Cameroon - Second Douala Port Project : Loan 1321 - Guarantee Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1321 CM GUARANTEE AGREEMENT (Second DoualA Port Project) between UNITED REPUBLIC OF CAMEROON and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated September 24, 1976 GUARANTEE AGREEMENT AGREEMENT, dated September 24, 1976, between UNITED REPUBLIC OF CAMEROON (hereinafter called the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS by the Loan Agreement of even date herewith between the Bank and National Ports Authority of Cameroon (hereinafter called the Borrower) the Bank has agreed to make to the Borrower a loan in various currencies equivalent to fifteen million dollars ($15,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Guarantor agree to guar- antee the obligations of the Borrower in respect of such loan as hereinafter provided; and WHEREAS the Guarantor, in consideration of the Bank's enter- ing 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: -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 (said General Conditions Applicable to Loan and Guarantee Agreements 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 Gen- eral Conditions and in Section 1.02 of the Loan Agreement have the respective meanings therein set forth. I ARTICLE II Guarantee; Provision of Funds Section 2.01. Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the Guaran- tor 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 and the punctual performance of all the other obligations of the Borrower, all as set forth in the Loan Agreement (including without limitation those set forth in Section 3.05 thereof). Section 2.02. Without limitation or restriction upon the pro- visions of Section 2.01 of this Agreement, the Guarantor specifi- cally undertakes, 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, to make all necessary arrangements promptly to pro- vide the Borrower or cause the Borrower to be provided with such funds as are needed to meet such expenditures on terms and condi- tions consistent with the Borrower's obligations under the Loan Agreement. 4w 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, special 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 for- eign 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 Guarantor, in creating or per- mitting 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 adminis- trative 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 satis- factory 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 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 Guarantor, of any political or administrative sub- division thereof and of an- entity owned or controlled by, or op- erating 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 Guar- antor. Section 3.02. The Guarantor shall carry out, not later than December 31, 1980, or such other date as the Bank shall agree: (i) the improvement of access road to the Bonabgri berth; and (ii) the improvement of the surface of the Wouri bridge. Section 3.03. The Guarantor shall ensure that all the follow- ing Associated Projects are completed under terms and conditions and according to a time schedule satisfactory to the Bank: Ci) those listed in Section 4.08 of the Loan Agree- ment; (ii) the relocation of the naval base to permit expan- sion of the downstream port area; (iii) the lowering of the oil pipeline connecting the mid-channel oil tanker berth to the storage tanks ashore to an adequate depth; -6- (iv) the relocation of water supply drainage, electric- ity and telephone facilities due to the enlargement of the port area and the construction of access to the port; (v) provision of a shelter, fresh water supply, park- ing and other facilities at the canoe beach to be built; and (vi) construction of the Douala marshalling yard facili- ties and of a link between such facilities and the port on the basis of feasibility studies undertaken for such facilities. Section 3.04. The Guarantor shall cause the Borrower to be represented in any organization which may be established to op- erate the industrial zone expected to be created at Bonabgri. Section 3.05. The Guarantor shall, not later than June 30, 1977, or such other date as the Bank shall agree, furnish to the Bank a plan acceptable to the Bank for the strengthening of the capability of its Ministries of Planning, of Transport and of Equip- ment with respect to transport planning and coordination which shall include, inter alia, estimated requirements of such ministries for technical assistance, training and consultants' services, pro- posals for financing such plan, together with a work program for such ministries in transport planning, and shall thereafter imple- ment such plan and carry out such program. Section 3.06. In order to assist the Guarantor in formulating a forestry sector development policy, the Guarantor shall not later than September 1, 1976 or such other date as the Bank shall agree, employ two consultants under terms of reference satisfactory to the Bank. Section 3.07. The Guarantor shall maintain in the position of Director General of the Borrower a person with qualifications and experience satisfactory to the Bank. ARTICLE IV Representative of the Guarantor; Addresses Section 4.01. The Minister of Economic Affairs and Planning of the Guarantor is designated as representative of the Guarantor 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 Guarantor: Ministry of Economic Affairs and Planning Yaoundg United Republic of Cameroon Cable address: Telex: MINEP 8268-KN Yaounde 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) 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 the District of Columbia, United States of America, as of the day and year first above written. UNITED REPUBLIC OF CAMEROON By /s/ Eric D. Quan Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Roger Chaufournier Regional Vice President Western Africa