Senegal - Petite Cote Tourism Project : Loan 1412 - Project Agreement - Conformed Copy - Conformed

CONFORMED COPY LOAN NUMBER 1412-T-SE LOAN NUMBER 1413-SE PROJECT AGREEMENT (Petite C6te Tourism Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and SOCIETE D'AMENAGEMENT DE LA PETITE COTE and OFFICE DES POSTES ET TELECOMMUNICATIONS Dated June 7, 1977 PROJECT AGREEMENT AGREEMENT, dated June 7, 1977, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, party of the first part (such party of the first part hereinafter called the Bank) and SOCIETE D'AMENAGEMENT DE LA PETITE COTE (hereinafter sometimes called SAPCO) and OFFICE DES POSTES ET TELECOMMUNICATIONS (hereinafter sometimes called OPT), parties of the second part (any such parties of the second part hereinafter sometimes individually called a Beneficiary and all such parties of the second part hereinafter sometimes collectively called the Beneficiaries). WHEREAS (A) by the Loan Agreement of even date herewith be- tween the Republic of Senegal (hereinafter called the Borrower) and the Bank (hereinafter called the Loan Agreement), the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to eight million dollars ($8,000,000), under the Interest Subsidy Fund for the Third Window established by Resolution No. 75-111 of the Executive Directors of the Bank and on such terms and conditions as set forth in the Loan Agreement, but only on condition that SAPCO and OPT agree to undertake such obligations toward the Bank as hereinafter set forth; (B) by a loan agreement of even date herevith between the Republic of Senegal (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to five million six hundred thousand dollars ($5,600,000), on the terms and conditions set forth in such loan agreement (hereinafter called the First Loan Agreement), but only on condition that SAPCO and OPT agree to undertake such obligations toward the Bank as hereinafter set forth; (C) by subsidiary loan agreements between the Borrower and SAPCO and OPT, a portion of the proceeds of the loans provided for under the Loan Agreement and under the First Loan Agreement will be made available to SAPCO and OPT on the terms and conditions therein set forth; and WHEREAS SAPCO and OPT, in consideration of the Bank's entering into the Loan Agreement and the First Loan Agreement with the Bor- rower, have agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: -3- ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Loan Agreement, in the First Loan Agreement and the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. SAPCO shall carry out Parts A, B, C(iii), D, E, F, G, H, K(i) and L of, and OPT shall carry out Part I of, the Project described in Schedule 2 to the Loan Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices. Section 2.02. (a) In order to assist SAPCO in the prepara- tion of plans and specifications for, in the preparation of bid- ding documents for, and in the supervision of the construction of, Parts A, B, C(iii), D, Eq F, G and H, respectively, of the Project, SAPCO shall employ by December 31, 1977, or such other date as the Bank may agree, engineering consultants and architects whose qualifications, experieuce and terms and conditions of em- ployment shall be satisfactory to the Bank. (b) In order to assist SAPCO in the carrying out of Part K(i) of the Project SAPCO shall employ by December 31, 1977, or such other date as the Bank may agree, consultants whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Bank. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Loan and of the First Loan, shall be procured in accordance with the provisions of Schedule 4 to the Loan Agreement. - 5 - Section 2.04. (a) SAPCO and OPT undertake to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan and of the First Loan relent to it by the Borrower against hazards incident to the ac- quisition, 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 SAPCO and OPT to replace or repair such goods. (b) Except as the Bank may otherwise agree, SAPCO and OPT shall cause all goods and services financed out of the proceeds of the Loan and of the First Loan relent to it by the Borrower to be used exclusively for the Project. Section 2.05. (a) SAPCO and OPT shall furnish to the Bank, promptly upon their preparation, the plans, specifications, re- ports, contract documents and construction and procure ent schedules for Parts A through H and for Part I of the Project, respectively, as appropriate, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) SAPCO and OPT shall, in respect of such parts of the Project for which each is responsible: (i) maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan and of the First Loan relent to them by the Borrower, and to disclose the use thereof in the Project; (ii) shall, without limitation upon the provisions of paragraph (c) of this Section, enable the Bank's representatives to visit the facilities and con- struction sites included in the Project, and to examine the goods - 6 - financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expendi- ture of the proceeds of the Loan and of the First Loan so relent to it and the goods and services financed out of such proceeds. (c) Each of the Beneficiaries shall enable the Bank's repre- sentatives to examine all plants, installations, sites, Norks, buildings, property and equipment of such Beneficiary and any relevant records and documents. Section 2.06. SAPCO and OPT shall duly perform all their respective obligations under the