Senegal - Second Sofisedit Project : Loan 1332 - Guarantee Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1332 SE GUARANTEE AGREEMENT (Second SOFISEDIT Project) between REPUBLIC OF SENEGAL and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated October 14, 1976 GUARANTEE AGREEMENT AGREE4ENT, dated October 1., 1976, between THE REPUBLIC OF SENEGAL (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 Soci6t6 Financiare Sfnfgalaise g le D6veloppement Industriel et Touristique (hereinafter called the Borrower) the Bank has agreed to make to the Borrower a loan'in various currencies equivalent to four million two hundred thousand dollars ($4,200,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Guarantor agree to guarantee the obliga- tions of the Borrower in respect of such loan as hereinafter pro- vided; 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 Conditiods; 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, subject, however, to the modifications thereof set forth in Schedule 2 to the Loan Agreement (said General Conditions Applicable to Loan and Guarantee Agreements, as so modified, 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 and the term "SONEPI" means the Soci4t9 Nationale d'Etudes et de Promotion Industrielle. -3- ARTICLE II Guarantee Section 2.01. Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the 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, 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 provi- sion to that effect; provided, however, that, if for any constitu- tional 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 I -5- 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 any entity owned or controlled by, or operating 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 Guarantor. Section 3.02. The Guarantor covenants that it will not take, cause or permit any of its political subdivisions or any of its agencies or any agency of any such political subdivisions or any institution which may be established to perform the functions of a central bank exclusively for the Guarantor to take, any action which would prevent or interfere with the performance by the Bor- rower of its obligations contained in the Loan Agreement and will take all reasonable action necessary or appropriate to enable the Borrower to perform such obligations. Section 3.03. The Guarantor shall guarantee any loan made by the Borrower to SONEPI, up to CFAF 20 million. Section 3.04. (a) The Guarantor shall cause SONEPI to carry out a study and pilot project in the small-scale service and -6- production sector (artisanat) under arrangements and pursuant to terms of reference satisfactory to the Bank and shall provide to SONEPI promptly as needed the funds, in addition to the amount of the Loan withdrawn under Section 2.02 (a) of the Loan Agreement, required for the purpose. (b) The Guarantor shall make available to the Borrower in advance as needed the funds required by the Borrower to pay to the Bank when due the interest and other charges on the amount of the Loan withdrawn pursuant to Section 2.02 (a) of the Loan Agreement and to repay the principal amount thereof pursuant to Section 2.08 (d) of the Loan 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: Ministere des Finances Rue Charles Laing Bolte Postale 4017 Dakar, Sengal Cable address: MINIFINANCES Dakar For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. -8- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- rent 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. REPUBLIC OF SENEGAL By /s/ Bayoro Diallo Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By // Andrg Gug Acting Regional Vice President Western Africa