover is designated as representative of the Guarantgr for the purposes of Section 11.03 of the General Conditions. Section 4.02. The follkwing addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Guarantor: Banco Central de la Repfblica Dominicana CalLe Pedro Henrfquez Urefla Santo Domingo, Dominican Republic Cable address: Telex, BANCENTRAL 3460052 (ITT) Santo Domingo 3464186 (RCA) For the Bank: Liternational Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 Uiited States of America Cable address: Telex: IFTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. DOMINICAN REPUBLIC By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin rica and the Caribbean 1 1 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE 1 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 cåte and affixed the Seal of the Bank thereunto this . day of I. , 1971. FOR SECRETARY