Convention Gengrale, the SAPCO Subsidiary Loan Agreement, and the OPT Subsidiary Loan Agreement, respectively. Except as the Bank shall otherwise agree, SAPCO and OPT shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the SAPCO Subsidiary Loan Agreement or the OPT Subsidiary Loan Agreement or any provision thereof. Section 2.07. (a) Each of the Beneficiaries shall, at the request of the Bank, exchange views with the Bank with regard to the progress of the Project, the performance of their respective obligations under this Agreement, under the SAPCO Subsidiary Loan Agreement and under the OPT Subsidiary Loan Agreement, as appropriate, and other matters relating to the purposes of the Loan and of the First Loan. (b) Each of the Beneficiaries shall promptly inform the Bank of any condition which interferes or threatens to interfere with, the progress of the Project, the accomplishment of the purposes of the Loan and of the First Loan, or the performance by each of the Beneficiaries of its obligations under this Agreement, under the SAPCO Subsidiary Loan Agreement and the OPT Subsidiary Loan Agreement, as appropriate. Section 2.08. If the completion of the Project is hindered or delayed, or is threatened with hindrance or delay, because the funds available to SAPCO and to OPT, respectively, are inadequate to insure its completion, SAPCO and OPT, respectively, shall prompt- ly demand that the Borrower provide SAPCO and OPT, respectively, or cause SAPCO and OPT, respectively, to be provided with the necessary funds on terms and conditions satisfactory to the Bank as and when required. Section 2.09. Each Beneficiary shall prepare and submit to the Bank no later than April 1, 1978, or such other date as the Bank may agree a critical path schedule for the part of the Proj- ect to be carried out by it, shall exchange views with the Bank every six months starting no later than October 1, 1978, on such proposed critical path schedule and shall make such modification in said critical path schedule as the Bank may reasonably request, and shall thereafter implement such parts of the Project in accordance with such Schedule. Section 2.10. No later than December 31, 1978, or such other date as the Bank may agree, SAPCO shall employ a manager for the pilot hotel referred to under Part F of the Project, whose quali- fications, experience and terms and conditions of employment shall be satisfactory to the Bank. - 8 - Section 2.11. SAPCO shall take or cause to be taken all such action as shall be necessary to ecquire as and when needed all such land and rights in respect of land as shall be required for the construction (and operation) of the facilities included in Parts A, B, C(iii), D, E, F, G, H and L of the Project and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are avail- able for purposes related to the Project. - 9 - ARTICLE III Management and Operations of SAPCO and OPT Section 3.01. (a) Each of the Beneficiaries shall, at all times, manage its affairs, plan its future expansion and carry on its operations, all in accordance with appropriate administrative, business, financial, public utility, and engineering practices, under the supervision of experienced and competent management assisted by qualified and competent personnel in adequate numbers. (b) Without limitation or restriction to the generality of the provisions of paragraph (a) of Section 3.01 of this Agreement: (i) before making any new appointment to the position of technical director, financial director, or senior consulting architect, SAPCO shall inform the Bank of the names, qualifications and experience of the persons considered for such appointment or appoint- ments and shall afford the Bank a reasonable oppor- tunity to exchange views with the Borrower and SAPCO on the qualifications and experience of such persons; and (ii) by June 30, 1978, or such other date as the Bank may agree, SAPCO shall establish and thereafter maintain an accounting department under the super- vision of a qualified and experienced accountant assisted by qualified and experienced personnel in adequate numbers. - 10 - (c) In order to assist SAPCO in establishing and maintaining the accounts referred to in paragraph (b) (i) of Section 4.01 of the Project Agreement, SAPCO shall, by June 30, 1978, or such other date as the Bank may agree, employ for a period of not more than 3 years accounting consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. (d) Each of the Beneficiaries shall at all times operate, maintain, renew and repair its facilities, plants, equipment, ma- chinery, communications systems and property (including but not limited to all facilities, plants, equipment, machinery and prop- erty financed out of the proceeds of the Loan and of the First Loan), and promptly make all necessary repairs and renewals thereof, in accordance with appropriate engineering and public utility prac- tices. (e) Each of the Beneficiaries shall take all action within its power to maintain its existence and right to carry on its opera- tions and shall take all steps necessary to acquire, maintain and renew all rights, privileges and franchises which are necessary or useful in the conduct of its business. (f) Except as the Bank shall otherwise agree, each of the Beneficiaries shall obtain title to all goods financed out of the proceeds of the Loan and of the First Loan and made available to it free and clear of all encumbrances. (g) Except in the normal course of business the Beneficiaries shall