Morocco - Housing Development Project : Loan 2245 - Guarantee Agreement - Conformed

OFFFF1ICIAL LD)CIjjENTS LOAN NUMBER 2245 MOR Guarantee Agreement (Housing Development Project) between KINGDOM OF MOROCCO and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated /9 ,1983 LOAN NUMBER 2245 NOR GUARANTEE AGREEMENT AGREEMENT, dated 1 , 1983, between KINGDOM OF MOROCCO (hereinafter called the Guarantor) and INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS by the Loan Agreement of even date herewith between the Bank and Credit Immobilier et H8telier (hereinafter called the Borrower) the Bank has agreed to make to the Borrower a loan in various currencies equivalent to sixty million dollars ($60,000,000), 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 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: 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 Gua- rantee Agreements of the Bank dated October 27, 1980, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Sche- dule 4 to the Loan Agreement (said General Conditions Applicable to Loan and Guarantee Agreements, as so modified, being herein- after 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. -2- ARTICLE II Guarantee 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, all as set forth in the Loan 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 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 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 or as security for the payment of debt incurred for the purpose of financing the purchase of such property; and (ii) any lien aris- ing in the ordinary course of banklng transactions and securing a debt maturing not more than one year after its date. -3- (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 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 Banque du Maroc or any institution performing the functions of a central bank or exchange stabilization fund, or similar func- tions, for the Guarantor. Section 3.02. The Guarantor shall make arrangements to pro- tect the Borrower against any loss in connection with the payment of interest and other charges on, and the repayment of principal of, the Loan as a result of a change in the rate of exchange between Dirhams and the currency or currencies in which such pay- ments are made. Section 3.03. The Guarantor covenants that it will not take, or cause or permit any of its political subdivisions or any of its agencies or any agency of any such political subdivisions or the Banque du Maroc to take, any action -.hich would prevent or interfere with the performance by the Borrower of its obligations contained in the Loan Agreement and will take or cause to be taken all reasonable action necessary or appropriate to enable the Borrower to perform such obligations. Section 3.04. The Guarantor shall, until June 30, 1986 or such other date as may be agreed between the Guarantor and the Bank, maintain or cause to maintain the interest rate structure (excluding subsidies) for low-cost housing construction or acquisition in effect as of the date of this Agreement, that is, annual interest rates of not less than: (a) under the Regime special (referred to in Title 6 of the Guarantor's Decree No. 552-67 dated December 17, 1968), for individual beneficiaries excluding cooperatives for low-cost housing construction and acquisition: (i) six per cent (6%) for complex housing units whose total real estate value does not exceed DH 100,000; (ii) seven per cent (7%) for individual housing units whose total real estate value does not exceed DH 100,000; -4- (iii) seven per cent (7%) for complex housing units whose total real estate value exceeds DH 100,000 but does not exceed DH 130,000; and (iv) eight per cent (8%) for individual housing units whose total real estate value exceeds DH 100,000 but does not exceed DH 130,000; (b) under the Regime general (referred to in Title 4 of the Guarantor's Decree No. 552-67 dated December 17, 1968), for individual beneficiaries excluding cooperatives for low-cost housing construction and acquisition: (i) ten per cent (10%) for housing units whose total real estate value does not exceed DH 200,000; (ii) twelve per cent (12%) for housing units whose total real estate value exceeds DH 200,000 but does not exceed DH 300,000; and (iii) fourteen per cent (14%) for housing units whose total real estate value exceeds DH 300,000. Section 3.05. Whenever the Borrower shall request the Gua- rantor to make a payment for it pursuant to Section 4.07 (b) of the Loan Agreement, the Guarantor shall promptly make such pay- ment, provided that the Borrower shall have exercised remedies to collect arrears on its outstanding loans for financing resettle- ment schemes and shall have, inter alia, initiated the legal pro- cess. ARTICLE IV Representative of the Guarantor; Addresses Section 4.01. The Minister of the Guarantor responsible for finance 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: Ministere des Finances Rabat Kingdom of Morocco -5- Cable address: Telex: MINISTERE FINANCES 31936 M Rabat, Morocco 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 District of Columbia, United States of America, as of the day and year first above written. KINGDOM OF MOROCCO By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Europe, Middle East and North Africa 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 JLday of, 4 , 198 0 FOR SECRETARY