Colombia - Sub-Sector Project For Rural Basic Education : Loan 2192 - Guarantee Agreement - Conformed

L.C ]U LON NUMBER 2192 CO Guarantee Agreement (Sub-sector Project for Rural Basic Education) between REPUBLIC OF COLOMBIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPENT Dated 30 , 1982 LOAN NUMBER 2192 CO GUARANTEE AGREEMENT - AGREEMENT, dated A30 , 1982, between REPUBLIC OF COLOMBIA (hereinaf ter called the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (herein- after called the Bank). WHEREAS by the Loan Agreement of even date herewith between the Bank and Fondo del Ministerio de Educaci6n Nacional (herein- after called the Borrower) the Bank has agreed to make to the Borrower a loan in various currencies equivalent to fifteen million dollars ($15,000,000), 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 Sec- tion 1.01 of the Loan Agreement (said General Conditions Applic- able 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, the Preamble to this Agreement and in Sec- tions 1.02 and 1.03 of the Loan Agreement have the respective meanings therein set forth. 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, and the punctual perform- ance 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: (a) to make arrangements, satisfactory to the Bank, promptly to provide the Borrower or cause the Bor- rower to be provided with such funds as are needed by the Bor- rower to comply with its obligations under paragraph (f) of Section 2.03 of the Loan Agreement and to meet the expenditures required for carrying out. the Project; and (b) to provide the Borrower, through the technical and administrative organization of MEN, with the staff, resources and facilities required by the Borrower to carry out the Project. 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, ip 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 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 -3- foreign exchange, the Guarantor shall prouiptly 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 satis- factory to the Bank, of the Guarantor or of any entity owned or controlled by, or operating for the account or benefit of, the Guarantor, 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 Gua- rantor. (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 banking transactions 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 foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Gua- rantor. Section 3.02. The Guarantor shall take all actions necessary in order: (i) to carry out the Guarantor's Rural Basic Education Sub-sector Program in accordance with appropriate educational, administrative and financial practices; and (ii) to allocate in an effective manner its resources for the Guarantor's education sector and shall exchange views with the Bank from time to time on such actions. Section 3.03. The Guarantor shall exchange views and agree with the Bank and the Borrower, by March I and September 1 of each year, on the provision of fund requIrements for the Project as provided under paragraph (h) of Section 2.03 of the Loan Agreement. 4- ARTICLE IV Representative of the Guarantor; Addresses Section 4.01. The Ministro de Hacienda y Cr&dito Publico 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: Republic of Colombia Ministerio de Hacienda y Cr6dito Pblico Palacio de los Ministerios Plaza San Agustin Bogota D.E., Colombia Cable address: MINHACIENDA Bogota 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 S5- of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF COLOMBIA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin America and the Caribbean 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 9o day of 198 . FOR SECRETARY