not, without the prior approval of the Bank, sell, lease, - 11 - transfer or otherwise dispose of any of their respective properties or assets which shall be required for the efficient operation of their respective businesses and undertakings. (h) To the extent that the responsibilities in respect of management, operations and maintenance of the facilities constructed under Parts D, G and H of the Project shall be transferred by SAPCO to a department or agency of the Borrower or to any other successor organization or entity, SAPCO shall make appropriate arrangements to, or cause appropriate arrangements to be made: (i) to ensure that such facilities shall be operated, maintained, renewed and repaired, as and when required, and that such service shall be provided, in accordance with appropriate business, financial, ad- ministrative and engineering practices; and (ii) to cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. Each of the Beneficiaries shall take out and maintain with responsible 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 3.03. SAPCO shall take all such action as may be required to ensure that whenever land is made available by SAPCO or through SAPCO acting in the name and on behalf of the Borrower, through a sale, a lease, assignment of lease, a transfer, or any other form, to developers of Tourism Investments, such land shall be made available by SAPCO to such developers on terms and conditions (including inter alia the terms and conditions set forth in the Convention Gnerale and the Cahiers des Charges) acceptable to - 12- the Bank whereby SAPCO shall obtain by written contract with such developer or by other appropriate legal means, rights adequate to protect the interest of the Borrower and of SAPCO, including the right: (i) to charge prices to be determined at a level suffi- cient to meet the requirements of Section 4.03 of the Project Agreement; (ii) to require completion of the construction works for the development of the land so made available in accordance with the Plan d'Am9nagement within a period not to exceed 42 months after the date said land has been made available to the developer; and (iii) to have such arrangements under such contract or such other instruments rescinded and the control of the land so made available returned to SAPCO or to the Borrower, as appropriate, in the event such developer has failed to construct, within the said period, the said development, all referred to in paragraph (ii) of this Section 3.03 of this Agree- ment, or failed to perform any of its obligations provided in the cahiers des charge, which shall be incorporated in such written contract or other ap- propriate legal means as if it were originally and fully set forth therein. - 13 - ARTICLE IV Financial Covenants Section 4.01. (a) Each of the Beneficiaries shall maintain records adequate to reflect in accordance with consistently main- tained appropriate accounting practices its operations and finan- cial condition. (b) Pursuant to paragraph (a) of this Section and by Decem- ber 31, 1978, or such other date as the Bank may agree, SAPCO shall establish and maintain a system of commercial accounts consisting of two separate accounts one covering the Sali Portudal infrastruc- ture constructed under the Project (excluding water supply and sewerage infrastructure), and the other covering the hotel referred to under Part F of the Project. Section 4.02. Each of the Beneficiaries shall: (i) have its accounts (including but without limitation the separate commercial accounts referred to in paragraph (b) of Section 4.01 of this Proj- ect Agreement) and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consis- tently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial 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) - 14 - furnish to the Bank such other information concerning the accounts (including but without limitation the separate commercial accounts referred to in paragraph (b) of Section 4.01 of this Project Agree- ment) and financial statements of such Beneficiaries and the audit thereof as the Bank shall from time to time reasonably request. Section 4.03. (a) SAPCO shall prepare and furnish to the Bank, by December 31, 1978, a statement of the financial policies of SAPCO satisfactory to the Bank, including the establishment of selling and leasing prices for commercial and recreational land and improvements, and tariffs and other charges, all to be cal- culated at levels which will enable SAPCO to meet the requirements set forth in paragraph (b) of this Section 4.03. (b) Except as the Bank shall otherwise agree, SAPCO shall take promptly as needed all such action (including without limi- tation adjustments of its selling and leasing prices for commercial and recreational land and improvements and tariffs or other charges) as shall be required to provide in any fiscal year an annual return on the average of the current net value of its fixed assets in service at the beginning and end of such fiscal year at a rate of not less than eight per cent (8%), commencing with the fiscal year starting January 1, 1986. For the purposes of this Section: (i) the annual return specified in paragraph (b) of this Section shall be calculated in respect of each fiscal year, by using as the denominator - 15 - one-half of the sum of the current net values of the fixed assets of SAPCO in service at the beginning and at the end of each such year, and as numerator the net operating income of SAPCO for the same