Morocco - Bay Of Agadir Tourism Project : Loan 1202 - Project Agreement - Conformed

CONFORMED COPY LOAN NUMBFR 1202 MOR PROJECT AGREEMENT (Bay of Agadir Tourism Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and SOCIETE NATIONALE D'AMENAGEMENT DE LA BAIE D'ACADIR (SONABA) Dated February 27, 1976 PROJECT AGREEMENT AGREEMENT, dated February 27, 1976, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and THE SOCIETE NATIONALE D'AMENAGEMENT DE LA BAIE D'ACADIR (SONABA) (hereinafter called SONABA). WHEREAS by the Loan Agreement of even date herewith between the Kingdom of Morocco (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to twenty-one million dol- lars ($21,000,000), on the terms and conditions set forth in the Loan Agreement; WHEREAS by a Subsidiary Loan Agreement to be entered into be- tween the Borrower and SONABA, part of the proceeds of the loan provided for under the Loan Agreement will be made available to SONABA on the terms and conditions therein set forth: and WHEREAS SONABA, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake such obligations toward the Bank as are hereinafter set forth: NOW THEREFORE the parties hereto hereby agree as follows: -2- ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the con- text shall otherwise require, the several terms defined in the Loan Agreement, the Preamble to this Agreement and the General Con- ditions (as so defined) have the respective meanings therein set forth. -3- ARTICLE II Execution of the Proj ect Section 2.01. SONABA shall carry out Part A of the Project described in, Schedule 2 to the Loan Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and technical practices. Section 2.02. In order to assist in preparing final designs for the works in the Project Area and in preparing bidding docu- ments and analyzing the bids SONABA shall employ engineering con- sultants and other experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Section 2.03. Except as the Bank shall otherwise agree, the goods and services (other than consultants' services) for Part A of the Project to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 4 to the Loan Agreement. Section 2.04. (a) SONABA undertakes to insure, or make ade- quate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan relent to it by the Bor- rower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by SONABA to replace or repair such goods. -4- (b) Except as the Bank shall otherwise agree, SONABA shall cause all goods and services financed out of the proceeds of the Loan relent to it by the Borrower to be used exclusively for Part A of the Project. Section 2.05. (a) SONABA shall furnish to the Bank, promptly upon their preparation, the plans, specifications, contract docu- ments and construction and procurement schedules for Part A of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) SONABA: (i) shall maintain records adequate to record the progress of Part A of the Project (including the cost thereof) and to identify the goods and services financed out of the pro- ceeds of the Loan relent to it by the Borrower, and to disclose the use thereof in the Project; (ii) shall enable the Bank's accredited representatives to visit the facilities and construction sites included in Part A of the Project and to examine the goods financed out of such proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such infor- mation as the Bank shall reasonably request concerning Part A of the Project, the expenditure of the proceeds of the Loan relent to it by the Borrower and the goods and services financed out of such proceeds. Section 2.06. SONABA shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Bank shall otherwise agree, SONABA shall not take or concur in any action -5- which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provision thereof. Section 2.07. (a) SONABA shall exchange views with the Bank with regard to the progress of Part A of the Project, the perfor- mance of its obligations under this Agreement and under the Subsid- iary Loan Agreement, and other matters relating to the purposes of the part of the Loan relent under such Agreement. (b) SONABA shall promptly inform the Bank of any condition which interferes or threatens to interfere with, the progress of Part A of the Project, the accomplishment of the purposes of the part of the Loan related thereto, or the performance by SONABA of its obligations under this Agreement and under the Subsidiary Loan Agreement. -6 0 ARTICLE III Management and Operations of SONABA Section 3.01. SONABA shall take out and maintain with respon- sible insurers, or make other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.02. (a) SONABA shall conduct its operations at all times in accordance with appropriate administrative and financial principles and practices under qualified and experienced manage- ment and staff. (b) SONABA shall inform the Bank of any proposal to fill a vacancy in the position of Directeur General of SONABA and shall exchange views with the Bank on proposals to fill a vacancy in the position of Technical