Liberia - Nioc Rehabilitation Project : Loan 2081 - Guarantee Agreement - Conformed

OGFFICIAL DOCUMENTS LOAN NUMBER 2081 LBR Guar~ntee Agreement (NIOC Rehabilitation Project) between REPUBLIC OF LIBERIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1982 LOAN NUMBER 2081 LBR GUARANTEE AGREEMENT AGREEMENT, dated gizu , 1982, between REPUBLIC OF LIBERIA (hereinafter ca led the uarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP NT (hereinafter called the Bank). WHEREAS by the Loan Agreement of even date herewith between the Bank and National Iron Ore Company, Ltd. (hereinafter called the Borrower) the Bank has agreed to make to the Borrower a loan in various currencies equivalent to eleven million seven hundred thousand dollars ($11,700,000), 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 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 and of the Borrower's agreement to pay to the Guarantor a fee of one per cent per annum of the equivalent in the currency of the Guarantor on the disbursed and outstanding balance of the Loan, 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 provlsions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank dated October 27, 1980, with the same force and effect as if they were fully set forth 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 -2- Guarantor 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. Section 2.02. Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guarantor specifically undertakes: (a) to make available to the Borrower, until June 14, 1984, the funds required by the Borrower to pay interest and other charges on the FMO Loan, such funds to be made available to the Borrower: (i) at such times and in such amounts as shall be required to make such payments when due and payable; and (ii) solely in exchange for shares of common stock of the Borrower; (b) to finance, until June 14, 1984, in exchange fox shares of common stock of the Borrower, interest and other charges on the proceeds of the ADB Loan and the OPEC Fund Loan relent by the Guarantor to the Borrower; and (c) in addition, 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 on of its operations (including the Project), to make arrange- ments, 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. Section 2.03. Except as the Bank shall otherwise agree, if the Guarantor shall prepay part, or all, of its debt under the ADB Loan Agreement or the OPEC Fund Agreement, or of the Borrower under any Senior Loan, the Guarantor shall, upon making such prepayment, make available to the Borrower, on terms and condi- tions satisfactory to the Bank, such amounts as shall be necessary to enable the Borrower to comply with the requirements of Section 5.08 of the Loan Agreement in respect of the other Senior Loans. Section 2.04. The Guarantor shall collect from the Borrouar, when due, the fee referred to in the second Whereas of the reci- tals to this Agreement. -3- Section 2.05. The Guarantor shall make arrangements, satis- factory to the Bank, for the purpose of providing that the Bor- rower shall not be obligated to pay duties, charges or fees on the importation of goods, equipment and materials for the Project, and shall not change such arrangements without the Bank's agreement. 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 con- cerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distri- bution 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 Guarantor, in creating or permitting the creation of suc% 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 foreign exchange assets held by any institution performing the functions of a central -4- bank or exchange stabilization fund, or similar functions, for the Guarantor. Section 3.02. The Guarantor shall exercise its rights and powers 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 the Scheduled Agreements, 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 in the Loan Agreement and the Scheduled Agreements contained. Section 3.03. Except as the Bank shall otherwise agree, the Guarantor shall not take any action to modify the share capital of the Borrower, or sell, transfer or otherwise dispose of any of its common stock of the Borrower if as a result of such action, or sale, transfer or other disposal the percentage of common stock of the Borrower held by the Guarantor would be reduced to less than 80% of the total common stock of the Borrower or the Guarantor would lose effective control of the Borrower. Section 3.04. If at any time the Guarantor shall, pursuant to the provisions of this Agreement, make any of the payments due under the Loan, the Guarantor shall, to the extent of any such payment, be subrogated to the rights of the Bank under the Loan Agreement and the Security Trust Agreement. ARTICLE IV Representative of the Guarantor; Addresses Section 4.01. The Minister of Finance 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 Finance Monrovia Liberia -5- Cable address: Telex: MINFIN 4221 Monrovia 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) 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 Borough of Manhattan, The City of New York, United States of America, as of the day and year first above written. REPUBLIC OF LIBERIA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Authorized Reprepentattve 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 day of A , 198. F[ft-EC1TARY