Ecuador - Port Of Guayaquil Project : Loan 0212 - Guarantee Agreement - Conformed

LOAN NUMBER 212 EC Guarantee Agreement (Port of Guayaquil Project) BETWEEN THE REPUBLIC OF ECUADOR AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED OCTOBER 9, 1958 LOAN NUMBER 212 EC Guarantee Agreement (Port of Guayaquil Project) BETWEEN THE REPUBLIC OF ECUADOR AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED OCTOBER 9, 1958 AGREEMENT, dated October 9, 1958, between THE RE- PUBLIC OF ECAnOR (hereinafter called the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP- ENr (hereinafter called the Bank). WHIEREAS by an agreement of even date herewith between the Bank and Autoridad Portuaria de Guayaquil (herein- after called the Borrower), which agreement and the sched- ules therein referred to are hereinafter called the Loan Agreement, the Bank has agreed to make to the Borrower a loan in various currencies equivalent to thirteen million dollars ($13,000,000), 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 Bor- rower in respect of such loan as hereinafter provided and that Banco Central del Ecuador accept its obligations under Section 3.01 of this Guarantee Agreement; and AVIEEAS the Guarantor, 1i consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed so to guarantee such obligations of the Borrower and Bunco Central del Ecuador has agreed so to accept such obligations; Now TH EHEFORE 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 13, 1956 (said Loan Regulations No. 4 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 Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement and in the Loan Regulations (as so defined) 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 con- tained, the Guarantor hereby unconditionally guarantees, 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, the premium, if any, on the prepayment of the Loan or the redemption of the Bonds, and the punctual performance of all the covenants and agreements of the Borrower, all as set forth in the Loan Agreement and in the Bonds. 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 inadequate to meet the estimated expenditures required for carrying out the Project and the operation of the Port dur- ing the period of construction, to make arrangements, satis- factory 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. SECTION 2.03. Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guarantor specifically undertakes (a) to permit the Borrower to estab- lish and maintain charges for its services in accordance with Section 5.08 of the Loan Agreement; and (b) except as the Bank and the Guarantor shall otherwise agree, not to amend, permit or cause the Charter of the Borrower to be amended. SECTION 2.04. The Guarantor specifically undertakes to reimburse the Borrower for any loss of revenue in excess of an aggregate amount of one million sucres incurred during any calendar year after 1962 and due to exemptions from port or service charges and the like granted by the Guaran- tor to any natural or juridical person. Such reimbursement shall be made within the calendar year following that in which the loss of revenue was incurred. 5 ARTICLE III SECTION 3.01. It is the mutual intention of the Guaran- tor and the Bank that no external debt shall enjoy any priority over the Loan by way of a lien hereafter created on governmental assets (including any priority in the allo- cation or realization of foreign exchange). To that end, the Guarantor and Banco Central del Ecuador undertake that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Guarantor or of the Banco Central del Ecuador, 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. Within the limits of its constitutional powers, the Guarantor will make the foregoing undertaking effective with respect to liens on assets of any of the Guarantor's agencies includ- ing agencies granted autonomy by the Constitution of Ecua- dor (other than Banco Central del Ecuador), or any of the Guarantor 's political subdivisions or of any agency of any such political subdivision, and to the extent that the Guar- antor is unable within the limits of its constitutional powers to make such undertaking effective, the Guarantor will give to the Bank an equivalent lien satisfactory to the Bank. The foregoing provisions 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; (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; or (iv) any lien solely upon revenues or receipts in currency of the Guaran- tor which is given by a political subdivision (consejo pro- vincial or nunicipalidad) or by an agency of a political subdivision of the Guarantor under arrangements con- taining no provisions which would result in priority in the allocation or realization of foreign exchange. 6 SECT1IN 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 reasonably request with regard to the general status of the Loan. On the part of the Guarantor, such information shall include informa- tion with respect to financial and economic conditions in the territories of the Guarantor and the international 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 1)romptly inform the Bank of any condition which interferes with, or threatens to interfere with, the accomplishment 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. SECTON 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 terri- tories; provided, however, that 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 beneficially owned by an individual or corporate resident of the Guarantor. SECTION 3.04. This Agreement, the Loan Agreement and the 3onds shall be free from any taxes or fees that shall be imposed under the laws of the Guarantor or laws in effect in its territories on or in connection with the execution, issue, delivery or registration thereof. S 7 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. ARTICLE IV SECTION 4.01. The Guarantor shall endorse, in accord- ance with the provisions of the Loan Regulations, its guar- antee on the Bonds to be executed and delivered by the Bor- rower. The Ministro del Tesoro of the Guarantor and such person or persons as he shall designate in writing are desig- nated 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: Republic of Ecuador Ministerio del Tesoro Calle Guayaquil 1575 Quito, Ecuador Alternative address for cablegrams and radiograms: Mintesoro Quito 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 Ministro del Tesoro of the Guarantor is designatod for the purposes of Section 8.03 of the Loan Regulations. IN W1TNESS HEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Guarantee Agreement to be signed in their re- spective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. THE REPUBLIC OF ECUADOR By /s/ CARLOS MORALES-CHACON Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ DAVIDSON SOMMERS Vice President BANCO CENTRAL DEL ECUADOR By /s/ CARLOS MORALES-C.HAC6N Authorized Representative