Director or Chief Urban Planner. Section 3.03. SONABA shall prepare and furnish to the Bank every six months following the date of this Agreement, reports on the progress in carrying out Part A of the Project together with revised critical path networks related thereto. Section 3.04. SONABA shall prepare and furnish to the Bank (i) within 2 years of the date of this agreement a program for the promotion of investment opportunities in the Project Area aimed at -7- national and foreign investors and (ii) within 4 years from such date a program for the publicizing, promotion and operation (animation) of the tourist facilities in the Project Area. -8- ARTICLE IV Financial Covenants Section 4.01. (a) SONABA shall maintain records adequate to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of SONABA. (b) Pursuant to paragraph (a) of this Section, SONABA shall establish within one year of the date of this Agreement a system of commercial accounts to be maintained by its accounting depart- ment. Section 4.02. SONABA shall: (i) have its accounts and finan- cial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by inde- pendent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than four months after the end of each such year, (A) certified ccpies of its finan- cial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of SONABA and the audit thereof as the Bank shall from time to time reasonably request. * -9 - Section 4.03. (a) SONABA shall prepare and furnish to the Bank within 12 months of the date of this Agreement a statement of the financial policies of SONABA satisfactory to the Bank in- cluding the establishment of selling and leasing prices for com- mercial and recreational land and improvements calculated at levels which will enable SONABA to recover its investment costs, including those for infrastructure, to provide a reasonable profit and in any event to maintain a debt-service coverage ratio of 1.1 to 1. (b) For the purposes of this Section: i "debt-service coverage ratio" means the ratio between net current assets at the end of the fiscal year last ended (or a more recent twelve-month period) together with the gross operating profit after taxes forecasted for the current fiscal year on the one hand, to total debt-service forecasted for such current fiscal year, on the other hand; (ii) 1net current assets" means cash, securities and receivables convertible to cash within one year less liabilities due within one year excluding debt-service; (iii) "gross operating profit" means gross revenue of SONABA less expenditures for operation and administration; and - 10 - (iv) "debt-service" means the aggregate of payments due by SONABA in such current fiscal year on account of principal, interest and other charges on the proceeds of the Loan relent by the Bor- rower to SONABA and on the long-term loan to SONABA from the Borrower referred to in Section 4.05 of the Loan Agreement, and of interest on the treasury advance referred to in such Section. Section 4.04. Except as the Bank shall otherwise agree, SONABA shall not incur prior to 1986 any debt other than for the financing of Part A of the Project. * -11 - ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Loan Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Bank and of SONABA thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Loan Agreement shall terminate in accordance with its terms: or (ii) a date 20 years after the date of this Agreement. (b) If the Loan Agreement terminates in accordance with its terms before the date specified in paragraph (a)(ii) of this Sec- tion, the Bank shall promptly notify SONABA of this event. Section 5.03. All the provisions of this Agreement shall con- tinue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. - 12 - ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or a. uch other address as such party shall have desig- nated by notice to the party giving such notice or making such re- quest. The addresses so specified are: 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 (UIT) For SONABA: Societe Nationale d'Amenagement de la Baie d'Agadir (SONABA) Boite Postale 348 Agadir, Morocco -13 - Cable address: Telex: SONABA 81896 Agadir Section 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of SONABA may be taken or executed by the Directeur-Gene"ral or such other person or persons as he shall designate in writing. Section 6.03. SONABA shall furnish to the Bank sufficient evi- dence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of SONABA, take any ac- tion or execute any documents required or permitted to be taken or executed by SONABA pursuant to any of the provisions of this Agree- ment. Section 6.04. This Agreement may be executed in several coun- terparts, each of which shall be an original, and all collectively but one instrument. - 14 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ M. P. Bart Acting Regional Vice President Europe, Middle East and North Africa SOCIETE NATIONALE D'AMENAGEMENT DE LA BAIE D'AGADIR (SONABA) By /s/ Abdelhadi Boutaleb Authorized Representative