year; (ii) the term "current net value of the fixed assets of SAPCO in service" means the gross value of SAPCO's fixed assets in service less the amount of accumulated depreciation both as valued from time to time in accordance with consistently applied appropriate methods of valuation or revaluation acceptable to the Bank; and (iii) the term "net operating income" means gross reve- nues from all sources less all expenditures, in- cluding expenses of administration, adequate main- tenance and taxes or any payment in lieu of taxes and adequate provision for depreciation but ex- cluding interest and other charges on debt. Section 4.04. (a) Except as the Bank may otherwise agree, SAPCO shall not: (i) declare any dividend or make any other distribution with respect to its share capital unless after the payment of such dividend or other distribution, SAPCO's current assets will exceed its current liabilities by at least 1.5 times its current liabilities, including debt service requirements for the next following fiscal year; and (ii) incur any debt, other than for money borrowed to finance the Project, unless its net - 16 - revenues for the fiscal year next preceding such incurrence or for a twelve-month period ended prior to such incurrence, whichever amount is the greater, shall be not less than 1.5 times the maximum debt service requirement for any succeeding fiscal year on old debt including the debt to be incurred. (b) For the purpose of this Section of this Agreement: (i) the term "debt" means all indebtedness of SAPCO, including debt for the service of which SAPCO is responsible, maturing by its terms more than one year after the date on which it is originally incurred; (ii) debt shall be deemed to be incurred on the date of execution and delivery of a contract, loan agreement or other instrument providing for such debt; pro- vided, however, that in the case of guarantee of debt, debt shall be deemed to be incurred on the day the agreement guaranteeing such debt has been entered into but only to the extent that the guaranteed debt is outstanding; (iii) the term "debt service requirements" means the ag- gregate amount of amortization (including sinking fund payments, if any) of, and interest and other charges on, debt; - 17 - (iv) the term "net revenues" shall mean gross revenues from all sources, adjusted to take account of SAPCO's selling and leasing prices and tariffs or other charges, in effect at the time of the incurrence of debt even though they were not in effect during the fiscal year or twelve-month period to which such revenues relate, less all operating and administrative expenses and provi- sions for taxes, if any, but before provision covering depreciation and interest and other charges on debt; (v) whenever for the purposes of this Section it shall be necessary to value, in terms of the currency of the Borrower, debt payable in another currency, such valuation shall be made on the basis of the prevail- ing lawful rate of exchange at which such other cur- rency is, at the time of such valuation, obtainable for the purpose of servicing such debt or, if such other currency is not so obtainable, at the rate of exchange that will be reasonably determined by the Bank; (vi) the term "current assets" includes cash, accounts receivable due within twelve months, inventories convertible to saleable goods within twelve months, prepaid expenses properly chargeable to operating expenses within the next twelve months, and all other assets which could, in the ordinary course of business, be converted within twelve months into cash; and - 18 - (vii) the term "current liabilities" includes accounts payable within twelve months, customer advances, taxes, bonuses and all other liabilities (including long-term debt) which will be due and payable, or could be called for payment, within twelve months. - 19 - 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 each of the Beneficiaries 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 24 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 each of the Beneficiaries 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 Loan Agreement. - 20 - 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 at such 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 (wUI) For SAPCO: Soci4t4 d'Am9nagement de la Petite C6te 112 Rue Blanchot Dakar Sgnggal - 21 - Cable address: AMEN Dakar For OPT: Office des Postes et Tglecommunications Dakar, S4n4gal Cable address: OFIPOSTEL Dakar Section 6.02. Pay action required or permitted to be taken, and any documents required ozr permitted to be executed, under this Agreement on behalf of SAPCO or OPT may be taken or executed by their respective Pr4sident Directeur G6n4ral and Directeur G6n4ral or such other person or persons as such Pr6sident Directeur Ggngral and Directeur General shall designate in writing. Section 6.03. SAPCO and OPT shall furnish to the Bank suffi- cient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behal! of SAPCO and OPT, take any action or execute any documents required or per- mitted to be taken or executed by SAPCO and OPT pursuant to any of the provisions of this Agreement. 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. - 22 - 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/ Roger Chaufournier Regional Vice President Wtstern Africa SOCIETE D'AMENAGEMENT DE LA PETITE COTE By /s/ Andre Coulbary Authorized Representative OFFICE DES POSTES ET TELECOMMUNICATIONS By /s/ Andre Coulbary Authorized Representative