Conformed Copy - L3121 - Second Housing Finance Project - Guarantee Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3122 MOR (Second Housing Finance Project) between KINGDOM OF MOROCCO and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated October 27, 1989 LOAN NUMBER 3122 MOR GUARANTEE AGREEMENT AGREEMENT, dated October 27, 1989, between KINGDOM OF MOROCCO (the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS (A) the Guarantor and Real Estate and Hotel Finance Company (the Borrower), having been satisfied as to the feasibility and priority of the Project described in Schedule 2 to the Loan Agreement, have requested the Bank to assist in the financing of the Project; and (B) by the Loan Agreement of even date herewith between the Bank and the Borrower, the Bank has agreed to extend to the Borrower a loan in various currencies equivalent to seventy-seven million five hundred thousand dollars ($77,500,000), 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 and to undertake such other obligations as provided in this Agreement; and Page 2 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 and to undertake such other obligations; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the modifications set forth in Schedule 4 to the Loan Agreement (the General Conditions) constitute an integral part of this Agreement. Section 1.02. 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. The Guarantor declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Loan Agreement, and, to this end, without limitation or restriction upon any of its other obligations under the Guarantee Agreement, 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, 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 promptly make arrangements, satisfactory to the Bank, to cause the Borrower to be provided with such funds as are needed to meet such expenditures. ARTICLE III Other Covenants Section 3.01. Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guarantor shall promptly take all measures as shall be required (including, without limitation, the review and, if necessary, approval of proposals by the Borrower to adjust the structure or levels of the Borrower's interest rates and other financial charges) in order to enable the Borrower to comply with its obligations set forth in Section 4.05 of the Loan Agreement. Section 3.02. (a) The Guarantor shall at all times maintain the Foreign Exchange Risk Coverage Scheme. (b) Further to, and without limitation on, the provisions of paragraph (a) of this Section, the Guarantor shall take all action necessary to ensure that: (i) the balance of all foreign exchange losses due and payable by the Guarantor to the Borrower as at December 31, 1988, shall be paid to the Borrower in accordance with a schedule satisfactory to the Bank; and (ii) all foreign exchange losses, other than those Page 3 referred to in sub-paragraph (i) of this paragraph, payable by the Guarantor to the Borrower pursuant to the Foreign Exchange Risk Coverage Scheme shall be paid to the Borrower in accordance with the terms of said Scheme. (c) For purposes of this Section the term "foreign exchange losses" means losses incurred by the Borrower resulting from changes in the rates of exchange between currencies (including Dirhams) used in the Borrower's lending and borrowing operations. Section 3.03. The Guarantor shall take all action necessary to ensure that: (a) the balance of all amounts due and payable by the Guarantor to the Borrower as at December 31, 1988, on account of interest rate subsidies for low cost housing and other claims, shall be paid to the Borrower in accordance with a schedule satisfactory to the Bank; and (b) all amounts other than those referred to in paragraph (a) of this Section, which shall become due and payable from time to time by the Guarantor to the Borrower pursuant to the legislation of the Guarantor regulating interest rate subsidies, shall be paid to the Borrower promptly. 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 Rabat Kingdom of Morocco Cable address: Telex: MINISTERE FINANCES 31936 M Rabat 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 duly authorized representatives, 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 Page 4 By /s/ A. Benjelloun Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ K. Dervis Acting Regional Vice President Europe, Middle East and North Africa